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, Queens County (Gerald Dunbar, J.), entered June 7, 2006, deemed from a judgment entered July 31, 2006 (see CPLR 5501 [c]). The judgment, entered pursuant to the June 7, 2006 order granting plaintiff’s motion for summary judgment and denying defendant’s cross motion for summary judgment, awarded plaintiff the principal sum of $1,791.73.

Judgment reversed without costs, so much of the order entered June 7, 2006 as granted plaintiff’s motion for summary judgment vacated, plaintiff’s motion for summary judgment denied, and matter remanded to the court below for all further proceedings.

In this action by a provider to recover assigned first-party no-fault benefits, the court granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for summary judgment. The instant appeal by defendant ensued.

On appeal, defendant contends, inter alia, that the affidavit by plaintiff’s corporate officer, submitted in support of plaintiff’s motion for summary judgment, failed to lay a proper foundation for the documents annexed to plaintiff’s moving papers and that, as a result, plaintiff failed to establish a prima facie case. We agree. The affidavit submitted by plaintiff’s corporate officer was insufficient to establish that said officer possessed personal knowledge of plaintiff’s [*2]practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Bath Med. Supply, Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists 2007]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, plaintiff’s motion for summary judgment is denied.

Defendant cross-moved for summary judgment dismissing the complaint on the ground that it timely denied plaintiff’s claims based on a lack of medical necessity as set
forth in affirmed peer review reports. Plaintiff’s contention that defendant was not entitled to summary judgment because its NF-10 denial forms are fatally defective lacks merit (see Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]). However, defendant failed to establish that its denial of claim forms were timely since defendant admittedly mailed its NF-10 denial forms more than 30 days following its receipt of the claim forms (Insurance Department Regulations [11 NYCRR] § 65-3.8 [a] [1]) without also demonstrating that its time to pay or deny same was tolled pursuant to Insurance Department Regulations (11 NYCRR) § 65-3.8 (a) (1). Accordingly, defendant’s cross motion for summary judgment was properly denied since defendant failed to demonstrate that its defense of lack of medical necessity was not precluded.

Pesce, P.J., and Rios, J., concur.
Decision Date: February 08, 2008

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, Queens County (Diane A. Lebedeff, J.), dated July 19, 2006, deemed from a judgment entered November 14, 2006 (see CPLR 5501 [c]). The judgment, entered pursuant to the July 19, 2006 order granting plaintiff’s cross motion for summary judgment and denying, in effect as academic, defendant’s motion to compel depositions, awarded plaintiff the principal sum of $4,670.12.

Judgment reversed without costs, order dated July 19, 2006 vacated, plaintiff’s cross motion for summary judgment denied and matter remanded to the court below for determination of defendant’s motion to compel depositions.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for an order, pursuant to CPLR 3124 and 3126, to compel depositions of plaintiff, plaintiff’s assignor and the treating physician, and plaintiff cross-moved for summary judgment. Plaintiff’s cross motion was supported by an affirmation from plaintiff’s counsel, an affidavit by a corporate officer of plaintiff, and various documents annexed thereto. The affidavit stated in a conclusory manner that the documents annexed thereto were plaintiff’s business records. Defendant opposed plaintiff’s cross motion. The court granted plaintiff’s cross motion for summary judgment and denied, in effect as academic, defendant’s motion to compel depositions. The instant appeal by defendant ensued.

On appeal, defendant asserts that the affidavit by plaintiff’s corporate officer, submitted in [*2]support of plaintiff’s cross motion for summary judgment, failed to lay a proper foundation for the admission of the documents annexed to plaintiff’s moving papers and that, as a result, plaintiff failed to establish a prima facie case. We agree. The affidavit submitted by plaintiff’s corporate officer was insufficient to establish that said officer possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Bath Med. Supply, Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists 2007]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, plaintiff’s cross motion for summary judgment is denied.

Inasmuch as the lower court denied defendant’s motion to compel depositions as a result of its conclusion that plaintiff was entitled to summary judgment, the matter is remanded to the court below for a determination of defendant’s motion.

In light of the foregoing, we reach no other issue.

Pesce, P.J., and Rios, J., concur.
Decision Date: February 08, 2008

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 (Bernard J. Graham, J.), entered March 2, 2006. The order granted defendant’s motion to vacate a default judgment.

Order reversed without costs and defendant’s motion to vacate a default judgment denied.

In order to vacate the default judgment entered in this action to recover assigned first-party no-fault benefits, defendant was required to establish, pursuant to CPLR 5015 (a), both a reasonable excuse for the default and a meritorious defense (see
Eugene Di Lorenzo, Inc. v Dutton Lbr. Co., 67 NY2d 138, 141 [1986]). A motion to vacate a default judgment is addressed to the sound discretion of the motion court (see Matter of Gambardella v Ortov Light., 278 AD2d 494 [2000]), and its determination will generally not be disturbed unless it can be shown that the court improvidently exercised its discretion (see Levy Williams Constr. Corp. v United States Fire Ins. Co., 280 AD2d 650 [2001]). Despite the strong public policy in favor of resolution of cases on the merits, upon a review of the record, we are of the opinion that the court below improvidently exercised its discretion in granting defendant’s motion to vacate the default judgment.

Defendant’s conclusory allegations that it possessed a meritorious defense were insufficient to warrant vacatur of the default judgment since defendant failed to show that its [*2]proffered defenses were set forth in timely denial of claim forms such that defendant is not precluded from interposing its defenses (see Insurance Department Regulations [11 NYCRR] § 65-3.5 [b]). The documentary proof annexed to defendant’s opposing papers was insufficient to give rise to a presumption that the denial of claim forms were timely mailed pursuant to a standard office practice or procedure (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; PDG Psychological, P.C. v Lumbermans Mut. Cas. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51343[U] [App Term, 2d & 11th Jud Dists 2007]). Moreover, defendant failed to establish that it possessed a reasonable excuse for its failure to timely serve its answer. Defendant’s claims representative merely assumed that defendant’s time to serve its answer was enlarged because she faxed a proposed stipulation to plaintiff granting defendant an enlargement of its time to answer. The claims representative never spoke to plaintiff’s counsel about such an extension, and she never received any indication that plaintiff agreed to extend defendant’s time to answer.

In light of the foregoing, the order is reversed and defendant’s motion to vacate the default judgment is denied.
Weston Patterson, J.P. and Rios, J., concur.
Decision Date: February 06, 2008

Civil Court of the City of New York, Richmond County

023996/06

Counsel for Plaintiff:Baker, Sanders, Barshay, Grossman, Fass, Muhlstock

& Neuwirth

150 Herricks Road

Mineola, NY 11501

516-741-4799

Counsel for Defendant:Samuel G. Lesman, Esq.

Melli, Guerin & Wall, P.C.

17 Battery Place

Suite 610

New York, NY 10004

212-509-6300

Katherine A. Levine, J.

In the instant matter the assignor Maria Tavarez (“Tavarez” or “claimant”) of plaintiff American Chinese Acupuncture, P.C. (“plaintiff”), was allegedly injured in an automobile accident on or about December 21, 2003. Tavarez assigned the cost of her six sessions of acupuncture treatment, in the amount of $257.04, to plaintiff health care provider. At the trial held on January 9, 2008, the parties stipulated to plaintiff’s prima facie case and defendant’s timely denial of the claim. Therefore, the only issue presented to the court was whether the six sessions of acupuncture sessions in March 2004 were medically necessary.

A presumption of medical necessity attaches to a defendant’s admission of the plaintiff’s timely submission of proper claim forms, and the burden then switches to the defendant to demonstrate the lack of medical necessity. Acupuncture Prime Care, P.C. v. State Farm Mutual Auto Ins., 2007 NY Slip Op. 52273U, 2007 NY Misc. LEXIS 7860 (Dist. Ct., Nassau Co. 12/3/2007);A.B. Medical Services v. NY Central Mut. Fire Ins. Co., 7 Misc 3d 1018(A), 801 N.Y.S., 2d 229 (Civil Ct. Kings. Co. 2005); Citywide Social Work & Psychological Services v. Travelers Indemnity, 3 Misc 3d 608, 609 (Civil Ct., Kings Co. 2004).

The parties stipulated into evidence the verification of treatment form (“NF3”) which indicated that Tavarez’s diagnosis and concurrent conditions were pain – neck (cervicalgia) and pain – low back (lumbalgia). Defendant presented the testimony of Dr. Joseph Kalangie who is a diplomate and board certified in physical medicine and rehabilitation. Dr. Kalangie performed an independent medical examination (“IME”) upon Tavarez approximately six weeks after her accident. The claimant informed him that several days after the accident she sought medical treatment due to headaches, pain in the neck, lower back and both shoulders. She also indicated she was placed on a regimen of physical therapy and other treatments, including acupuncture four times a week. She indicated that she currently had headaches, pain in the [*2]lower back and pain in both shoulders.

Dr. Kalangie’s IME of Tavarez revealed that the cervical and lumbar strain/sprain, as well as the bilateral shoulder contusion, had resolved. Specifically, the doctor examined the cervical spine and found no sensory deficit or motor weakness of the upper extremities. There was no complaint of any radiation of pain. He also examined both shoulders and found normal rotation and no instability of the joints Finally, he examined the lumbosacral spine and found no complaints of tenderness and normal range of motion and no atrophy.

Based on his examination he opined that treatment had been reasonable, related and necessary from a physiastrist point of view and that there was no need for further chiropractic care and acupuncture treatment. Since all the alleged injuries due to the accident had been resolved, there was no need for any type of further formal treatment.

On cross examination, Dr. Kalangie stated that he was not a licensed acupuncturist and he does not perform and has no training in acupuncture. He opined that acupuncture provides relief to pain and admitted that Tavarez was complaining of pain.He did not have her medical records at the time of the exam and did not request the records even though he could have. He does, however, review other medical records when he himself is the treating physician of patients in auto accidents. 25-30% of his income is derived from peer reviews and IMEs. In 75% of the cases he does not find medical necessity.He typically spends 20-30 minutes on an IME.

In response to questions posed by the court, the doctor indicated that pain is subjective and that his findings as to the shoulders and spine were objective. He did not assess the complaints of headaches since that was outside of his realm of expertise.

Defendant contends that it has proven lack of medical necessity and it therefore is not responsible for the $257.00 charged by plaintiff. It pointed out that plaintiff offered no rebuttal. Plaintiff posits a number of grounds as to why the doctor’s testimony should not be credited, only one of which this court finds determinative: that the doctor is under an obligation to state the generally accepted medical practice and expertise in treating claimant and how plaintiff deviated from this practice.

