[*1]

Argued February 8, 2005; decided March 29, 2005

{**4 NY3d at 319} OPINION OF THE COURT

Rosenblatt, J.

On this certified question from the United States Court of Appeals for the Second Circuit, we are asked whether, under our “no-fault” insurance laws (see Insurance Law § 5101 [*2]et seq. and implementing regulations), insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises to which patients have assigned their claims. We conclude that they may.

Patients covered by no-fault insurance often assign their claims to their health care providers rather than seek reimbursement from insurance carriers directly (see 11 NYCRR 65-3.11). Regulations require the carriers to make prompt decisions on claims once the provider has furnished adequate factual support (see 11 NYCRR 65.15).

This case began when State Farm filed a complaint in the United States District Court for the Eastern District of New York seeking a judgment declaring that it need not reimburse defendants—fraudulently incorporated medical corporations—for assigned claims submitted under no-fault. The complaint also sought equitable relief and damages against defendant companies and individuals for unjust enrichment and fraud. State Farm alleged, in essence, that to obtain payments from the carriers under the requirements of no-fault insurance, defendants willfully evaded New York law prohibiting nonphysicians from sharing ownership in medical service corporations.^[FN1]

According to the complaint, the unlicensed defendants paid physicians to use their names on paperwork filed with the State to establish medical service corporations. Once the medical service corporations were established under the facially valid cover of the nominal physician-owners, the nonphysicians actually operated the companies. To maintain the appearance that the physicians owned the entities, the nonphysicians caused the corporations to hire management companies (owned by the nonphysicians), which billed the medical corporations inflated rates for {**4 NY3d at 320}routine services. In this manner, the actual profits did not go to the nominal owners but were channeled to the nonphysicians who owned the management companies.

Notably, State Farm never alleged that the actual care received by patients was unnecessary or improper. The patients insured by State Farm presumably received appropriate care from a health professional qualified to give that care. State Farm’s complaint centers on fraud in the corporate form rather than on the quality of care provided.

The Federal District Court dismissed State Farm’s complaint, holding that defendants’ noncompliance with the licensing and incorporation statutes did not extinguish State Farm’s duty to pay, so long as the actual providers acted within the scope of their licenses in [*3]rendering care. The Second Circuit then certified to this Court the question whether

“a medical corporation that was fraudulently incorporated under N.Y. Business Corporation Law §§ 1507, 1508, and N.Y. Education Law § 6507(4)(c) [is] 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” (372 F3d 500, 510 [2004]).

We accepted the certification and now answer that such corporations are not entitled to reimbursement.

Insurance Law § 5102 et seq. requires no-fault carriers to reimburse patients (or, as in this case, their medical provider assignees) for “basic economic loss.” Interpreting the statute, the Superintendent of Insurance promulgated 11 NYCRR 65-3.16 (a) (12) (effective April 4, 2002) and excluded from the meaning of “basic economic loss” payments made to unlicensed or fraudulently licensed providers, thus rendering them ineligible for reimbursement.^[FN2]

If State Farm’s allegations are true, as we must construe them to be at this stage, the defendant companies undisputedly fail to meet the applicable state licensing requirements, which prohibit {**4 NY3d at 321}nonphysicians from owning or controlling medical service corporations. Furthermore, a fraudulently incorporated medical company is “[a] provider of health care services” within the meaning of the regulation.

Defendants contend they are entitled to reimbursement even if fraudulently licensed. They first argue that the actual care that patients received was within the scope of the licenses of those who treated the patients. Defendants posit that this licensing compliance brings them within the regulatory framework for reimbursement. We disagree. The fact remains that the reimbursement goes to the medical service corporation that exists to receive [*4]payment only because of its willfully and materially false filings with state regulators.

Defendants also argue that the quoted regulation conflicts with the prompt payment goals of the no-fault statutes. The Second Circuit treated this issue as a difficult policy balance: on the one hand, there is our State’s prohibition against lay ownership of shares in medical corporations (and the accompanying potential for fraud), and on the other, our encouragement of prompt payment of insurance claims, as reflected in the statutes.

