APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

In consolidated appeals, plaintiffs, as limited by their brief, appeal from three orders of the Civil Court, Bronx County (Sharon Aarons, J.), dated March 8, 2005, and four orders (same court and Judge), dated April 25, 2005, which, inter alia, granted defendant’s cross motions for summary judgment dismissing the complaints. Defendant cross appeals from two orders (same court and Judge), dated April 25, 2005, which denied its cross motions for summary judgment dismissing the complaints as against plaintiffs Maple Medical Acupuncture Services, P.C., a/a/o Jose Villanueva and Continental Medical Acupuncture Services, P.C., a/a/o Maria Tejeda.

PER CURIAM:

Orders (Sharon Aarons, J.), dated March 8, 2005 and April 25, 2005, which granted defendant’s cross motions for summary judgment, modified to deny defendant’s cross motions, and as so modified, affirmed, without costs; orders (Sharon Aarons, J.) dated April 25, 2005, which denied defendant’s cross motions for summary judgment, affirmed, without costs.

In these nine actions, consolidated for purposes of appeal, plaintiffs health care providers seek to recover assigned first-party no-fault benefits. Defendant moved for summary judgment in each action based on the identical defense that the treating acupuncturists were independent contractors rather than employees of plaintiffs providers.

Whether an employer-employee relationship exists generally is a question of fact and turns on the “degree of control exercised by a purported employer over the results produced by the work and the means used to achieve those results” (Cipriani Group, 1 NY3d 193, 198 [2003]; see also Matter of Charles A. Field Delivery Serv., Inc., 66 NY2d 516 [1985]). Here, summary judgment is unwarranted since issues of fact exist as to whether the acupuncturists who rendered the services underlying plaintiffs claims were employees or independent contractors. Contrary to defendant’s contention, plaintiffs’ letter dated April 1, 2002 is not dispositive of the issue (cf. Antell, D.O., PC v New York Cent. Mut. Fire Ins. Co., 11 Misc 3d 137A [2006]). While the reporting of annual pay on an IRS 1099 form may be significant in assessing whether the [*2]acupuncturists were independent contractors or employees, it is only one of the relevant factors in assessing the relationship which existed between plaintiffs and the acupuncturists (see Bynog v Cipriani Group, 1 NY3d at 198).

This constitutes the decision and order of the court.
I concurI concurI concur
Decision Date: July 27, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Sandra K. Pardes, J.), entered March 22, 2005. The order denied plaintiff’s motion for summary judgment and awarded defendant $50 in costs.

Order affirmed without costs.

Plaintiff commenced this action to recover first-party no-fault benefits for medical services rendered to its assignor. Thereafter, plaintiff moved for summary judgment,
which motion defendant opposed. By order entered April 4, 2005, the court below denied plaintiff’s motion on the ground that it failed to establish its prima facie entitlement to judgment, and awarded defendant $50 in costs. The instant appeal by plaintiff ensued.

Contrary to the determination of the court below, the affidavit plaintiff submitted in support of its motion for summary judgment was sufficient to allow the annexed claim forms, mailing receipts, denials (indicating that defendant received the claims) and other documents to be considered by the court. Consequently, plaintiff established its prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 2004]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App [*2]Term, 9th & 10th Jud Dists]; see also A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]). The burden then shifted to defendant to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

Contrary to plaintiff’s contention, the affidavit submitted by defendant’s claims examiner established that the denials were timely mailed to plaintiff pursuant to defendant’s “routine office practice and procedures.” In addition, the affirmed peer review reports defendant annexed to its opposition papers present factual bases and medical rationales for the peer reviewers’ opinions and, therefore, raise triable issues of fact as to medical necessity (see e.g. A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 7 Misc 3d 132[A], 2005 NY Slip Op 50605[U] [App Term, 2d & 11th Jud Dists]). Accordingly, the court below properly denied plaintiff’s motion for summary judgment and awarded defendant $50 in costs pursuant to UDCA 1906 (a).

Angiolillo, J.P., McCabe and Tanenbaum, JJ., concur.
Decision Date: July 26, 2006

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 (Jack M. Battaglia, J.), entered July 6, 2005. The order granted defendant’s motion to dismiss the complaint to the extent of directing plaintiff to, inter alia, produce responses to defendant’s discovery demands, and denied plaintiff’s cross motion for summary judgment with leave to renew after completion of discovery.

Appeal from so much of the order as granted defendant’s motion to dismiss the complaint to the extent of directing plaintiff to, inter alia, provide responses to defendant’s discovery demands dismissed.

Order, insofar as reviewed, affirmed without costs.

Plaintiff commenced this action to recover assigned first-party no-fault benefits for medical supplies furnished to its assignor. Defendant moved to dismiss plaintiff’s complaint for plaintiff’s failure to comply with defendant’s discovery demands and plaintiff cross-moved for summary judgment. By order entered July 6, 2005, the court below granted defendant’s motion to the extent of ordering plaintiff to, inter alia, produce responses to defendant’s discovery demands and also denied plaintiff’s cross motion for summary judgment with leave to renew after completion of discovery. Plaintiff failed to submit written opposition to defendant’s motion, but [*2]instead cross-moved for summary judgment without addressing defendant’s argument that it was entitled to discovery. Since so much of the order as granted defendant’s motion to the extent of directing plaintiff to, inter alia, provide responses to defendant’s discovery requests was entered on default, the appeal therefrom by plaintiff, a defaulting party, must be dismissed (see CPLR 5511; Coneys v Johnson Controls, Inc., 11 AD3d 576 [2004]; see also Marino v Termini, 4 AD3d 342 [2004]; Adamson v Evans, 283 AD2d 527 [2001]).

A provider establishes a prima facie entitlement to summary judgment by proof that it submitted a claim, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). A plaintiff ordinarily establishes the “submission” of the claim form by demonstrating proof of proper mailing, which gives rise to the presumption that the claim form was received by the addressee. The presumption may be created either by proof of actual mailing, or by proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). Here, the affidavit of plaintiff’s corporate officer and the proof annexed thereto were insufficient to establish that plaintiff mailed the claims to defendant since “there is no evidence that th[e] claim[s] w[ere] mailed to [defendant] under that certified mail receipt number” (New York & Presbyt. Hosp. v Allstate Ins. Co., ___ AD3d ___, 2006 NY Slip Op 03558). Moreover, plaintiff’s attorney’s affirmation was not based on personal knowledge that the claim was actually mailed to defendant and, as such, is unsubstantiated hearsay and has no probative value (see e.g. Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]). Furthermore, the denial of claim form annexed to plaintiff’s moving papers was insufficient to establish that plaintiff sent, and that defendant received, the claims since items 23-32 on said denial of claim form, including the date on which defendant received the claims, were not filled out by defendant (cf. A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]). Thus, plaintiff failed to establish its prima facie entitlement to summary judgment. Accordingly, the lower court properly denied plaintiff’s cross motion for summary judgment.