This court finds that the defendant’s proof fails to prima facie demonstrate the lack of medical necessity for the treatment in question. Fatally missing from the doctor’s testimony is any mention of the applicable generally accepted medical/professional standard and the plaintiff’s departure therefrom. In the leading case of Services v. Travelers Indemnity, Citywide Social Work & Psychological, 3 Misc 3d 608, 609 ( Civil Ct., Kings Co. 2004), Justice Battaglia succinctly stated:

“A no-fault insurer defending a denial of first-party benefits on the

ground that the billed-for-services were not medically necessary’

must at least show that the services were inconsistent with [*3]

generally accepted medical/professional practice. The opinion

of the insurers’s expert, standing alone, is insufficient to carry the

burden of proving that the services were not medically necessary.”

See , Acupuncture Prime Care v. State Farm Mutual Auto, supra .A generally accepted medical/professional practice has been defined as “that range of practice that the professional will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling.” 3 Misc 3d at 616.; A.B. Medical Services , P.L.L.C., supra .

Although acupuncture, physical therapy, and chiropractic are distinct modalities of treatment, they could conceivably be used to treat the same condition. Rose Med. Acupuncture Servs. P.C. v. Specialized Risk Mgmt., 2004 NY Slip Op 51078U, 4 Misc 3d 1027A, 798 NYS2d 348 (City Court, Mt. Vernon, 2004). See, Universal Acupuncture Pain Services, P.C. v Lumbermens MutualCasualty Co., 195 Misc 2d 352, 758 NYS2d 795 (Civ Ct. Queens Co. 2003). Thus, where the insurer and medical provider disagree on what should be classified as concurrent care, and a denial is then issued, the dispute should be brought before a court of competent jurisdiction for final resolution on this pivotal issue (See id.).

Here, Dr. Kalangie did not posit that acupuncture and physical therapy constituted concurrent care. Nor did he even address how he would treat Tavarez’s complaints of headaches and why acupuncture could not alleviate the subjective pain that she allegedly was suffering. The conclusory opinion of Dr. Kalangie, standing alone, is insufficient to demonstrate the lack of medical necessity.

In conclusion, the court grants judgment in favor of plaintiff.

The foregoing constitutes the decision and order of the court.

Dated:February 6, 2008

Staten Island, NYHON. KATHERINE A. LEVINE

Judge, Civil Court

ASN by ________ on ____________.

A P P E A R A N C E S

Counsel for Plaintiff:Baker, Sanders, Barshay, Grossman, Fass, Muhlstock

& Neuwirth

150 Herricks Road

Mineola, NY 11501

516-741-4799

Counsel for Defendant:Samuel G. Lesman, Esq.

Melli, Guerin & Wall, P.C.

17 Battery Place

Suite 610

New York, NY 10004

212-509-6300

Supreme Court, Nassau County

3442/02

TO: Stillman & Stillman

By: Christopher McCollum, Esq.

Attorney for Plaintiffs

2622 East Tremont Avenue

Bronx, NY 10461

Julie A. Linwood, Esq.

McDonnell & Adels, P.C.

Attorneys for Defendants

401 Franklin Avenue

Garden City, NY 11530Howard Stern, Esq.

Werner, Zaroff, Stern, Ashkenazcz, LLP

Attorney for counterclaim

360 Merrick Road, 2nd Floor

Lynbrook, NY 11563

Daniel Palmieri, J.

The motion by plaintiffs for partial summary judgment pursuant to CPLR 3212 as to the 5th and 24th causes of action in the complaint (Hernandez and Leyva) is granted. Entry of judgment shall await resolution of all claims and counterclaims asserted by the parties hereto.

The motion by plaintiffs on the counterclaim (improperly denominated as a cross motion) for partial summary judgment pursuant to CPLR 3212 dismissing defendant’s counterclaim to the extent interposed against plaintiffs 5th and 24th causes of action in the complaint is denied.

The cross motion by defendant Geico for an order pursuant to CPLR 3126 striking plaintiffs’ pleadings, or in the alternative for partial summary judgment pursuant to CPLR 3212 summarily dismissing those portions of the complaint that request interest, is denied, without prejudice to requesting a negative inference charge from the trial court with regard to documents demanded but stated no longer to be in possession of the plaintiffs, and without prejudice to the service of a further demand consistent with this decision and order.

The background of this action is set forth in this Court’s prior order dated October 10, [*2]2006. In short, the principal of plaintiff Carnegie Hill Orthopedic Services, P.C. (“Carnegie”) and the owner of Devonshire Surgical Facility (“Devonshire”) is Dr. Allen Chamberlin, a physician whose license to practice medicine was revoked based on evidence of the performance of unnecessary procedures and filing reports with false diagnoses. See Matter of Chamberlin v New York State Bd. For Professional Med. Conduct, 34 AD3d 1097 (3rd Dept. 2006). Geico alleges that Dr. Chamberlin carried out an extensive and pervasive practice of fraud which included fabricating injuries, falsifying medical records to justify surgery billed for but not performed, and performance of procedures/surgeries which risked harm to patients. Nevertheless, the plaintiffs contend that pursuant to applicable Department of Insurance regulations they were entitled to be paid or to have their claims denied within the 30 days after proof of their claims were suppled to the defendant, and because neither occurred they are now entitled to be paid, with interest and attorneys’ fees.

Plaintiffs now move for partial summary judgment on two of their fifty-three claims for unpaid No-Fault first-party insurance benefits.

Summary judgment is the procedural equivalent of a trial. S.J. Capelin Assoc. Inc. v Globe Mfg. Corp., 34 NY2d 338, 341 (1974). The function of the court in deciding a motion for summary judgment is to determine if triable issues of face exist. Matter of Suffolk Cty Dept of Social Services v James M., 83 NY2d 178, 182 (1994). The proponent must make a prima facie showing of entitlement to judgment as a matter of law. Guiffrida v Citibank Corp., 100 NY2d 72, 82 (2003); Alvarez v Prospect Hosp., 68 NY2d 320, 324 (1986). Once a prima facie case has been made, the party opposing the motion must come forward with proof in evidentiary form establishing the existence of triable issues of fact or an acceptable excuse for its failure to do so. Zuckerman v City of New York, 49 NY2d 557, 562 (1980).

In an action for no-fault payments the plaintiff makes a prima facie showing of entitlement to judgment by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of the No-Fault benefits was overdue. Insurance Law 5106(a); Westchester Medical Center v AIG, Inc., 36 AD3d 900 (2nd Dept. 2007). On this motion plaintiffs argue that they have presented a prima facie case for payment of no-fault benefits for services rendered to John Hernandez in 2000 in the amount of $15,802 and services rendered to Helio Leyva in 1998 in the amount of $15,801. They have submitted the requisite billing forms, certified mail receipts, signed return receipt cards, and an affidavit from Martha Chamberlin stating that she personally mailed the claims. There is no dispute that Geico failed to pay or deny the claims within 30 days. On this record the Court finds that plaintiffs have presented a prima facie case.

In opposition Geico relies upon its affirmative defenses, including lack of proximate cause, and its counterclaim of fraud, which this Court permitted Geico to assert by way of its order of October 10, 2006.

Specifically with regard to the claims at issue here, Geico submits a properly affirmed report of Dr. Craig Levitz who reviewed the records of the No-Fault plaintiffs in this case and opines, in pertinent part, as follows: [*3]

… Dr. Chamberlin persistently billed for procedures that he clearly did not perform, billed for non-reimbursable procedures, made up lavish and fraudulent explanations of these procedures in records and reports, performed surgery that was not indicated and maintained inadequate records. In addition it is my opinion that the nature of this fraud was so pervasive that it would be impossible for the Geico Insurance Company to detect the fraud within 30 days.

A review of 23 cases demonstrates a disturbing pattern. In every case Dr. Chamberlin operated within a week of the patients initial visit and in some cases, the same day on patients whose main physical exam complaint is pain. He failed to document any clinical indications of a more significant problem prior to surgery and each of these patients has a relatively normal MRI. In every case he finds the same exact pathology that requires the same exact treatment… He then billed Geico for procedures that were not indicated, to correct pathology that was not present, and delivered fraudulent explanations of these procedures.

….

In review of the specific claims against [sic] patient Hernandez…It is my opinion that in patient Hernandez there was nothing wrong with this knee, there is no evidence Dr. Chamberlin did anything nor discussed any of this with his patient. If he did surgery it was not indicated…

…

In examining the case of patient Leyva the same pattern of fraud that was documented by the office of professional conduct is seen as well. He once again begins with a normal patient with no documented finding, proceeds directly to surgery, performs his standard 5 procedures that he does on every patient and then is once again not satisfied with collecting payment for unindicated surgeries for pathology without documentation, but then fraudulently bills for these services… in patient Levya there was nothing wrong with his knee, there is no evidence Dr. Chamberlin did anything nor discussed any of this with his patient. If he did surgery it was not indicated.

Geico argues that the surgeries performed on John Hernandez and Helio Levya were not injuries sustained in or causally related to the accident, and therefore plaintiffs’ claims fall outside the scope of coverage of the underlying policies.

Pursuant to Insurance Law 5106(a), no-fault benefits are overdue if not paid by the insurer within 30 days after submission of proof of loss. See also, 11 NYCRR 65-3.8, formerly 11 NYCRR 65.15(g)(3). The insurer is precluded from asserting any defenses to payment when it fails to deny the claim within the required 30-day period. Presbyterian Hosp. in the City of New York v Maryland Casualty Co., 90 NY2d 274, 278 (1997). A narrow exception to this preclusion rule is recognized for situations where the insurer raises a defense of lack of coverage. Central General Hosp. v Chubb Group of Ins. Cos., 90 NY2d [*4]195, 198 (1997). The issue presented by this case is whether Geico’s defense and counterclaim of fraud is precluded by the 30-day rule, or whether the defense and counterclaim fall within the narrow exception for lack of coverage.

