SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Kathryn E. Freed, J.), entered August 11, 2006. The order granted defendant’s motion to vacate a default judgment and to compel plaintiff to accept a late answer.

Order reversed without costs and defendant’s motion to vacate the default judgment and compel plaintiff to accept a late answer denied.

In this action to recover assigned first-party no-fault benefits, defendant moved to vacate the default judgment and to compel plaintiff to accept a late answer. The court below granted defendant’s motion, and this appeal by plaintiff ensued.

It is well settled that in order to vacate a default judgment, the defaulting party
must demonstrate both a reasonable excuse for its default and a meritorious defense to the action (see Titan Realty Corp. v Schlem, 283 AD2d 568 [2001]; Matter of Gambardella v Ortov Light., 278 AD2d 494 [2000]). A court may, in the exercise of discretion, accept a claim of law office failure as an excuse (see CPLR 2005). However, counsel “must submit supporting facts in evidentiary form sufficient to justify the default” (Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553, 554 [2001]) and include “a detailed explanation of [the] oversights” (Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 433 [2004]; see also Grezinsky v Mount Hebron Cemetery, 305 AD2d 542 [2003]; Morris v Metropolitan Transp. Auth., 191 AD2d 682, 683 [1993]). In the case at bar, defendant’s attorney merely stated that law office failure constitutes a reasonable excuse for defaulting but did not elaborate as to why her office failed to serve a timely answer. Although defense counsel stated in her affirmation that the insurance carrier delayed in forwarding the summons and complaint to her office and made general statements regarding the summons and complaint having been “lost in the shuffle” by the insurance company, as well as [*2]lost or misplaced in the mail, her affirmation was not based on personal knowledge and therefore, has no probative value (see Zuckerman v City of New York, 49 NY2d 557 [1980]). Consequently, defendant failed to establish a reasonable excuse for its default.

Accordingly, the court below improvidently exercised its discretion in granting
defendant’s motion to vacate the default judgment and to compel plaintiff to accept a late answer. We pass on no other issue.

Pesce, P.J., Weston Patterson and Rios, JJ., concur.
Decision Date: July 30, 2008

[*1]

Supreme Court, Appellate Term, Second Department, July 30, 2008

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City (Robin Grumet of counsel), for appellant. Gary Tsirelman, P.C., Brooklyn (Darya Klein of counsel), for respondent.

{**21 Misc 3d at 11} OPINION OF THE COURT

Memorandum.

Order, insofar as appealed from, modified by providing that the branches of defendant’s motion seeking to compel plaintiff to respond to the demand for discovery and inspection, the demand for verified written interrogatories and the supplemental demand for verified written interrogatories are granted to the extent of compelling plaintiff to produce its certificate of incorporation for discovery and inspection, and serve responses to numbers 1, 15 and 16 of defendant’s demand for verified written interrogatories and numbers 1, 15, 31, 37-40, and 44-46 of defendant’s supplemental demand for verified written interrogatories within 60 days of the date of the order entered hereon; as so modified, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved to strike plaintiff’s complaint pursuant to CPLR 3126 or, in the alternative, to compel plaintiff to produce its owner, Valentina Anikeyeva, for an examination before trial and to produce the discovery demanded in defendant’s demand for discovery and inspection, demand for verified written interrogatories and supplemental demand for verified written interrogatories. [*2]Plaintiff opposed the motion and cross-moved for a protective order. The court granted defendant’s motion to the extent of requiring plaintiff to provide documentation pertaining to the license of plaintiff’s owner, Anikeyeva, and to plaintiff’s corporate structure, and granted plaintiff’s{**21 Misc 3d at 12} cross motion to the extent of providing that Anikeyeva did not have to produce personal documents. This appeal by defendant ensued.

Plaintiff was required, but failed, to challenge the propriety of defendant’s notice for discovery and inspection pursuant to CPLR 3120 within the time prescribed by CPLR 3122. Likewise, plaintiff failed to object to defendant’s demand for verified written interrogatories and to defendant’s supplemental demand for verified written interrogatories. As a result, plaintiff is obligated to produce the information sought except as to matters which are palpably improper or privileged (see Fausto v City of New York, 17 AD3d 520 [2005]; Marino v County of Nassau, 16 AD3d 628 [2005]; Garcia v Jomber Realty, 264 AD2d 809 [1999]; A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term, 2d & 11th Jud Dists 2006]).

To the extent the discovery demands concern matters relating to defenses which defendant is precluded from raising, they are palpably improper notwithstanding the fact that plaintiff did not specifically object thereto (see A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [2006], supra). However, the record reveals that defendant set forth detailed and specific reasons for believing that plaintiff may be ineligible to recover no-fault benefits as a fraudulently incorporated professional service corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), a defense which is not precluded. By obtaining discovery of, among other things, plaintiff’s certificate of incorporation, management agreements, and the names of plaintiff’s shareholders, defendant will be able to ascertain whether plaintiff is ineligible for reimbursement of no-fault benefits (see e.g. Preferred Med. Imaging, P.C. v Liberty Mut. Ins. Co., 11 Misc 3d 1069[A], 2006 NY Slip Op 50437[U] [Suffolk Dist Ct 2006]). As a result, in addition to the discovery previously ordered by the Civil Court, which portion of the order we do not review since it is not the subject of this appeal, defendant is also entitled to production of plaintiff’s certificate of incorporation as well as responses to interrogatories numbered 1, 15, and 16 and responses to the supplemental interrogatories numbered 1, 15, 31, 38-40 and 44-46 since said items were not palpably improper or privileged.

We further note that special circumstances exist which warrant the disclosure of plaintiff’s corporate income tax returns (see CPLR 3101 [a]; Statewide Med. Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 134[A], 2006 NY Slip Op 52014[U] [App Term,{**21 Misc 3d at 13} 1st Dept 2006], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U] [Civ Ct, Bronx County 2005]; Preferred Med. Imaging, P.C. v Liberty Mut. Ins. Co., 11 Misc 3d 1069[A], 2006 NY Slip Op 50437[U] [2006], supra; see also Dore v Allstate Indem. Co., 264 AD2d 804 [1999]; cf. Benfeld v Fleming Props., LLC, 44 AD3d 599, 600 [2007]; Altidor v State-Wide Ins. Co., 22 AD3d 435 [2005]). Accordingly, defendant is also entitled to the information demanded in defendant’s supplemental interrogatory number 37.

Defendant’s contention that the court erred in denying the branch of its motion which sought to compel plaintiff to produce its owner, Valentina Anikeyeva, for an examination before trial is without merit. The notice of examination before trial served by defendant sought to require Anikeyeva to appear for an examination before trial at defendant’s counsel’s office in “Lake Success, New York 11042.” However, as noted by plaintiff, since Anikeyeva is “an [*3]officer, director, member or employee” of plaintiff, defendant improperly noticed the deposition for a location outside New York City (see CPLR 3110). Consequently, the court did not err insofar as it declined to compel plaintiff to produce Anikeyeva for an examination before trial at the location sought (see e.g. Mamunes v Szczepanski, 70 AD2d 684 [1979]).