Pesce, P.J., and Rios, J., concur.

Golia, J., concurs in a separate memorandum.

[*3]Golia, J., concurs with the result only, in the following memorandum:

While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I disagree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.
Decision Date: July 26, 2006

[*1]

Supreme Court, Appellate Term, Second Department, July 26, 2006

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City (David S. Rubackin of counsel), for appellant. Gary Tsirelman, P.C., Brooklyn, for respondent.

{**13 Misc 3d at 59} OPINION OF THE COURT

Memorandum.

Order reversed, without costs, plaintiff’s motion for summary judgment denied and defendant’s cross motion to dismiss the complaint granted to the extent of directing that plaintiff shall respond to those discovery demands which seek information regarding whether plaintiff was fraudulently incorporated, within 30 days of the date of the order entered hereon or within such other reasonable time period as the parties stipulate to in writing.

In this action to recover $1,107.51 in first-party no-fault benefits for health care services rendered to its assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]). Defendant failed to deny the claims within the 30-day claim determination period and failed to establish that it tolled the statutory time period by mailing verification and follow-up requests to plaintiff (see e.g. Ocean Diagnostic Imaging P.C. v Travelers Indem. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50644[U] [App Term, 2d & 11th Jud Dists 2005]). Consequently, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Nevertheless, the defense that plaintiff, a provider of health care services, is not eligible for reimbursement of no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) is not subject to preclusion (see A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50504[U] [App Term, 2d & 11th Jud Dists 2006]). Moreover, summary judgment should be denied where{**13 Misc 3d at 60} the opposition papers set forth that facts essential to justify opposition may exist but cannot then be stated (see CPLR 3212 [f]).

In Mallela (4 NY3d 313 [2005], supra), the Court of Appeals found that insurers may withhold payment of first-party no-fault benefits provided by fraudulently licensed medical service corporations to which patients have assigned their claims. Consequently, we find that discovery requests seeking information to determine whether the owners of a medical service corporation are improperly licensed are germane to the question of whether said corporation is eligible for reimbursement. Pursuant to 11 NYCRR 65-3.16 (a) (12),

“A provider of health care services is not eligible for reimbursement under section 5102 (a) (1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service[s] in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed.”

The Education Law provides that only persons licensed or certified can practice acupuncture in the State of New York (see Education Law § 8212). The Business Corporation Law provides that each shareholder, director or officer of the corporation must be licensed to practice the profession for which the corporation was organized (see Business Corporation Law § 1503 [b]; § 1507).

We find that defendant’s papers establish that so much of defendant’s discovery requests as seek information regarding whether plaintiff was fraudulently incorporated are material and necessary (see CPLR 3101) and, thus, defendant’s papers set forth that facts essential to justify opposition may exist but cannot now be stated. Consequently, plaintiff’s motion for summary judgment is premature pending the completion of discovery (see CPLR 3212 [f]). It is noted that plaintiff did not oppose the cross motion in the court below. Accordingly, plaintiff’s motion for summary judgment is denied and defendant’s cross motion is granted to the extent of directing that plaintiff shall respond to defendant’s discovery demands which seek information regarding the ownership, control and licensing of plaintiff corporation within 30 days of the date of the order entered hereon.{**13 Misc 3d at 61}

Golia, J.P. (concurring with the result only). While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

Rios and Belen, JJ., concur; Golia, J.P., concurs in a separate memorandum.

[*1]

Supreme Court, Appellate Term, Second Department, July 26, 2006

Metroscan Imaging, P.C. v GEICO Ins. Co., 8 Misc 3d 829, affirmed.

APPEARANCES OF COUNSEL

Baker, Barshay & Neuwirth, LLP, Mineola (David M. Barshay and Michael C. Rosenberger of counsel), for appellant. Cadwalader, Wickersham & Taft LLP, New York City (William J. Natbony of counsel), and Stern & Montana LLP, New York City (Robert Stern of counsel), for respondent.

{**13 Misc 3d at 36} OPINION OF THE COURT

Memorandum.

Order, insofar as appealed from, affirmed without costs.

This appeal raises the question of whether, as a result of the Court of Appeals decision in State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]), a medical corporation that was fraudulently incorporated under Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c) is entitled to be reimbursed by insurers for medical services rendered by licensed medical practitioners prior to the effective date of 11 NYCRR 65-3.16 (a) (12).^[FN*] In [*2]Mallela, the New York Court of Appeals was asked the following certified question by the United States Court of Appeals, Second Circuit:

“Is a medical corporation that was fraudulently incorporated under N.Y. Business Corporation Law §§ 1507, 1508 and N.Y. Education Law § 6507(4)(c) entitled to be reimbursed by insurers, under New York Insurance Law §§ 5101 et seq. and its implementing regulations, for medical services rendered by licensed medical practitioners” (State Farm Mut. Auto. Ins. Co. v Mallela, 372 F3d 500, 509 [2004]).

The New York Court of Appeals stated that such medical corporations were not entitled to reimbursement (see 4 NY3d at 320). In addition to certifying the preceding question to the New York Court of Appeals, the Second Circuit stated that “defendants raise another issue of New York law that would arise only if the initial question is answered as State Farm wishes. This is: would the applicable revised regulation, 11 N.Y.C.R.R. § 65-3.16(a)(12), if it is read to bar reimbursement, be given retroactive effect” (372 F3d at 508). Consequently, the Second Circuit “welcome[d]” the Court of Appeals’ “guidance with respect to any issues that could arise depending on its answer to the question certified” (id. at 509-510). In Mallela, the Court of Appeals did not explicitly state whether 11 NYCRR 65-3.16 (a) (12) was to be given retroactive effect so as to bar{**13 Misc 3d at 37} reimbursement to a medical corporation that was fraudulently incorporated under Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c). Rather, the only portion of the Court of Appeals decision which expressly dealt with the retroactivity of the regulation concerned an insurer’s ability to maintain a cause of action sounding in fraud or unjust enrichment to recoup payments made by the insurer to a fraudulently incorporated medical corporation prior to the effective date of the regulation. On this question, the Court of Appeals indicated that the regulation was not to be applied retroactively, but rather prospectively (4 NY3d at 322).