The defense of fraud based upon “staged accidents” or intentional collisions are considered defenses premised on lack of coverage, and have been found not subject to the rigorous 30-day rule because there was, in fact, no “accident.” See, Matter of Allstate Ins. Co v Massre, 14 AD3d 610 (2nd Dept. 2005); State Farm Mutual Automobile Ins. Co. v Laguerre, 305 AD2d 490 (2nd Dept. 2003); Metro Medical Diagnostics, P.C. v Eagle Ins. Co., 293 AD2d 751 (2nd Dept. 2002); see also, VA Acutherapy Acupuncture, P.C. v State Farm Ins. Co., 16 Misc 3d 126(A)(App Term, 2nd & 11th Jud Dists 2007) and Vista Surgical Supplies Inc v State Farm Ins. Co., 14 Misc 3d 135(A)(App Term, 2nd & 11th Jud Dists 2007).

However, cases of fraud based upon fraudulent billing or excessive treatment are considered claims of “provider fraud” and can be precluded by the 30-day rule. Careplus Medical Supply Inc v State-Wide Ins. Co., 11 Misc 3d 29 (App Term, 2nd & 11th Jud Dists 2005); MGM Psychiatry Care PC v Utica Mutual Ins. Co., 12 Misc 3d 137(A) (App Term, 2nd & 11th Jud Dists 2006).

The key distinction is that in the first circumstance the insurance carrier demonstrated that an issue existed as to whether there was any coverage at all, whereas in the second the courts were presented with an exclusion under the policy, which does not mean that there was no contractual obligation in the first instance. In the latter, the 30-day rule still applies. Fair Price Supply Corp. v Travelers Indemnity Co., 9 Misc 3d 76 (App Term, 2nd Dept. 2005), affd 42 AD3d 277 (2nd Dept. 2007), lv granted 2007 Slip Op 78445 (2d Dept. Sept. 19, 2007)

In Fair Price the insurer was billed for various medical supplies, but the insured denied ever receiving any medical supplies as a result of injuries he sustained in the accident.

Nevertheless, the Appellate Term stated that one of the tradeoffs of No-Fault reform is that an insurer’s ability to resist “ill-founded, illegitimate and fraudulent claims” submitted by providers of medical services or medical equipment is limited to the “strict short-leashed contestable period,” of 30 days. See Presbyterian Hosp in City of New York at 285. It noted that the insurer is not without remedy; it could pay the claim and then bring an action to recover the benefits paid under a theory of fraud or unjust enrichment. 9 Misc 3d at 79-80. The Appellate Term directed payment of the subject no-fault claim.

In affirming the Appellate Term, Presiding Justice Prudenti summarized the Appellate Division’s view as follows: “Contrary to the defendant’s [insurer’s] contention, the alleged fraud in this case, no matter how egregious, was not related to the existence of coverage in the first instance. The plaintiff’s alleged failure to furnish services or supplies has no bearing on whether coverage for such services or supplies existed in [plaintiff’s assignor’s] insurance policy. Thus, enforcing the preclusion rule in this case does not have the effect of creating coverage that did not otherwise exist.” Fair Price, supra , 42 AD3d at 284.

The undersigned is of course bound by the law as established by the Appellate [*5]Division, Second Department. The fact that here the alleged fraud has to do with medical services either not provided or provided without justification, and not with supplies, is a distinction without a difference. Indeed, as noted in the above-quoted section of her opinion, Justice Prudenti places services on the same footing as supplies. In short, so long as there is no question that insurance existed-the case here-a defense to such payment based upon an exclusion from coverage, no matter how strong that defense might be, does not free the insurer from the 30-day rule. As no issue of fact exists with regard to the defendant’s failure to meet this requirement, summary judgment must be granted on the two claims at issue. Indeed, cases involving claims of other recipients of treatment or services from Dr. Chamberlin and these same plaintiffs have been construed as cases of “provider fraud,” wherein the insured’s failure to comply with the 30-day rule precluded consideration of the alleged fraud. Devonshire Surgical Facility v Geico, 16 Misc 3d 130(A), (App Term, 1st Dept. 2007); Devonshire Surgical Facility v Geico, 14 Misc 3d 1208(A) (Civ Ct., NYCty, 2006).^[FN1]

It may be that the type of fraud allegedly committed here could not reasonably be detected by a simple question put to the assignor, as was the suggestion made by the Appellate Division in Fair Price, at 285: “We find it doubtful that an insurer… will often need to do more than… simply ask the insured whether he or she received the medical supplies in question.” Nevertheless, and as indicated above, the legal concept and factual scenario underlying the Appellate Division’s determination cannot be distinguished from the matter before this Court in a meaningful way.

The Court notes, but must reject, the defendant’s contention that because a counterclaim in fraud exists that might be of equal or greater value than what the plaintiff stands to recover on these claims, it should deny summary judgment. A denial on this ground is appropriate where the claims are so intertwined that they cannot be separately analyzed. However, here they can be, because the requirements of Department of Insurance regulations clearly have been viewed as an obligation separate and distinct from any other obligation that may be imposed on the parties by other law. Cf., Yoi-Lee Realty v 177th Street Realty Assocs., 208 AD2d 185 (1st Dept. 1995).

The foregoing, however, also means that the counterclaims asserted by the defendant to recover moneys already paid in connection with any of the allegedly fraudulent claims can be separately pursued. On this record, and especially in view of Dr. Levitz’s affirmation, defendant has raised a triable issue of fact as to fraud in connection with the claims presented. The theories of recovery based on these allegations sound in fraud and unjust [*6]enrichment, and are attacked by the plaintiffs are being without support under New York common law. However, the Appellate Term endorsed both such theories in Fair Price, and its determination was affirmed by the Appellate Division without any comment on this suggested remedy. For this reason summary judgment dismissing the counterclaims is denied.

The Court now turns to defendant’s motion to dismiss the complaint for failure to comply with the following five court orders: (1) order dated November 17, 2005, by Judge Brennan directing responses to questions; (2) a preliminary conference order dated February 9, 2006 by Judge Brennan; (3) this Court’s order dated October 10, 2006, directing plaintiffs to provide answers and supporting documentation to certain interrogatories; (4) this Court’s conference order dated November 2, 2006, incorporating its prior decision of October 10, 2006; and (5) this Court’s further conference order dated February 8, 2007 wherein this Court directed that the parties continue to comply with the order of October 10, 2006.

Striking a pleading in inappropriate absent a clear showing that the failure to comply with discovery demands is wilful, contumacious or in bad faith Conciatori v Port Authority of New York and New Jersey, __AD3d__, 846 NYS2d 659 (2nd Dept. 2007); Negro v St. Charles Hosp and Rehabilitation Center, 44 AD3d 727 (2nd Dept. 2007). Defendant has made no such showing.

The major point of dispute concerns production of fifty-two “special reports” of range of motion, neurological testing, and muscle power testing, all with alleged abnormal findings. These “special reports” were used to justify the surgery billed by the plaintiffs. Dr. Chamberlin testified that the medical files originally did contain such “special reports” and he does not know the present location of the reports (for example see Chamberlin transcript at pp. 152-158, 208-209, 233-234, 264-265, 290-292, 316-317, 332-333). Under these circumstances striking of plaintiffs’ pleading is not warranted, and further discovery orders would be unproductive. The missing evidence does not prevent defendants from proving their defenses and counterclaims based upon the remaining medical records and the testimony of their expert, but it appears that it may seek a negative inference charge at trial. Yechieli v Glissen Chemical Co., Inc., 40 AD3d 988 (2nd Dept. 2007); EW Howell Co., Inc. v SAF LaSala Corp., 36 AD3d 653 (2nd Dept. 2007); see Mylonas v Town of Brookhaven, 305 AD2d 561 (2nd Dept. 2003). That, however, is a matter to be placed before the trial court.

Defendant further complains that it served a Demand for Discovery and Inspection dated April 13, 2007, which requested the production of 20 items, and that plaintiffs have failed to provide the requested documentation. A review of the April 2007 demand reveals that it seeks, inter alia, documents related to Dr. Chamberlin’s taxes and his personal bankruptcy proceeding.

Tax returns and other financial information 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. Benfeld v Fleming Properties, LLC, 44 AD3d 599 (2nd Dept. 2007); Chang v SDI International Inc., 15 AD3d 520 (2nd Dept. 2005); Latture v Smith, 304 AD2d 534 (2nd Dept. 2003). Defendant’s argument that it needs such documents to establish [*7]a motive for fraud by Dr. Chamberlin, namely that he need to recoup more than $6,000,000 he lost from 1985-1993 ( see Chamberlin v Commissioner of Internal Revenue, 14 Fed Appx. 69 (2d Cir. 2001) is untenable. This action concerns No-Fault claims, and the existence and discoverability of fraud in connection with those claims. The defrauding party’s need to defraud is immaterial, and requests directed to such motivational questions are thus outside the scope of permissible inquiry. Where, as here, discovery requests are numerous and some are improper, the Court need not prune the requests Chang v SDI International Inc. Consequently, defendant’s Demand for Discovery and Inspection dated April 13, 2007, cannot form the basis for relief based on either CPLR 3126 or CPLR 3212, and to the extent it has not been answered need not be. This ruling is without prejudice to service of any further proper demand within 20 days of the date of this order.

This shall constitute the Decision and Order of this Court.

E N T E R

DATED: January 29, 2008

_____________________________

Hon. Daniel Palmieri

Acting Supreme Court Justice

TO:Stillman & Stillman

By: Christopher McCollum, Esq.

Attorney for Plaintiffs

2622 East Tremont Avenue

Bronx, NY 10461

Julie A. Linwood, Esq.

McDonnell & Adels, P.C.

Attorneys for Defendants

401 Franklin Avenue

Garden City, NY 11530

Howard Stern, Esq.

Werner, Zaroff, Stern, Ashkenazcz, LLP

Attorney for counterclaim

360 Merrick Road, 2nd Floor

Lynbrook, NY 11563

Footnotes

Footnote 1: It should be noted that these cases do not collaterally estop defendant from litigating the instant action, as collateral estoppel does not apply to a prior determination involving solely a question of law. Sterling National Bank as Assignee of NorVergence, Inc. v Eastern Shipping Worldwide, Inc., 35 AD3d 222, 223 (1st Dept. 2006); Avon Development Enterprises Corp v Samnick, 286 AD2d 581 (1st Dept. 2001). Here that question of law is the application of the 30-day rule, or the exception thereto.

Civil Court of the City of New York, Bronx County

1741/07

Plaintiff:

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Esqs.

Edward A. Cespedes, Esq.

of Counsel

150 Herricks Road

Mineola, New York 11501

(516) 741-4799

Defendant:

McDonnell & Adels, P.C.

Diana Leahy. Esq.

