APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from that portion an order of the Civil Court, Bronx County entered January 24, 2005 (Larry Schachner, J.) which denied its cross motion for summary judgment dismissing the complaint.

PER CURIAM

Order entered January 24, 2005 (Larry Schachner, J.), modified to the extent of granting summary judgment to defendant dismissing the complaint; as modified, affirmed, without costs.

Plaintiff provided medical services to its assignor and subsequently submitted claims to defendant insurer seeking first-party no-fault benefits. Defendant delayed payment on the ground that plaintiff’s assignor failed to respond to timely requests for additional verification.

Defendant established its entitlement to summary judgment dismissing the complaint. An insurer is not obligated to pay or deny a claim until requested verifications have been provided (see 11 NYCRR § 65-3.8[b][3]). The record reveals that plaintiff and its assignor failed to respond to defendant’s timely requests for additional verification. Accordingly, the period within which defendant was required to respond to plaintiff’s claims did not begin to run, and any claim for payment was premature (see Nyack Hospital v State Farm Mutual Automobile Insurance Company, 19 AD3d 569 [2005]).

This constitutes the decision and order of this court.
I concur
Decision Date: October 26, 2005

Civil Court of the City of New York, Queens County

086471/04

Howard G. Lane, J.

Plaintiff commenced this action to recover first-party no-fault benefits for medical services rendered to its assignor Katina Johnson pursuant to New York’s No-Fault Insurance Law § 5101 et. seq., as well as statutory interest and attorney’s fees. Thereafter, defendant moved for summary judgment on the ground that plaintiff’s claims for No-Fault benefits is not overdue and that this action is premature. Plaintiff cross-moved for summary judgment on its claims in the amount of $759.00, on the ground that defendant failed to pay or to deny its claims within the statutory 30-day period as required by Insurance Law section 5106 [a].

SUMMARY JUDGMENT STANDARD

The rule governing summary judgment requires the proponent of a summary judgment motion to make a prima facie showing of entitlement to judgment as a matter of law, tendering admissible evidence to eliminate any material issues of fact from the case (Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]; Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]; Tortorello v. Carlin, 260 AD2d 201 [1st Dept 1999]). Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers (Matter of Redemption Church of Christ v. Williams, 84 AD2d 648; Greenberg v. Manlon Realty, 43 AD2d 968).

If the moving party satisfies those standards, the burden shifts to the opponent to rebut that prima facie showing by presenting evidence in admissible form establishing the existence of triable issues of fact (see, CPLR §3212, subd [b]; Zuckerman v. City of New York, 49 NY2d 557 [1980]; Davenport v. County of Nassau, 279 AD2d 497 [2d Dept 2001]; Pagano v. Kingsbury, 182 AD2d 268 [2d Dept 1992]; Kaufman v. Silver, 90 NY2d 204 [1997]). It is well settled that summary judgment should be denied if there is any doubt as to the existence of a triable issue of fact (Freese v. Schwartz, 203 AD2d 513 [2d Dept 1994]).

When deciding a motion for summary judgment, the court must review the [*2]evidence in the light most favorable to the non-moving party, and must give that party all of the reasonable inferences that can be drawn from the evidence (Louniakov v. M.R.O.D. Realty Corp., 282 AD2d 657 [2d Dept 2001]; SSBSS Realty Corp. v. Public Service Mut. Ins. Co., 253 AD2d 583[1st Dept 1998]).

DEFENDANT’S MOTION AND PLAINTIFF’S CROSS-MOTION FOR SUMMARY JUDGMENT.

Pursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, within thirty [30] days after a claimant submits proof of the facts and the amount of loss sustained, an insurer is required to either pay or deny a claim for insurance coverage of medical expenses arising from a motor vehicle accident (see, 11 NYCRR §65.15 [g] [3]; Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195 [1997]; Mount Sinai Hosp., v. Triboro Coach, 263 AD2d 11 [2d Dept 1999]; New York Hosp. Med. Center of Queens v. Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002]).

The only exception to the 30 day rule is where an insurer’s untimely denial is based upon the defense of lack of coverage, or where a medical condition for which the patient was treated, was not “related to the accident”. Chubb, supra. To withstand a motion based on this defense, the insurer has the burden to come forward with proof in admissible form to establish “the fact” or the evidentiary foundation for its belief that the patient’s treatment was unrelated to the accident (Metro Med. Diagnostics, P.C., v. Eagle Ins. Co., 293 AD2d 751 [2d Dept 2002]).

Within 10 business days after receipt of the completed no-fault application (NF-2), the insurer must forward verification forms for healthcare or hospital treatment (NF-3, NF4 or NF-5) to the injured party or that party’s assignee. After receipt of the completed verification of healthcare or hospital treatment form, the insurer may seek “additional verification” or further proof of claim from the injured party or that party’s assignee within 15 business days thereof. 11 NYCRR §65-3.5(b). Hence, the 30 day period may be extended by a request for verification. See, New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co.,supra; Presbyterian Hosp. in the City of New York v. Maryland Cas. Co., 90 NY2d 279 [1997]).