Defendant’s argument that the court should have denied the branch of plaintiff’s cross motion which resulted in a protective order as to Anikeyeva’s “personal documents” lacks merit. “It is well settled that tax returns are generally not discoverable in the absence of a strong showing that the information is indispensable to the claim and cannot be obtained from other sources” (Altidor, 22 AD3d at 435-436 [citations and internal quotation marks omitted]; see also Benfeld, 44 AD3d at 600). At this juncture, defendant failed to meet its burden of establishing that Anikeyeva’s personal tax returns and personal bank account records are needed, particularly where, as here, defendant is entitled to disclosure of plaintiff’s tax returns and the requested financial information with respect to said corporation. Thus, based upon the record before it, the court did not improvidently exercise its discretion in issuing its protective order.

Pesce, P.J., Weston Patterson and Rios, JJ., concur.

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Plaintiff appeals from an order of the Civil Court of the City of New York, New York County (Manuel Mendez, J.), entered October 12, 2006, which, inter alia, denied its motion for partial summary judgment in the principal sum of $2,527.50.

Per Curiam.

Order (Manuel Mendez, J.), entered October 12, 2006, reversed, with $10 costs, and plaintiff’s motion for partial summary judgment in the principal sum of $2,527.50 granted. The Clerk is directed to enter judgment accordingly.

In this action to recover first party no-fault benefits, plaintiff made a prima facie showing of entitlement to partial judgment by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue (see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Fair Price Med. Supply, Inc. v St. Paul Travelers Inc. Co., 16 Misc 3d 8 [2007]). In opposition, defendant failed to raise a triable issue since it did not submit the IME report upon which its denials were based or any other evidentiary proof to support its defense of lack of medical necessity (see Vista Surgical Supplies, Inc. Travelers Ins. Co., 50 AD3d 778 [2008]; Response Med. Equip. v General Assur. Co., 13 Misc 3d 129[A], 2006 NY Slip Op 51765[U] [2006]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concurI concurI concur
Decision Date: July 28, 2008

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Plaintiff appeals from an order of the Civil Court of the City of New York, New York County (Diane A. Lebedeff, J.), entered March 31, 2006, which denied its motion for summary judgment without prejudice to renewal.

Per Curiam.

Order (Diane A. Lebedeff, J.), entered March 31, 2006, reversed, with $10 costs, and plaintiff’s motion for summary judgment in the principal sum of $2,420 granted. The Clerk is directed to enter judgment accordingly.

In opposition to plaintiff’s prima facie showing of entitlement to summary judgment recovery of first party no-fault benefits (see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742[2004]; Fair Price Med. Supply, Inc. v St. Paul Travelers Inc. Co., 16 Misc 3d 8 [2007]), defendant failed to submit competent proof that it timely mailed its denial of claim forms within the prescribed 30-day period. Thus, defendant is precluded from asserting statutory exclusion defenses, including its defenses of excessive fees (see Westchester Med. Ctr. v American Tr. Ins. Co., 17 AD3d 581 [2005]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2002]) and lack of medical necessity (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Country-Wide Ins. Co. v Zablozki, 257 AD2d 506 [1999]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concurI concurI concur [*2]
Decision Date: July 28, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Motion by appellant for leave to appeal to the Appellate Division from the order of this court dated February 8, 2008 denied as academic.

On the court’s own motion, reargument of the order and decision of this court in the above-entitled action, dated February 8, 2008, is granted and, upon reargument, the order and decision of this court dated February 8, 2008 are vacated and the following is substituted as the decision of the court:

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), dated October 17, 2006. The order denied plaintiff’s motion for summary judgment.

Order reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed plaintiff’s motion, asserting,
inter alia, that the affidavits submitted by plaintiff were insufficient to support plaintiff’s motion for summary judgment and that plaintiff failed to submit a timely claim for reimbursement of benefits. The court denied plaintiff’s motion for summary judgment, holding that defendant raised triable issues of fact as to the denial of the claim and as to whether plaintiff timely mailed the bills to defendant. This appeal by plaintiff ensued.

Plaintiff established its prima facie entitlement to summary judgment by proof that it [*2]submitted the claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; see also Mani Med., P.C. v NY Cent. Mut. Ins. Co., 19 Misc 3d 128[A], 2008 NY Slip Op 50508[U] [App Term, 2d & 11th Jud Dists 2008]). The burden, therefore, shifted to defendant to demonstrate the existence of a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320 [1986]).

The affidavit’ of defendant’s no-fault supervisor, submitted by defendant to establish that defendant timely denied plaintiff’s claim, was not signed. Thus, the affidavit’ is of no probative value and defendant failed to establish that it timely denied plaintiff’s claim within the 30-day prescribed period (Insurance Department Regulations [11 NYCRR] § 65-3.8 [c]). As a result, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 282 [1997]), including its proffered defense that the claim was submitted more than 45 days after the date of service.

Accordingly, plaintiff’s motion for summary judgment is granted and the matter is remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., and Rios, J., concur.
Decision Date: July 25, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

DECISION

Motion by respondent for leave to appeal to the Appellate Division from the order of this court dated January 15, 2008 denied as academic.

On the court’s own motion, reargument of the order and decision of this court, dated January 15, 2008, in the above entitled action, is granted and, upon reargument, the order and decision of this court dated January 15, 2008 are vacated and the following is substituted as the decision of the court:

Appeal from an order of the Civil Court of the City of New York, Queens County (Thomas D. Raffaele, J.), entered May 9, 2006, deemed from a judgment entered November 27, 2006 (see CPLR 5501 [c]). The judgment, entered pursuant to the May 9, 2006 order granting plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $5,805.99.

Judgment affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed the motion, contending that plaintiff failed to make a prima facie showing because plaintiff did not establish the existence of a valid assignment; that plaintiff’s claim for $82.89 was timely denied on the ground that it was subject to the personal injury protection deductible contained within the insurance policy issued to plaintiff’s assignor; and that plaintiff’s remaining claims were timely denied based upon affirmed peer review reports. In reply, plaintiff asserted that defendant’s peer review reports did not constitute evidence in admissible form in that they failed to comply with CPLR 2106 since the doctor’s signatures were affixed by stamp or generated by computer. The court held that plaintiff [*2]made a prima facie showing and that defendant’s peer review reports did not constitute evidence in admissible form because the signatures were not affixed in accordance with CPLR 2106. As a result, the lower court granted plaintiff’s motion for summary judgment, and judgment was subsequently entered thereon. This appeal by defendant ensued.

Defendant argues that plaintiff failed to make a prima facie showing because plaintiff did not demonstrate that it possessed a valid assignment. Even assuming that a prima facie case requires proof of a valid assignment, where, as here, the claim forms stated that the assignor’s signature was on file,’ such a burden is satisfied, inasmuch as defendant did not timely take action to verify the existence of a valid assignment (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007]). Since defendant raises no other issue with respect to plaintiff’s establishment of its prima facie case, we do not pass on the propriety of the implicit determination of the court below with respect thereto.