401 Franklin Avenue

Garden City, New York 11530

(516) 328-3697

Sharon A. Aarons, J.

Plaintiff commenced this action to recover no-fault first party benefits for unpaid medical services provided to Anthony Montes in the amount of $1,221.04, together with statutory interest, statutory attorney’s fees and costs and disbursements. This matter came before this Court for trial on December 7, 2007. In support of its prima facie case, plaintiff submitted a copy of its summons [*2]and complaint, a Notice to Admit and defendant’s Responses to the Notice to Admit, which were marked and entered into evidence as Court Exhibits I, II and III, respectively. Neither plaintiff nor defendant presented any witnesses nor proffered any other evidence. After review of these Court Exhibits and oral argument the Court ruled that plaintiff had not established a prima facie case and granted defendant’s motion for a directed verdict. Due to the fact that it has now become increasing common for plaintiffs seeking to recover no-fault first party benefits to attempt to establish its/their prima facie case at trial through the use of a Notice to Admit and the responses thereto, has resulted in the trial courts being divided on this issue (compare RJ Med., P.C. v. All-State Ins. Co., 15 Misc 3d 1140(A), 841 NYS2d 823 (Civ. Ct., Bronx County, 2007);PDG Psychological, P.C. v. State Farm Mut. Auto Ins. Co., 12 Misc 3d 1183(A), 824 NYS2d 766 (Civ. Ct., Kings County, 2006), with Seaside Med., P.C. v. General Assur. Co., 16 Misc 3d 758, 842 NYS2d 234 (Dist. Ct., Suffolk County, 1st Dist. 2007); New York Massage Therapy P.C. v. State Farm Mut. Ins. Co., 14 Misc 3d 1231(A), 836 NYS2d 494 (Civ. Ct., Kings County, 2006), the Court stated it would issue a formal written Decision/Order addressing the matter.

Plaintiff’s Notice to Admit (Court Exhibit II) asked the defendant to admit the following eleven items:

1. The defendant received the claims(s) for No-Fault benefits that are the subject of thisaction.

2. The defendant received the N-F-3 Verification of Treatment Form(s) that are the subjectof this action.

3. The defendant received the bill(s) that are the subject of this action.

4. The defendant received Assignment of Benefits Form(s) for the claim(s) that are thesubject of this action.

5. Annexed hereto are true and accurate copies of the plaintiff’s bill(s), claim(s) and/orN-F-3(s) referenced in 1 through 3 above, and the Assignment of Benefits formsreferenced in 4 above.

6. The defendant received the summons and complaint in this action.

7. The defendant received plaintiff’s bill(s) and/or N-F-3(s) referenced in 1 through 3 above,and the Assignment of Benefits form(s) referenced in 4 above, more than thirty daysbefore the defendant received the summons and complaint in this action.

8. The defendant has not paid the bill(s), claims(s) and/or N-F-3(s) referenced in 1 through3 above.

9. The defendant has not paid the bill(s), claims(s) and/or N-F-3(s) referenced in 1 through3 above, in full. [*3]

10. The defendant did not mail requests for verification to the plaintiff for the plaintiff’sbill(s), claims(s) and/or N-F-3(s) referenced in 1 through 3 above.

11. The defendant issued a policy of insurance covering the vehicle(s) plaintiff’s assignor(s)was/were in, or by which the assignor(s) was/were injured, at the time of the underlyingmotor vehicle accident(s).

Defendant’s verified Response to plaintiff’s Notice to Admit contained the same verbatim response to each of the eleven questions of the Notice to Admit which reads as follows:

Objection. The Notice to Admit goes to the heart of the matter being litigated and,

as such, is an improper use of a Notice to Admit. The Hawthorne Group, LLC v. RREVentures, et al., 7 AD3d 320, 324 (1st Dep’t 2004) and Sagiv v. Gamache, 26 AD3d 368, 369 (2nd Dep’t 2006); Defendant further objects as Plaintiff is asking Defendant to admit the genuineness and authenticity of any documents provided heretofore which is improper as such is exclusively within Plaintiff’s knowledge. Spawton v. James E. Strates Shows, Inc., 75 Misc 2d 813, 349 NYS2d 295 (Sup. Ct. Erie County, 1973) (emphasis added).

CPLR §3123(a) provides, inter alia, as follows:

Each of the matters of which an admission is requested shall be deemed admitted

unless within twenty days after service thereof or within such further time as the

court may allow, the party to whom the request is directed serves upon the party

requesting the admission a sworn statement either denying specifically the matters

of which an admission is requested or setting forth in detail the reasons why he

cannot truthfully either admit or deny those matters.

Here, the defendant neither admitted, denied or set forth a reason why he could not truthfully either admit or deny those matters sought in the Notice to Admit. Unlike requests for written interrogatories where a party is permitted to object and state the reason with reasonable particularity (CPLR§3133 (a)), such a procedure is not authorized with a Notice to Admit (CPLR§3123(a)). Webb v. Tire and Brake Distributor, Inc., 13 AD3d 835, 786 NYS2d 636 (3rd Dept. 2004). If a party believes that any of the requests for admissions are improper the correct procedure is seek a protective order under CPLR§3103. Kowalski v. Knox, 293 AD2d 892, 741 NYS2d 291 (3rd Dept. 2002). Otherwise, they may be deemed be admitted. Id. at 892; Tire and Brake Distributor, Inc., 13 AD3d at 838. Notwithstanding the fact that a party fails to respond to a Notice to Admit or its responses are improper, it is still the function of the court to review the propriety of the Notice to Admit and disregard same if the requests are improper. Eddyville Corp. v. Relyea, 35 AD3d 1063, 827 NYS2d 315 (3rd Dept. 2006).

The defendant herein contends that the admissions sought by plaintiff in its Notice to Admit are improper because they go to the heart of the matter being litigated. The purpose of a Notice to Admit is to obviate the necessity of producing witnesses to testify at trial pertaining to facts and/or documents where there “can be no substantial dispute at the trial and which are within the knowledge of the other party or can be ascertained by him upon reasonable inquiry.” CPLR§3123(a). An analysis of plaintiff’s Notice to Admit and relevant case law reveals that none of the individual [*4]questions for which admissions are sought rise to the level of matters that go to the “heart of the matter” and consequently the admissions sought by the plaintiff in its Notice to Admit were proper. Bajaj v. General Assurance, 2007 NY Slip Op. 27487 (App. Term, 2nd and 11th Jud. Dists.); General Assur. Co., 16 Misc 3d at 763-767; Marigliano v. State Farm Mut. Auto Ins. Co., 12 Misc 3d 1180(A), 824 NYS2d 764 (Civ. Ct., Richmond County, 2006); State Farm Mut. Ins. Co., 836 NYS2d at 494. Notwithstanding that the admissions sought by the plaintiff in its Notice to Admit were proper, the plaintiff by failing to append the documents it specifically stated were attached to its Notice to Admit, did not establish its prima facie case. State Farm Mut. Auto Ins. Co. 824 NYS2d at 764.

Parenthetically, the Court notes that the issue in no-fault health care provider case of whether use solely of a Notice to Admit and/or a defendant’s responses or lack thereto can establish a prima facie case has resulted in an apparent split of authority between the Appellate Term, 2nd and 11th Jud. Dists., and the Appellate Term, 1st Department. The Appellate Term, 2nd and 11th Jud. Dist., has unequivocally held in Bajaj that a Notice to Admit by itself is insufficient to establish a prima facie case and that a health care provider was required to tender evidentiary proof of the transaction sued upon in admissible form. However, the Appellate Term, 1st Dept., in Fair Price Med. Supply, Inc. v. St. Paul Travelers Ins. Co., 16 Misc 3d 8, 838 NYS2d 848 (2007), sustained a plaintiff’s prima facie case at trial based solely on defendant’s responses to plaintiff’s demand for verified written interrogatories. Unlike Bajaj, Fair Price did not require the submission of evidentiary proof of the transaction sued upon. Accordingly, in this department it appears, based upon Fair Price, that a plaintiff can establish solely through the use of a Notice to Admit and/or a defendant’s responses thereto a prima facie case.

CONCLUSION

For the reasons stated above, plaintiff had not established a prima facie case, defendant’s motion for a directed verdict is granted and plaintiff’s complaint is dismissed .

The foregoing constitutes the decision and Order of the Court.

Dated: January, 2008______________________________

Bronx, New YorkSharon Aarons, J.C.C.

Supreme Court, Nassau County

013941/07

JOSEPH HENIG, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P. O. Box 1144

Bellmore, NY 11710

SHORT & BILLY, P.C.

Attorney for Defendant

217 Broadway, Suite 300

New York, NY 10007

James P. McCormack, J.

Motion pursuant to CPLR § 3212 by plaintiffs, Westchester Medical Center (hereinafter Westchester) , The New York Hospital Medical Center of Queens (hereinafter New York Hospital); Sound Shore Medical Center (hereinafter Sound Shore) et.al., for summary judgment.

The instant action involves three no-fault insurance claims against defendant American Transit Insurance Company (hereinafter American Transit), by Westchester, New York Hospital, and Sound Shore for services rendered to Daphne McPherson, Arnold Terlien, and Raymond Labrusciano, patients involved in three unrelated automobile accidents. The claims herein stem from hospital bills that were allegedly never paid by defendant insurer. Plaintiff filed the instant motion seeking summary judgment pursuant to Insurance Law Section 5106(a).

Section 5106 (a) of the New York State Insurance Law provides that payment of a no-fault claim by an insurer is considered overdue if it is not paid or denied within 30 days after the claimant provides the insurer with proof of fact and amount of loss related to the claim. Interest is accrued at a rate of 2% for every month the claim remains unpaid (see Hempstead Gen. Hosp. v Ins. Co. of N. Am., 208 AD2d 501; see also Smithtown Gen. Hosp. v State Foram Mutual Auto Ins. Co., 207 AD2d 338.) In addition, the claimant is entitled to reasonable attorney’s fees “for services necessarily performed in connection with securing payment of an overdue claim” subject to certain limitations outlined in 11 NYCRR 65.17; NY Ins Law 5106 (a). Specifically, “once a court action has been commenced, 11 NYCRR 65.17(b)(6)(v) grants an attorney’s fee on no-fault insurance claims of 20% of the amount of first-party benefits awarded plus interest with a maximum payment of $850 per claim.” ( Hosp. for Joint Diseases v Nationwide Mutual Ins., 284 AD2d 374.)