The court below concluded that because the claims at issue in Mallela arose prior to the effective date of 11 NYCRR 65-3.16 (a) (12), the Court of Appeals held that the regulation applied to unpaid claims for medical services rendered without regard to the date on which such services were rendered (8 Misc 3d 829 [2005]). Although the court below was not alone in reaching this conclusion (see Allstate Ins. Co. v Belt Parkway Imaging, P.C., 11 Misc 3d 810 [2006]; A.T. Med., P.C. v State Farm Mut. Ins. Co., 10 Misc 3d 568 [2005]; Multiquest, PLLC v Allstate Ins. Co., 9 Misc 3d 1031 [2005]), other trial courts have reached a contrary determination (see Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 1069[A], 2005 NY Slip Op 52209[U] [2005]; Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 1061[A], 2005 NY Slip Op 52071[U] [2005]; Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 1061[A], 2005 NY Slip Op 52069[U] [2005]; Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 877 [2005]). While the Court of Appeals did not expressly address whether 11 NYCRR 65-3.16 (a) (12) was applicable to unpaid claims for assigned first-party no-fault benefits arising from medical services [*3]which were rendered prior to the effective date of said regulation, we nevertheless read the Court of Appeals decision as holding that, irrespective of the date on which the medical services were rendered, a provider of medical services may not recover therefor if it is a fraudulently incorporated medical corporation.

In Mallela, the medical corporation defendants which were allegedly fraudulently incorporated in violation of Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c) asserted that they were entitled to reimbursement notwithstanding their alleged fraudulent incorporation because the medical care rendered to their assignors was within the scope of the licenses of those who treated the assignors and{**13 Misc 3d at 38} thus the medical corporation defendants were within the regulatory framework for reimbursement. In advancing such an argument, some of the defendants’ separate briefs to the Court of Appeals relied, in part, upon the Court of Appeals decision in Charlebois v Weller Assoc. (72 NY2d 587 [1988]).

In Charlebois, the Court of Appeals held that a contract which required payment to an unlicensed business corporation for engineering services performed by an independent licensed professional engineer was valid because the corporation was not engaged in the unauthorized practice of engineering. By contrast, in Mallela, although the medical treatments were rendered by apparently licensed medical practitioners, said licensed practitioners were not the “providers” for billing purposes under the No-Fault Law. Instead, the “providers” for no-fault billing purposes were their employers, medical service corporations, which were incorporated in violation of Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c). This critical distinction apparently prompted the Court of Appeals, in Mallela, to reject the defendants’ position stating, “The fact remains that the reimbursement goes to the medical service corporation that exists to receive payment only because of its willfully and materially false filings with state regulators” (4 NY3d at 321).

In so holding, the Court of Appeals implicitly recognized that medical service corporations which are fraudulently incorporated in violation of Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c), i.e., which “fail[ed] to meet the applicable state licensing requirements” (4 NY3d at 320), were not entitled to reimbursement since their authority to render professional services was obtained through fraudulent means and possession of such authority was a prerequisite to reimbursement (see Education Law § 6507 [4] [c]; see also Business Corporation Law § 1503; Valley Physical Medicine & Rehabilitation v New York Cent. Mut. Ins. Co., 193 Misc 2d 675 [App Term, 9th & 10th Jud Dists 2002]). Such a result is in accord with the common law, which has historically denied compensation to unlicensed providers of services for which a regulatory license is required (see Spivak v Sachs, 16 NY2d 163 [1965]; Bendell v De Dominicis, 251 NY 305 [1929]; Mavco Realty Corp. v M. Slayton Real Estate, Inc., 12 AD3d 575 [2004]; Price v Close, 302 AD2d 374 [2003]; Gordon v Adenbaum, 171 AD2d 841 [1991]; P.C. Chipouras & Assoc. v 212 Realty Corp., 156 AD2d 549{**13 Misc 3d at 39} [1989]; Unger v Travel Arrangements, 25 AD2d 40, 44 [1966]; 13 NY Jur 2d, Businesses and Occupations § 61), and the regulations, which permit a medical service corporation to recover for medical services provided so long as the treating medical practitioner was an employee of the medical service corporation as opposed to an independent contractor (see 11 NYCRR former 65.15 [j] [1], now 11 NYCRR 65-3.11 [a]; Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc 3d 52 [App Term, 2d & 11th Jud Dists 2005] [because a billing [*4]provider is not a “provider” of the medical services if the medical services were rendered by an independent contractor rather than by an employee of the billing provider, it is not permitted to recover direct payment of assigned no-fault benefits from an insurer]; A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 9 Misc 3d 36 [App Term, 2d & 11th Jud Dists 2005]). Indeed, where an action is based upon a contract which violates public policy or which is being used to circumvent public policy, courts have refused to enforce such a contract and have left the parties where they stand (see Spivak v Sachs, 16 NY2d at 168; McConnell v Commonwealth Pictures Corp., 7 NY2d 465 [1960]; Veazey v Allen, 173 NY 359 [1903]; Matter of Ungar v Matarazzo Blumberg & Assoc., 260 AD2d 485 [1999]; LoMagno v Koh, 246 AD2d 579 [1998]; United Calendar Mfg. Corp. v Huang, 94 AD2d 176 [1983]). Accordingly, under the common law, prior to the effective date of 11 NYCRR 65-3.16 (a) (12), such fraudulently incorporated medical corporations were not entitled to recover a judgment against an insurer for assigned first-party no-fault benefits. The promulgation of 11 NYCRR 65-3.16 (a) (12) by the Superintendent of Insurance merely codified the common-law rule to the extent it barred recovery by unincorporated or fraudulently incorporated medical service corporation providers for assigned first-party no-fault benefits.