If the requested verification has not been supplied to the insurer within 30 calendar days, after the original request, the insurer shall issue within 10 calendar days of the insured’s failure to respond a follow-up request “either by telephone call, properly documented in the file, or by mail.” See 11 NYCRR §65-3.6(b), now 15 days per 11 NYCRR §65-3.5 [b]; S&M Supply v. Allstate Insurance Co., 2003 NY Slip Op 51191 [U] [App Term, 2d & 11th Jud Dists]. “An insurer shall not issue a denial of claim form . . . prior to its receipt of verification of all of the relevant information requested . . . “(New York Hosp. Med. Ctr. Of Queens v. Country-Wide Ins. Co., supra at 585. Glassman D.C., PC v. State Farm Mut. Auto. Ins. Co., 192 Misc 2d 264 [App Term, 2nd & 11 Jud [*3]Dists 2002]).

A legally valid basis for denying a first party benefit claim would be the provider’s assignor failing to comply with an insurer’s requests for verification. See generally, Lopedote v. General Assurance Company, 2004 NY Slip Op 50593[U] [Kings Co. Civil Ct. 2004]. However, any party required to provide verification information must be afforded adequate and proper notice of the request. See generally, Star Medical Services, P.C. v. Allstate Ins. Co., 5 Misc 3d 785 [Kings Co. Civil Ct. 2004].

Failure to pay or deny a claim within the 30-day period requirement, absent a request for additional verification, renders benefits “overdue,” and precludes the insurer from disclaiming liability based on a breach of a policy condition or a statutory exclusion defense (Presbyterian Hosp. in City of New York v. Maryland Cas. Co., 90 NY2d 274 [1997]). All overdue payments bear interest at a rate of 2% per month, and the claimant is entitled to recover attorney’s fees where a “valid claim or portion” was denied or overdue [see, Insurance Law §5106 [a]; Presbyterian Hosp. in the City of New York, supra.

Plaintiff maintains that it is entitled to summary judgment because the defendant failed to pay or deny its claims within 30 days of receipt as required by the Insurance Law §5106 (a). Plaintiff asserts that it submitted to defendant proofs of claims for medical supplies which defendant admits to receiving, that defendant did not request additional verification and that the claim is overdue and owing.

Plaintiff proved that it submitted a timely and proper notice of claim pursuant to the No-Fault statute for medical supplies provided, which defendant acknowledged receiving, and not paying. See, Capio Medical, P.C. ex rel. Berger v. Progressive Cas. Ins. Co., 7 Misc 3d 129(A), 2005 NY Slip Op 50526(U) (App Term, 2nd and 11 th Jud Dists); Park Health Center v. Prudential Prop. and Cas. Ins. Co., 2001 WL 1803364 (App Term 2nd and 11th Jud Dist 2001). The burden then shifted to defendant to show the existence of a triable issue of fact. See, Alvarez v. Prospect Hosp., supra. Defendant asserts that it received the bills at issue on August 20, 2002, “printed” and then mailed a request for additional verification on August 30, 2002, and after receiving no response from plaintiff, followed up with a second written request on September 30, 2002. Plaintiff did not admit to receiving the request for verification. Defendant asserts that the requests for verification were timely sent to plaintiff and establish defendant’s right to a tolling of the 30-day period by its verification requests.

In support of its motion defendant submits copies of the alleged verification request addressed to plaintiff, and proof of mailing of its request for verification (S & M Supply, Inc. v. GEICO, 2003 NY Slip Op 51192[U] [App Term, 2d & 11th Jud Dists 2003]). Specifically, defendant proffers the affidavit of Linda Phillips, a litigation representative employed by defendant who avers in her affidavit in support of defendant’s motion for summary judgment that “[w]ith respect to the mailing of the . . . [*4]verification requests, my office mailed same in accordance with its normal practice and procedure, followed in the regular course of my office’s business. . .” She further avers that “[s]uch request includes the specific claim information and bears the date that it is printed. It is then placed in a bin for the daily 1:15 p.m. collection by my office’s internal mail room personnel. The same day, a mail room employee prepares a post paid envelope bearing the same address of the entity that submitted the claim and seals the verification request in the envelope. Also the same day, a carrier from United States Post Office collects, with the mail, the envelope containing the verification request form at 3:30 P.M.” Additionally, she avers that “any verification request form that is placed in the bin for mail room collection after 1:15 p.m. is collected during the next business day’s internal mail collection.”

The court finds the assertions of defendant’s litigation examiner conclusory and such assertions fail to specify either that it was the duty of the litigation examiner to ensure compliance with said office procedures or that the litigation examiner had actual knowledge that said procedures were complied with. (See, Contemp. Med. Diag. & Treatment, P.C. v. GEICO, 6 Misc 3d 137(A), 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists 2005]). See also, Amaze Medical Supply v. State Farm Automobile Ins. Co., 8 Misc 3d 139(A), 2005 NY Slip Op 51315(U) [2d and 11th Jud Dists 2005]). As defendant’s papers in support of the motion for summary judgment do not contain an affidavit of someone with personal knowledge that its verification requests were actually mailed, or describing the standard office practices or procedures it used to ensure that such requests were properly addressed and mailed (see, Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679 [2d Dept 2001]), defendant failed to establish by competent evidence that it timely mailed its verification requests, and therefore, the 30-day period within which it was required to pay or deny the claim was not tolled (see, S&M Supply Inc. Co. V. Lancer Ins. Co., 4 Misc 3d 131[A], 2004 NY Slip Op 50695[U] [App Term, 2d & 11th Jud Dists 2004]).