In order to succeed on a motion for summary judgment, the plaintiff must demonstrate through competent evidence that there is no issue of material fact upon which reasonable people could disagree. (Baly v Chrysler Credit Corp., 94 AD2d 781.) Summary judgment is a drastic [*2]remedy and should only be granted where there are no triable issues of fact. (Andre v Pomeroy, 35 NY2d 361.) The goal of summary judgment is to issue find, rather than to issue determine. (Hantz v Fleischman, 155 AD2d 415.) If there is any reasonable question raised as to any alleged fact of a claim “based on personal knowledge and documentary evidence”, then a motion for summary judgment must fail and the case must proceed to trial in order to resolve the issue. (Baly, 94 AD2d 781, citing Behar v Ordover, 92 AD2d 557.)

McPherson Action

The plaintiff, Westchester is the assignee for health service rendered to Ms. McPherson between January 15, 2007 and January 22, 2007. That treatment was necessary after an automobile accident which occurred on January 14, 2007. According to the plaintiff, the defendant was billed on February 16, 2007 with a Hospital Facility Form (Form N-F 5) and UB-92, for payment of a hospital bill in the sum of $6,993.96. That bill, according to the plaintiff, was sent certified mail return receipt requested and was received by the defendant on February 20, 2007. Plaintiff allege the defendant failed to either pay the hospital bill or to issue a timely Denial of Claim Form within 30 days. Moreover, plaintiff Westchester claims that when they did finally get a Denial of Claim Form it was untimely, as it was dated April 5, 2007. In addition, the plaintiff claims the reason given on the Denial of Claim form “Claimant is eligible for workers’ comp…” is an invalid reason for denial.

In Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274, the Court of Appeals stated, “[A]n insurer may be precluded from interposing a statutory exclusion defense for failure to deny a claim within 30 days as required by Insurance Law section 5106(a) and 11 NYCRR 65.15 (g)(3).”The bill, although denied, was denied untimely and according to plaintiff remains unpaid as of today. Accordingly, the defendant did not deny the claim in a timely fashion as required under Insurance Law 5106(a), and as such, the court must grant summary judgment to the plaintiff and order defendant to pay the outstanding hospital bill in the amount of $6,993.96 with statutory interest and attorney’s fees. Counsel for plaintiff is directed to submit judgment on notice.

Terlien Action

On February 5, 2007, Arnold Terlien was in a auto accident for which he received treatment at The New York Hospital from February 5, 2007 to February 9, 2007. Terlien assigned his claim for no-fault medical benefits to the New York Hospital.

The New York Hospital subsequently billed defendant, American Transit on May 9, 2007 for the treatment in the sum of $4,670.17. Plaintiff billed with a Form N-F5 (Hospital Facility Form) and a UB-92 form by certified mail, return receipt requested. According to the plaintiff, the bills were received on May 10, 2007. Defendant does not deny receipt of this bill but rather claims the claim was immediately denied on May 11, 2007 on the grounds that proper notice of claim in writing was not received within 30 days of the date of the accident. Summary judgment must be denied where there are factual issues in dispute. If a genuine issue of fact exists, summary judgment must be denied (see Sillman v Twentieth Century Fox Film Corp., 3 NY2d 395) Summary Judgment is a drastic remedy and should be denied if there is any significant doubt as to the existence of a triable issue or if there is even arguably such an issue. When a disputed question of fact arising out of a No-Fault denial arises, the court should deny summary [*3]judgment. (see Hospital for Joint Diseases v Nationwide Mutual Ins. Co., 284 AD2d 374).

Accordingly, the court finds there is a sufficient factual issue that prevents this court from granting summary judgment. Therefore, the Terlien matter will be placed on the court’s calendar for a conference on March 18, 2008.

Labrusciano Action

Plaintiff, Sound Shore, is the assignee for health services rendered to Raymond Labrusciano during the period from January 13, 2007 through January 19, 2007. The injuries were the result of an automobile accident on January 13, 2007.

According to the plaintiff, the defendant American Transit, was billed on February 5, 2007 with Hospital Facility Form (N-F 5) and a UB-92, for payment of a hospital bill in the sum of $17,967.83. The plaintiff states the bill was mailed certified mail, return receipt requested and was received by defendant on February 7, 2007. Defendant agrees that they received the bill on February 7, 2007 and states that the defendant requested verification including (1) complete medical records; (2) a signed assignment of benefit for and (3) a completed and signed N-F 5. Thereafter, when no response had been received regarding the Labrusciano claim, the defendant sent a second request for the same information on March 14, 2007. According to the defendant on June 4, 2007 plaintiff finally responded to the two prior letters and provided the verification that had been requested. Thereafter, on June 29, 2007, defendant made a timely denial of the plaintiff’s claim. This was clearly within 30 days of the receipt of the verification that had been repeatedly requested. Plaintiff failed to address any of these communications in their motion presently before the court, but rather moves this court to grant summary judgment due to an untimely denial. Accordingly, summary judgment is denied as to the Labrusciano claim as it appears the claim was denied in a timely fashion. This matter will also be placed on the court’s calendar for a conference on March 18, 2008.

This constitutes the decision and order of this court.

Dated: January 21, 2008

JOSEPH HENIG, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P. O. Box 1144

Bellmore, NY 11710

SHORT & BILLY, P.C.

Attorney for Defendant

217 Broadway, Suite 300

New York, NY 10007

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court, Bronx County (Francis M. Alessandro, J.), dated February 4, 2005, which granted plaintiff’s pretrial motion to preclude defendant’s denial of claim forms and directed judgment in favor of plaintiff in the principal sum of $8,715.82.

Per Curiam.

Order (Francis M. Alessandro, J.), dated February 4, 2004, reversed, with $10 costs, motion denied and matter remanded for further proceedings.

In this action to recover first party no-fault benefits, plaintiff’s motion to preclude defendant’s NF-10 denial of claim forms should have been denied. Defendant’s NF-10 forms, which stated that each claim was denied based upon an independent consultant’s review, sufficiently apprised plaintiff of the factual basis for the denials (see 11 NYCRR 65-3.8 [b][4]; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d 778 [2007]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: January 18, 2008

District Court of Nassau County, First District

5444/07

Attorneys for plaintiff: Friedman, Harfenist, Langer & Kraut

Attorneys for defendant: Law Offices of Teresa M. Spina

Andrew M. Engel, J.

The Plaintiff commenced this action to recover no-fault first party benefits in the total sum of $879.73, for medical services allegedly provided to its assignor following a motor vehicle accident of February 2, 2005. The action was commenced on February 6, 2007. Issue was joined on April 10, 2007. The Plaintiff now moves for summary judgment. The Defendant opposes that motion and cross-moves for summary judgment as well. The Plaintiff opposes the Defendant’s cross-motion.

Summary judgment is a drastic remedy, Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395, 165 NYS2d 498 (1957), which should not be granted where there is any doubt as to the existence of a triable issue of fact. Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 413 NYS2d 141 (1978) To prevail, the movant must first make a showing of entitlement to judgment, as a matter of law, Bank of New York v. Granat, 197 AD2d 653, 602 NYS2d 942 (2nd Dept. 1993), tendering evidentiary proof in admissible form. Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065, 416 NYS2d 790 (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, 427 NYS2d 595 (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 [*2]University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985)

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

The Plaintiff alleges that it performed an MRI of its assignor’s cervical spine on February 26, 2005. The bills for this alleged service was dated March 30, 2005. According to the Plaintiff, this bill was received by the Defendant on April 1, 2005; and, the Plaintiff submits a copy of the denial (“N-F 10”) received, dated April 14, 2005, confirming this fact. The Defendant’s admission of having received the Plaintiff’s claims cures any defect in the Plaintiff’s proof of mailing. Prestige Medical & Surgical Supply Inc. v. Clarendon National Insurance Company, 13 Misc 3d 127(A), 824 NYS2d 758 (App. Term 2nd and 11th Jud. Dists. 2006); Magnezit Medical Care, P.C. v. New York Central Mutual Fire Ins. Co., 12 Misc 3d 144(A), 824 NYS2d 763 (App. Term 2nd and 11th Jud. Dists. 2006)

The Plaintiff does not allege that the Defendant’s N-F 10 was untimely. The Plaintiff does allege that the Defendant’s N-F 10 is improper as to form and must be disregarded. Specifically, the Plaintiff suggests that the N-F 10 was not issued on the forms prescribed by the Insurance Department Regulation 68, having omitted therefrom items 2A through 2F, relating to categories of payments which have been denied in part, and items 3 through 17, relating to all policy issues, loss of earnings benefits and other reasonable and necessary expenses. The redaction of item number 5 also resulted in the omission of advice to the assignor and/or assignee that they may qualify for special expedited arbitration.

To establish its prima facie right to a judgment as a matter of law, the Plaintiff must demonstrate its timely and proper submission of the claims in question and the Defendant’s failure to either pay or issue a valid denial within thirty (30) days of receipt of those claims. 11 N.Y.C.R.R. § 65-3.(c); Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274, 660 NYS2d 536 (1997); Nyack Hospital v. State Farm Mutual Automobile Insurance Company, 11 AD3d 664, 784 NYS2d 136 (2nd Dept. 2004); Westchester Medical Center v. AIG, Inc., 36 AD3d 900, 829 NYS2d 180 (2nd Dept. 2007) If the Plaintiff fails to demonstrate each of these elements, by the submission of evidence in admissible form, the Plaintiff’s motion will be denied. Such is the case before this court.

