[*1]

District Court of Nassau County, Third District, May 22, 2007

APPEARANCES OF COUNSEL

Bruno, Gerbino & Soriano, LLP, Melville (Alyson J. Birdie of counsel), for defendant. Israel, Israel & Purdy, LLP, Great Neck (Veronica Renta Irwin of counsel), for plaintiff.

OPINION OF THE COURT

Howard S. Miller, J.

By order to show cause dated December 15, 2006, defendant moves for an order “rectifying plaintiff’s proposed judgment.” That proposed judgment was filed pursuant to this court’s order of September 29, 2006. The order dealt ambiguously with the issue of attorneys’ fees under the no-fault regulations, which are ambiguous themselves, in a case where multiple claims are litigated in the same action. The parties have been unable to agree on the resolution of that ambiguity, and now ask the court to resolve it.

Plaintiff in this action is a provider of medical services, and it received assignments from Eddie Medina of several claims for different services provided to Mr. Medina on different dates, all arising out of one automobile accident. Defendant insurer provided no-fault coverage to Eddie Medina for that accident.

Plaintiff submitted separate claims for each service. This court has already ruled that defendant must pay those claims, and it appears that defendant has done so. The court went on to direct that attorneys’ fees were awarded in the amount of 20% of each claim and that “[a]ttorney’s fees are not to exceed $850.” Plaintiff maintains that the $850 limitation applies to each cause of action, and it seeks to enter judgment accordingly for an amount well in excess of $850. Defendant resists that entry of judgment on the grounds that the $850 limitation applies to the action as a whole, and thus plaintiff may not enter judgment because defendant has already made payment based on an award of attorneys’ fees limited to one award of $850.

The dispute revolves around the interpretation of 11 NYCRR 65-4.6 (e), which provides, in relevant part as follows: “(e) For all other disputes subject to arbitration, . . . the attorney’s fees shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850.”

Plaintiff relies on a decision of the Appellate Division, Second Department,^[FN1] which interpreted a predecessor regulation, 11 NYCRR 65.17 (b) (6) (v),^[FN2] to hold that the $850 limitation applies per claim. Defendant relies on a more recent decision of the Civil [*2]Court, Richmond County,^[FN3] which distinguished Smithtown Gen. Hosp. on the grounds that it involved several different assignors, and that the Insurance Department has promulgated an opinion letter in which it opines that the $850 limitation applies per assignor. Because the instant dispute involves only one assignor, defendant argues that this court should give deference to the Insurance Department’s opinion letter and should follow Marigliano, not Smithtown Gen. Hosp.

While the court would agree that it ought to give some deference to the opinion of the Insurance Department in interpreting its own regulations, the court is not obliged to follow that opinion if there are good reasons not to do so. The court is obliged to follow the opinion of the governing Appellate Division until such time as it overrules its own precedent, particularly when there appears to be no good reason to overrule that precedent.

The court is concerned that the Insurance Department may have given inadequate consideration to the practical consequences on the court system if its opinion letter were to be followed by the courts. If attorney’s fees are limited to $850 per assignor in each action, then there is an incentive for medical suppliers holding multiple claims from the same assignor to file those claims as separate actions so that they can recover $850 in attorney’s fees in each action. Such a multiplicity of actions runs contrary to the principle of judicial economy, and would produce a lot of unnecessary paper and fees.

The insurance regulations provide for a limit of $850 per dispute. As far as this court is concerned, a “dispute” arises each time a claim is denied by an insurer. A medical provider ought not to be penalized for promoting judicial economy by consolidating a number of “disputes” (i.e., causes of action) into one civil action. If the Insurance Department really means for its regulations to be interpreted to apply per assignor or per action, it ought to say so clearly in the regulations after a proper rule-making process, not by opinion letter.

In the meantime, the court follows the rule in Smithtown Gen. Hosp. (supra) and modifies its prior order to the extent of clarifying that the $850 limitation on attorney’s fees applies to each cause of action. Defendant’s motion to the contrary is denied. Insofar as that motion pertains to other issues, the court finds them to be de minimis. Plaintiff may enter judgment accordingly for any amounts that remain unpaid. All stays in the order to show cause are vacated.

Footnotes

Footnote 1: Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co., 207 AD2d 338 (2d Dept 1994).

Footnote 2: The predecessor section did not differ in any material way from the current regulation. It provided, in pertinent part, as follows: “For all other disputes subject to AAA and IDA arbitrations, . . . the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850” (11 NYCRR 65.17 [b] [6] [v]).

Footnote 3: Marigliano v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 1079 (2006).

—[*1] Bruno, Gerbino & Soriano, LLP, Melville, N.Y. (Charles W. Benton of counsel), for appellant.

Joseph Henig, P.C., Bellmore, N.Y., for respondent.

In an action to recover no-fault insurance benefits under certain contracts of insurance, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Jaeger, J.), entered May 17, 2006, as granted that branch of the plaintiff’s cross motion which was for summary judgment on the first cause of action.

Ordered that the order is affirmed insofar as appealed from, with costs.

In support of that branch of its cross motion which was for summary judgment on the first cause of action, the plaintiff, Westchester Medical Center, as assignee of Demetrio Recinos (hereinafter WMC), demonstrated its prima facie entitlement to judgment as a matter of law by submitting, inter alia, the requisite billing forms, a certified mail receipt, a signed return receipt card which referenced Recinos and the forms, and an affidavit of its biller stating that the defendant failed either to pay or to deny the claim (see New York & Presbyt. Hosp. v Travelers Prop. Cas. Ins. Co., 37 AD3d 683 [2007]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 34 AD3d 532 [2006], lv granted 8 NY3d 807 [2007]; New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492 [2006]). This evidence demonstrated that the defendant received the no-fault billing and failed to respond within the requisite 30-day period (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.5; New York & Presbyt. Hosp. v Travelers Prop. Cas. Ins. Co., supra). In opposition, the defendant failed to raise a triable issue of fact. There is no evidence that it timely objected to the completeness of the [*2]claim forms, or sought verification of Recinos’s assignment. Therefore, the defendant waived any defenses based thereon, including the plaintiff’s purported lack of standing to maintain the first cause of action (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., supra; Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2005]; Hospital for Joint Diseases v Allstate Ins. Co., 21 AD3d 348 [2005]). Accordingly, the Supreme Court correctly granted that branch of the plaintiff’s cross motion which was for summary judgment on the first cause of action.

The defendant’s remaining contentions either are improperly raised for the first time in this Court or are without merit. Rivera, J.P., Florio, Dillon and Carni, JJ., concur.

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Carman, Callahan & Ingham, LLP, Farmingdale, N.Y. (Adeel Jamaluddin of counsel), for respondent.

In an action to recover no-fault benefits under an insurance contract, the plaintiff appeals from an order of the Supreme Court, Nassau County (Murphy, J.), dated October 20, 2006, which granted the defendant’s cross motion for summary judgment dismissing the second, third, and fourth causes of action and, in effect, denied its motion for summary judgment on those causes of action.

Ordered that the order is reversed, on the law, with costs, the plaintiff’s motion for summary judgment on the second, third, and fourth cause of action is granted, and the defendant’s cross motion for summary judgment dismissing the second, third, and fourth causes of action is denied.