While plaintiff sought summary judgment, inter alia, upon its claim form dated December 23, 2002 in the sum of $746.01, the record is devoid of any proof of a denial of claim form corresponding to plaintiff’s $746.01 claim form. (We note that the supervisor of defendant’s no-fault department submitted an affidavit in opposition in which she stated that defendant received separate claims seeking the sums of $82.89 and $663.23.’ The sum of the foregoing two claims does not equal $746.01. However, two of the NF-10 denial of claim forms annexed to defendant’s opposing papers indicated that they denied separate claims seeking the sums of $82.89 and $663.12, the sum of which does equal $746.01. Defendant makes no attempt to explain this discrepancy.) As a result, plaintiff was entitled to summary judgment upon its claim for $746.01.

Further, with respect to plaintiff’s remaining claims, the court below held that the peer review reports submitted by defendant in opposition to plaintiff’s motion were inadmissible inasmuch as they failed to comply with CPLR 2106. Where, as here, the signatures appear to be affixed by stamp or generated by a computer, plaintiff’s assertion, in its reply papers, that such peer review reports did not constitute evidence in admissible form due to a failure to comply with CPLR 2106 would ordinarily raise an issue of fact that cannot be resolved on a motion for summary judgment (see Seoulbank, NY Agency v D & J Export & Import Corp., 270 AD2d 193 [2000]; Dyckman v Barrett, 187 AD2d 553 [1992]; see also James v Albank, 307 AD2d 1024 [2003]). However, inasmuch as defendant’s counsel has submitted papers to this court in opposition to plaintiff’s motion for leave to appeal to the Appellate Division from the original order of this court dated January 15, 2008, (which motion has been rendered academic by the issuance of this decision and order), conceding that [t]he reports in question contain stamped signatures,’ and there is nothing in the record to indicate that the stamped signatures were placed on the reports by the doctor who performed the peer reviews or at his direction, it is our view that defendant failed to raise a triable issue of fact with respect to the claim at issue (see Vista Surgical Supplies, Inc. v Travelers Ins. Co., 50 AD3d 778 [2008]).

Accordingly, the judgment is affirmed.
Pesce, P.J., and Rios, J., concur.
Golia, J., concurs in a separate memorandum.
Golia, J., concurs in the result only, in the following memorandum:

While I agree with the ultimate disposition in the decision reached by the majority, I wish [*3]to note that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views. In particular, I wish to note that, as stated in my dissenting opinion in Uptodate Med. Serv., P.C. v Lumbermens Mut Cas. Co. (___ Misc 3d ___, 2008 Slip Op ______ [App Term, 2d & 11th Jud Dists 2008]), an appellate court
“should always consider the issue of whether a prima facie showing has been made, irrespective of whether the issue was raised by the defendant” (see also Alvarez v Prospect Hosp., 68 NY2d 320 [1986]).
Decision Date: July 25, 2008

[*1]

District Court of Nassau County, First District, July 25, 2008

APPEARANCES OF COUNSEL

Gullo & Associates (Paul Schneider of counsel), for defendant. Baker Sanders Barshay Grossman Fass Muhlstock & Neuwirth, Mineola (Michael Hayes of counsel), for plaintiff.

{**20 Misc 3d at 852} OPINION OF THE COURT

Andrew M. Engel, J.

The plaintiff commenced this action on or about July 15, 2002 seeking to recover $1,791.16, plus interest and counsel fees, in no-fault first-party benefits for services allegedly provided to its assignor, which remained unpaid by the defendant. Issue was joined on or about August 2, 2002. The defendant now moves for summary judgment against the plaintiff, dismissing the complaint. The plaintiff opposes this motion and cross-moves for summary judgment, requesting the entry of a judgment for the amount demanded in the complaint, or in the alternative, a declaration as to the sufficiency of the plaintiff’s prima facie case, the dismissal of the defendant’s affirmative defenses and the imposition of sanctions against the defendant. The defendant opposes the cross motion.

The parties do not dispute the following essential facts of this claim: The plaintiff performed MRIs of its assignor’s cervical and lumbar spine on January 4, 2002. The plaintiff submitted its bill for these services, dated April 5, 2002, in the total sum of $1,791.16, to the defendant, which received same on April 11, 2002. On April 24, 2002 defendant sent a verification request to the plaintiff and the plaintiff’s assignor seeking records from Mark Heyligers, D.C., the referring chiropractor. On May 28, 2002, not having received the requested records within 30 days, the defendant sent a follow-up verification request to the plaintiff and the assignor. The requested verification information was received by the defendant on June 5, 2002. On July 1, 2002 the defendant made a partial payment in the sum of $1,571.24 and denied the balance of the plaintiff’s claim,{**20 Misc 3d at 853} $219.92, asserting that the fees charged for the [*2]MRIs in question were in excess of the workers’ compensation fee schedule.^[FN1]

Defendant’s Motion

In support of its motion for summary judgment, the defendant argues that the plaintiff improperly billed 100% for both the cervical and lumbar MRIs. According to the defendant, the plaintiff was required to charge the same fee for MRIs as is called for in the workers’ compensation fee schedule, ground rule 3b, for diagnostic X ray procedures to two remote parts of the body, which calls for the payment of 100% of the greater single X ray fee charged and 75% of the lesser X ray fee. Applying this fee schedule for such X rays to MRIs the defendant alleges that it has paid the plaintiff’s claim in full, requiring dismissal of the complaint.

In opposition to the defendant’s motion the plaintiff initially argues that although the defendant’s denial of claim was received within 30 days of the defendant’s receipt of the requested verification information, the denial was nevertheless untimely. The plaintiff accuses the defendant of

“us[ing] the verification protocols to delay payment of the claim, and than [sic] once it determined the services were medically necessary, sought out a different basis to refuse payment. The verification requests do not extend the time in which the defendant has to deny the claim unless the defendant bases its denial on the requested verification.” (Hayes affirmation, Apr. 2, 2008.)^[FN2]

The plaintiff further posits that “a failure by the insurer to issue a denial when it is in possession of the necessary information serves as a waiver of any right to deny a claim based on such information.” (Hayes affirmation, Apr. 2, 2008.) The plaintiff does not cite any case law or regulation that supports either of these propositions. The controlling regulations and case law are, in fact, contrary to the plaintiff’s argument.{**20 Misc 3d at 854}

The Insurance Department regulations in effect at the time the claim herein arose provided, in pertinent part, “[w]ithin 30 calendar days after proof of claim is received, the insurer shall either pay or deny the claim in whole or in part” (11 NYCRR former 65.15 [g] [3]). Insurance Law § 5106 (a) similarly provided that no-fault first-party “benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained.” (See New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2d Dept 2004].) The regulations further provided that this 30-day period may be extended by the insurer’s timely demand for verification of the plaintiff’s claim (see 11 NYCRR former 65.15 [d], [e]), and “[n]o-fault benefits are overdue if not paid within 30 calendar days after the insurer receives verification of all of the relevant information requested pursuant to subdivision (d) of this section.” (See 11 NYCRR former 65.15 [g] [1] [i]; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [2d Dept 1999].) [*3]Moreover, “an insurer is not obligated to pay or deny a claim until all demanded verification is provided.” (Hospital for Joint Diseases v New York Cent. Mut. Fire Ins. Co., 44 AD3d 903, 904 [2d Dept 2007] [citations omitted]; see also New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., supra; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., supra; Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889 [2d Dept 2007]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2d Dept 2005].) In fact, 11 NYCRR former 65.15 (g) (2) (iii) specifically provided that “an insurer shall not issue a denial of claim form (NYS Form N-F 10) prior to its receipt of verification of all of the relevant information requested pursuant to subdivision (d) of this section (e.g., medical reports, wage verification, etc.)” (see New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002]; Summit Psychological, P.C. v General Assur. Co., 9 Misc 3d 8 [App Term, 9th & 10th Jud Dists 2005]; Shtarkman v Allstate Ins. Co., 8 Misc 3d 129[A], 2005 NY Slip Op 51028[U] [App Term, 2d & 11th Jud Dists 2005]), and if the defendant had issued a denial, on the basis of an alleged fee schedule violation, without asserting the defense of lack of medical necessity, before the requested medical records were received, the defendant would have been deemed to have waived a possible defense of lack of medical necessity. (S & M Supply Inc. v Allstate Ins. Co., 2003 NY Slip Op 51191[U] [App Term, 2d & 11th Jud Dists 2003].){**20 Misc 3d at 855}