Our reading of Mallela is buttressed by the Court of Appeals holding therein that a cause of action by an insurance carrier sounding in fraud or unjust enrichment would not lie prior to the effective date of 11 NYCRR 65-3.16 (a) (12). This too comports with the common-law rule, to wit, the lack of a required license will prevent recovery for services rendered, but the lack of a license does not permit recovery of the fee by the payer after it was paid (see Johnston v Dahlgren, 166 NY 354 [1901]; Goldman v Garofalo, 71 AD2d 650 [1979]; see also 13{**13 Misc 3d at 40} NY Jur 2d, Businesses and Occupations § 68). However, we read Mallela as holding that the promulgation of 11 NYCRR 65-3.16 (a) (12) by the Superintendent of Insurance altered the common law prospectively such that an insurance carrier may maintain a cause of action against a fraudulently incorporated medical service corporation to recover assigned first-party no-fault benefits which were paid by the insurer to such medical service corporation after the regulation’s effective date (4 NY3d at 322). [*5]

In light of the foregoing, the order, insofar as appealed from, is affirmed.

Golia, J.P., Rios and Belen, JJ., concur.

Footnotes

Footnote *: Insofar as is relevant, the regulation provides: “A provider of health care services is not eligible for reimbursement under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement” (11 NYCRR 65-3.16 [a] [12]).

[*1]

Supreme Court, Appellate Term, Second Department, July 26, 2006

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellants. Carman Callahan & Ingham, LLP, Farmingdale (Paul A. Barrett of counsel), for respondent.

{**13 Misc 3d at 26} OPINION OF THE COURT

Memorandum.

Appeal as taken by plaintiff Lvov Acupuncture P.C. dismissed.

Order modified by granting so much of the motion as sought summary judgment on behalf of plaintiffs A.B. Medical Services PLLC and D.A.V. Chiropractic P.C. to the extent of awarding partial summary judgment to plaintiff D.A.V. Chiropractic P.C. in the principal sum of $370.70 and awarding summary judgment to plaintiff A.B. Medical Services PLLC in the principal sum of $8,682.82, and matter remanded to the court below for the calculation of statutory interest and attorney’s fees thereon and for all further proceedings on the remaining claims; as so modified, affirmed insofar as reviewed without costs.

In this action to recover first-party no-fault benefits for health services rendered to their [*2]assignor, plaintiffs A.B. Medical Services PLLC and D.A.V. Chiropractic P.C. established their prima facie entitlement to summary judgment by proof that they submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). The burden shifted to defendant to show a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Contrary to the determination of the court below, plaintiffs did not have to establish the validity of the assignments as part of their prima facie case. Defendant’s failure to seek verification of the assignments, or to allege any deficiency in the assignments in its denial of claim forms, constitutes a waiver of any defenses with respect thereto (see New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2004]; Presbyterian{**13 Misc 3d at 27} Hosp. in City of N.Y. v Aetna Cas. & Sur. Co., 233 AD2d 433 [1996]; Medwide Med. Supply Inc. v Country-Wide Ins. Co., 8 Misc 3d 131[A], 2005 NY Slip Op 51078[U] [App Term, 2d & 11th Jud Dists]; A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 6 Misc 3d 70 [App Term, 2d & 11th Jud Dists 2004]).

It is uncontroverted that defendant timely denied plaintiff A.B. Medical Services PLLC’s $604.24 claim based upon the conclusions of an affirmed peer review report which was annexed to the denial. Plaintiff contends that the report is insufficient since defendant did not provide its reviewer with the narrative report and the follow-up reports it had previously provided to defendant. Indeed, the reviewer stated that he was not provided with reports from any of the assignor’s health care providers and, therefore, medical necessity could not be established. In view of the foregoing, since the peer review report was incomplete in that it did not take into account all of the documents plaintiff provided to defendant, the denial was inadequate to establish a factual basis and medical rationale sufficient to demonstrate the lack of medical necessity (see Park Neurological Servs. P.C. v GEICO Ins., 4 Misc 3d 95 [App Term, 9th & 10th Jud Dists 2004]).

Defendant also timely denied plaintiff A.B. Medical Services PLLC’s $1,999.12, $71.40 and $752.62 claims, by its denial of claim form dated April 30, 2003, on the ground that the assignor failed to appear for independent medical examinations (IMEs). However, in opposition to plaintiffs’ motion for summary judgment, defendant merely established the mailing of a single IME request. The insurance regulations provide that if any verification request is not supplied to the insurer within 30 calendar days after the original request, then, within 10 calendar days, the insurer shall follow up with the party from whom the verification was sought (see 11 NYCRR 65-3.6 [b]). Inasmuch as defendant did not show that it complied with the follow-up verification regulation, it has failed to rebut plaintiff’s prima facie showing as to these claims (see e.g. Metro Med. Diagnostics v Lumbermens Ins. Co., 189 Misc 2d 597 [App Term, 2d & 11th Jud Dists 2001]).

As to plaintiff A.B. Medical Services PLLC’s remaining claims, defendant failed to show a triable issue of fact since its denial of claim form dated June 10, 2003 is incompletely filled out and is, thus, insufficient to assert a defense.

“A proper denial of claim must include the information called for in the prescribed denial of claim form{**13 Misc 3d at 28} (see 11 NYCRR 65-3.4 [c] [11]) [*3]and must ‘promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated’ . . . Moreover, ‘[a] timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law’ (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [2004])” (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664-665 [2004]).

Furthermore, although plaintiff D.A.V. Chiropractic P.C. contends that it is entitled to summary judgment in the principal sum of $1,586.44, a review of the claim forms annexed to its moving papers as exhibit E indicates that said plaintiff is only entitled to $370.70 since the mailing receipts annexed to establish its mailing of its other three claims list the provider as A.B. Medical Services PLLC. Accordingly, upon the record presented, there has been an insufficient showing that D.A.V. Chiropractic P.C. mailed said three claims to defendant. As noted above, defendant’s June 2003 denial of claim form is insufficient and, therefore, does not raise a triable issue of fact or rebut plaintiff’s prima facie showing as to its $370.70 claim (see Nyack Hosp., 11 AD3d at 664).

In view of the foregoing, plaintiff A.B. Medical Services PLLC is awarded summary judgment in the principal sum of $8,682.82 and plaintiff D.A.V. Chiropractic P.C. is awarded partial summary judgment in the principal sum of $370.70, and the matter is remanded to the court below for entry of judgment and the calculation of statutory interest and attorney’s fees thereon pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on the remaining claims.

Inasmuch as Lvov Acupuncture P.C. is not an aggrieved party, the appeal as taken by it is dismissed (see CPLR 5511).