With respect to the second cause of action involving health services provided to Kevin Kane to recover no-fault benefits under an insurance contract and the third cause of action involving health services provided to Gladys Navarro, limited to recovery of an attorney’s fee and statutory interest, the plaintiff demonstrated its entitlement to judgment as a matter of law by demonstrating that the necessary billing documents were mailed to and received by the defendant and that payment of the no-fault benefits was overdue (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1]; Mount Sinai Hosp. v Joan Serv. Corp., 22 AD3d 649, 650 [2005]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2004]). While the defendant, in its cross motion, initially denied [*2]that the plaintiff provided requested verification material to the defendant triggering its obligation to either pay or deny the claims (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.5; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]), the defendant failed to rebut the plaintiff’s showing that the verification material was actually mailed to the defendant (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 548 [2006]). Here, the plaintiff, on the second and third causes of action, proffered the certified mail receipts with postmarks of September 7, 2005, as to Kane and September 16, 2005, as to Navarro, as well as specific item numbers and notations to the Kane and Navarro medical records. The plaintiff also proffered the return receipt card with the same item numbers and notations indicating that they had been received by “W. Deall,” a representative of the defendant on September 9, 2005, as to Kane and September 19, 2005 as to Navarro. A presumption of receipt was created by the signed certified mail return receipt and the defendant’s denial of receipt of the verification material was insufficient to raise a triable issue of fact (see Matter of Fodor v MBNA Am. Bank, N.A., 34 AD3d 473 [2006]; Matter of State Farm Mut. Auto. Ins. Co. [Kankam], 3 AD3d 418, 419 [2004]; cf. New York & Presbyt. Hosp. v Allstate Ins. Co., supra at 548). Accordingly, the Supreme Court should have granted summary judgment to the plaintiff on the second and third causes of action and erred in awarding summary judgment to the defendant on those causes of action.

With respect to the fourth cause of action to recover no-fault benefits but involving health services provided to Alyssa Arater, the plaintiff similarly demonstrated its entitlement to judgment as a matter of law by demonstrating that the necessary billing documents were mailed to and received by the defendant and that payment of the no-fault benefits was overdue (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1]; Mount Sinai Hosp. v Joan Serv. Corp., supra; Mary Immaculate Hosp. v Allstate Ins. Co., supra). The defendant presented evidence in opposition to the motion and in support of its cross motion that the plaintiff failed to provide verification material, i.e. medical records, requested in writing by the defendant on October 21, 2005 (see 11 NYCRR 65-3.5 [b]). The plaintiff, in opposition to the cross motion and in further support of its motion for summary judgment, proffered the certified mail receipt with a postmark of February 13, 2006, an item number and a notation to the requested medical records. An unsigned letter dated February 13, 2006, from Hospital Receivables Systems, Inc., was also annexed as an exhibit. It was addressed to the defendant’s Farmingdale, New York address, stated that Arater’s complete medical record was enclosed and referenced, inter alia, the date of the accident and the plaintiff’s file number which was “WMC-NF-2783.” The plaintiff further proffered a copy of the United States Postal Service “Track & Confirm” printout with the same certified mail item number indicating that a representative of the defendant signed for the item on February 15, 2006. These submissions demonstrate that a mailing of the verification material occurred and that the mailed items were clearly related to the same claim (see Vista Surgical Supplies, Inc. v Statewide Ins. Co., 12 Misc 3d 131[A], 2006 NY Slip Op 51118[U]).

The defendant mistakenly places complete reliance upon this Court’s determination in New York & Presbyt. Hosp. v Allstate Ins. Co. (supra) to support its position that the plaintiff’s evidence was inadequate. Under the particular facts of that case, we determined that the certified mail receipt and the “Track & Confirm” printout were insufficient to support a grant of summary judgment to the plaintiff. Specifically, no evidence was presented that the material purportedly mailed to Allstate was mailed under the proffered certified mail receipt number. Here, however, the plaintiff presented sufficient evidence, despite the absence of a signed return receipt card, to demonstrate that it mailed the requested medical records to the defendant. Most notably, both the cover letter and the outgoing certified mail receipt contained a handwritten notation that the items being mailed were the Arater medical records. Moreover, the certified mail receipt, with a postmark [*3]of February 13, 2006, matched the date on the cover letter, and the “Track & Confirm” printout indicated that an item under the same mailing number was delivered on February 15, 2006, in Farmingdale, New York, and signed for by “W. Deall,” the same person who signed for the records relating to the second and third causes of action. As such, the defendant’s assertion that the plaintiff failed to respond to its request for verification was sufficiently rebutted by the plaintiff’s submissions which established the plaintiff’s entitlement to summary judgment since the defendant did not tender payment within 30 days of receiving the verification material (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1], [2]). Accordingly, the Supreme Court should have granted that branch of the plaintiff’s motion which was for summary judgment on the fourth cause of action, and erred in granting that branch of the defendant’s cross motion which was for summary judgment dismissing that cause of action. Rivera, J.P., Florio, Dillon and Carni, JJ., concur.

Civil Court of the City of New York, New York County

64123/05

For plaintiffs:

Christopher McCollum, Esq.

Law Offices of Christopher McCollum

57 W. 57th St., Suite 502

New York, NY 10019

917-407-5690

For defendant:

Allison B. Frischling, Esq.

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, NY 11747

631-390-0010

Barbara Jaffe, J.

By notice of motion dated January 25, 2007, defendant moves for an order granting it leave to renew and reargue my decision and order of December 6, 2006 granting summary judgment to plaintiffs on their claims for unpaid no-fault insurance benefits, statutory interest, and attorney fees. For the following reasons, the motion is denied.

I. PRIOR DECISION

In granting plaintiffs summary judgment, I held that they had established, prima facie, that their office manager had personally mailed the pertinent no-fault claim forms to defendant and that defendant had failed to deny plaintiffs’ claims timely. Defendant raised no objection to plaintiffs’ prima facie case.

In holding that defendant had failed to establish good cause for seeking discovery relating [*2]to its defenses and plaintiffs’ corporate structure, I found that: 1) in light of plaintiffs’ counsel’s affirmation that plaintiff Devonshire Surgical Facility (Devonshire) was officially converted from a general partnership into a limited liability corporation and notwithstanding the absence of its name from lists maintained on the websites of the New York State Education Department’s Office of Professions and the New York Department of State Division of Corporations, defendant failed to demonstrate sufficiently that at the time the healthcare services were rendered, Devonshire was fraudulently incorporated; 2) defendant failed to demonstrate sufficiently that the revocation of Allen Chamberlin’s license to practice medicine based on conduct he engaged in during 1998 constitutes good cause to believe that his facility, defendant Carnegie Hill Orthopedic Services (Carnegie Hill), was fraudulently incorporated in 2001 when the services in issue were rendered; 3) because the revocation of Chamberlin’s license was based on his excessive and unnecessary treatments and fraudulent billing for services never provided, which are forms of provider fraud, and absent any indication that defendant had interposed a timely denial based on those defenses, plaintiffs are not precluded from seeking reimbursement; and 4) defendant failed to interpose in its answer any contention that an independent contractor had provided the services at issue and that Chamberlin had violated the prohibition against self-referral.

II. RE-ARGUMENT

A motion for leave to reargue “shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion.” (CPLR 2221[d][2]).

A. Defendant’s discovery demands relating to Carnegie Hill’s corporate structure

1. Contentions

Defendant argues that there exists good cause for discovery relating to Carnegie Hill’s corporate structure, again relying solely on the 2005 administrative finding that Chamberlin engaged in fraudulent billing and fraudulent and excessive medical practices in 1998 as evidence that he engaged in those practices in 2001. As Chamberlin’s license was revoked based on conduct he engaged in during 1998, defendant argues, his license must be deemed revoked as of 2001, and if Chamberlin was not authorized to practice medicine in 2001, then Carnegie Hill had issued him shares in violation of Business Corporation Law (BCL) § 1507(a) and was thus fraudulently incorporated in 2001. (Affirmation of Alison B. Frischling, Esq., dated Jan. 25, 2007 [Frischling Aff.]). Defendant thus attempts to avoid preclusion of a defense based on provider fraud by characterizing it as one sounding in fraudulent incorporation.

In opposition, plaintiffs observe that I had rejected the same argument in my December 2006 decision. (Affirmation of Christopher McCollum, Esq., dated Mar. 12, 2007 [McCollum Aff]).