The clear prohibition against issuing a denial of claim before all demanded verification information is received notwithstanding, the relevance of the medical records sought by the defendant before issuing its denial is patent. “Defendant is not required to provide a blank checkbook to plaintiff. Rather, defendant is entitled to find out whether and why each MRI was prescribed; in other words, the carrier is entitled to inquire as to the medical necessity before it pays the bills.” (Lenox Hill Radiology & MIA P.C. v Global Liberty Ins., 20 Misc 3d 434, 438 [Civ Ct, NY County 2008].) Given the nature of the defendant’s fee schedule defense, that it is only obligated to pay 100% of the more expensive MRI and 75% of the less expensive MRI, this issue would not arise if the defendant was of the opinion that one or both MRIs were not medically necessary. It is only after receiving the requested medical verification that the defendant was able to determine that the MRIs were medically necessary and the fees it believed it was then obligated to pay.

Alternatively, the plaintiff argues that the defendant has failed to submit proper proof in admissible form that plaintiff’s bills were in excess of the appropriate workers’ compensation fee schedule. On this score, the plaintiff is correct.

To prevail, the movant must first make a showing of entitlement to judgment, as a matter of law (Bank of N.Y. v Granat, 197 AD2d 653 [2d Dept 1993]), tendering evidentiary proof in admissible form. (Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065 [1979].) It is only thereafter incumbent upon the party opposing summary judgment to “demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action or tender an acceptable excuse for his failure so to do.” (Zuckerman v City of New York, 49 NY2d 557, 560 [1980].) The movant’s failure to make such a showing, regardless of the sufficiency of opposing papers, mandates the denial of a summary judgment motion. (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985].)

In support of its motion, the defendant relies upon the affirmation of counsel, which [*4]is of no probative value (Zuckerman v City of New York, supra; Morissaint v Raemar Corp., 271 AD2d 586 [2d Dept 2000]; Citibank v Joffe, 265 AD2d 291 [2d Dept 1999]), the conclusory statement of one of its Litigation Examiners to the effect that the appropriate fee “[f]or multiple diagnostic x-ray procedures: for two remote parts, the charge shall be the greater fee plus 75% of the lesser fee” (Chase affidavit, Nov. 28, 2007, ¶ 2), and the decision of Honorable Denny{**20 Misc 3d at 856} Chin, from the United States District Court for the Southern District of New York, in Brentwoood Pain & Rehabilitation Servs., P.C. v Allstate Ins. Co. (508 F Supp 2d 278 [1997]), holding that the fees charged for MRIs by no-fault first-party benefits providers shall be in accordance with the workers’ compensation fee schedule, ground rule 3b, for diagnostic X ray procedures to two remote parts of the body.

The defendant’s reliance on Judge Chin’s decision is misplaced. “Federal case law is at best persuasive in the absence of state authority; it is largely irrelevant to a peculiarly local question . . . .” (Cox v Microsoft Corp., 290 AD2d 206, 207 [1st Dept 2002].) A determination by the federal court, “while entitled to great weight, is not binding on this court.” (New York R.T. Corp. v City of New York, 275 NY 258, 265 [1937] affd 303 US 573 [1938]; see also People v Kin Kan, 78 NY2d 54 [1991]; Walker v Walker, 51 AD2d 1029 [2d Dept 1976]; People v Weiner, 63 AD2d 722 [2d Dept 1978].) Nor is Judge Chin’s decision entitled to preclusive effect, pursuant to the doctrine of collateral estoppel, as the plaintiff was neither a party nor in privity with a party to that proceeding. (Ryan v New York Tel. Co., 62 NY2d 494 [1984]; see also Matter of Hee K. Choi v State of New York, 74 NY2d 933 [1989]; G. Rama Constr. Enters., Inc. v 80-82 Guernsey St. Assoc., LLC, 43 AD3d 863 [2d Dept 2007].)

While Judge Chin’s decision might ultimately prove to be correct, the defendant herein has failed to provide the court with any proof in admissible form which supports its fee schedule theory. This court notes that before Brentwoood Pain & Rehabilitation Servs., P.C. v Allstate Ins. Co. was removed to the federal court, Justice Joan A. Madden, sitting in the Supreme Court of New York State, New York County, denied a defense motion to dismiss on the same grounds now asserted by the defendant herein. In refusing to give Justice Madden’s decision preclusive effect, under the doctrine of law of the case, Judge Chin noted, inter alia, that Justice Madden “did not have the benefit of the additional letters that have been submitted to this Court.” (Brentwoood Pain & Rehabilitation Servs., P.C. v Allstate Ins. Co. at 289.) This court presently finds itself in the same position as Justice Madden.

Having failed to “proffer sufficient evidence to establish as a matter of law that [plaintiff’s] claims reflected the incorrect amount for the services provided . . . the court . . . denie[s] defendant’s motion for summary judgment.” (Triboro Chiropractic & Acupuncture, PLLC v New York Cent. Mut. Fire Ins.{**20 Misc 3d at 857} Co., 15 Misc 3d 145[A], 2007 NY Slip Op 51175[U], *2 [App Term, 2d & 11th Jud Dists 2007].)