The Plaintiff has failed to lay a proper evidentiary foundation for the introduction of its claim forms into evidence. The Defendant’s admission of receipt of the Plaintiff’s claim forms “did not concede the facts asserted in the claim forms and it remained plaintiff’s burden to proffer such evidence in admissible form, which it failed to do (see, Midborough Acupuncture, P.C. v. New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132 (A), 2006 N.Y.Slip Op. 51879(U), supra ).” Dan Medical, P.C. v. New York Central Mutual Fire Insurance Company, 14 Misc 3d 44, 829 NYS2d 404 (App. Term 2nd & 11th Jud. Dists. 2006); See also: Fortune Medical, P.C. v. Allstate Insurance Co., 14 Misc 3d 136, 836 NYS2d 492 (App. Term 9th & 10 Jud. Dists. 2007) “Indeed, absent a foundation to establish the admissibility of the provider’s claim forms as business records, said claim forms do not constitute proof of the act, transaction, occurrence or event’ set forth therein for which plaintiff seeks to recover (CPLR 4518).” Bajaj v. General Assurance, __ Misc 3d __, __ {18 Misc 3d 25} NYS2d __ 2007 WL 4165268 (App. Term 2nd & 11th Jud. Dists. 2007); See also: Ontario Medical, P.C. v. Sea Side Medical, P.C., 15 Misc 3d 129, 839 NYS2d 435(App. Term 9th & 10 Jud. Dists. 2007); V.S. Medical Services, P.C. v. One [*3]Beacon Insurance, 14 Misc 3d 142, 836 NYS2d 504 (App. Term 2nd & 11th Jud. Dists. 2006)

In recognition of this significant defect in its motion papers, the Plaintiff attempts, for the first time in reply, to lay a business record foundation for its claim forms. The use of reply papers for this purpose, however, is improper. The purpose of reply papers is to address arguments raised in opposition to the motion, not to permit the introduction of new arguments, issues, grounds or evidence in support of the motion. Merchants Bank of New York v. Gold Lane Corp., 28 AD3d 266, 814 NYS2d 99 (1st Dept. 2006); Litvinov v. Hodson, 34 AD3d 1332, 826 NYS2d 536 (4th Dept. 2006)

Contrary to the Plaintiff’s argument, CPLR § 2001, which provides the court with the discretion to “permit a mistake, omission, defect or irregularity, …, to be corrected” at any stage of an action, cannot be used to correct the Plaintiff’s failure to make out a prima facie case with proof in admissible form in the first instance. The cases relied upon by the Plaintiff are inapposite. In Moccia v. Carrier Car Rental, Inc., 40 AD3d 504, 837 NYS2d 67 (1st Dept. 2007) the court permitted a reply to provide a certificate of conformity for a previously submitted out of state affidavit to provide compliance with CPLR § 2309(c), nunc pro tunc. The court specifically noted that this did nothing more than correct a defect in form. Ramos v. Dekhtyar, 301 AD2d 428, 753 NYS2d 489 (1st Dept. 2003) involved papers submitted on a motion to renew, not in reply. Moreover, the only correction made was the affixing of a jurat to a previously affirmed chiropractor’s report; again correcting form, not substance. Farkas v. Tarrytown Lumber, Inc. 133 AD2d 251, 519 NYS2d 49 (2nd Dept. 1987) and Holy Spirit Association for Unification of World Christianity v. Harper & Row Publishers, Inc., 101 Misc 2d 30, 420 NYS2d 56 (S.C. NY Co. 1979) allowed replies to specify the sections under which the motions had been brought, which were either omitted or misstated in the original motion papers. Once again, the courts noted that the substance of the papers submitted were unchanged and that the replies were permitted to correct technical defects as to form. Krug v. Offerman, Fallon, Mahoney & Cassano, 245 AD2d 603, 664 NYS2d 882 (3rd Dept. 1997) is to the same effect, allowing a reply to correct the misidentification of a signature on an original affidavit, without making any substantive change.

In the matter sub judice, it is only after the Defendant had already served and submitted its opposition to the Plaintiff’s motion that the Plaintiff submitted the reply Affidavit of Brijkumar Yamraj, sworn to on October 22, 2007, which alleges, for the first time, that it is the Plaintiff’s regular office policy and procedure to record the information contained in the Plaintiff’s claim forms in its billing program upon completion of the tests performed; that the billing program automatically generates a bill for the services and that the bill is stored in the patient’s file. This affidavit does much more than correct a technical defect as to form; rather, it is testimonial and substantive in nature, attempting to set forth factual elements of the Plaintiff’s prima facie case. The Plaintiff may not, however, rely upon evidence submitted for the first time in reply to meet its prima facie burden. Rengifo v. City of New York, 7 AD3d 773, 776 NYS2d 865 (2nd Dept. 2004); Branham v. Loews Orpheum Cinemas, Inc., 31 AD3d 319, 819 NYS2d 250 (1st Dept. 2006); Migdol v. City of New York, 291 AD2d 201, 737 NYS2d 78 (1st Dept. 2002)

Accordingly, having failed to demonstrate all necessary elements to its entitlement to a judgment as a matter of law in the first instance, with evidentiary proof in admissible form, the Plaintiff’s motion for summary judgment is denied. [*4]

DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT

The Defendant alleges that it timely served its N-F 10 in response to the Plaintiff’s claim. The Defendant further alleges that its N-F 10 was proper, having been issued on a form allegedly approved by the New York State Insurance Department. Relying on an affirmed peer review report, the Defendant also alleges that it has demonstrated a lack of medical necessity for the services in question, as set forth in its N-F 10.

Before the defense of lack of medical necessity will be considered, the Defendant must demonstrate, through the submission of evidentiary proof in admissible form, that it timely issued a proper N-F 10 asserting that defense in response to the Plaintiff’s claim. The Defendant will be precluded from raising its medical necessity defense where it fails to make such a demonstration. Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274, 660 NYS2d 536 (1997); Mt. Sinai Hospital v. Triboro Coach Incorporated, 263 AD2d 11, 699 NYS2d 77 (2nd Dept. 1999); Church Avenue Medical Care, P.C. v. Allstate Insurance Company, 189 Misc 2d 340, 731 NYS2d 582 (App. Term 2nd Dept. 2001); Struhl v. Progressive Casualty Insurance Company, 7 Misc 3d 138(A), 801 NYS2d 242 (App. Term 9th and 10th Jud. Dists. 2005)

Addressing the timely service of the Defendant’s N-F 10, although the court does not find the affidavit of Kathleen McClernon to properly demonstrate “either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed (citations omitted)[,]” Residential Holding Corp. v. Scottsdale Insurance Company,286 AD2d 679, 729 NYS2d 776 (2nd Dept. 2001); See also: New York and Presbyterian Hospital v. Allstate Insurance Co., 29 AD3d 547, 814 NYS2d 687 (2nd Dept. 2006), or one “geared so as to ensure the likelihood that a notice … is always properly addressed and mailed[,]” Nassau Insurance Company v. Murray, 46 NY2d 828, 414 NYS2d 117 (1978), this issue need not be determined by the court. The Plaintiff acknowledges that its claim was timely denied and that it received the Defendant’s N-F 10. Plaintiff states, “On April 14, 2005, GEICO denied the bills for the elctrodiagnostic [sic] and/or other diagnostic services[,]” (Armao Affirmation 9/7/07, ¶ 7), and annexes a copy of the N-F 10 to its motion papers, confirming this fact. This admission cures the defect in the Defendant’s proof concerning the timeliness of its denial.

In an effort to demonstrate the propriety of its modified N-F 10 the Defendant relies upon the affidavits of Mark Pressler and Aurora de la Torre. In November 2006 Mr. Pressler was an Assistant Deputy Superintendent and Chief of the Property Bureau of the New York State Insurance Department, whose duties included oversight of the no-fault reparations system. Aurora de la Torre, is a Senior Vice President of Operations of Nadent-Health Data Services (“HDS”) and has held a management position with that company since 1980. In January and February of 1992 she was the Director of Operations. Her duties included providing assistance in no-fault claims procedure, systems and fee schedule coding.

Ms. de la Torre alleges that in January 1992 HDS contacted the Insurance Department of behalf of the Defendant, “to see if GEICO could use a form for denial of health service benefits which would not include boxes for defenses that had no application to the health provider’s claims.” (de la Torre Affidavit 2/5/07, ¶ 2) Ms. de la Torre submits a copy of the Insurance Department’s reply letter dated January 23, 1992 which states that the proposed form may not be [*5]used, indicating, inter alia, “Your page two as presently constituted does not meet the prescribed standards. … Your modification of page two of the NF-10 form is not acceptable and can not be used in its present format.” (Smeragliuolo Letter 1/23/92, ¶ 2) Ms. de la Torre alleges that HDS then amended its proposed form, in accordance with Mr. Smeragliuolo’s recommendations, and faxed a copy to the Insurance Department on January 31, 1992. Ms. de la Torre further alleges that HDS then received a letter from Mr. Smeragliuolo dated February 3, 1992 allowing the proposed amended N-F 10 to be used. HDS then so notified GEICO.

The affidavit of Mark Pressler confirms that on January 31, 1992 HDS submitted for approval a proposed N-F 10 to be used in denying health service claims, altering the form prescribed by Regulation 68. Quoting Mr. Smeragliuolo’s letter of February 3, 1992, Mr. Pressler alleges that the Insurance Department advised HDS that they ” may use this form for all No-Fault denials of benefits on or after February 1, 1992.'” (Pressler Affidavit 11/29/06, ¶ 3) Mr. Pressler explains that “[t]he letter was intended to convey the Department’s assent to the use of the form in conformity with the provisions of the regulation.” (Pressler Affidavit 11/29/06, ¶ 3)

Based upon the foregoing, the Defendant argues that the N-F 10 it used to deny the Plaintiff’s claim was issued on the same form approved by the Insurance Department and was, therefore, not only timely, but proper as to its form. For the reasons to be detailed below, this court does not agree.

It is initially noted that the Defendant has failed to submit a complete copy of the N-F 10 in question. As indicated hereinabove, according to the Defendant, the Insurance Department initially rejected its proposed altered N-F 10 due to problems with the form’s second page. While the Defendant alleges that it corrected these problems and obtained permission to use the corrected form, the Defendant fails to provide this court with the second page of the N-F 10 allegedly used. Without this page 2, it is impossible for this court to determine if the N-F 10 used was in conformity with the permission allegedly given by the Insurance Department and/or in compliance with Insurance Department Regulation 68 and the forms prescribed therein as of the date of denial. Given the absence of this page, the Defendant has failed to demonstrate that its N-F 10 was proper, as a matter of law. For this reason alone, the Defendant’s motion must be denied.

Additionally, it is not clear from the evidence submitted by the Defendant that the Defendant ever actually obtained approval to use the N-F 10 it submitted to the Insurance Department. Mr. Smeragliuolo’s letter of February 3, 1992, upon which the Defendant relies as proof of the Department’s approval, explicitly states, in referring to the Defendant’s proposed altered N-F 10, “Nonpolicy forms of this type are not approved by the Department.” (Smeragliuolo Letter 2/3/92, ¶ 2) Mr. Smeragliuolo’s opinion, that the Defendant’s proposed form “appears to comply with the standards set in Appendix 13-A” and that the Defendant “may use this form for all No-Fault denials of benefits on or after February 1, 1992[,]” (Smeragliuolo Letter 2/3/92, ¶ 2) not only contradicts his own statement regarding the Insurance Department’s refusal to approve this form, but is beyond the scope of his authority.