2. Analysis

Pursuant to 11 NYCRR 65-3.16 (a) (12), effective April 4, 2002, unlicensed or fraudulently licensed healthcare providers are ineligible to receive reimbursement for no-fault medical services provided by them. In affirming the dismissal of an insurer’s causes of action for fraud and unjust enrichment, the Court of Appeals held in State Farm Mut. Auto. Ins. Co. v Mallela, that no such causes of action lie for payments made by insurers before April 4, 2002. (4 [*3]NY3d 313, 322 [2005]). The Court also observed that insurers may withhold payment for medical services provided by enterprises incorporated in violation of BCL §§ 1507 and 1508 and Education Law § 6507(4)(c). Pursuant to BCL §1507, a professional service corporation may issue shares only to those individuals who are authorized by law to practice the profession which the corporation is authorized to practice.

Here, it is undisputed that Chamberlin was authorized by law to practice medicine when Carnegie Hill was organized. And, although Chamberlin’s license has now been revoked and he must now disassociate himself from Carnegie Hill (BCL § 1509 [if shareholder of professional service corporation becomes legally disqualified to practice his profession, he must sever all employment with and financial interests in corporation]), absent any indication that the revocation is retroactive or that any of the governing statutes, regulations, or case law requires that lawfully issued shares be invalidated retroactively, there is no basis for finding that Carnegie Hill was fraudulently incorporated when formed merely because Chamberlin’s license was revoked thereafter. (See CKC Chiro. v Republic Western Inc. Co., 5 Misc 3d 492 [Civ Ct, Kings County 2004] [provider may be reimbursed for services rendered when she was properly licensed or registered, even if she subsequently became unlicensed or unregistered]).

I also observe that the conduct underlying the revocation of Chamberlin’s license relates to defenses which, if this action arose in the Second Department, are precluded if not timely denied. (Careplus Med. Supply Inc. v State-Wide Ins. Co., 11 Misc 3d 29 [App Term, 2d & 11th Jud Dists 2005] [fraudulent billing or performance of excessive or unnecessary medical treatment are forms of provider fraud]; Fair Price Med. Supply Corp. v Travelers Indemn. Co., 9 Misc 3d 76 [App Term, 2d Dept 2005] [defense based on fraudulent scheme to obtain no-fault benefits precluded due to untimely denial]; Ocean Diagnostic Imaging, PC v Utica Mutual Ins. Co., 9 Misc 3d 138[A], 2005 NY Slip Op 51745[U], *1 [App Term, 9th & 10th Jud Dists 2005] [alleged irregularities in the treatment and billing process did not support defense that survived preclusion]). Although no appellate court in the First Department has addressed the issue of whether a defense based on services billed but never rendered is subject to preclusion for untimely denial, and a judge in the Eastern District of New York disagrees with the Appellate Term’s decision in Fair Price, 9 Misc 3d 76, that a defense based on services billed but not rendered is subject to preclusion (Allstate Ins. Co. v Valley Physical Med. & Rehab., P.C., 475 F Supp2d 213 [US Dist Ct, EDNY 2007]), here, defendant did not even allege that plaintiffs billed for services that were not rendered.

In any event, evidence that Chamberlin fraudulently or excessively billed or unnecessarily treated patients in 1998 is inadmissible to prove that he engaged in such conduct in 2001. (Prince, Richardson on Evidence § 4-517 [11th Ed Farrell]; see Matter of Brandon, 55 NY2d 206 [1982]; Hand v Stanper Food Corp., 224 AD2d 584 [2d Dept 1996] [evidence that defendant’s principal broke two signs in front of defendant’s premises over five-year period prior to alleged accident, without more, insufficient to support inference that he broke sign at issue]; Kelly v Ryder Truck Rental, Inc., 14 Misc 3d 127[A], 2006 NY Slip Op 52467[U] [App Term 1st Dept 2006] [evidence of prior accident inadmissible to support inference of fraud absent any claim that prior accident was staged]; Maraziti v Weber, 185 Misc 2d 624 [Sup Ct, Dutchess County 2000] [motion in limine granted as to prior findings of Department of Health]). If Carnegie Hill excessively billed for its services or billed for services never rendered, defendant would have had [*4]the means of proving it without relying on inadmissible evidence of a disposition to engage in fraud. Rather, it seeks to rely solely on inadmissible evidence of prior misconduct.

As defendant failed to establish that it properly sought discovery from Carnegie Hill based on a non-precluded defense (A.B. Med. Svces., PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term, 2d & 11th Jud Dists 2006]), that it has good cause to believe that Carnegie Hill was fraudulently incorporated, and that Carnegie Hill was required to respond to defendant’s discovery requests on these issues (see A.B. Med. Svces., PLLC, 11 Misc 3d 71 [discovery demands relating to precluded defenses are “palpably improper” and plaintiff healthcare provider need not respond to them]; Devonshire Surgical Facility and Carnegie Hill Orthopedic Services v GEICO, NYLJ, Apr. 7, 2006, at 20, col 1 [Civ Ct, New York County] [defendant may not allege provider fraud if not asserted in denial]), it has failed to demonstrate that I overlooked or misapprehended any matter of fact or law in deciding the prior motion.

B. Defendant’s discovery demands relating to Devonshire’s corporate structure

Defendant claims that discovery relating to Devonshire’s corporate structure is warranted as it may reveal that Devonshire was not a properly licensed entity when the services in issue were rendered. It relies, as it did in its opposition to plaintiff’s motion for summary judgment, on the results of two website searches which do not list Devonshire as a professional medical corporation prior to 2006. (Frischling Aff.). Devonshire denies that defendant’s allegations against it, even if true, constitute a defense of fraudulent incorporation, and claims that a violation of the Business Corporation Law is curable and that Devonshire was and continues to be a properly licensed entity. (McCollum Aff.).

As Devonshire was not incorporated at the time the services in issue were rendered, Mallela, 4 NY3d 313, as well as Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 (1st Dept 2006), are inapposite absent any requirement that an entity offering professional services be incorporated. I observe that BCL §1503(a) merely permits one or more individuals authorized by law to render the same professional service to organize a professional service corporation.

I also observe that only business and not for profit corporations, limited partnerships, limited liability companies and limited liability partnerships, as well as other miscellaneous businesses, are listed on the New York Department of State’s Division of Corporation’s website; general partnerships, sole proprietorships, and limited liability partnerships are expressly excluded from it. Consequently, as the absence of Devonshire’s name from the website list prior to 2006 reflects only that Devonshire was not incorporated as a business or not for profit corporation, limited partnership, limited liability company, or limited liability partnership before that time, it is immaterial.

Pursuant to Education Law § 6507(4)(c), the New York State Education Department is required issue a certificate of authority to a qualified professional service organization organized pursuant to BCL § 1503. As Devonshire was not organized pursuant to BCL § 1503, Education Law § 6507(4)(c) is not applicable.

I also find that defendant’s conclusory allegations that an independent contractor provided the services in issue and that Chamberlin violated the prohibition against self-referral form no basis for discovery as defendant did not plead such defenses and did deny the claims based thereon. Defendant has thus failed to demonstrate good cause to assert, nor has it even argued, [*5]that at the time that Devonshire rendered the services at issue, it was owned, operated, controlled or otherwise involved with unlicensed individuals or entities.

Accordingly, plaintiffs were not required to respond to discovery demands on these issues.For all of these reasons, defendant has failed to establish good cause to believe that Devonshire was fraudulently incorporated before May 2006, and absent such good cause, defendant is not entitled to discovery on this issue. Consequently, defendant has failed to establish that I overlooked or misapprehended any matter of fact or law in deciding the prior motion.

C. Triable issues of fact

Defendant also includes in its motion for leave to reargue a claim that there exist triable issues of fact as to whether Devonshire was ever a properly licensed entity and whether Carnegie Hill improperly issued shares to Chamberlin. It argues, without any explanation, that Devonshire’s registration with the Department of State as a “domestic limited liability company” rather than “professional limited liability company” raises a triable issue as to whether it is a licensed provider. (Frischling Aff.).