Accordingly, defendant’s motion for summary judgment is denied. Plaintiff’s cross-motion for summary judgment is granted and judgment shall be awarded in favor of plaintiff in the amount of $759.00, together with statutory interest and attorneys fees.

The foregoing constitutes the decision and order of this Court.

Dated, October 24, 2005________________________________

Howard G. Lane

Judge, Civil Court

[*1]

District Court of Suffolk County, Second District, October 24, 2005

APPEARANCES OF COUNSEL

Parker Law Firm, Farmingdale (Scott Schwaber of counsel), for plaintiff. Jeena R. Belil, Melville, for defendant.

OPINION OF THE COURT

Patrick J. Barton, J.

The within action for payment of no-fault benefits was commenced on March 19, 2004.

After hearing testimony and examining exhibits, I make the following findings of fact and conclusions of law.

Plaintiff is the assignee of Julia Johnson, who was involved in an automobile accident on July 19, 2003. At the time of the accident, there was an existing insurance policy issued by defendant containing benefits under the No-Fault Law.

Under this policy, plaintiff’s assignor was entitled to health service expenses resulting from the accident. She was referred by her treating physician to plaintiff for MRIs of her lumbar and cervical spine, and on July 29, 2003, the MRIs were performed.

Plaintiff timely submitted a bill for $1,571.80 to defendant on or about September 16, 2003 for these MRIs together with a proper no-fault verification form.

Defendant timely denied payment and its denial of claim form contained the sole affirmative defense of no medical necessity for the MRIs. The defendant bears the burden of proof on this defense (see Choicenet Chiropractic P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672[U] [App Term, 2d & 11th Jud Dists 2003]; Prime Med. v Travelers Indem. Co., 2 Misc 3d 1009[A], 2004 NY Slip Op 50234[U] [Civ Ct, Kings County 2004]). At trial, defendant’s expert, Dr. Joseph C. Cole, testified that he conducted a peer review and came to the conclusion that these MRIs were not medically necessary. Dr. Cole’s report was admitted into evidence as defendant’s exhibit B. I find that Dr. Cole’s testimony was not sufficient to establish by a fair preponderance of the credible evidence defendant’s burden to rebut the presumption of medical necessity.

However, in addition to the defense of no medical necessity, defendant, for the first time at trial, raised an objection to the referral herein as an improper self-referral prohibited by section 238-a of the Public Health Law. This issue is one of first impression in this court. Section 238-a [*2]provides in pertinent part:

“Prohibition of financial arrangements and referrals

“1. (a) A practitioner authorized to order clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services may not make a referral for such services to a health care provider authorized to provide such services where such practitioner or immediate family member of such practitioner has a financial relationship with such health care provider.

“(b) A health care provider or a referring practitioner may not present or cause to be presented to any individual or third party payor or other entity a claim, bill, or other demand for payment for clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services furnished pursuant to a referral prohibited by this subdivision . . .

“7. If a referring practitioner or a health care provider furnishing clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services or any other person or entity collects any amounts that were billed in violation of this section, such referring practitioner and health care provider and other person or entity shall be jointly and severally liable to the payor for any amounts so collected.”

A “financial relationship” is defined in section 238 (3) of the Public Health Law as “an ownership interest, investment interest or compensation arrangement.” A review of the record in the instant matter indicates that the parties stipulated at trial that the referring physician, Dr. Gautam Khakar, was associated with Superior Medical Services, P.C. According to certified records from the New York State Education Department (introduced as defendant’s exhibit C), the single shareholder of Superior Medical Services, P.C. is Raymond V. Damadian. The certified records of the Education Department further revealed that Raymond V. Damadian is also the single shareholder of Stand-Up MRI of the Bronx, the plaintiff herein. As such, I find that this referral falls within the ambit of subdivision (1) of section 238-a. Although the defense of improper referral was not contained in defendant’s denial of claim form, I find that the defense was properly raised at trial, as the 30-day time limitation set forth in section 5106 (a) of the Insurance Law does not apply to cases that fall within the purview of section 238-a (1) of the Public Health Law (see Ozone Park Med. Diagnostic Assoc. v Allstate Ins. Co., 180 Misc 2d 105 [App Term, 9th & 10th Jud Dists 1999]). I also note that this was raised as an affirmative defense in defendant’s answer.

Accordingly, this case is dismissed.

—[*1]

In a proceeding pursuant to CPLR 7511 to vacate an award of a master arbitrator dated September 25, 2003, affirming an award of an arbitrator dated July 9, 2003, the appeal is from an order of the Supreme Court, Suffolk County (Cohalan, J.), dated November 12, 2004, which denied the petition and dismissed the proceeding.

Ordered that the order is affirmed, with costs.