Golia, J., dissents in part and concurs in part, and votes to affirm the order in the following memorandum:

At the outset, I concur with the majority in the dismissal of the appeal as taken by plaintiff Lvov Acupuncture P.C. As regards the claim of A.B. Medical Services PLLC and D.A.V. Chiropractic P.C., I find that plaintiffs are required, at the very least, to submit proof of a properly executed assignment. Here, plaintiffs A.B. Medical and D.A.V. Chiropractic failed to do so. Consequently, I respectfully dissent and vote to affirm.{**13 Misc 3d at 29}

The insurance regulations provide, in relevant part, that a health care provider must submit to the insurer “a properly executed assignment” on one of the following forms: (1) the prescribed verification of treatment by the attending physician or other provider of service form (NYS Form NF-3); (2) the prescribed verification of hospital treatment form (NYS Form NF-4), or the prescribed hospital facility form (NYS Form NF-5); or (3) the prescribed no-fault assignment of benefits form (NYS Form NF-AOB) (see 11 NYCRR 65-3.11 [b] [2]; see also A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 6 Misc 3d 70, 71 [App Term, 2d & 11th Jud Dists 2004]). The plain language of the regulations clearly mandate submission of a properly executed assignment, and since the No-Fault Law is in derogation of the common law, its regulations must be strictly construed (see Presbyterian Hosp. in City of N.Y. v Atlanta Cas. Co., 210 AD2d 210, 211 [1994]).

In my view, the submissions of A.B. Medical and D.A.V. Chiropractic fail, on their face, to demonstrate a properly executed assignment. As the court below correctly noted, the forms submitted by these plaintiffs appear to be copies of a single assignment form which was signed by the assignor in blank. Plaintiffs’ names were inserted thereafter on copies of the original form. Under these circumstances, it cannot [*4]be said that plaintiffs A.B. Medical and D.A.V. Chiropractic presented evidence of a properly executed assignment as required under the insurance regulations. Accordingly, plaintiffs’ motion for summary judgment was properly denied.

Pesce, P.J., and Weston Patterson, J., concur. Golia, J., dissents in part and concurs in part in a separate memorandum.

—[*1]

In an action to recover no-fault benefits, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Mahon, J.), dated October 3, 2005, as, upon renewal, adhered to so much of a prior determination in an order of the same court dated July 15, 2004, as denied that branch of their motion which was made on behalf of the plaintiff Montefiore Medical Center for summary judgment on the first cause of action, asserted on behalf of the plaintiff Montefiore Medical Center, and granted the defendant’s cross motion dismissing that cause of action.

Ordered that the appeal by the plaintiffs Hospital for Joint Diseases and Mary Immaculate Hospital is dismissed, without costs or disbursements, as they are not aggrieved by the order; and it is further,

Ordered that the order is affirmed insofar as appealed from, without costs or disbursements.

The Supreme Court correctly determined that the defendant, Liberty Mutual Insurance Company, established a meritorious defense to the first cause of action. The defendant established that it had cancelled the policy of insurance covering the subject vehicle before the date of the accident. It is well settled that no notice of disclaimer is required where the policy does not provide coverage for the claim, nor do principles of waiver or estoppel preclude the insurer from denying coverage in this case (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Zappone v Home Ins. Co., 55 NY2d 131 [1982]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2004]; Commissioners of State Ins. Fund v Aetna Cas. & Sur. Co., 283 AD2d 335 [2001]). [*2]

Contrary to the contention of the plaintiff Montefiore Medical Center, the affidavit of the defendant’s claims representative based on records maintained by the insurer in the ordinary course of business was sufficient to establish the defense (see Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 433 [2004]). Similarly, the documents submitted on the cross motion demonstrate that the insurer effectively canceled the policy (see Hughson v National Grange Mut. Ins. Co., 110 AD2d 1072 [1985]). Schmidt, J.P., Adams, Luciano and Lifson, 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 (Robin S. Garson, J.), entered May 12, 2005. The order, insofar as appealed from, granted plaintiff’s motion for summary judgment to the extent of awarding plaintiff partial summary judgment upon its claim for $1,546.20 and denied defendant’s cross motion for summary judgment.

Order, insofar as appealed from, modified by providing that, upon searching the record, plaintiff’s motion for summary judgment is granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees; as so modified, affirmed without costs.

In an action to recover first-party no-fault benefits for medical services rendered to its assignor, a health care provider establishes a prima facie entitlement to summary judgment by proof that it submitted the statutory claim forms, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). While the affidavit submitted by plaintiff was insufficient to establish the mailing of any of the appended claim forms to defendant, the deficiency in plaintiff’s moving papers concerning proof of its submission of the claims was cured by defendant’s NF-10 denial of claim forms which adequately established that plaintiff sent, and that defendant received, said claim forms (see Careplus Med. Supply Inc. v State-Wide Ins. Co., 11 Misc 3d 29 [App Term, 2d & 11th Jud Dists 2005]; A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 7 Misc 3d 14 [App Term, 2d & 11th Jud Dists 2005]). [*2]

Although defendant’s submissions were sufficient to establish that defendant mailed, within the 30-day claim determination period, its NF-10 forms (see D.A.V. Chiropractic P.C. v American Tr. Ins. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50609[U] [App Term, 2d & 11th Jud Dists]; cf. Gribenko v Allstate Ins. Co., 10 Misc 3d 139[A], 2005 NY Slip Op 52201[U] [App Term, 2d & 11th Jud Dists]; Contemp. Med. Diag. & Treatment, P.C. v Government Empls. Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists]), plaintiff was nevertheless entitled to summary judgment upon said claims. Defendant’s denial of claim forms and the accompanying explanation of benefit forms merely advised plaintiff that the claims were denied pursuant to a peer review report and that a copy of said report would be sent to plaintiff under separate cover. Since there is no evidence that the peer review was sent to plaintiff under separate cover within the 30-day claim determination period, and the denial of claims were otherwise devoid of any factual basis for the denial, defendant is precluded from asserting lack of medical necessity as a defense to said claims (see A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 11th Jud Dists]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], supra). As a result, upon searching the record, we find that plaintiff is entitled to summary judgment on both of its claims and grant plaintiff’s motion for summary judgment in its entirety. The matter is remanded to the[*3]court below for a calculation of the statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., and Rios, J., concur.