I first observe that defendant’s opposition to plaintiff’s motion for summary judgment was based solely on plaintiffs’ failure to respond to its discovery demands. Consequently, these new arguments may not be considered. (CPLR 2221[d][1]; Mariani v Dyer, 193 AD2d 456 [1st Dept 1993] [motion to reargue not appropriate vehicle to assert arguments different from those asserted on original motion]). In any event, defendant cites no authority in support of its proposition that licensed health care providers must be registered only as professional limited liability companies.

I thus find that defendant failed to establish that I overlooked or misapprehended any of its evidence or relevant decisions in granting plaintiffs summary judgment on their claims. For all of these reasons, I adhere to my prior decision and deny defendant’s motion to reargue.

III. RENEWAL

A motion for leave to renew “shall be based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination, and shall contain reasonable justification for the failure to present such facts on the prior motion. (CPLR 2221[e][2], [3]).

A. Retroactivity of fraudulent incorporation regulation

In moving to renew, defendant relies on Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 (1st Dept 2006), for the proposition that a provider’s prior fraudulent conduct may be used to prove that the provider conducted itself similarly on a subsequent occasion. Counsel maintains that the First Department held that “a providers [sic] fraudulent conduct can be applied retroactively.” (Frischling Aff.). It maintains that the decision constitutes a change in law which would change my prior determination, and that the regulation applies to the period during which plaintiffs rendered the services in issue. It thus argues that as there is reason to believe, based on the subsequent revocation of Chamberlin’s license, that plaintiffs were fraudulently licensed or had engaged in fraudulent conduct when the services were rendered, plaintiffs may not be entitled to reimbursement for those services. (Id.).

The First Department recently applied Mallela to claims for services rendered prior to April 4, 2002, rejecting a provider’s argument that it was entitled to be reimbursed for claims [*6]relating to services rendered prior to the effective date of the regulation, reasoning that “[t]he very word reimbursement,’ used in the regulation, implies that the services had already been provided . . . [and that] it would be illogical to read [Mallela] as applying only to claims submitted on or after April 4, 2002.” (Belt Parkway, 33 AD3d 407). Thus, unlicensed and fraudulently licensed health care providers and those that are incorporated in violation of BCL

§§ 1507 and 1508 and Education Law § 6507(4)(c) are ineligible to be reimbursed even if their services were rendered prior to April 4, 2002.

While the court applied the regulation retroactively, it did not even address the issue raised by defendant, namely, whether a provider’s fraudulent conduct on one occasion may be utilized to prove that it engaged in fraudulent conduct on another occasion. As noted supra (II.A.2.), evidence of prior misconduct is generally inadmissible to prove later alleged misconduct.

Consequently, the decision in Belt Parkway does not change my determination that defendant failed to establish good cause to seek discovery concerning Carnegie Hill’s alleged fraudulent incorporation.

B. Plaintiffs’ prima facie case

Defendant maintains that recent decisions compel the finding that the affidavit supporting plaintiffs’ motion for summary judgment was insufficient to lay a foundation for the admission in evidence of plaintiffs’ business records or demonstrate that the claims were overdue. (Frischling Aff.). Plaintiffs argue that the supporting affidavit was based on their office manager’s personal knowledge of the contents of the mailings and the mailings themselves. (McCollum Aff.). In reply, defendant argues that the affidavit is insufficient as plaintiffs’ office manager fails to set forth her knowledge of plaintiffs’ business practices and procedures or any specifics concerning the claims at issue, such as the date of the accident, dates of service, and amounts in dispute. (Reply Affirmation of Allison B. Frischling, Esq., dated March 29, 2007 [Frischling Reply Aff.]).Here, plaintiffs’ officer manager swore that she had personal knowledge of the documents, that she personally verified that they were contained in the envelopes, that she mailed the envelopes, and that defendant neither paid nor denied the claims within thirty days. She also stated that she has been plaintiffs’ office manager for more than seven years, that one of her responsibilities is the supervision of all billing procedures and mailing of claim forms, and that based on her personal knowledge and review of the file, the claims forms annexed to the motion papers were made by plaintiffs’ employees who had the obligation to make the record in the regular course of business and who had the actual knowledge of the events recorded or received the information from someone within the business who had actual knowledge and was under a business duty to report the events to the maker of the records, and that the documents were made at the time of the transaction or occurrence or a reasonable time thereafter.

In Dan Medical, P.C. v NY Central Mutual Fire Ins. Co., 14 Misc 3d 44 (App Term, 2d Dept 2006), the plaintiff submitted the affidavit of its corporate officer stating that the documents attached to the plaintiff’s motion papers were its business records. The court held that the plaintiff “failed to demonstrate that the officer possessed sufficient personal knowledge of [its] office practices and procedures so as to lay a foundation for the admission of the annexed documents as business records.” (14 Misc 3d at 46).

Here, plaintiffs’ office manager had personal knowledge of plaintiffs’ business practices [*7]and procedures for creating the claims, as well as personal knowledge that the claims were mailed to defendant. Thus, her affidavit satisfies the requirements for admitting in evidence as business records the claims and annexed documents.

Moreover, plaintiffs’ office manager set forth in her affidavit the amounts plaintiffs billed defendant for the services at issue and the date on which she mailed the claims to defendant, and she states that defendant did not pay or timely deny the claims. She also refers to the claim forms and other documents annexed to plaintiffs’ papers which indicate the dates of service and types of services provided by plaintiffs.

In PDG Psych., P.C. v Ntl. Grange Mut. Ins. Co., 14 Misc 3d 136(A), 2007 NY Slip Op 50242(U) (App Term, 2d & 11th Jud Dists 2007), the court held that the plaintiff’s officers’ affidavit was too vague and conclusory to support plaintiffs’ prima facie case as the officer did not identify what services were rendered, when they were rendered, the amounts which were owed or the dates on which the claims were mailed, but only alleged that the bills were accurate and that proof of mailing was available for inspection.

Here, the affidavit references the annexed documents for which a sufficient evidentiary foundation was laid, thereby providing the specific details of the amounts billed, the dates of service and services rendered, and the date the claims were mailed. Consequently, the affidavit was sufficient to satisfy plaintiffs’ prima facie burden.

I thus find that as defendant failed to demonstrate that there has been any change in the law that would change the prior determination, leave to renew is denied.

IV. SHORT SERVICE

In its reply, defendant claims that plaintiffs did not serve their opposition to its motion by March 16, 2007, the date agreed to in the parties’ stipulation dated February 26, 2007. (Frischling Reply Aff.).

While plaintiffs’ affidavit of service of the opposition papers reflects that the papers were served on March 19, 2007, defendant replied on the merits to the papers and alleges no prejudice. I thus find that it waived plaintiffs’ late service. (See Piquette v City of New York, 4 AD3d 402 [2d Dept 2004] [although motion made on insufficient notice, plaintiffs waived objection to it by opposing it on merits]; Adler v Gordon, 243 AD2d 365 [1st Dept 1997] [petitioner waived right to contest late service of motion by opposing it on merits]).

V. CONCLUSION

Accordingly, defendant’s motion for leave to reargue is granted and re-argument is denied, and defendant’s motion for leave to renew is denied. This constitutes the decision and order of the court.

_______________________________

Barbara Jaffe, JCC

DATED:May 21, 2007

New York, New York [*8]

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 (Johnny Lee Baynes, J.), entered December 28, 2005. The order denied defendant’s motion for severance.

Order reversed without costs and defendant’s motion to sever the claim of each assignor into a separate action granted.