Consistent with the public policy in favor of arbitration, the grounds specified in CPLR 7511 for vacating or modifying a no-fault arbitration award are few in number and narrowly applied (see Matter of Domotor v State Farm Mut. Ins. Co., 9 AD3d 367 [2004]). Here, the petitioner failed to demonstrate the existence of any of the statutory grounds for vacating the master arbitrator’s award. The arbitrator acted within his discretionary authority in refusing to entertain late submissions from each of the parties. Moreover, the determination of the master arbitrator affirming the original award had a rational basis (see Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 231-232 [1982]; Matter of Liberty Mut. Ins. Co. v Spine Americare Med., 294 AD2d 574, 576 [2002]). Crane, J.P., Santucci, Mastro and Dillon, JJ., concur.

—[*1]

In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from an order of the Supreme Court, Queens County (Satterfield, J.), dated February 24, 2004, which granted the defendant’s motion for summary judgment dismissing the complaint.

Ordered that the order is affirmed, with costs.

The plaintiff sustained personal injuries in an automobile accident on August 22, 1994. Since that time, she has pursued two prior actions and an arbitration against her insurer, the defendant Country-Wide Insurance Company, to recover, inter alia, both uninsured and no-fault benefits under her policy. As a result thereof, the plaintiff recovered the full amounts of her policy limits, as well as statutory penalties for the defendant’s delay in paying her claims. As relevant to the instant appeal, in connection with the settlement of the plaintiff’s second action, which was commenced on or about January 24, 2000, the plaintiff executed, inter alia, a general release, dated January 25, 2002. In the instant action, the plaintiff seeks, inter alia, damages for breach of contract based on the defendant’s alleged bad faith in delaying the processing of her insurance claims.

The general release, dated January 25, 2002, which the plaintiff signed, bars the instant action (see Falconieri v A & A Discount Auto Rental, 262 AD2d 446, 447 [1999]; DeQuatro v Zhen Yu Li, 211 AD2d 609, 609-610 [1995]). [*2]

The plaintiff’s remaining contentions are either unpreserved for appellate review or without merit. H. Miller, J.P., Adams, Spolzino and Fisher, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal by defendant from an order of the Civil Court, Kings County (M. Mendez, J.), entered May 5, 2004, which denied defendant’s motion to preclude, or in the alternative, to compel compliance with discovery demands and granted plaintiff’s cross motion for summary judgment.

Order affirmed without costs.

In this action to recover assigned first-party no-fault benefits, plaintiff health care provider established its prima facie entitlement to summary judgment by proof that it submitted a statutory claim form, setting forth the fact and amount 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]). The burden then shifted to defendant to create a triable issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

Absent tolling of the statutory time (Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 434 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]), defendant’s conceded failure to deny the claim, received September 25, 2002, until March 28, 2003, violated the 30-day claim determination period and precluded it from interposing its defenses aside from the claim that the incident was staged to defraud. All post-claim requests for examinations under oath (EUO) pursuant to the verification regulations must [*2]be made within prescribed time frames (11 NYCRR 65-3.5 [a], [d]; 11 NYCRR 65-3.6 [b]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2002]). “Any attempt by the insurer to deny the claim prior to exhausting the verification protocols is premature and of no effect” (King’s Med. Supply Inc. v Allstate Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50451[U] [App Term, 9th & 10th Jud Dists]; see also New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d at 570; King’s Med. Supply v New York Cent. Mut. Fire Ins. Co., 5 Misc 3d 136[A], 2004 NY Slip Op 51550[U] [App Term, 2d & 11th Jud Dists]). Here, defendant’s initial EUO request, its letter dated December 10, 2002, was itself untimely and did not schedule the EUO within the prescribed time. The assignor was therefore under no duty to appear for the first scheduled EUO and it is irrelevant that defendant may have duly rescheduled the EUO upon assignor’s initial non-appearance.

As to the fraud claim, which survives the preclusion sanction (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]), defendant’s proof thereof was not submitted in admissible form. None of the investigators’ reports or operators’ statements were sworn, and neither the affirmation of counsel, which alleged no basis to support an inference that any of the facts asserted in his statements were based on personal knowledge, nor the affidavit of defendant’s employee, which asserted merely the conclusory statement that “material misrepresentations [were] made in the presentation of the claim,” sufficed to allege the necessary facts. Thus, defendant failed to establish a triable issue of fraud and summary judgment was properly granted (see e.g. Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists] [claims examiner’s conclusory assertions as to fraud insufficient]; Ocean Diagnostic Imaging P.C. v Lancer Ins. Co., 6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004] [unsworn investigation reports inadmissible in opposition to summary judgment motion]; Melbourne Med. P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004] [attorney’s factual allegations, without personal knowledge of the investigation, mere unsubstantiated hearsay]; Dotzel v Allstate Ins. Co., 2003 NY Slip Op 50853[U] [App Term, 9th & 10th Jud Dists] [unsworn investigation reports inadmissible in opposition to summary judgment motion]).

In light of the foregoing, we need not address defendant’s remaining claims of error.

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

Golia, J., dissents in part in a separate memorandum. [*3]
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE TERM : 2nd and 11th JUDICIAL DISTRICTS
PRESENT : PESCE, P.J., PATTERSON and GOLIA, JJ.
OCEAN DIAGNOSTIC IMAGING, P.C.
a/a/o ALICIA PRINCE,

Respondent,

-against-
UTICA MUTUAL INSURANCE COMPANY,

Appellant.