Golia, J., concurs in a separate memorandum. [*4]

Golia, J., concurs with the result only, in the following memorandum:

I am constrained to agree with the ultimate disposition in the decision reached by the majority. I, however, wish to note that I do not agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

In this regard, I note my dissent in A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co. (10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 1th Jud Dists]), and in further support of my argument, I cite 11 NYCRR 65-3.8 (b) (4) which states:

“If the specific reason for a denial of a no-fault claim…is a…peer review report…the insurer shall release a copy of that report…upon the written request of any of these parties.” (emphasis added)

To hold as the majority does, in my opinion, would usurp the role of the Legislature. It would require defendant to produce the peer review report within 30 days despite the fact that the regulations do not require that the report be produced at all, unless requested in writing by the plaintiff, a burden the rules did not impose upon the defendant.
Decision Date: July 19, 2006

Supreme Court, Nassau County

9808/04

Locks Law Firm, PLLC

Attn: Seth R. Lesser, Esq.

Andrew P. Bell, Esq.

Attorneys for Plaintiff

110 East 55th Street

New York, NY 10022

Thomas W. Alfano, Esq.

Attorney for Plaintiff

400 Garden City Plaza

New York, NY 11530

Balesi & Donovan, P.C.

Attn: John Balesi, Esq.

Attorneys for Plaintiff

1225 Franklin Avenue

Suite 400

Garden City, NY 11501

O’Melveny & Myers, LLP Attn: Ralph P. DeSanto, Esq.

Attorneys for Defendant

Times Square Tower

7 Times Square

New York, NY 10036

Thomas P. Phelan, J.

Motion by plaintiff for an order: (a) granting plaintiff re-argument and/or granting his requested extension of time to serve the instant motion on or before March 3, 2006; and (b) certifying the above-captioned action, pursuant to CPLR 901 and 902, as a class action is denied, except that plaintiff’s time to serve this motion is extended nunc pro tunc to March 3, 2006 and is deemed timely.

In a prior order dated March 24, 2005, this Court dismissed plaintiff’s first, third and fourth causes of action. Plaintiff’s second cause of action for breach of contract remains as the only predicate for the proposed class action. As such, plaintiff, a retail supplier of durable medical equipment (DME), brings this breach of contract action to recover on behalf of the Class for defendant’s alleged refusal to pay the regulatory rate of reimbursement for DME no-fault claims submitted by entities and/or persons in New York State.

More specifically, plaintiff alleges that: “Defendant GEICO arbitrarily, unilaterally, and without any basis in law or pursuant to any contractual terms, reduced the amounts it would reimburse claimants and/or their assignees from New York State ( Claimants’) based upon the results of ad hoc surveys that a Geico claims examiner conducted to come up with their own idea of what should be a reasonable and customary’ charge for certain DMEs. [and that] In conjunction with reducing such reimbursements, Geico stated to each such Claimant that the claimed amounts were reduced to a reasonable reimbursement of 150%’ of the industry average’ or of the average retail price’ for the particular DME for which a claim was submitted.” (Plaintiff’s memorandum of law dated March 3, 2006 [plaintiff’s memo] at pp. 1-2; see complaint ¶¶2, 22-23, 39).

Plaintiff contends that: “This case is a perfect one for class certification. Under New York law, a determination of whether GEICO breached its contracts will not require the trier of fact to look at the circumstances of individual transactions” (plaintiff’s memo at p.2). The Court does not agree that this is a perfect case for class certification or that individual transactions will not have to be examined. On this motion, the burden of proof is on plaintiff to establish “compliance with the statutory requirements for class action certification under CPLR 901 and 902.” (Rallis v City of New York, 3 AD3d 525, 526). Plaintiff has not made the necessary showing.

CPLR 901 contains five enumerated “prerequisites”. CPLR §902 lists five additional “considerations”. These will be addressed seriatim.

The first prerequisite set forth in CPLR 901 (a) is that “the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable.” Plaintiff has failed to establish the first prerequisite. Counsel for plaintiff alleges in plaintiff’s memorandum of law that: while plaintiff contends that “the Class certainly numbers in the multiple dozens of entities encompassing hundreds if not thousands of claims on behalf of hundreds and thousands of individual New Yorkers who were injured, and through New York’s DME suppliers, filed claims for reimbursement” (plaintiff’s memo at p. 14), actual evidence showing numerosity is not provided. Class action certification will not be granted until there is a determination of “at least the approximate size of the class.” (82 NY Jur2d, Parties, § 276; see Spatz v Wide World Travel Service, Inc., 80 AD2d 519, 520; Simon v Cunard Line Ltd., 75 AD2d 283, 289).

The second prerequisite set forth in CPLR 901 (a) is that “there are questions of law or fact common to the class which predominate over any questions affecting only individual members.” Plaintiff has failed to establish the second prerequisite as well. Plaintiff contends that “there are no individual issues whatsoever, except as to the amount of damages recoverable by each Class member” (plaintiff’s memo, p. 15). The Court disagrees. There is only one legal question common to the alleged class — whether GEICO breached its insurance contracts with class members by unilaterally reducing the amounts of reimbursement based [*2]upon what GEICO determined was a “reasonable and customary” charge for certain DMEs. All of the other legal and factual questions are case specific.

Each DME transaction must be examined separately to see whether the class member has a prima facie case. First of all, each class member must submit an executed assignment of benefits form and copies of proofs of the claim which were mailed to GEICO. (See Inwood Hill Med. P.C. v Allstate Ins. Co., 3 Misc 3d 1110A, 2004 NY Slip Op 50565U at p. 12). Furthermore, class members “must document the cost of the supplies or equipment to the provider and must show that this cost was paid for the specific supplies or equipment provided to the assignor.” (Careplus Med. Supply Inc. v Allstate Indem. Co., 5 Misc 3d 1002A, 2004 NY Slip Op 51148U at p. 3). Of course, separate assessments of damages must be made for each class member who is found to be entitled to reimbursement.

Additionally, the timeliness of GEICO’s denial of all or part of a class member’s claim must be considered in order to determine whether defenses other than lack of coverage can be raised. The Court of Appeals has held that “an insurer, despite its failure to reject a claim within the 30-day period prescribed by Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3), may assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident.” (Cent. Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199). This would include cases of fraud, which, “if proven, would establish that there was no coverage at all for the claim.” (Carepluss Med. Supply Inc. v State Farm Mut. Auto. Ins. Co., 5 Misc 3d 1014A, 2004 NY Slip Op 51373U at p. 3). It would not, however, include cases of fraud involving excessive DME costs. (See Valley Psychological, P.C. v Liberty Mut. Ins. Co., 2006 NY App Div LEXIS 7500, 2006 NY Slip Op 4480 at p. 2).