Plaintiff commenced this action to recover no-fault benefits as assignee of five individuals. The claims allegedly arose out of five separate accidents. Defendant
moved to sever the five causes of action in the complaint into five separate actions pursuant to CPLR 603, which motion the court below denied. The instant appeal by defendant ensued.

We find that the particular facts herein relating to each claim are likely to raise few, if any, common issues of law or fact, even if the assignors’ insurance policies are identical (see Radiology Resource Network, P.C. v Fireman’s Fund Ins. Co., 12 AD3d 185 [2004]; Mount Sinai Hosp. v Motor Veh. Acc. Indem. Corp., 291 AD2d 536 [2002]; S.I.A. Med. Supply Inc. v GEICO Ins. Co., 8 Misc 3d 134[A], 2005 NY Slip Op 51170[U] [App Term, 2d & 11th Jud [*2]Dists]; Metro Med. Diagnostics, P.C. v Motor Veh. Acc. Indem. Corp., 6 Misc 3d 136[A], 2005 NY Slip Op 50238[U] [App Term, 2d & 11th Jud Dists]). Defendant’s answer clearly places at issue with respect to each assignor, inter alia, the necessity and reasonableness of the particular medical services rendered and the sufficiency of the no-fault claim forms that have been submitted. To the extent plaintiff argued that defendant needed to proffer an affidavit from someone with personal knowledge regarding prejudice to the defendant as a result of plaintiff’s joinder of the claims, this court has consistently held that the answer, without more, places at issue the basis for severance (see S.I.A. Med. Supply Inc. v GEICO Ins. Co., 8 Misc 3d 134[A], 2005 NY Slip Op 51170[U], supra; Metro Med. Diagnostics, P.C. v Motor Veh.
Acc. Indem. Corp., 6 Misc 3d 136[A], 2005 NY Slip Op 50238[U], supra). Accordingly, defendant’s motion to sever the causes of action should have been granted.

Pesce, P.J., Weston Patterson and Golia, JJ., concur.
Decision Date: May 15, 2007

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Bryan M. Rothenberg, Hicksville, N.Y. (Fiedelman & McGaw [Ross P. Masler] of counsel), for respondent.

In an action to recover no-fault insurance medical benefits, the plaintiff appeals from an order of the Supreme Court, Nassau County (Alpert, J.), dated November 20, 2006, which granted that branch of the defendant’s motion which was pursuant to CPLR 317 to vacate a judgment of the same court entered March 8, 2005, upon its default in answering, and denied its motion to punish the defendant for contempt of court based on its failure to respond to an information subpoena.

Ordered that the order is affirmed, with costs.

The Supreme Court providently exercised its discretion in granting that branch of the defendant’s motion which was to vacate the default judgment pursuant to CPLR 317 (see CPLR 317; Franklin v 172 Aububon Corp., 32 AD3d 454, 455 [2006]; Rios v Starrett City, Inc., 31 AD3d 418 [2006]; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 968 [2006]). The Supreme Court properly denied the plaintiff’s motion to punish the defendant for contempt. Rivera, J.P., Spolzino, Fisher, Lifson and Dickerson, JJ., concur.

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 (Howard G. Lane, J.), entered September 30, 2005. The order granted plaintiff’s motion for summary judgment.

Order reversed without costs and plaintiff’s motion for summary judgment denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was granted. The sole issue raised on appeal is whether defendant proffered sufficient evidence to demonstrate that there was an issue of fact as to whether the injuries plaintiff’s assignor allegedly sustained arose from
an insured incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Upon a review of the record, we find that the affidavit submitted by defendant’s investigator was sufficient to demonstrate that defendant’s denial was based on a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (id. at 199). Accordingly, since defendant demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, supra; Zuckerman v City of New York, 49 NY2d 557 [1980]), plaintiff was not entitled to summary judgment.

Pesce, P.J., Weston Patterson and Golia, JJ., concur.
Decision Date: May 14, 2007

[*1]

[*2]Civil Court of the City of New York, Queens County, May 14, 2007

APPEARANCES OF COUNSEL

Cohen & Jaffe, Lake Success (Richard S. Jaffe and Stefan Belinfanti of counsel), for plaintiff. Shapiro, Beilly, Rosenberg, Aronowitz, Levy & Fox, LLP, New York City (Shelly Hefefz of counsel), for defendant.

OPINION OF THE COURT

Diane A. Lebedeff, J.

Currently, torrents of no-fault litigation deluge New York courts and no-fault requests for accelerated judgment swell our motion calendars.^[FN1] Adding to the turmoil is that no-fault [*3]summary judgment motions pose undeniable difficulties, in large part, because traditional summary judgment formulations give poor guidance for their ready resolution.

Building a more workable approach to no-fault summary judgment motions requires recognition that the bulk of no-fault summary judgment issues are decided on the sufficiency of the papers and arguments of law regarding specific no-fault technicalities, as well as explicit identification of no-fault variations of traditional summary judgment precepts.^[FN2] Using that foundation, construction of a series of relevant inquiries produces the following four-step analysis for no-fault summary judgment motions: (1) a threshold review of the three requisite showings of a no-fault plaintiff’s prima facie case; (2) an assessment of the insurer’s tendered proof of issuance and service of its response, if any; (3) a regulatory compliance review of any properly served insurer response, weighing a response’s timeliness, form and substance; and (4), finally, a search for triable issues of fact in relation to any properly preserved, otherwise precludable defenses, as well as of defenses independent of the response process. This decision concentrates on these four areas of inquiry, with amplification and qualifications footnoted.

This same analysis is adaptable to identification of trial issues in no-fault cases and—by starting with the second step—to insurers’ motions and cross motions for summary judgment. In relation to the case before the court, the plaintiff’s motion and insurer’s cross motion for summary judgment are subjected to the above pattern of analysis and, near the end of this decision, special consideration is given to the fee schedule dispute posed.

Step 1: Plaintiff’s Prima Facie Threshold Review

As a matter of law, a no-fault plaintiff’s summary judgment showing is extremely limited [*4]and is free of the normal summary judgment obligation to rebut defenses.^[FN3] A no-fault plaintiff’s necessary prima facie showing consists of only three scant elements.

First, the claimant must present in its original motion papers the claim and assignment forms it submitted to the insurer (see, A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 127[A], 2005 NY Slip Op 50432[U] [App Term, 2d & 11th Jud Dists 2005] [as to claim form]; see, Inwood Hill Med. P.C. v Allstate Ins. Co., supra, 2004 NY Slip Op 50565[U], *7; T&G Med. Supplies, Inc. v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 1017[A], 2005 NY Slip Op 50636[U] [Civ Ct, NY County 2005]). Second, necessary to a proper evidentiary foundation for the forms and related documents, a supporting affidavit must establish the tendered records are part of plaintiff’s business records (see CPLR 4518 [a]; North Acupuncture, P.C. v State Farm Ins. Co., 14 Misc 3d 130[A], 2006 NY Slip Op 52523[U], *2 [App Term, 2d & 11th Jud Dists 2006]).^[FN4] Third, the no-fault plaintiff must prove that the claim and assignment forms were served upon the insurer.^[FN5] [*5]

The adequacy of plaintiff’s motion is tested by inspecting the plaintiff’s affidavits and exhibits for sufficiency. If these three elements are made out and stand unrefuted, a no-fault plaintiff is entitled to a determination that it has made out its prima facie case.^[FN6]

Step 2: Assessment of Proof of Issuance and Service of Insurer’s

Denial or Unsatisfied Request

Because no-fault plaintiffs’ summary judgment motion papers need not counter pleaded denials and affirmative defenses, insurers bear the entire burden of establishing the existence of cognizable defenses (see generally, Mitchell S. Lustig and Jill Lakin Schatz, Outside Counsel, Summary Judgment Motions: Defending No-Fault Insurer, NYLJ, Oct. 26, 2005, at 4, col 4). This second analytic stage reviews the insurer’s opposition papers to determine whether the insurer makes a threshold showing that it preserved a precludable defense or that unsatisfied verification requests exist.