Golia, J., dissents in part and votes to modify the order and deny plaintiff’s motion for summary judgment in the following memorandum:

Contrary to the holding of the majority, I find that the papers submitted by the defendant in opposition to the plaintiff’s motion for summary judgment were sufficient to raise an issue of fact as to whether the defense of fraud was based upon a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]).

For the reasons stated in my dissent in Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co. (6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004]), I find that the unsworn reports when submitted in opposition to a motion for summary judgment and accompanied by an affidavit which makes reference to such reports, are sufficient for the purpose of raising a triable issue of fact. This Court must, when deciding a motion for summary judgment, interpret the evidence in the light most favorable to the non-movant (see Weiss v Garfield, 21 AD2d 156 [1964]). This is especially true where there is an allegation of fraud.

Accordingly, I would modify the order of the lower court and would deny the plaintiff’s motion for summary judgment.
Decision Date: October 21, 2005

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal by plaintiffs from an order of the Civil Court, Kings County (E. Nadelson, J.), entered June 14, 2004, denying their motion for partial summary judgment in favor of D.A.V. Chiropractic P.C.

Appeal as taken by plaintiff Daniel Kim’s Acupuncture P.C. unanimously dismissed.

Order unanimously affirmed without costs.

In this action to recover first-party no-fault benefits for medical supplies furnished to its assignor, plaintiff D.A.V. Chiropractic P.C. established a prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the [*2]
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]). Plaintiff, however, also submitted and relied upon defendant’s denial of claim forms which had unaffirmed peer reviews attached thereto. In opposition to the motion, defendant likewise relied upon said unaffirmed peer reviews which contained a sufficient factual basis and medical rationale so as to raise a triable issue of fact regarding medical necessity (see Pagano v Kingsbury, 182 AD2d 268 [1992]; Triboro Chiropractic & Acupuncture v Electric Ins. Co., 2 Misc 3d 135[A], 2004 NY Slip Op 50215[U] [App Term, 2d & 11th Jud Dists]). Accordingly, plaintiffs’ motion for partial summary judgment was properly denied.

Inasmuch as plaintiff Daniel Kim’s Acupuncture P.C. does not appear to be an aggrieved party, the appeal as taken by it is dismissed (CPLR 5511).
Decision Date: October 21, 2005

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal by defendant from an order of the District Court, Nassau County (S. Jaeger, J.), entered March 31, 2004, which granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for summary judgment, or in the alternative, for an order compelling discovery.

Order unanimously affirmed without costs.

In this action to recover assigned first-party no-fault benefits, plaintiff health care provider established its prima facie entitlement to summary judgment by proof that it submitted a statutory claim form setting forth the fact and 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]). The burden shifted to defendant to create a triable issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Defendant’s conceded failure to deny the claim (received September 12, 2002) until December 2, 2002, that is, well beyond the 30-day claim determination period, precluded most defenses unless defendant established a tolling of the statutory time (Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 434 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]).

All post-claim independent medical examination and examination under oath verification requests must be made within prescribed time frames (11 NYCRR 65-3.5 [a], [b], [d]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2002]), and “[a]ny attempt by the insurer to deny the claim prior to exhausting the verification protocols is [*2]premature and of no effect” (King’s Med. Supply Inc. v Allstate Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50451[U] [App Term, 9th & 10th Jud Dists]; see also New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d at 570 [2004]; King’s Med. Supply v New York Cent. Mut. Fire Ins. Co., 5 Misc 3d 136[A], 2004 NY Slip Op 51550[U] [App Term, 2d & 11th Jud Dists]). Neither of defendant’s initial examination requests were issued timely nor did they schedule the examination within the requisite 30-day period. Accordingly, defendant’s verification requests failed to toll the 30-day claim determination period.

As to the defense that the incident was staged to defraud, which defense survives the preclusion sanction (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]), as plaintiff properly argued below, none of defendant’s proof offered to establish the defense was submitted in admissible form. Defendant’s counsel alleged no basis to support an inference that the facts asserted in his statements were based on personal knowledge. Defendant’s “no-fault suit specialist” asserted merely the conclusory reference to “a possible staged fraudulent accident” based on unspecified “material misrepresentations made in the presentation of her claims,” an unsworn police accident report, and unsworn investigators’ reports, the latter of which concerned only alleged irregularities in the treatment and billing process, not the traffic incident, and thus, did not support a defense that survived the preclusion sanction (see Ocean Diagnostic Imaging P.C. v Prudential Prop. & Cas. Ins. Co., ____ Misc 3d _____, 2005 NY Slip Op ____ [App Term, 9th & 10th Jud Dists, February 17, 2005] [“Since defendant failed (timely to deny the claim) . . . it is precluded from raising
. . . its defense of provider fraud”]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]). The adverse operator’s statements as recorded on the police accident report, plainly self-serving, hearsay statements, were inadmissible for the purpose offered (Hoffman v Eastern Long Is. Transp. Enter., 266 AD2d 509, 510 [1999]; see also Cover v Cohen, 61 NY2d 261, 274 [1984]; Wolf v We Transp., 274 AD2d 514 [2000]). Thus, defendant failed to establish a triable issue of fraud (see e.g. Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists] [claims examiner’s conclusory assertions as to fraud insufficient]; Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co., 6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004] [unsworn investigation reports inadmissible in opposition to summary judgment motion]; Melbourne Med. P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004] [attorney’s factual allegations, without personal knowledge of the investigation, mere unsubstantiated hearsay]; Dotzel v Allstate Ins. Co., 2003 NY Slip Op 50853[U] [App Term, 9th & 10th Jud Dists] [unsworn investigation reports inadmissible in opposition to summary judgment motion]). [*3]