Plaintiff’s Motion

The plaintiff will establish “a prima facie showing of [its] entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue.” (Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2d Dept 2004] [emphasis added; citations omitted]; see also A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2d Dept 2007]; Westchester Med. Ctr. v AIG, Inc., 36 AD3d 900 [2d Dept 2007]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 45 AD3d 822 [2d Dept 2007].) Benefits are overdue “if not paid within 30 calendar days after the insurer receives verification of all of the relevant information requested pursuant to subdivision (d) of this section.” (11 NYCRR former 65.15 [g] [1] [i]; see also Insurance Law § 5106 [a]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 42 AD3d 277 [2d Dept 2007]; New York & Presbyt. Hosp. v Selective Ins. Co. of Am., 43 AD3d 1019 [2d Dept 2007].) Plaintiff’s prima facie case does not require a showing that the fees it charged were in accordance with the workers’ compensation fee schedule. (AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 17 Misc 3d 41 [App Term, 2d & 11th Jud Dists 2007].) Plaintiff’s prima facie case does require that a proper business record foundation be laid (see Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]; Fortune Med., P.C. v Allstate Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50243[U] [App Term, 9th & 10th Jud Dists 2007]; Ontario Med., P.C. v Sea Side Med., P.C., 15 Misc 3d 129[A], 2007 NY Slip Op 50609[U] [App Term, 9th & 10th Jud Dists 2007]; V.S. Med. Servs., P.C. v One Beacon Ins., 14 Misc 3d 142[A], 2007 NY Slip Op 50369[U] [App Term, 2d & 11th Jud Dists 2007]) for the admission of the “properly completed claim form, which suffices on its face to establish the ‘particulars of the nature and extent of the injuries and [health benefits] received and contemplated’ (11 NYCRR 65-1.1), and the ‘proof of the fact and amount of loss sustained’ (Insurance Law § 5106[a]).” (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], *2 [App Term, 2d & 11th Jud Dists 2003]; Damadian MRI in Elmhurst v Liberty Mut.{**20 Misc 3d at 858} Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists 2003].)

“[T]o the extent defendant insurer issued denial of claim forms or admitted receipt of plaintiff’s claim forms, . . . said admissions were not concessions of the facts asserted in plaintiff’s claim forms, and it was plaintiff’s burden to proffer such evidence in admissible form (Midborough Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132 [A], 2006 NY Slip Op 51879[U] [App Term, 2d & 11th Jud Dists 2006]).” (Bajaj v General Assur., 18 Misc 3d 25, 28 [App Term, 2d & 11th Jud Dists 2007.)

Distinguished from the case sub judice is the circumstance where the defendant pays the claim in full after litigation is commenced and the only issues remaining are the amount of interest and/or attorney’s fees to be paid. In such a case, a plaintiff’s failure to lay a proper business record foundation for the admission of its claim form will be overlooked. (Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52453[U] [App Term, 2d & 11th Jud Dists 2007].)

As previously indicated, the defendant herein concedes, both in its denial of claim form and in its motion papers, that the plaintiff’s claim was timely received. These admissions cure any defect which may exist in the plaintiff’s proof of mailing. (Prestige Med. & Surgical Supply, Inc. v Clarendon Natl. Ins. Co., 13 Misc 3d 127[A], 2006 NY Slip Op 51672[U] [App Term, 2d & 11th Jud Dists 2006]; Magnezit Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co., 12 Misc 3d 144[A], 2006 NY Slip Op 51434[U] [App Term, 2d & 11th Jud Dists 2006].) The parties also agree that $219.92 of that claim remains unpaid. The plaintiff, however, has failed to lay a proper business record foundation for the admission of its claim form.

The plaintiff attempts to lay this foundation through the affidavit of Nicole Simeona, who advises the court that she is”employed by plaintiff’s counsel” (Simeona affidavit, Apr. 3, 2008), not [*5]by the plaintiff. Ms. Simeona further avers that she is “intimately familiar with the administration of all aspects of the collection department.” (Simeona affidavit, Apr. 3, 2008.) She does not indicate whose collection department, the plaintiff’s or her employer’s. Moreover, nowhere does Ms. Simeona allege that she has any knowledge of the plaintiff’s record keeping practices and the creation of the plaintiff’s claim form.{**20 Misc 3d at 859}

Accordingly, those branches of the plaintiff’s cross motion which seek summary judgment, or in the alternative, partial summary judgment, are denied.

That branch of the plaintiff’s cross motion which seeks an order dismissing the defendant’s affirmative defenses is granted to the extent of dismissing the defendant’s second and third affirmative defenses, alleging lack of medical necessity and failure to comply with policy conditions, respectively. The defense of lack of medical necessity was waived by the defendant’s failure to issue a timely denial of claim asserting such defense. (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997].) Additionally, both the second and third affirmative defenses merely plead conclusions of law and fail to allege any facts. (See Plemmenou v Arvanitakis, 39 AD3d 612 [2d Dept 2007]; Petracca v Petracca, 305 AD2d 566 [2d Dept 2003]; Staten Is.-Arlington, Inc. v Wilpon, 251 AD2d 650 [2d Dept 1998].) The defendant’s remaining affirmative defenses relate to the defendant’s claim that it paid the plaintiff, in full, pursuant to the appropriate workers’ compensation fee schedule.

Finally, that branch of the plaintiff’s motion which seeks the imposition of sanctions against the defendant, pursuant to 22 NYCRR 130-1.1, for alleged frivolous conduct, is denied. “People who live in glass houses should not throw stones.”

Footnotes

Footnote 1: While the plaintiff’s papers in opposition to the defendant’s motion question the defendant’s proof of service of the defendant’s verification requests and denial, at oral argument the plaintiff conceded the timeliness and receipt of the defendant’s verification requests, as well as the fact that the defendant issued its denial within 30 days of its receipt of the requested verification information. For this reason, the court will not address the defendant’s proof of service of the verification requests or the denial.

Footnote 2: The plaintiff has failed to number either the paragraphs or pages of the papers it submits on this motion.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from a decision of the Civil Court of the City of New York, Queens County (Bernice Daun Siegal, J.), dated December 13, 2006, deemed from a judgment of said court entered September 4, 2007 (see CPLR 5520 [c]). The judgment, after a nonjury trial, awarded plaintiff the principal sum of $1,200.53, plus interest and attorney’s fees (see 14 Misc 3d 673 [2006]).

Judgment affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the court below awarded plaintiff attorney’s fees upon each of the eight claims submitted for medical services provided to plaintiff’s assignor rather than upon the aggregate sum of the eight claims. The instant appeal by defendant ensued.

For the reasons stated in Fortune Med., P.C. v New York Cent. Mut. Fire Ins. Co. ( Misc 3d , 2008 NY Slip Op 28218 [App Term, 2d & 11th Jud Dists 2008]), the judgment is affirmed.

Pesce, P.J., Rios and Steinhardt, JJ., concur. [*2]
Decision Date: July 22, 2008

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court of the City of New York, New York County (Manuel J. Mendez, J.), entered May 14, 2007, which granted plaintiff’s motion for summary judgment.

Per Curiam.

Order (Manuel J. Mendez, J.), entered May 14, 2007, reversed, with $10 costs, motion denied, and upon searching the record, summary judgment awarded to defendant dismissing the action.

In this action to recover no-fault first party benefits, defendant’s documentary submissions were sufficient to give rise to a presumption that defendant’s verification requests were timely mailed and received by plaintiff (see Nassau Ins. Co. v Murray, 46 NY2d 828 [1978]). Inasmuch as an insurer is not required to pay or deny a claim until it receives verification of all relevant requested information (see 11 NYCRR 65-3.8[b][3]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 19 AD3d 569 [2005]), and it being undisputed on this record that plaintiff did not respond to defendant’s verification requests, plaintiff’s claim for payment was premature. Under these circumstances, where no triable issue exists as to whether plaintiff provided defendant with the requested information, defendant is entitled to summary judgment dismissing the action (see Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2004]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: July 16, 2008

Supreme Court, Suffolk County

06505-07

PLTF’S/PET’S ATTORNEY:

Brody, O’Connor & O’Connor

111 John Street, Suite 900

New York, New York 10038

Bruce S. Rosenberg, Esq.