11 N.Y.C.R.R. § 2.5 clearly identifies which officials and employees of the Insurance Department may give written opinions. This regulation specifically limits those individuals to “[t]he superintendent, all deputy superintendents, the department counsel and bureau heads[.]” Moreover, 11 N.Y.C.R.R. § 2.5(e) advises that opinions issued by the Insurance Department “should not be broader than the scope of the powers and duties of the official or employee giving [*6]the same.” Mr. Smeragliuolo, is an Associate Insurance Examiner; he is not an official or employee who is empowered to issue an opinion on behalf of the Insurance Department. Additionally, as will be discussed at length hereinafter, the Insurance Department does not have any authorization to approve the use a modified N-F 10 “for all No-Fault denials of benefits on or after February 1, 1992.” (Smeragliuolo Letter 2/3/92, ¶ 2)

Even if Mr. Smeragliuolo’s opinion was considered to be approval of the Defendant’s proposed N-F 10, the N-F 10 which the Defendant served upon the Plaintiff was not the same as the one allegedly approved. Moreover, the Defendant has not submitted any proof that it obtained approval for the N-F 10 form it used, following the revision of Insurance Department Regulation 68.

Insurance Department Regulation 68, implementing the no-fault law, was first promulgated in 1974. These regulations were repealed on September 1, 2001 and a revised Regulation 68 was issued at that time. Implementation of the new Regulations was stayed on August 31, 2001; and, the old Regulations remained in effect until April 5, 1992, when the stay on implementation of the new Regulations was lifted and they became effective. See: In re Medical Society of the State of New York v. Serio, 298 AD2d 255, 749 NYS2d 227 (1st Dept. 2002), aff’d 100 NY2d 854, 800 NE2d 728, 768 NYS2d 423 (2003)

At the time the Defendant sought approval of its modified N-F 10 form, the old Regulations were in effect. The N-F 10 in the matter before this court was issued more than thirteen (13) years later. The new Regulations had been in effect for approximately three (3) years; and, the prescribed form itself had been changed by the Insurance Department at least twice, once in March 2002 and again in January 2004. In fact, at the time of the March 2002 amendment of the prescribed form, Appendix 13 of the new Regulations explicitly provided, “Other than NYS form NF-AOB, no deviations may be made to the prescribed forms unless expressly acknowledged by the Department. … Insurers may continue to use currently existing stocks of prescribed No-Fault forms until May 1, 2003 at which time the revised prescribed forms must be utilized.” Despite these changes to the prescribed form, and the clear mandate that the new prescribed forms must be used, unless proper approval is given for their modification, the Defendant continued to use the modified N-F 10 it created in 1992. The Defendant’s suggestion, during oral argument on this motion, that it took it upon itself to further modify its N-F 10 form in an attempt to keep up with the amendments to the Regulations and the prescribed form, while continuing the alterations it began in 1992, is unavailing.

It is undisputed that the N-F 10 issued by the Defendant in this matter was neither on the prescribed form, as it existed in 2005, nor on the form allegedly approved by the Insurance Department in 1992. Neither the old Regulations nor the new Regulations permit an insurer to adjust or amend its forms of its own accord. Both the old and new Insurance Department Regulations only allow for the modification of an N-F 10 upon approval of the Insurance Department. See: 11 N.Y.C.R.R. § 65-3.4(c)(11); 11 N.Y.C.R.R. § 65-3.8(c)(1); and former 11 N.Y.C.R.R. § 65.15(c)(3)(x);11 N.Y.C.R.R. § 65.15(g)(3)(c); See also: New York University Hospital Rusk Institute v. Hartford Accident & Indemnity, 32 AD3d 458, 820 NYS2d 309 (2nd Dept. 2006) Even if the Defendant had received approval for the form it submitted to the Insurance Department in 1992, the evidence submitted at this time demonstrates that the N-F 10 used by the Defendant herein was neither on the allegedly approved form nor on a form which had ever been submitted to the Insurance Department for approval. [*7]

The above notwithstanding, whether the Defendant obtained approval for the N-F 10 form it served upon the Plaintiff or not, it appears that the Defendant improperly used that form in an effort to effectuate a complete denial of the Plaintiff’s claims in this matter. The Defendant’s use of this form to deny the Plaintiff’s claims violated the Insurance Department Regulations as they existed in1992 and as they existed at the time the Defendant’s N-F 10 was issued.

At the time the Defendant’s N-F 10 was served upon the Plaintiff, the revised Regulation 68, at 11 N.Y.C.R.R. § 65-4.4(c) provided, in pertinent part: “Attached is an appendix (13, infra) which includes the following prescribed claim forms that must be used by all insurers, and shall not be altered unless approved by the superintendent: (11) Denial of Claim Form (NYS N-F 10)[.]” Using virtually the same language quoted by Mr. Pressler in his affidavit, 11 N.Y.C.R.R. § 65-3.8(c)(1) provides:

If the insurer denies a claim in whole or in part involving elements of basic economic loss or extended economic loss, the insurer shall notify the applicant or the authorized representative on the prescribed denial of claim form, in duplicate, and shall furnish, if requested by the applicant, one copy of all prescribed claim forms submitted by or on behalf of the applicant thereto. However, where a denial involves a portion of a health provider’s bill, the insurer may make such denial on a form or letter approved by the department which is issued in duplicate. No form or letter shall be approved unless it contains substantially the same information as the prescribed form which is relevant to the claim denied.

Assuming, for the sake of argument, proper approval of the Defendant’s N-F 10, the propriety of the Defendant’s use of this N-F 10 in this matter must rise or fall on the intent and application of these regulations, which are in derogation of the common law and must be strictly construed. Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 226 AD2d 613, 641 NYS2d 395 (2nd Dept.1996) aff’d 90 NY2d 274, 683 NE2d 1 (1997); Presbyterian Hospital in the City of New York v. Aetna Casualty & Surety Company, 233 AD2d 431, 650 NYS2d 255 (2nd Dept.1996); Bennett v. State Farm Insurance Co., 147 AD2d 779, 537 NYS2d 650 (3rd Dept.1989)

“The intention of the Legislature is first to be sought from a literal reading of the act itself[.]” Statutes § 92; See also: DaimlerChrysler Corp. v. Spitzer, 7 NY3d 653, 627 NYS2d 88 (2006); State v. Patricia II, 6 NY3d 160, 811 NYS2d 289 (2006); In re M.B., 6 NY3d 437, 813 NYS2d 349 (2006). “[W]here the statutory language is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used (citations omitted).” Patrolmen’s Benevolent Association of City of New York v. City of New York, 41 NY2d 205, 391 NYS2d 544 (1976); See also: Tall Trees Construction Corporation v. Zoning Board of Appeals of Town of Huntington, 97 NY2d 86, 735 NYS2d 873 (2001) People v. Garson, 6 NY3d 604, 815 NYS2d 887 (2006) A statute must be construed as a whole; and, its various provisions must be considered together, with reference to each other. Statutes § 97; Friedman v. Connecticut General Life Insurance Company, 9 NY3d 105, __ NYS2d __ (2007); Charter Development Co., L.L.C. v. City of Buffalo, 6 NY3d 578, 815 NYS2d 13 (2006); In Matter of Notre Dame Leasing, LLC v. Rosario, 2 NY3d 459, 779 NYS2d 801 (2004) Every part of a statute is to be given [*8]meaning and effect; Statutes § 98; Heard v. Cuomo, 80 NY2d 684, 594 NYS2d 675 (1993); Matter of Yolanda D., 88 NY2d 790, 651 NYS2d 1 (1996) and any interpretation of one part which deprives meaning and effect to another is to be avoided. People v. Mobil Oil Corporation, 48 NY2d 192, 422 NYS2d 33 (1979) Roballo v. Smith, 63 NY2d 485, 483 NYS2d 178 (1984); People v. Jeanty, 94 NY2d 507, 706 NYS2d 683 (2000) “Words are not to be rejected as superfluous where it is practicable to give each a distinct and separate meaning (citations omitted).” Cohen v. Lord, Day & Lord,75 NY2d 95, 551 NYS2d 157 (1989); Rosner v. Metropolitan Property and Liability Insurance Company, 96 NY2d 475, 729 NYS2d 658 (2001); Leader v. Maroney, Ponzini & Spencer, 97 NY2d 95, 736 NYS2d 291 (2001) These well established rules of statutory construction are equally applicable to the construction of regulations. ATM One, LLC v. Landaverde, 2 NY3d 472, 779 NYS2d 808 (2004); East Acupuncture, P.C. v. Allstate Insurance Co., 15 Misc 3d 104, 832 NYS2d 737 (App.Term 2nd & 11th Dists.2007)

Applying these rules to the effect to be given to 11 N.Y.C.R.R. § 65-4.4(c)(11) and

11 N.Y.C.R.R. § 65-3.8(c)(1), it is clear that modified N-F 10 forms or letters of denial which have been approved by the Insurance Department may only be used “where a denial involves a portion of a health provider’s bill[.]” 11 N.Y.C.R.R. § 65-3.8(c)(1) If a health service benefits claim is being denied in full, the prescribed N-F 10 must be used.

As previously indicated, 11 N.Y.C.R.R. § 65-4.4(c) explicitly “prescribed [the] claim forms that must be used by all insurers, [which] shall not be altered unless approved by the superintendent[.]” Consistent with the first part of that subsection, the first sentence of 11 N.Y.C.R.R. § 65-3.8(c)(1) reiterates that any denial issued for all elements of basic economic loss must be made “on the prescribed denial of claim form[.]” This provision clearly does not allow for the use of any form other than the “prescribed form.” The natural significance of the words used have a definite meaning; and, the court may not add or subtract words to this sentence. People v. Zimmerman, __ NY2d, __ NYS2d __ (2007); Majewski v. Broadalbin-Perth Central School District, 91 NY2d 577, 673 NYS2d 966 (1998); Matter of Greenberg, 70 NY2d 573, 523 NYS2d 67 (1987) This latter provision clearly does not contain any authorization for use of a modified N-F 10 or letter of denial where a claim is to be denied in full. Nor does this provision authorize the Insurance Department to approve such use. To read this sentence otherwise would render the very next sentence of 11 N.Y.C.R.R. § 65-3.8(c)(1) meaningless.