In light of the foregoing, defendant’s remaining contentions need not be addressed.
Decision Date: October 21, 2005

[*1]

Supreme Court, Appellate Term, Second Department, October 21, 2005

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellants. Bruno Gerbino & Macchia LLP, Melville (Charles W. Benton of counsel), for respondent.

{**10 Misc 3d at 51} OPINION OF THE COURT

Memorandum.

Order insofar as appealed from modified by granting plaintiff A.B. Medical Services PLLC partial summary judgment in the sum of $6,765.47, plaintiff D.A.V. Chiropractic P.C. partial summary judgment in the sum of $593.94, and plaintiff Lvov Acupuncture P.C. partial summary judgment in the sum of $1,690.56, and as to those sums, the matter is remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees, and for all further proceedings on said plaintiffs’ remaining claims; as so modified, affirmed without costs.

Appeal insofar as taken by plaintiff Square Synagogue Transportation Inc. unanimously dismissed.

Plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C. and Lvov Acupuncture P.C. established their prima facie entitlement to summary judgment by proof that they submitted statutory claim forms, setting forth the fact and amount 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]). Upon such proof, the burden shifted to defendant to create a triable issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324[*2][1986]). Absent tolling of the statutory time (Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 434 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]), defendant’s conceded failure to deny the claims until December 2, 2002 violated the 30-day claim determination period and precluded it from interposing most defenses (aside from its claim that the incident was staged to defraud) as to all claims mailed on or before November 2, 2002.

As to the fraud defense, which survives the preclusion sanction (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293{**10 Misc 3d at 52} AD2d 751 [2002]), none of the proof offered to establish that the underlying incident was staged to defraud defendant was submitted in admissible form. None of the investigators’ reports or operators’ statements were sworn, defendant’s counsel alleged no basis to support an inference that any of the facts asserted in his statements were based on personal knowledge, and Tonya Miller, defendant’s claims representative, asserted in her affidavit merely the conclusory statement that “material misrepresentations [were] made in the presentation of the claim” and failed to adopt any of the factual assertions contained in the attached reports and statements. Thus, defendant failed to establish a triable issue of fraud (Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists 2005]; Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co., 6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004]; see e.g. Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004] [attorney’s factual allegations, without personal knowledge of the investigation, mere unsubstantiated hearsay]; Dotzel v Allstate Ins. Co., 2003 NY Slip Op 50853[U] [App Term, 9th & 10th Jud Dists 2003]).

Similarly, defendant did not establish proper verification requests with respect to its letters which, inter alia, indicated that it intended to examine “claimants” under oath. An insurer

“may not rely on a letter, even if denominated a verification request, that merely informs a claimant that a decision on the claim is delayed pending an investigation, and without specifying a particular form of verification and the person or entity from whom the verification is sought, to toll the 30-day claim determination period” (Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d at 94; see also A.B. Med. Servs. PLLC v Country-Wide Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50255[U] [App Term, 2d & 11th Jud Dists 2005]; Ocean Diagnostic Imaging P.C. v Nationwide Mut. Ins. Co., 4 Misc 3d 142[A], 2004 NY Slip Op 51041[U] [App Term, 2d & 11th Jud Dists 2004]).

While the particular form of verification sought is stated, the persons sought to be examined are not identified, nor do the letters specify, inter alia, the time and place the examinations would take place (cf. 11 NYCRR 65-3.5 [d], [e]). As the instant letters do not conform to the requirements of a proper examination under oath verification request in substantial respects, the{**10 Misc 3d at 53} letters are ineffective to toll the 30-day claim determination period.

Therefore, defendant must first demonstrate a tolling via proof that one or more of the notice of physical examination letters of October 2, 2002 and the follow-up letters of October 29, 2002 issued, that assignor failed to appear, and that the timing of said notice(s) and nonappearance(s) established a defense to any or all claims. As the December 2, 2002 denial was timely as to the final four post-November 2, 2002 claims, namely, plaintiff A.B. Medical Services PLLC’s claims for $323.36 and $71.40, plaintiff D.A.V. Chiropractic P.C.’s claim for $168.50, [*3]and plaintiff Lvov Acupuncture P.C.’s claim for $425 defendant need only establish that the denial as to said four claims was based on a meritorious defense (cf. Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d & 11th Jud Dists 2004] [“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 . . .”]). It is initially noted that defendant’s claim denial form, which invoked only the eligible injured person’s failure to attend independent medical examinations (IMEs) on October 25, 2002 and November 8, 2002, is materially defective on its face. “A proper denial of claim must include the information called for in the prescribed denial of claim form” (Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005] [“(A) denial of a claim form issued by (an insurer) . . . even if timely, (is) fatally defective (if) it omit(s) numerous items of requested information and thus (is) incomplete”]; see also 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 665 [2004] [the insurer’s “denial of claim, while timely, was nonetheless fatally defective in that it failed to include a number of basic items called for in the prescribed form,” citing Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 (2004), supra]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613, 614 [1996] [preclusion sanction imposed where the insurer “fail(ed) to establish that it issued to the (claimant) a properly completed Denial of Claim Form within the (prescribed) 30-day period”]). Here, an accurate determination as to the significance of the IME demands for plaintiffs’ recovery of no-fault benefits depends on when defendant received each claim in the series, information which, in the first instance, is the insurer’s obligation to provide in a properly executed claim denial form. Moreover, as none of the six IME letters scheduled an examination for October 25, 2002, this verification request is unproved.{**10 Misc 3d at 54}