Just as a plaintiff must do, and by reason of similar case law standards, the insurer must advance copies of all relevant communications, prove the service of each, and establish a [*6]business record foundation (see, Mitchell S. Lustig and Jill Lakin Schatz, Outside Counsel, Proper Proof of Mailing Under NY No-Fault Law, NYLJ, Oct. 2, 2006, at 4, col 4 [as to insurer’s proof of mailing]). If the insurer claims an unsatisfied request is outstanding, the insurer must submit a copy of the original request and a follow-up request, establish issuance and service of the requests, and supply evidence of the failure to respond or cooperate (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2006]; Psychological Practice, P.C. v State Farm Fire & Cas. Co., 16 Misc 3d 12, 13 [App Term, 2d Dept 2007] [general statement of affiant’s “personal knowledge” not sufficient factual support to establish failure to appear for examination]).^[FN7] However, if the insurer issued a denial while a verification request was outstanding, the request is deemed waived and is disregarded (King’s Med. Supply Inc. v Kemper Auto & Home Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50450[U], *2 [App Term, 2d & 11th Jud Dists 2005]).

Step 3: Regulatory Compliance Review of Timeliness and Form

of No-Fault Insurer’s Denial or Verification Requests

If the defendant does establish that it issued and served a denial or verification requests, each communication must be examined to determine if it serves as a proper defense by conforming in timing, form and substance with the requirements of the “Rube-Goldberg-like maze” of the No-Fault Law and the “thicket” of governing Insurance Department regulations (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., supra, 90 NY2d at 286, 280).^[FN8]

In relation to timeliness, the insurer must provide proof of “when the . . . [denial or] request . . . was mailed” (I & B Surgical Supply v New York Cent. Mut. Fire Ins. Co., 16 Misc 3d 4, 6 [App Term, 2d & 11th Jud Dists 2007]), and show mailing within the appropriate time period (see n 2). Typically, an insurer’s affidavit refers to the date of [*7]printing of the form and describes a procedure which assured a properly addressed envelope containing the form was mailed on that day or the next business day.

As to form and substance of a denial, a “proper denial of claim must include the information called for in the prescribed denial of claim form . . . and must ‘promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated’ ” and cannot be amended after the applicable time period has passed (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664 [2d Dept 2004], quoting General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979]). A denial is deficient if it is “factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law” (id. at 665, quoting Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d Dept 2004]).^[FN9]

In relation to the form of a verification request, it must “request . . . information . . . relative to . . . [the] claim” from the claimant or identify to the claimant the persons or entities asked to provide the information (Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [2d Dept 1999]; Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2d Dept 2005] [“delay” letter explaining investigation underway not a verification request]). Belated litigation objections that such requests are unclear are generally rejected (Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 [2d Dept 1999] [“Any confusion . . . as to what was being sought should have been addressed by further communication, not inaction”]; Metroscan Med. Diagnostics, P.C. v Progressive Cas. Ins. Co., 15 Misc 3d 126[A], 2007 NY Slip Op 50500[U], *2 [App Term, 9th & 10th Jud Dists] [fact of response showed request sufficiently clear]).

On these issues, the court reaches a straightforward determination of law unless some cognizable question of ambiguity is raised by a litigant (compare Foley Prods. v Singer Corp., 133 AD2d 531 [4th Dept 1987] [where no ambiguity in document, no deferral for factual exploration]). Dismissal on the ground of prematurity follows if proper unsatisfied outstanding verification requests are established. Where a proper and timely denial is found, the court proceeds to the next analytic step.

Step 4: Summary Judgment Evaluation of Properly Cognizable Defenses[*8]

Only at this final stage are typical summary judgment principles applied to those defenses found preserved and unprecluded, as well as to any independent defenses, with recognition that the defendant bears the burden on such defenses for reasons set forth above.^[FN10] Some defenses can be resolved as a matter of law and others on the basis of evidentiary standards appropriate to the nature of the case. In ruling on such motions, when appropriate, courts should preserve judicial resources and not shy away from granting partial relief as to predicate elements where the record does not support a full determination (CPLR 3212 [e], [g]).

The point upon which opposition papers frequently stumble is the failure to present evidentiary material in admissible form (New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512, 513 [2d Dept 2006]; CPLR 3212 [b]).^[FN11] However, because summary judgment may be defeated when the opponent raises a “significant doubt” regarding the existence of “a material, triable issue of fact,” an insurer may avail itself of the alternative of an opposition affidavit which[*9]“set[s] forth names of witnesses, the substance of their testimony, how it was known what their testimony would be, and how the witnesses acquired their knowledge” (Phillips v Kantor & Co., 31 NY2d 307, 311-312 [1972]).^[FN12]

With respect to fee schedule disputes, special treatment is appropriate once, as here, the insurer establishes a timely denial objecting that a charge was not a permissible scheduled fee.^[FN13] Where a fee for medical services or goods does not have a fixed value in the applicable fee schedule and no comparable charge is shown, it is typically found that the fee schedule dispute raises a triable issue (see, for example, A.B. Med. Servs., PLLC v American Tr. Ins. Co., 15 Misc 3d 132[A], 2007 NY Slip Op 50680[U] [App Term, 2d & 11th Jud Dists 2007]).

Conclusion and Application

In the captioned matter, plaintiff moves, and the insurer cross-moves, for summary judgment. The plaintiff has made out a prima facie case, with the insurer admitting receipt of the [*10]two subject claims (step 1); denials are shown to have been issued and served (step 2); the denials are proper in timeliness, form and substance, and preserved fee schedule objection (step 3); and the fee schedule disputes pose triable issues of fact (step 4).

As to the cross motion, the insurer does not establish a proper scheduled fee for the goods at issue and does not show a properly comparable fee. Although the insurer does establish that a verification request was unanswered, it presents no argument of law as to why such request should not be held waived by reason of the denial nor urge that the motion is premature because of outstanding discovery related to matters within the exclusive knowledge of the movant (CPLR 3212 [f]; 3101; Lexington Acupuncture, P.C. v State Farm Ins. Co., 12 Misc 3d 90 [App Term, 2d & 11th Jud Dists 2006]).

Based on the foregoing, the motion and cross motion are granted to the extent that it is determined that plaintiff has established its prima facie case and that triable issues of fact exist as to proper scheduled fees, and they are otherwise denied.

Footnotes

Footnote 1: “No-fault” litigation is brought by medical establishments pursuing insurers for payment of assigned economic loss claims of motor vehicle accident victims. Starting in 2002, a majority of no-fault claimants began to choose litigation over arbitration (Robert A. Stern, Take the Money and Run: The Fraud Crisis in New York’s No-Fault System, 75 NY St BJ 35, 35 [Oct. 2003] [“(b)etween 1999 and 2002, arbitrations and court actions reversed places in the volume of cases filed”]), and they continue to do so in increasing numbers. Statistics portray the consequences. In calendar year 2006 alone, the New York City Civil Court had approximately 100,000 new no-fault case filings, of which roughly 70,000 were filed in Queens County Civil Court. In Queens County Civil Court, on a typical 2007 court day, a trial judge may be assigned two to seven no-fault trials and, on the summary judgment no-fault motion calendar, 100 or so motions may appear; considering a larger time frame of the last six months of 2006 in that same court and all types of no-fault motions, a total of almost 11,000 no-fault motions were resolved on the no-fault motion calendars, with more than 3,000 cases marked disposed, primarily by and before this judge.

Footnote 2: The technical issues involve the no-fault system’s “tightly timed process of claim, disputation and payment” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 281 [1997]; Insurance Law § 5101 et seq.; 11 NYCRR 65-1.1 et seq.; see , last updated Feb. 2, 2007, for Insurance Department Web site links to the No-Fault Law, regulations, forms, opinion letters and frequently asked questions).