2631 Merrick Road, Suite 401

Bellmore, New York 11710

Einsnberg & Carton

2631 Merrick Road, Suite 201

Bellmore, New York 11710

Meiselman, Denlea, Packman, Et Al.

1311 Mamaroneck Avenue

White Plains, New York 10605

Neil L. Fuhrer & Associates, LLP

750 Third Avenue

New York, New York 10017

Kenneth B. Schwartz, Esq.

555 Westbury Avenue

Carle Place, New York 11514

Conroy & Associates

350 Old Country Road, Suite 106

Garden City, NY 11530

Wylie M. Stecklow

10 Spring Street, Suite 1

New York, New York 10012

DEFT’S/RESP ATTORNEY:

Bruno, Gerbino & Soriano, LLP

James K. Hogan, Esq.

445 Broad Hollow Road, suite 220

Melville, New York 11714

Peter Fox Cohalan, J.

It is, ORDERED that these motions by plaintiff for injunctive relief (seq. #

001), and by defendants for dismissal (seq. #

002 & 004), and a change of venue (seq.#

003) are hereby decided as follows.

The plaintiff instituted this action against the various named defendants listed as the Halima et al. defendants, the Minick defendants and the Glassman defendants [*2]alleging that all the various defendants and entities have engaged in a systematic scheme to defraud the plaintiff insurance company by submitting bills for reimbursement of no-fault related services allegedly rendered to individuals involved in automobile accidents. The plaintiff contends that the named individual defendants who are physicians sold their names and allowed the use of their medical licenses to form the related professional corporations also named as defendants for the sole basis of obtaining benefits from the plaintiff, among others. The plaintiff contends that the professional medical corporations were actually created and owned by laypersons, chiropractors and a now disbarred attorney. The plaintiff claims that it is currently litigating claims by these defendants in excess of $456,682.11 and points to a New York Court of Appeals decision in State Farm Insurance v. Mallela, 4 NY3d 313, 794 NYS2d 700 (2005) for the proposition that a fraudulently incorporated professional corporation is not entitled to recover benefits under the New York no-fault law where the corporation is not actually owned by the required medically licensed physician. This lawsuit thereafter ensued. The Halima et al., defendants have defaulted except for defendant Mark Slamowitz who has interposed an answer and filed opposition to the plaintiff’s requested relief and has sought by way of motion a change of venue from Suffolk County, New York to Kings County, New York pursuant to CPLR §510.

The plaintiff now moves for injunctive relief (seq. #

001) seeking to stay all current and future no-fault proceedings against the defendants as well as payments pending resolution of the instant litigation and the answering defendants oppose the requested relief. The Minick defendants, Michele Minick and her designated companies, ANN Management Company Inc., ANM Transport Co., CJ Transport Co., and Scott Funding Company, Inc., (seq. #

002) [hereinafter Michelle Minick et al.] and Michael Scott Minick and his designated companies, Montgomery Medical P.C. and Metro Chiro and Rehab, PLLC., (seq. #

004) [hereinafter Michael Minick et al.] move to dismiss the 1st, 2nd, 3rd, 4th, 5th and 6th causes of action (Michael Scott Minick et al., seq. #

004) and the 3rd, 4th and 5th causes of action (Michele Minick et al., seq. #

002) for failure to state a cause of action. The plaintiff opposes this requested relief. The defendant, Mark Slamowitz, also moves for a change of venue of this action from Suffolk County, New York to Kings County, New York pursuant to CPLR 510(1), 511(b) or 510(3) on the grounds that the plaintiff’s choice of forum is improper which relief the plaintiff opposes.

The purpose of a preliminary injunction is to preserve the status quo pending trial. McLaughlin, Piven, Vogel Inc. v. W. J. Nolan & Co., Inc., 114 AD2d 165, 498 NYS2d 146 (2nd Dept. 1987), appeal denied 67 NYS2d 606, 501 NYS2d 1024. In order to prevail on a motion for a preliminary injunction, the moving party has the burden of establishing, (1) a likelihood of ultimate success on the merits, (2) irreparable injury absent a granting of the requested relief and (3) the equities weigh in its favor. Related Properties, Inc., v. Town Bd of Harrison, 22 AD3d 587, 802 NYS2d 221 (2nd Dept. 2005); Upgrade Education Services, Inc. v. Rappaport, 136 AD2d 628, [*3]523 NYS2d 872 (2nd Dept. 1988); Benjamin Kurzban and Son, Inc. v. Board of Education, City of New York, 129 AD2d 756, 514 NYS2d 749 (2nd Dept. 1987). Preliminary Injunctive relief lies with the sound discretion of the Court [Geres v Koch, 62 NY2d 84, 476 NYS2d 73 (1984)] and it is predicated on a clear showing of the afore-mentioned three prong test. Ginsberg v. Ock-A-Bock Community Ass’n, Inc., 34 AD3d 637, 825 NYS2d 119 (2nd Dept. 2006); W. T. Grant Co., v Srogi, 52 NY2d 496, 438 NYS2d 761 (1981); cf. Albini v. Solork Associates, 37 AD2d 835, 326 NYS2d 150 (2nd Dept. 1971).

As a provisional remedy, the chief function of a preliminary injunction is to prevent any conduct before judgment which would impair the ability of the Court to render the appropriate final judgment. Mucchi v. Eli Haddad Corp., 101 AD2d 724, 475 NYS2d 35 (1st Dept. 1984). However, it is also well settled that, absent extraordinary circumstances, a preliminary injunction will not be granted if it provides the ultimate relief that the movant would gain via a final judgment. SHS Baisley, LLC. v Res Land, Inc., 18 AD3d 727, 795 NYS2d 690 (2nd Dept. 2005). Here, in the case at bar, the plaintiff provides an affidavit from a cooperating named defendant, Ahmed Erfan Halima, M.D. (hereinafter “Halima”), setting forth the very fraudulent acts discussed in the complaint wherein physicians were lending their names for a fee to laypersons, chiropractors and an attorney so as to fraudulently incorporate no-fault clinics actually owned and controlled by these non-licensed non medical professionals. The plaintiff has established a likelihood of success, irreparable injury and equities which favor its case. The defendants suggest that the plaintiff is not entitled to injunctive relief because money damages would compensate the plaintiff for any wrongdoing; however, if the fraudulent corporation owned or controlled by a non-licensed medical professional goes out of business or disappears, the plaintiff is indeed irreparably harmed as is the public because monies would have been diverted to those in control of the fraudulent corporation without any recourse by the plaintiff.