The next sentence of 11 N.Y.C.R.R. § 65-3.8(c)(1), beginning with the word “However,” clearly designates that what follows is an exception to the language which preceded it, and gives effect to that portion of 11 N.Y.C.R.R. § 65-4.4(c) which authorizes the superintendent to approve changes to the prescribed forms. That exception, which would permit the use of a modified N-F 10 or letter of denial approved by the Insurance Department, is specifically limited to situations “where a denial involves a portion of a health provider’s bill.” 11 N.Y.C.R.R. § 65-3.8(c)(1) This limited exception leaves in tact the sentence which precedes it, mandating the use of the “prescribed denial of claim form” for all other elements of basic economic loss and extended economic loss, including health service benefits which are denied in full. Clearly, if the Regulations intended to allow the use of an approved modified N-F 10 or a letter of denial to deny a health service benefits claim in full, the sentence beginning with “However” would have included such claims within the exception’s ambit. Having failed to do so, the only interpretation [*9]of the controlling Regulation that can be gleaned from the clear and unequivocal language is that approved modified N-F 10s or letters of denial may only be used for partial denials of health service benefits; and, the Insurance Department does not have any authority to approve the use of modified N-F 10s or letters of denial for any other elements of basic economic loss.

A comparison of cases determining the validity of modified N-F 10 forms or letters of denial confirms this obvious interpretation of the controlling Regulations. In Nyack Hospital v. Metropolitan Property & Casualty Insurance Company, 16 AD3d 564, 791 NYS2d 658 (2nd Dept. 2005) the issue before the court was the validity of a modified N-F 10 form which the defendant had used to deny the plaintiff’s entire bill for medical services. In finding the use of the modified N-F 10 improper, and in granting the plaintiff summary judgment, the court held, “A proper denial of claim must include the information called for in the prescribed denial of claim form (citations omitted). The denial of claim form issued by the defendant in the case at bar, even if timely, was fatally defective in that it omitted numerous items of requested information, and thus was incomplete (citations omitted).” Nyack Hospital v. State Farm Mutual Automobile Insurance Company, 11 AD3d 664, 784 NYS2d 136 (2nd Dept. 2004) Summit Psychological, P.C. v. General Assurance Company, 9 Misc 3d 8, 801 NYS2d 117 (App.Term 9th & 10th Jud. Dists. 2005) and Spineamericare Medical, P.C. v. U.S. Fidelity & Guaranty Company, 12 Misc 3d 138(A), 824 NYS2d 766 (App.Term 9th & 10th Jud. Dists. 2006) are to the same effect. On the other hand, in New York University Hospital Rusk Institute v. Hartford Accident & Indemnity, supra . the court was confronted with a partial denial of the plaintiff’s claim for medical expenses. The court therein recognized that in such a situation a letter of disclaimer could be used, in lieu of the prescribed form, provided it had been approved by the Insurance Department and issued in duplicate. Summary judgment was nevertheless granted to the plaintiff due to the defendant’s failure to satisfy the latter requirements.

As can be seen from the affidavit of Mark Pressler, submitted by the Defendant, the Insurance Department is apparently in agreement with this court’s application of the controlling regulations. As previously indicated, Mr. Pressler specifically states that the Mr. Smiragliuolo’s letter of February 3, 1992, upon which the Defendant relies, was only “intended to convey the Department’s assent to the use of the form in conformity with the provisions of the regulation.” (Pressler Affidavit 11/29/06, ¶ 3) Moreover, Mr. Pressler makes very clear what he means by “conformity with the provisions of the regulation,” when he sets forth the Regulation, as it existed at that time, as follows:

If the insurer denies a claim in whole or in part involving elements of basic economic loss, or for accidents occurring on and after January 1, 1982 involving elements of extended economic loss, the insurer shall notify the applicant or the authorized representative on the prescribed denial of claim form, in duplicate, and shall furnish, if requested by the applicant, one copy of all prescribed claim forms submitted by or on behalf of the applicant thereto. However, where a denial involves a portion of a health provider’s bill, the insurer may make such denial on a form or letter approved by the department which is issued in duplicate. No form or letter shall be approved unless it contains substantially the same information as the prescribed form which is relevant to the claim denied.’ (emphasis in original) (Pressler Affidavit 11/29/06, ¶ 2)

As can be seen, the old Regulation, in pertinent part, was identical to the revised Regulation. By underlining the above section, Mr. Pressler, an Assistant Deputy Superintendent and Chief of the [*10]Property Bureau of the New York State Insurance Department, emphasizes that modified N-F 10 forms and letters of denial may only be approved by the Insurance Department and used by an insurer where the “denial involves a portion of a health provider’s bill.” To employ Mr. Pressler’s words, the use of a modified N-F 10 in any other circumstance would not be “in conformity with the provisions of the regulation.” (Pressler Affidavit 11/29/06, ¶ 3)

While the N-F 10 used in the matter before this court bears an “X” mark at item number 2, indicating that “A PORTION OF YOUR CLAIM FOR HEALTH SERVICES IS DENIED AS FOLLOWS[,]” it is clear from the remainder of the Defendant’s N-F 10 that this was not a denial of a portion of the Plaintiff’s bill, but a complete denial. The Defendant’s N-F 10 indicates that the amount of the bill in question was “$879.73,” that the amount paid by the Defendant was “$0.00,” and that the amount is dispute is “$879.73.” While it appears fairly clear that the Defendant’s N-F 10 was issued as a complete denial of the Plaintiff’s claim, at best, the conflicting entries raise a question of fact.

For each of the reasons stated above, having failed to properly demonstrate the timely service of a proper denial of claim, the Defendant’s motion for summary judgment is denied. Under these circumstances, the court need not pass on the validity of the Defendant’s defense of lack of medical necessity at this time.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

January 18, 2008

___________________________

Andrew M. Engel

J.D.C.

District Court of Suffolk County, Third District

HUC 3646-05

Baker, Sanders, Barshay, Grossman,

Fass, Muhlstock & Neuwirth

150 Herricks Road

Mineola, New York 11501

Attorneys for the Plaintiff

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, New York 11747

Attorneys for the Defendant

C. Stephen Hackeling, J.

Plaintiff’s complaint dated May 27, 2005, seeks recovery on fifteen separate no-fault medical provider insurance claims, together with statutory interest and statutory N.Y.S. Insurance Law Article 51attorney’s fees. Each claim is identified via its own independent cause of action and designated as the odd number causes of action detailed in the complaint. Each of these fifteen causes of action represents an individual bill/claim for services.

Issue Presented

On the October 25, 2007 trial date herein, the parties’ attorneys settled the above causes of action for first party benefits by agreeing that the plaintiff would recover a determined percentage of the principle sued for, together with interest and costs. The parties seek judicial intervention solely on the issue of the proper method of calculating statutory attorney’s fees to be awarded to the plaintiff.

-1-

Relying upon a NY State Insurance Department opinion the defendant argues that the Court should aggregate the plaintiff’s fifteen cause of action/claims, and award attorney’s fees in the amount of 20% of the aggregate amount of the bills encompassed in plaintiff’s complaint, with a maximum award of [*2]attorney’s fees capped at $850. The plaintiff argues that it is entitled to separate attorney’s fees for each bill submitted and overdue; in this case on each of the fifteen separate causes of action, which correspond to fifteen separate bills of a single provider for services rendered to a single assignor.

Legal Discussion

Regulation 11 NYCRR §65-4.6 (e) of the Insurance Law governs attorney’s fees in no-fault actions. It states that “….Subject to the provisions of subdivisions (a) and (c) of this section, the attorney’s fee shall be limited as follows: twenty percent of the amount of first-party benefits, plus interest thereon, awarded by an arbitrator in Court, subject to a maximum fee of $850”. The statute “requires payment of counsel fees on a per claim basis“. LMK Psychological Servs., P.C. v. State Farm Mut. Auto Ins. Co., 2007 NY Slip Op. 10443. (NYAD 3d Dept. 1994). See also Smithtown General Hospital v. State Farm Mut. Auto Ins. Co., 207 AD2d 338 (NYAD 2d 1994), interpreted a predecessor statute (11 NYCRR 65.17 (b) (6), awarded attorney’s fees on a “per claim” basis and rectified its lower Court’s imposition of a $850 ceiling on attorney’s fees in the entire action. As noted by the Court in Valley Stream Medical & Rehab., P.C. v. Allstate Insurance Co., 15 Misc 3d 576 (Civ. Ct. Queens, 2007), “the per claim’ calculation of attorney’s fees laid out in Smithtown General Hospital decision are properly calculated for each separate claim form submitted to an insurer… has been accepted as the proper approach.

In Alpha Chiropractic, PC. v. State Farm Mut. Auto Ins. Co.,14 Misc 3d 673 ( NY City Civ. Ct., 2006), the Court awarded attorney’s fees to plaintiff “as to each proof of claim form submitted pertaining to the assignor, equal to twenty percent of the amount set forth in each claim…” and explained that each “proof of claim” form refers to “an NF-3 (or its functional equivalent), which while often enumerating a number of medical services provided over more than one date, (and) relates to a single bill”. See also, Spineamericare Medical, PC. v. Liberty Mutual Ins. Co., 2002 NY Slip Op. 50511U ( District, Nassau, 2002), which awarded plaintiff’s attorneys’ fees in the amount of twenty percent of the total of each of two claims, “…subject to a cap of $850, separately applicable to each claim.”

This Court regards and agrees with the discussion of the Hon. Diane A. Lebedeff, in Valley Stream Medical & Rehab., PC. v. Allstate Insurance Co.(citation supra), which declines to adopt the reasoning of an Insurance Department opinion letter under its consideration and which aptly discusses the doctrine of stare decisis. By similar reasoning, this Court rejects any interpretation which relies on the Insurance Department opinion letter in question and which seeks to cap “no-fault” attorney fees at $850 per claim. Inasmuch as the causes of action contained in the instant complaint correspond to individual claims of the plaintiff herein, the plaintiff is entitled to attorney’s fees on a per claim basis on each odd numbered cause of action, at the rate of twenty percent of the amount settled to for each claim, with a maximum of $850 per claim.

-2-

The plaintiff shall submit the stipulation of the parties (as to principle, interest and costs) along with a proposed judgment, which shall include attorneys fees calculated in amanor consistent with this [*3]decision.

Dated: January 10, 2008

____________________________

J.D.C.

Decision to be published_____yes_____no.