The process of claim submission and insurer response, and the computation of time periods, are well summarized elsewhere (see Inwood Hill Med. v Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 NY Slip Op 50565[U], *4-7 [Civ Ct, NY County 2004, Hagler, J.]; see also Metroscan Imaging v American Tr. Ins. Co., NYLJ, Dec. 10, 1999, at 27, col 5 [Civ Ct, NY County 1999, Karen Smith, J.] [addressing “old” regulations in effect prior to Apr. 5, 2002]). Briefly put, once a claim is submitted (11 NYCRR 65-3.11 [b]), payment is subject to the “30 day rule” (11 NYCRR 65-3.8 [a] [1]), with a default of timely payment entitling a claimant to sue for payment of an overdue claim (Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2d Dept 2004]). While a failure to issue a timely denial precludes an insurer from subsequent objection to the sufficiency or propriety of the claim form submitted (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., supra, 90 NY2d at 278), a timely denial preserves the stated objections for litigation. Unsatisfied insurer requests support dismissal of claims.

Footnote 3: A no-fault plaintiff’s substantive proof of its claim is the claim form (Insurance Law § 5106 [a] [claim form gives “proof of the fact and amount of loss sustained”]; 11 NYCRR 65-1.1 [d] [Sec I, Conditions, Proof of Claim] [claim form proves “particulars of the nature and extent of the injuries and (health benefits) received and contemplated”]; Dermatossian v New York City Tr. Auth., 67 NY2d 219, 224 [1986] [“to receive payment (a claimant) need only file a ‘proof of claim’ (which) the insurers are obliged to honor”]). The exemption from the normal summary judgment motion requirement that a movant “show that there is no defense to the cause of action” (CPLR 3212 [b]) arises because courts have perceived that the “clear legislative mandate to facilitate the prompt and efficient resolution of first-party no-fault claims” requires that a litigating no-fault claimant be subjected to “[no] greater burden of proof after the action is commenced than was necessary at the claim stage” (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], *3 [App Term, 2d & 11th Jud Dists 2003]; see Global Med. Equip., Inc. v Allstate Ins. Co., 15 Misc 3d 131[A], 2007 NY Slip Op 50675[U], *1 [App Term, 2d & 11th Jud Dists 2007] [plaintiff need not show denial untimely]).

Footnote 4: Such an affidavit must show the affiant “possessed sufficient personal knowledge of plaintiff’s office practices and procedures so as to lay a foundation for the admission of the . . . documents as business records” (Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44, 46 [App Term, 2d & 11th Jud Dists 2006] [affiant’s unelaborated description as “corporate officer” insufficient]; Vista Surgical Supplies, Inc. v Allstate Ins. Co., 15 Misc 3d 126[A], 2007 NY Slip Op 50502[U] [App Term, 9th & 10th Jud Dists 2007] [conclusory statement that documents were business records insufficient]; Pine Hollow Med., P.C. v Progressive Cas. Ins. Co., 13 Misc 3d 131[A], 2006 NY Slip Op 51870[U] [App Term, 2d & 11th Jud Dists 2006] [proper proffer by affidavit of employee of billing company]).

Footnote 5: Service of both the no-fault claim and assignment forms is established by an actual affidavit of mailing or by proof of “an office practice and procedure followed . . . in the regular course of . . . business . . . geared so as to ensure the likelihood that [the item] is always properly addressed and mailed” (Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830 [1978]). A post office receipt may supply additional “direct proof of actual mailing” (LMK Psychological Servs., P.C. v Liberty Mut. Ins. Co., 30 AD3d 727, 728 [3d Dept 2006]) provided evidence relates the receipt to an identified mailing (New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 548 [2d Dept 2006]). A conclusory affidavit of service is insufficient (A.B. Med. Servs. PLLC v Specialty Natl. Ins. Co., 11 Misc 3d 144[A], 2006 NY Slip Op 50810[U], *2 [App Term, 2d & 11th Jud Dists 2006] [finding deficient statement affiant “issued,” “billed out,” and “sent” claims]). A proper showing of mailing gives rise to a presumption of receipt and an insurer asserting it did not receive a claim bears a heavy burden to overcome that presumption (see, for example, Maldonado v Steiner, 10 Misc 3d 128[A], 2005 NY Slip Op 51905[U] [App Term, 2d & 11th Jud Dists 2005]).

A plaintiff may tender an insurer’s denial of claim form as an acknowledgment of receipt as its business record (see Medical Expertise v Trumbull Ins. Co., 196 Misc 2d 389, 390-394 [Civ Ct, Queens County 2003, Siegal, J.]; but see Midborough Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132[A], 2006 NY Slip Op 51879[U], *2 [App Term, 2d & 11th Jud Dists 2006] [such tender establishes no other element of plaintiff’s prima facie case]).

Footnote 6: Rarely, an estoppel or a triable issue of fact arises from an actual or possible error in a claim or assignment form (see Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], *4 [App Term, 2d & 11th Jud Dists 2003] [estoppel as to items not prescribed]; Amaze Med. Supply v Eagle Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50389[U] [App Term, 2d & 11th Jud Dists 2003] [same, items not delivered to assignor]; see generally, Resnick v Levine, 80 AD2d 699 [3d Dept 1981] [as to errors in business ledgers]; see, Damadian MRI in Garden City, P.C. v Windsor Group Ins., 2 Misc 3d 138[A], 2004 NY Slip Op 50266[U], *2 [App Term, 2d & 11th Jud Dists 2004] [“whether plaintiff is the same entity as the one named in the assignment” can be question of fact] [as to assignment]). Dismissal is warranted where the claim form discloses services were performed by an independent contractor, rather than by claimant (see Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc 3d 52, 54 [App Term, 2d Dept 2005]).

Footnote 7: These requirements apply to verification requests, as well as requests for appearance at an examination under oath and independent medical examination. A failure to appear for a “preclaim” examination may be viewed as a lack of cooperation which defeats coverage (see Inwood Hill Med., P.C. v General Assur. Co., 10 Misc 3d 18 [App Term, 1st Dept 2005]), but a plaintiff may render the question a triable issue of fact by offering “a valid excuse for . . . [the] nonappearance [or demonstrate] that the . . . requests were unreasonable under the circumstances” (Amaze Med. Supply Inc. v General Assur. Co., 12 Misc 3d 127[A], 2006 NY Slip Op 50910[U], *1-2 [App Term, 2d & 11th Jud Dists 2006]).

Footnote 8: This review follows the pattern of CPLR 3212 (g) in that the court—”by examining the papers” and “interrogating counsel”—reaches a determination of operative legal facts “deemed established for all purposes in the action” which are “not in dispute or are incontrovertible,” often winnowed during oral argument. This process permits the trial court to comply with the mandatory obligation to take judicial notice of state agency regulations (CPLR 4511 [a]) and be alerted to new appellate decisions not covered in papers prepared over as long as a nine-month period (see Socrates Psychological Servs., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 642, 645 n 1 [Civ Ct, Queens County 2005]).

Footnote 9: Typical denials assert a defective assignment of benefits, belated filing of the claim, a lack of medical necessity (whether for the treatment or inflation in the quantum or cost of treatment), and that a charge exceeds permitted fee schedules. In many instances, a clear statement of the objection is sufficient, and even medical necessity denials need not set out a medical rationale (A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d 778 [2d Dept 2007], revg 12 Misc 3d 30 [App Term, 2d & 11th Jud Dists 2006]; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2d Dept 2007]; New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832 [2d Dept 2007]). A rejection for untimely filing must “advise claimants of their right to justify late submissions” or be “deemed ineffective” (Radiology Today, P.C. v Citiwide Auto Leasing Inc., 15 Misc 3d 92, 94 [App Term, 2d & 11th Jud Dists 2007]).