Nevertheless, in support of its motion, plaintiffs submitted a series of defendant’s IME request letters and a letter from counsel for plaintiff’s assignor to defendant wherein he admits that assignor failed to appear for IMEs on October 16, 18, and 19, 2002 and on November 8, 15, and 22, 2002. While defendant submitted no proof of mailing of any of the IME notification letters, plaintiffs’ concessions establish receipt of the November 8, 2002 IME request and assignor’s nonappearance, the only proved basis for the claims’ denial asserted in the claim denial form. The issue is whether defendant exhausted the verification protocols with respect to said IME request, and for that matter, the remaining IME requests which, while not invoked as a basis for the claims’ denial, are established on the instant record.

The insurance regulations permit preclaim IMEs, but without consequence for the running of the 30-day claim determination period (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18 [App Term, 2d & 11th Jud Dists 2004]). All postclaim IME verification requests must be made within prescribed time frames, the initial request within 10 days of the claim’s filing (to be scheduled within 30 days of the claim’s receipt) and a “follow-up” request within 10 days of a subject’s nonappearance at the initially-scheduled IME (11 NYCRR 65-3.5 [a], [d]; 65-3.6 [b]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2002]). “Any attempt by the insurer to deny the claim prior to exhausting the verification protocols is premature and of no effect” (King’s Med. Supply Inc. v Allstate Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50451[U], *2 [App Term, 9th & 10th Jud Dists 2005]; see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570[*4][2004]; King’s Med. Supply Inc. v New York Cent. Mut. Fire Ins. Co., 5 Misc 3d 136[A], 2004 NY Slip Op 51550[U] [App Term, 2d & 11th Jud Dists 2004]). The request for the November 8, 2002 IME issued within 10 days only of plaintiff A.B. Medical Services PLLC’s claim for $71.06 and absent a follow-up IME request the claim determination period lapsed as to this claim. Further, said request predated receipt only of plaintiff A.B. Medical Services PLLC’s claims for $323.36 and $71.40, plaintiff Lvov Acupuncture P.C.’s claim for $425, and plaintiff D.A.V. Chiropractic P.C.’s claim for $168.50, and as an unattended preclaim IME, as to those claims, summary judgment was properly denied (cf. Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18 [2004], supra). In any event, there was no follow-up IME request after the assignor{**10 Misc 3d at 55} failed to appear on November 8, 2002, and the December 2, 2002 claim denial preserved no meritorious defense as to any claim filed prior to the November 8, 2002 IME demand (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d at 44).

Plaintiff Square Synagogue Transportation Inc. concedes in appellants’ brief that it is not entitled to the relief sought upon the motion to the court below. Therefore, the appeal as taken by it is dismissed.

Accordingly, plaintiffs’ motion for summary judgment is granted as to plaintiff A.B. Medical Services PLLC’s claims for $182.37, $230.10, $604.24, $751.83, $218.35, $360, $1,972.08, $1,999.12, $376.32, and $71.06, plaintiff D.A.V. Chiropractic, P.C.’s claim for $391.74 and $202.20, and plaintiff Lvov Acupuncture, P.C.’s claims for $1,180.56 and $510, and as to those sums, the matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on said plaintiffs’ remaining claims.

Golia, J., concurs in part and dissents in part, and votes to dismiss the appeal insofar as taken by Square Synagogue Transportation Inc. and to modify the order, insofar as appealed from, by denying the motion of plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C. and Lvov Acupuncture P.C. for summary judgment and, upon searching the record, granting defendant’s cross motion for summary judgment dismissing the complaint as to said plaintiffs in the following memorandum: I concur with the majority in their dismissal of the appeal by Square Synagogue Transportation Inc.

However, contrary to the holding of the majority, I find that the papers submitted by the defendant in opposition to the plaintiffs’ motion for summary judgment were sufficient to raise an issue of fact as to whether the defense of fraud was based upon a “founded belief that the alleged injur[ies] do[ ] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]), i.e., as to whether it was a “staged” accident.

For the reasons stated in my dissent in Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co. (6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004]), I find that the unsworn statements, when submitted in opposition to a motion for summary judgment and accompanied by an affidavit which makes reference to such reports, are sufficient for the purpose of raising a triable issue{**10 Misc 3d at 56} of fact (see also Levbarg v City of New York, 282 AD2d 239, 241 [2001]). This court must, when deciding a motion for summary judgment, interpret the evidence in the light most favorable to the nonmovant (see Weiss v Garfield, 21 AD2d 156 [1964]). This is especially true where there [*5]is an allegation of fraud.