The third prerequisite set forth in CPLR 901 (a) is that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” The third prerequisite has been established. As alleged, “plaintiff and all other members of the Class have virtually identical claims: they all had claims for reimbursement of DMEs reduced by GEICO based upon an average price’ that GEICO unilaterally and illegally implemented” (plaintiff’s memo, p. 17). All that is required is that plaintiff’s claim arise out of the same practice or course of conduct and be based upon the same legal theory as the claims of the other class members. (See Freeman v Great Lakes Energy Partners, 12 AD3d 1170, 1171; Ackerman v Price Waterhouse, 252 AD2d 179, 201; Friar v Vanguard Holding Corp., 78 AD2d 83, 99). Such is the case here.

The fourth prerequisite set forth in CPLR 901 (a) is that “the representative parties will fairly and adequately protect the interests of the class.” Plaintiff has failed to establish the fourth prerequisite. The deposition testimony of Jean M. Francois, owner and President of P.Z.F. Management Co., Inc., d/b/a Globe Surgical Supply, (“Globe” or “PZF”) and the exhibits supplied by GEICO indicate that plaintiff, as the assignee of Remy Gallant, may not be able to [*3]prove Mr. Gallant’s no-fault claim against GEICO. In such case, the class action would fail as well. (82 NY Jur2d, Parties, § 267; see Banks v County of Suffolk, 133 AD2d 438; Estruch v Volkswagenwerk, 97 AD2d 978; Funderburke v Uniondale Union Free Sch. Dist. No. 15, 172 Misc 2d 963, 967, aff’d 251 AD2d 622).

Plaintiff, in its complaint, alleges that on February 10, 2001, Remy Gallant was injured in an accident with a GEICO policyholder and that, on July 26, 2001, Gallant purchased a Tens Unit (i.e., a device for relieving pain by electrical stimulation of nerves) from Globe pursuant to a doctor’s prescription [complaint, ¶12]. Plaintiff further alleges that: “The item cost Globe $340.00, and Globe obtained an assignment of Mr. Gallant’s claim in order to obtain reimbursement from [GEICO] under the provisions of the No-Fault Insurance Law” [Id.]. It is additionally alleged that: “On April 30, 2001, Globe submitted a claim to [GEICO], as Mr. Gallant’s assignee, setting forth a balance owed to Globe by [GEICO] … in the amount of $510.00 (which, as provided for in Part E [i.e., 11 NYCRR § 68, Appendix 17-C, Part E] is 150%, or, in this case less than 150%, of $340.00). On May 23, 2001, [GEICO] denied the claim and reimbursed Globe for only $200.00 for that item” [Id., ¶22].

Part of GEICO’s Exhibit G and of Exhibit C to Plaintiff’s Memorandum of Law is Remy Gallant’s claim to GEICO, dated April 30, 2001, for $1,048.25, which includes a Tens Unit for $510.00. Also included as part of these same exhibits is Invoice # 5692 from Certified Health Products, dated July 20, 2000, to Globe which includes a Tens Unit for $340.00. Since this July 20, 2000 invoice is dated almost seven (7) months prior to Mr. Gallant’s February 10, 2001 accident and more than one (1) year prior to the date Globe allegedly sold the Tens Unit to Mr. Gallant, it cannot be accepted as proof of what the Tens Unit allegedly sold to Mr. Gallant cost Globe.

Furthermore, at his February 21, 2006 deposition, Mr. Francois admitted to the practice of submitting the same invoices multiple times. (Transcript, pp. 138, 141-142, 146). Mr. Francois explained that he reuses the same invoices because it’s “convenient.” (Transcript, p. 138). With respect to the Tens Units, Mr. Francois testified that he randomly picks an invoice and sends it over and over. (Transcript, p. 146). Mr. Francois also testified that Globe was never asked by any company to provide a specific invoice corresponding to the exact date of purchase. (Transcript, p. 146). When asked whether he has the invoices for the Tens Units purchased from Certified Health Products which have not been produced, Mr. Francois answered: “I don’t know where they are.” (Transcript, p. 147).

Mr. Francois’ deposition testimony additionally indicates that he will be unable to produce a cancelled check showing that Globe actually paid for the Tens Unit allegedly sold to Mr. Gallant. At his February 21, 2006 deposition, Mr. Francois testified that in the ordinary course of business he would have paid invoices from Certified Health Products by check. (Transcript, p. 159). At the deposition, counsel for GEICO advised Mr. Francois that a subpoena had been sent to Washington Mutual Bank for “all checks drawn on the PZF [*4]Management account from 2000 until mid 2004.” (Transcript, p. 159). Counsel then asked Mr. Francois whether he could “explain why there are no checks to Certified Heath Products in the production from Washington Mutual Bank between the dates of 2000 and early 2004?” (Transcript, p. 160). Mr. Francois responded that he didn’t know. (Transcript, p. 160).

According to counsel for GEICO, Globe’s bank has produced only 6 checks written on PZF’s account to Certified Health Products, none of which relate to the DME transaction at issue. In this regard, Mr. Francois testified that there are no other bank accounts with respect to Globe and/or PZF other than the one at Washington Mutual Bank. (Transcript, p.162). Under the circumstances, the Court cannot find that Globe would make an adequate representative party. Mr. Francois’ practice of using the same invoices over and over again when filing no-fault claims to document the cost of DMEs gives the appearance of insurance fraud and is to be condemned. Furthermore, Mr. Francois’ inability to produce the actual invoice for the Tens Unit allegedly sold to Mr. Gallant and a cancelled check to prove payment adds to that appearance.

The fifth and final prerequisite set forth in CPLR 901 (a) is that “a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” Plaintiff has failed to establish the fifth prerequisite. Pursuant to Insurance Law §5106[b], a no fault claimant has the option of submitting their disputed claim to binding arbitration. Further, a successful claimant is entitled to recover penalty interest at the rate of “two percent per month” plus attorneys’ fees (Insurance Law § 5106 [a]). Plaintiff has not shown how a one-issue class action is superior to the remedies provided to individual claimants by the Insurance Law.