Footnote 10: There are roughly three classes of additional independent defenses. First, some center upon arguments “that the alleged injury does not arise out of an insured incident,” often by asserting a “staged accident” or an independent basis for the injury (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; see also 11 NYCRR 65-3.8 [e]; A.B. Med. Servs. PLLC v Commercial Mut. Ins. Co., 12 Misc 3d 8, 11 [App Term, 2d & 11th Jud Dists 2006] [assignee health care provider not an “innocent” third party and may be subject to retroactive cancellation of fraudulently procured policy]). Second, some urge a lack of eligibility to receive no-fault payments under no-fault or other rules applicable to the medical provider, the patient, or the insured (see, for example, State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 320 [2005] [improper professional corporation]). Third, albeit less commonly seen, traditional defenses exist, such as statutes of limitations, exhaustion of policy benefits, and the like.

Footnote 11: Formal or substantive requirements apply to certain affidavits (Support Billing & Mgt. Co. v Allstate Ins. Co., 15 Misc 3d 126[A], 2007 NY Slip Op 50496[U], *1 [App Term, 2d & 11th Jud Dists 2007] [doctor must affix stamped facsimile signature (citing CPLR 2106)]; Bath Med. Supply, Inc. v Allstate Indem. Co., 13 Misc 3d 142[A], 2006 NY Slip Op 52273[U] [App Term, 2d & 11th Jud Dists 2006] [out-of-state affidavit needs certificate of conformity to comply with CPLR 2309 (c)]; see All County Open MRI & Diagnostic Radiology P.C. v Travelers Ins. Co., 11 Misc 3d 131[A], 2006 NY Slip Op 50318[U], *2 [App Term, 9th & 10th Jud Dists 2006] [“peer review . . . conclud(ing) that there was no medical necessity due to ‘the lack of sufficient information’ upon which the reviewer could make such determination” deficient, absent proof of verification request for such information]). Exhibits should also be in admissible form or their proffer limited to admissible portions (see, as to police reports, Johnson v Lutz, 253 NY 124 [1930]; 58 NY Jur 2d Evidence and Witnesses § 480 [police reports, generally]; § 503 [police report as to cause of accident or injury]). And, even though “admissions by a party of any fact material to the issue are always competent evidence against [that party], wherever, whenever or to whomsoever made” (Reed v McCord, 160 NY 330, 341 [1899]), some formal requirements may be applicable to assure accuracy (see R.M. Newell Co. v Rice, 236 AD2d 843, 844 [4th Dept 1997], lv denied 90 NY2d 807 [1997] [proffer of reporter-certified unsigned deposition transcript]).

Footnote 12: Such showing is distinguished from a simple offer of proof because its proponent should “demonstrate acceptable excuse for [its] failure to meet the requirement of tender in admissible form” (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; see, Ratut v Singh, 186 Misc 2d 350, 351 [Civ Ct, Kings County 2000], and Vincent C. Alexander, New York Practice, Opposing Summary Judgment With Hearsay, NYLJ, Mar. 15, 2004, at 3, col 1 [discussing cases]; see Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co., 6 Misc 3d 62, 65 [App Term, 2d & 11th Jud Dists 2004, Golia, J., dissenting]). This type of opposition is likely to be tendered when a defense is “that the alleged injury does not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., supra, 90 NY2d at 199), or an insurer urges “badges of fraud” are present (see Tahir v Progressive Cas. Ins. Co., 12 Misc 3d 657, 664 [Civ Ct, NY County 2006, Lebedeff, J.] [collecting cases in dicta]).

Footnote 13: A medical provider must limit its charges to those permitted by approved fee schedules (Insurance Law § 5108 [a]; 11 NYCRR 68.0 [f]), which protects a patient from erosion of available benefits by inflated charges (Ops Gen Counsel NY Ins Dept No. 04-06-11 [June 16, 2004]; see AIU Ins. Co. v Olmecs Med. Supply, Inc., 2005 WL 3710370, *1-4, 2005 US Dist LEXIS 29666, *4-13 [ED NY 2005] [scheme to highly inflate durable medical goods claims]). Fees for services and procedures are governed by the workers’ compensation fee schedule (11 NYCRR 68.1), and durable medical goods fees are governed by the New York Medicaid fee schedule (11 NYCRR part 68, Appendix 17C, part F [a]; , last updated May 1, 2007). An attorney’s affirmation can request judicial notice of a scheduled fee and submit the page of the fee schedule applicable to the fee on the date of service or sale.

If an insurer demonstrates it was correct in its reading of the fee schedules or its identification of comparable procedures, it is entitled to judgment (Forrest Chen Acupuncture Servs., P.C. v GEICO Ins. Co., 15 Misc 3d 137[A], 2007 NY Slip Op 50874[U] [App Term, 2d & 11th Jud Dists 2007]; Great Wall Acupuncture v GEICO Gen. Ins. Co., 16 Misc 3d 23 [App Term, 2d & 11th Jud Dists 2007] [acupuncturist’s fee properly set as equivalent to chiropractor performing acupuncture]), unless the claimant shows “an unusual procedure or unique circumstance justifies the necessity” for a charge above the scheduled fee (11 NYCRR 68.4).

—[*1] Serpe, Andree & Kaufman (Rivkin Radler, LLP, Uniondale, N.Y. [Evan H. Krinick, Cheryl F. Korman, and Stuart M. Bodoff] of counsel), for appellant.

Ruffo, Tabora, Mainello & McKay, Lake Success, N.Y. (John F. McKay III and Michael Patigalia of counsel), for respondent.

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration, the appeal is from an order of the Supreme Court, Nassau County (Brandveen, J.), dated May 24, 2006, which granted the petition.

Ordered that the order is reversed, on the law, with costs, and the petition is denied.

On July 29, 2002 an insured of State Farm Insurance Companies (hereinafter State Farm) was in a vehicle which was struck by a vehicle owned by the City of Long Beach (hereinafter Long Beach). State Farm paid its insured no-fault benefits. State Farm then sought to recover such benefits from Long Beach’s insurer, Specialty National Insurance Company (hereinafter Specialty National), initiating arbitration pursuant to Insurance Law § 5105. In response, Long Beach commenced this proceeding to permanently stay the arbitration. State Farm appeals from the order of the Supreme Court granting the petition. We reverse.

An arbitration proceeding pursuant to Insurance Law § 5105 is to be commenced within three years of the accrual of an insurer’s claim (see Conception v Hew Cab Corp., 114 AD2d 880, 880-881 [1985]; see also Matter of Pacific Ins. Co. v State Farm Mut. Auto. Ins. Co., 150 AD2d 455, 456 [1989]; cf. Matter of Liberty Mut. Ins. Co. v State Farm Mut. Auto. Ins. Co., 265 AD2d 412 [1999]). Here, [*2]pursuant to Insurance Law § 5105, State Farm initiated arbitration approximately two years after the subject accident and, thus, well before the expiration of the applicable limitations period (see CPLR 214 [2]). Therefore, the Supreme Court improperly granted Long Beach’s petition based on the application of the one-year and 90-day statute of limitations of General Municipal Law § 50-i.

Long Beach’s remaining contentions are without merit. Miller, J.P., Ritter, Covello and McCarthy, JJ., concur.

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 (Delores J. Thomas, J), entered January 24, 2006. The order denied plaintiff’s motion for summary judgment.

Order affirmed without costs.

In this action by a provider to recover first-party no-fault benefits, plaintiff moved for summary judgment. The court below denied the motion on the ground that plaintiff’s moving papers failed to allege personal knowledge of the mailing of the claims. Plaintiff appeals from the denial of its motion for summary judgment.

On appeal, defendant asserts that the affidavit of plaintiff’s corporate officer, submitted in support of the motion, 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. 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]; 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 was properly denied.

Pesce, P.J., Weston Patterson and Rios, JJ., concur.
Decision Date: May 7, 2007