The plaintiff has established irreparable harm, likelihood of ultimate success on the merits and that the balancing of the equities lies in their favor. Trimboli v. Irwin, 18 AD3d 866, 796 NYS2d 659 (2nd Dept. 2005). However, because preliminary injunctive relief is an equitable remedy, the award of such relief is not only discretionary with this Court, but may be tailored to protect the interests of all the parties. See, Paddock Construction LTD. v. Automated Swim Pools, Inc., 130 AD2d 894, 515 NYS2d 662 (3rd Dept. 1987); Antinelli v. Toner, 74 AD2d 996, 427 NYS2d 99 (4th Dept. 1980) appeal after remand, 78 AD2d 576, 432 NYS2d 421. Therefore, as to the defaulting defendants named, injunctive relief is granted without opposition; as to those defendants appearing in this action, the injunctive relief sought is granted unless these defendants present and file with the plaintiff, the corporate documents establishing a licensed medical professional is the owner, operator and in principal control of the corporation seeking reimbursement of no-fault benefits provided. A failure to so provide the corporate documents, resolutions and identity of the officers of the corporation seeking benefit payments will continue the injunction as to all defendants failing to [*4]provide such proof. The defendants are directed to provide to the Court copies of all documents identifying the principals in control of the various entities seeking payment for benefits provided under the no-fault provisions. The defendants are granted leave to renew their objections to injunctive relief if they have been unfairly denied reimbursement after having provided the documentation and proof required by this order. See, CPLR §6314. The plaintiff is directed to file an undertaking in the amount of $100,000.00 pursuant to CPLR §6312 (b).

The Minick defendants also move pursuant to CPLR §3211 (a) (7) for dismissal of the causes of action contained within the plaintiff’s complaint ( seq. #

002 & #

004) on the grounds that the causes of action identified in the movant’s papers fail to state a cause of action.

Upon a motion to dismiss a complaint for legal insufficiency, the test to be applied is whether the complaint gives sufficient notice of the transactions, occurrences or series of transactions or occurrences intended to be proven and whether the requisite elements of any cause of action know to our law can be discerned from its averments. Frank v. DaimlerChrysler Corp., 292 AD2d 118, 741 NYS2d 9 (1st Dept. 2002); Gruen v. County of Suffolk, 187 AD2d 560, 590 NYS2d 217 (2nd Dept. 1992); Moore v. Johnson, 147 AD2d 621, 538 NYS2d 28 (2nd Dept. 1989); Conroy v. Cadillac Fairview Shopping Center Properties, 143 AD2d 726, 533 NYS2d 446 (2nd Dept. 1988). Furthermore, the complaint should be liberally construed in plaintiff’s favor and the facts alleged in the complaint should be assumed to be true. P.T. Bank Central Asai v. ABN Amro Bank N.V., 301 AD2d 373, 754 NYS2d 245 (1st Dept. 2003); Palazzolo v. Herrick, Feinstein, LLP, 298 AD2d 372, 751 NYS2d 401 (2nd Dept. 2002); Holly v. Pennysaver Corp., 98 AD2d 570, 471 NYS2d 611 (2nd Dept. 1984). The nature of the inquiry is whether a cause of action exists and not whether it has been properly stated. McGill v. Parker, 179 AD2d 98, 582 NYS2d 91 (1st Dept. 1992); Marini v. D’Atolito, 162 AD2d 391, 557 NYS2d 45 (1st Dept. 1990).

As noted by the Court in Pace v. Perk, 81 AD2d 444, 440 NYS2d 710 (2nd Dept. 1981) with regard to a motion to dismiss pursuant to CPLR 3211

” Upon such a motion to dismiss a complaint for legal insufficiency, the court must assume that the allegations are true (Denihan Enterprises v. O’Dwyer, 302 NY 451, 458, 99 NE2d 235), and must deem the complaint to allege whatever can be imputed from its statements by fair and reasonable intendment, however imperfectly, informally or illogically facts may be stated therein (Condon v. Associated Hosp. Service of New York, 287 NY 411, 40 NE2d 230). In making its analysis, the court is not bound by the constructions and theories of the parties (see, Siegel, Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR 3211:24). The test of the sufficiency of a complaint is whether it gives sufficient notice of the transactions, occurrences, or series of transactions or occurrences intended to be proved and [*5]whether the requisite elements of any cause of action know to our law can be discerned from its averments (CPLR 3013; Foley v. D’Agostino, 21 AD2d 60, 62-65, 248 NYS2d 121; Guggenheimer v. Ginzberg, 43 NY2d 268, 274-275, 401 NYS2d 182, 372 NE2d 17). Where the motion to dismiss for failure to state a cause of action is made under CPLR 3211, the plaintiff may rest upon the matter asserted within the four corners of the complaint and need not make an evidentiary showing by submitting affidavits in support of his complaint (Rovello v. Orofino Realty Co., 40 NY2d 633, 389 NYS2d 314, 357 NE2d 970).”

The rules governing the Court’s review of a motion to dismiss pursuant to CPLR 3211 (a)(7) are both simple and straight forward. The Court must afford the complaint a liberal construction, accept as true the allegations contained therein, afford plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal theory. Guggenheimer v. Ginzburg, 43 NY2d 268, 401 NYS2d 182 (1978); One Acre Inc. V. Town of Hempstead, 215 AD2d 359, 626 NYS2d 226 (2nd Dept. 1995). Although, as the Court noted, the plaintiff need not make an evidentiary showing by submitting affidavits or other documentation in support of the complaint, nevertheless, if submitted by the plaintiff, they “may be used freely to preserve inartfully pleaded, but potentially meritorious claims” (Rovello v. Orofino Realty Co., supra , 635, 389 NYS2d 314, 316).

With these general principles in mind, the Court, upon review of the plaintiff’s complaint, submissions, affidavits and the allegations contained in it, finds that for the reasons stated herein the motions by the Minick defendants for dismissal of the plaintiff’s complaint pursuant to CPLR §3211 (a)(7) for failure to state a cause of action (seq. #

002-Michelle Minick and #

004-Michael Scott Minick) are in all respects denied.

The Court when assessing the motion pursuant to CPLR §3211 (a)(7) may freely consider the plaintiff’s affidavit to remedy any defects which may be apparent in the complaint. The criterion is not whether the proponent has pleaded a cause of action but whether, in fact, the proponent has one and affidavits and other evidence may be considered. Fay Estates v. Toys “r” Us, Inc., 22 AD3d 712 (2nd Dept. 2005); Pechko v. Gendelman, 20 AD3d 404 (2nd Dept. 2005).

As the Court in Scott v. Cooper, 215 AD2d 368, 625 NYS2d 661 (2nd Dept. 1995) app. Dis. 86 NY2d 812, 632 NYS2d 497, aptly noted:

” The criterion is whether the plaintiff has a cause of action and not whether he may ultimately be successful on the merits (see, Stukuls v. State of New York, 42 NY2d 272, 275; Detmer v. Acampora, 207 AD2d 475; Greenview Trading Co. V. Hershman & Leicher, 108 AD2d 468, 470).” [*6]

The motions by the defendants for dismissal of the plaintiff’s complaint pursuant to CPLR §3211 (a)(7) is set forth in each of the two (2) individual motions by the defendants.