The fifth prerequisite set forth in CPLR 901 (a) additionally ties into the third consideration set forth in CPLR 902, which requires the Court to take into account: “the extent and nature of any litigation concerning the controversy already commenced by or against members of the class.” While plaintiff has failed to present any evidence or information as to this consideration, GEICO has submitted copies of arbitration awards and court decisions showing the existence of litigation and arbitration proceedings concerning the issue sought to be determined in the proposed class action. (See GEICO’s Appendix of Unreported, Out-of-State and Other Legal Authorities, etc.). It is likely that an appellate court will decide the legal issue that is the basis for the proposed class action in the near future — a consideration which weighs against plaintiff’s application.

The first consideration set forth in CPLR 902 requires the Court to take into account: “the interest of members of the class in individually controlling the prosecution or defense of separate actions.” This consideration weighs against plaintiff’s application as well. The Appellate Division, First Department, has held that: “Where . . . a choice of remedies is available to each member of an alleged class, class action status should be denied.” (Martinez v American Export Industries, Inc., 48 AD2d 803; see, also, 82 NY Jur2d, Parties, § 280). The First Department has also held that “the fact that wrongs were committed pursuant to a [*5]common plan or pattern does not permit invocation of the class action mechanism where the wrongs done were individual in nature or subject to individual defenses.” (Mitchell v Barrios-Paoli, 253 AD2d 281, 291; see, also, 82 NY Jur2d, Parties, § 280). As noted above, the Insurance Law provides each claimant with a choice of remedies and the timeliness or untimeliness of GEICO’s denial of coverage will determine what defenses GEICO can raise.

The second consideration set forth in CPLR 902 requires the Court to take into account: “the impracticality or inefficiency of prosecuting or defending separate actions.” Plaintiff has failed to present evidence concerning this consideration. There is no proof that the relatively small amounts of each claim are discouraging any prospective class members from pursuing their claims individually. To the contrary, the arbitration awards and court decisions collected in GEICO’s Appendix of Unreported, Out-of-State and Other Legal Authorities, etc., show that separate actions and arbitrations are being pursued. Thus, this consideration too weighs against plaintiff’s application.

The fourth consideration set forth in CPLR 902 requires the Court to take into account: “the desirability or undesirability of concentrating the litigation of the claim in the particular forum.” Plaintiff has failed to show that this Court is a desirable forum for the proposed class action. With the relatively small amount of each claim, it seems unlikely that claimants from all over New York State would choose Supreme Court, Nassau County, as the forum to litigate their claims. This consideration also weighs against plaintiff’s application.

The fifth and last consideration set forth in CPLR 902 requires the Court to take into account: “the difficulties likely to be encountered in the management of a class action.” This consideration similarly weighs against plaintiff’s application. Once the one common legal issue is decided, each claim would have to be adjudicated separately, with evidence and witnesses coming from all over New York State. Coordinating the mini-trials of numerous small claims would present a logistical and scheduling nightmare.

Inasmuch as plaintiff has failed to establish four out of the five prerequisites for class action certification set forth in CPLR 901 and all five considerations set forth in CPLR 902 weigh against granting class action certification, plaintiff’s application for class action certification is denied.

This decision constitutes the order of the court.

Dated: JULY 19, 2006 THOMAS P. PHELAN

J.S.C.

Locks Law Firm, PLLC

Attn: Seth R. Lesser, Esq.

Andrew P. Bell, Esq.

Attorneys for Plaintiff

110 East 55th Street

New York, NY 10022

Thomas W. Alfano, Esq.

Attorney for Plaintiff

400 Garden City Plaza

New York, NY 11530

Balesi & Donovan, P.C.

Attn: John Balesi, Esq.

Attorneys for Plaintiff

1225 Franklin Avenue

Suite 400

Garden City, NY 11501

O’Melveny & Myers, LLP

Attn: Ralph P. DeSanto, Esq.

Attorneys for Defendant

Times Square Tower

7 Times Square

New York, NY 10036

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 (Arlene Bluth, J.), entered July 15, 2005. The order, insofar as appealed from as limited by plaintiff’s brief, upon granting defendant’s motion for reargument of plaintiff’s summary judgment motion, which was granted in a prior order dated March 2, 2005, denied plaintiff’s motion for summary judgment.

Order, insofar as appealed from, affirmed without costs.

Plaintiff commenced this action to recover $1,791.73 in first-party no-fault benefits for medical services rendered to its assignor. Thereafter, plaintiff moved for summary judgment. Defendant opposed the motion and cross-moved for summary judgment dismissing the complaint. In March 2005, the court below granted plaintiff’s motion and denied defendant’s cross motion as moot. In July 2005, defendant moved by order to show cause for reargument of the court’s March order, which motion plaintiff opposed. By order entered July 15, 2005, the court granted reargument and, insofar as is relevant hereto, denied plaintiff’s motion for summary judgment.

Contrary to the determination of the court below, the affidavit plaintiff submitted in support of its motion for summary judgment was sufficient to allow the annexed claim forms to be considered by the court. The deficiency in plaintiff’s moving papers concerning proof of its submission of the claims to defendant was cured by the acknowledgment of receipt of the claims in the denial of claim forms annexed to plaintiff’s moving papers (see A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]). The burden then shifted to defendant to demonstrate a triable issue of fact (see [*2]Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Upon a review of the record, we find that defendant raised a triable issue of fact by showing that it timely requested verification and made the requisite follow-up requests (see 11 NYCRR 65-3.5 [b]), and, upon receiving the requested verification, timely denied the claims based on lack of medical necessity as set forth in detailed peer review reports (see A.B. Med Servs. PLLC v Travelers Prop Cas. Corp., 8 Misc 3d 139[A], 2005 NY Slip Op 51330[U] [App Term, 2d & 11th Jud Dists]; Park Health Ctr. v Peerless Ins. Co., 2 Misc 3d 127[A], 2003 NY Slip Op 51687 [App Term, 2d & 11th Jud Dists]; Triboro Chiropractic and Acupuncture v Electric Ins. Co., 2 Misc 3d 135[A], 2004 NY Slip Op 50215[U] [App Term, 2d & 11th Jud Dists]). Accordingly, plaintiff’s motion for summary judgment was properly denied.

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

Golia, J., concurs in a separate memorandum. [*3]

Golia, J., concurs with the result only, in the following memorandum:

While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.
Decision Date: July 18, 2006