I further find that it is uncontroverted that the defendant insurer sent notices to the plaintiff’s assignor to appear for independent medical examinations (IMEs) on October 16, 18 and 19, 2002 and, upon her failure to appear, gave her an additional opportunity to appear on November 8, 15 and 22, 2002. We know this is true because the plaintiff submitted a letter written by the assignor’s attorney dated January 21, 2003 acknowledging receipt of those notices as well as acknowledging the fact that assignor, Ms. Abbott, did not appear. The letter goes on to state that Ms. Abbott is a single mother and requests, through her attorney, to have all her IMEs held in one location and on the same date which must be a Saturday. In support of this demand, Ms. Abbott’s attorney admonished the insurance carrier that “[t]he no-fault regulations clearly state that all medical examinations requested by the insurer shall be held at [a] time and place reasonably convenient to the applicant.”

It is interesting to note that one of the IMEs was scheduled for Saturday, October 19, 2002 and the assignor still failed to appear. It is even more interesting to note that her claimed medical treatments consisted of 12 separate dates including several visits in a single week and only one visit claimed fell on a Saturday, and that was for transportation unconnected to any claimed medical treatment.

It should be observed that the provision of the no-fault regulation addressed by the assignor’s attorney is 11 NYCRR 65-3.5 (e), which is part of the postclaim verification protocols.

As the majority of the appellate court stated in Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co. (7 Misc 3d 18, 20 [App Term, 2d & 11th Jud Dists 2004]):

“The insurance regulations provide, in the mandatory personal injury protection endorsement, which is independent of the verification protocols, that ‘[t]he eligible injured person shall submit to medical examination . . . when, and as often as, the Company may reasonably require‘ (11 NYCRR 65-12 [e], now 11 NYCRR 65-1.1 [d]) . . . and because this provision is included in the mandatory endorsement and not in the verification protocols, there appears{**10 Misc 3d at 57} to be no reason to preclude an insurer” (emphasis added).

To be clear, I filed a dissenting opinion in Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co. (7 Misc 3d 18 [2004], supra) and do not agree with reading the no-fault regulations as a fragmented collection of rules and regulations. It is for this reason that I believe that both requirements should be read together. Therefore, all eligible injured persons must submit to medical examinations when and as often as the company may reasonably require, and the company shall hold such examinations at a place and time reasonably convenient to the eligible injured person. [*6]

In the matter at hand, I find that the “company” fully complied with the regulations. It was the plaintiff’s assignor who clearly and intentionally chose not to submit to any independent medical examinations. The letter from the assignor’s attorney sent only after she failed to appear at any of the first noticed three IMEs (one of which was a Saturday) or any of the second noticed IMEs was merely a “red herring” meant solely to excuse her failures and not to comply with the regulations. Specifically, she had found the time on Wednesday, September 10, 2002, to attend a consultation ($230.10) with Dr. Schwartz and submit to SSEP testing ($604.24) with the same doctor, undergo physical therapy ($751.83) with Dr. Pegarum, and be treated ($391.74) by Dr. Konn, a chiropractor, all on the same day. Then on the following day, Thursday, September 11, 2002, she underwent substantial acupuncture treatment ($1,180.56) and analysis with Dr. Yuen. Indeed, she went for treatment on 11 separate days during the middle of the week.

Clearly, if it was reasonable for the assignor to attend all of her scheduled medical treatments during the work week, it was certainly not unreasonably inconvenient for her to attend the scheduled or rescheduled IMEs.

Accordingly, I would modify the order of the lower court insofar as appealed from and deny the plaintiffs’ motion for summary judgment and, upon searching the record, I would dismiss the complaint for the reasons set forth in my dissent in the case of Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co. (7 Misc 3d 18 [2004], supra).

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

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, First District (Francis D. Ricigliano, J.), entered October 1, 2004. The order, insofar as appealed from, granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for summary judgment.

Order unanimously modified by denying plaintiff’s motion for summary judgment; as so modified, affirmed with $10 costs.

In this action to recover first-party no-fault benefits for medical services rendered to its assignor, plaintiff health care provider established its 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]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]). Inasmuch as defendant herein failed to pay or deny the claim within the 30-day prescribed period (11 NYCRR 65-3.8 [c]), it was precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Defendant was not, however, precluded from asserting the defense that the collision was in furtherance of an insurance fraud scheme, despite the untimely denial of the claim (see Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]). Contrary to the finding of the [*2]court below, the affidavit of defendant’s special investigator, which, inter alia, revealed numerous discrepancies in the examinations under oath of plaintiff’s assignor and defendant’s insured as to the circumstances surrounding the accident, was sufficient to demonstrate that said defense was based upon a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Accordingly, since defendant raised a triable issue of fact as to whether there was a lack of coverage (see Zuckerman v City of New York, 49 NY2d 557 [1980]), the court below erred in granting plaintiff’s motion for summary judgment.
Decision Date: October 20, 2005