The motion by defendant, Michelle Minick, et al. (Seq. #

002), seeks to dismiss the third (3rd) cause of action sounding in fraud, the fourth (4th) cause of action seeking punitive damages and the fifth (5th) cause of action sounding in unjust enrichment/restitution. The defendant Michelle Minick et al’s motion is denied as to cause of action three (3rd) sounding in fraud and five (5th) sounding in unjust enrichment. CPLR §3016 requires an action sounding in fraud to be pled with particularity and to set forth sufficient detail to clearly inform the defendant with respect to the incidents complained of. The plaintiff has set forth in detail that the named defendants and the corporations controlled by them are but shell corporations in the name of licensed medical physicians but are actually owned and controlled by non- licensed non-medical individuals, such as Michael Scott Minick, a chiropractor, using the “dummy” corporations to bill the no-fault carrier for services allegedly not performed or performed contrary to law. The plaintiff provides an affidavit from Halima, a defaulting defendant and a cooperating one, as well as an affidavit from Nichole Matthews, an investigator for Autoone Insurance Company, that Halima, among others, sold his name to non-licensed non-medical professionals to incorporate “dummy or shell” corporations owned and controlled by others but carrying a licensed physician’s name to provide no-fault services which were billed to the named plaintiff seeking reimbursement for these no-fault services. While there may be some missing details, the New York Court of Appeals has held that the misconduct of the defendants complained of must be shown in some detail but particularity and/or specific conduct may await further discovery where it is impossible at this stage of the proceedings to detail the fraud. See, Lanzi v. Brooks, 43 NY2d 778, 402 NYS2d 384 (1977); Oxford Health Plans (NY) Inc. V. Bettercare Health Care Pain Management & Rehab P.C., 305 AD2d 223, 762 NYS2d 344 (1st Dept 2003).

Here, the plaintiff presents, through affidavits, and the substance of its allegations in its complaint, that the named defendants, Michael Scott Minick and Michelle Minick, hold and own controlling interests in fraudulent medical service corporations named as defendants which carry a licensed physician as the owner in name only for the sole purpose of seeking reimbursement under no-fault notwithstanding the proscription that only a medical corporation owned and controlled by a licensed physician may seek no fault insurance reimbursement. State Farm Mutual Insurance Co. V. Mallela et al., 4 NY3d 313, 794 NYS2d 700 (2005). In State Farm v. Mallela, supra , the Court also noted that no claims for fraud or unjust enrichment would lie for payments made prior to April 2002, necessarily providing the imprimatur that such claims would lie for such payments under fraud and unjust enrichment causes of action for payments after that date. Oxford Health Plans (NY) Inc. V. Bettercare Health Care Pain Management & Rehab P.C., supra . The plaintiff alleges that Michelle Minick acted in concert with Michael Scott Minick who is [*7]the true owner of the underlying medical corporations which are not owned or controlled by a licensed physician as required by law or by the rules and regulations promulgated by the New York Superintendent of Insurance. See, 11 NYCRR 65-3.16 (a). The motions by both defendants, Michelle Minick et al., and Michael Scott Minick et al., as to the 3rd cause of action sounding in fraud and the 5th cause of action sounding in unjust enrichment, are denied as the causes of action have been pled by the plaintiff with sufficient detail and particularity at this stage of the proceedings to inform the defendants of the nature of their alleged conduct and the claims being made against them.

As to the 4th cause of action sounding in punitive damages, the courts have long recognized that punitive damages are warranted where the conduct of the party being held liable evidences a high degree of moral culpability, where the conduct is so flagrant as to transcend mere recklessness or where the conduct constitutes wilful or wanton negligence or recklessness. Hale v. Odd Fellow & Rebekah Health Care Facility, Inc., 302 AD2d 948, 755 NYS2d 164 (4th Dept.. 2003); see also, Gellman v. Seawane Golf & Country Club, Inc., 24 AD3d 415, 805 NYS2d 411 (2nd Dept. 2005). An award of punitive damages can be premised on conduct particularly egregious in nature directed at both the plaintiff and the general public. National Broadcasting Co. Inc., v Fire Craft Services, Inc., 287 AD2d 408, 731 NYS2d 722 (1st Dept. 2001). It may also lie where the allegations in the complaint have a fraudulent or evil motive. U.S. Trust Corp. v. Newbridge Partners, LLC., 278 AD2d 172, 718 NYS2d 63 (1st Dept. 2000). Since the plaintiff alleges in its complaint the commission of a tort in the nature of a fraud, independent of any contractual claim, the cause of action alleging punitive damages is proper. See, Probst v. Cacoulidis, 295 AD2d 331, 743 NYS2d 509 (2nd Dept. 2002). The motions by both defendants, Michelle Minick et al.(seq.#

002), and Michael Scott Minick et al.(seq. #

004), as to the 4th cause of action seeking punitive damages is denied.

Finally, the defendant, Michael Scott Minick et al., seeks dismissal of the 1st and 2nd causes of action seeking declaratory judgment relief based upon the fraud in the ownership and licensing of the defendant medical professional corporations and the defendants’ failure to cooperate and that aspect of the motion is denied. As previously noted, the rules governing the Court’s review of a motion to dismiss pursuant to CPLR 3211 (a)(7) are both simple and straight forward. The Court must afford the complaint a liberal construction, accept as true the allegations contained therein, afford plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal theory. A review of the plaintiff’s complaints and submissions demonstrates sufficient claims and principles well recognized in the New York Court of Appeals’ decision in State Farm v. Mallela, supra , that there is no entitlement to no-fault reimbursement for a fraudulently incorporated medical corporation and the failure of the defendants to cooperate into a full airing of the underlying ownership and control of the various corporate entities by the individual defendants named is subject to the relief requested if established. For those reasons, [*8]the motion to dismiss the 1st and 2nd causes of action seeking declaratory judgment relief is denied.

Finally, the defendant, Mark Slamowitz, moves to change venue (seq. #

003) of this action from Suffolk County, New York to Kings County, New York pursuant to CPLR §503(c) and CPLR §509 for an improper forum or alternatively under CPLR §510 (3) on the grounds that the majority of the defendants reside and do business in Kings County. This motion to change venue is denied. Suffolk County is a proper forum and venue, in that the plaintiff maintains a principal office within it. Furthermore, it has been held that a demand to change venue based on the designation of an improper county must be served with the answer or before the answer is served. When a defendant fails to serve a timely demand to change venue and fails to make the motion for such relief within the statutory 15 day period provided, the motion becomes one addressed to the Court’s exercise of its sound discretion. See, Obas v. Grappell, 43 AD3d 431, 841 NYS2d 595 (2nd Dept. 2007).

On a motion to change venue pursuant to CPLR §510 (3) based upon the convenience of witnesses, the movant must establish the identity of the witnesses of the witnesses who allegedly will be inconvenienced, their willingness to testify and the nature of their anticipated testimony. Walsh v. Mystic Tank Lines Corp., 51 AD3d 908, 859 NYS2d 233 (2nd Dept. 2008); O’Brien v. Vassar Brothers Hospital, 207 AD2d 169, 622 NYS2d 284 (2nd Dept. 1995); Simeti v. Smithtown Fairfield Condominium, Inc., 172 AD2d 513, 567 NYS2d 860 (2nd Dept. 1991). In the absence of such a showing such a change of venue which is addressed to the sound discretion of the Court, should be denied. Countrywide Insurance Company v. Quinn, 268 AD2d 381, 703 NYS2d 2 (1st Dept. 2000). The defendant has failed to make a proper showing and therefore the motion is denied.

The foregoing constitutes the decision of the Court.

Dated: July 15, 2008_______________________________________

J.S.C.