The regulation is valid. We are guided by the well-established principle of administrative law that the Superintendent’s “interpretation, if not irrational or unreasonable, will be upheld in deference to his special competence and expertise with respect to the insurance industry, unless it runs counter to the clear wording of a statutory provision” (Matter of New York Pub. Interest Research Group v New York State Dept. of Ins., 66 NY2d 444, 448 [1985]). Where, as here, the Superintendent has properly crafted a rule within the scope of his authority, that rule has the force of law and represents the policy choice of this State.^[FN3]

The Superintendent’s regulation allowing carriers to withhold reimbursement from fraudulently licensed medical corporations governs this case. We hold that on the strength of this regulation, carriers may look beyond the face of licensing documents to identify willful and material failure to abide by state and local law. Defendants argue that the carriers will turn {**4 NY3d at 322}this investigatory privilege into a vehicle for delay and recalcitrance.

The regulatory scheme, however, does not permit abuse of the truth-seeking opportunity that 11 NYCRR 65-3.16 (a) (12) authorizes. Indeed, the Superintendent’s regulations themselves provide for agency oversight of carriers, and demand that carriers delay the payment of claims to pursue investigations solely for good cause (see 11 NYCRR 65-3.2 [c]). In the licensing context, carriers will be unable to show “good cause” unless they can demonstrate behavior tantamount to fraud. Technical violations will not do. For example, a failure to hold an annual meeting, pay corporate filing fees or submit otherwise acceptable paperwork on time will not rise to the level of fraud. We expect, and the Legislature surely intended, vigorous enforcement action by the Superintendent against any carrier that uses the [*5]licensing-requirement regulation to withhold or obstruct reimbursements to nonfraudulent health care providers.

The Second Circuit questioned whether, if the fraudulent corporations were not entitled to reimbursement, State Farm could recover money already paid out under theories of fraud or unjust enrichment. Because we rest our holding on the Superintendent’s amended regulation declaring fraudulently licensed corporations ineligible for reimbursement, no cause of action for fraud or unjust enrichment would lie for any payments made by the carriers before that regulation’s effective date of April 4, 2002. State Farm’s complaint does not clearly indicate, one way or the other, whether it has paid money to defendants after the amended regulation took effect. We therefore answer only the certified question and decline to consider whether State Farm has alleged sufficient facts to support causes of action for fraud or unjust enrichment.

Based on the foregoing, the certified question should be answered in the negative.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Graffeo, Read and R.S. Smith concur.

Following certification of a question by the United States Court of Appeals for the Second Circuit and acceptance of the question by this Court pursuant to section 500.17 of the Rules of {**4 NY3d at 323}Practice of the Court of Appeals (22 NYCRR 500.17), and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, certified question answered in the negative.

Footnotes

Footnote 1: See e.g. Business Corporation Law § 1507 (“A professional service corporation may issue shares only to individuals who are authorized by law to practice in this state a profession which such corporation is authorized to practice . . .”).

Footnote 2: See 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 . . .”). In his amicus brief, the Superintendent asserts that he promulgated this rule to combat rapidly growing incidences of fraud in the no-fault regime, fraud that he has identified as correlative with the corporate practice of medicine by nonphysicians.

Footnote 3: We have already unanimously concluded that the regulation is within the Superintendent’s authority to issue and will not disturb that result (see Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 866 [2003] [“Here, however, the challenged regulations create not a new category of exclusion, but rather merely a condition precedent with which all claimants must comply in order to receive benefits under the statute.”]).

[*1]

Civil Court of the City of New York, Kings County, March 24, 2005

APPEARANCES OF COUNSEL

Alden Banniettis, Brooklyn, for plaintiff. Moore & Associates, New York City, for defendant.

OPINION OF THE COURT

Arlene P. Bluth, J.

Plaintiff Dilon Medical Supply Corp. brought this action to recover first-party no-fault benefits in the amount of $1,928 plus statutory interest, costs, and attorneys’ fees for medical supplies it allegedly furnished to plaintiff’s assignor, Cuthbert Grannum, on January 29, 2004, and February 16, 2004, following an alleged accident on November 5, 2003.

The trial was scheduled before me on March 10, 2005. Since the attorneys for both parties stipulated to the facts below, there was no testimony by witnesses.

For the following reasons, the court finds for defendant Travelers Insurance Company, and dismisses plaintiff’s complaint.

Stipulated Facts

Plaintiff Dilon Medical Supply Corp., as the proper assignee of Cuthbert Grannum, submitted two bills for no-fault benefits to defendant Travelers Insurance Company. The first bill was for $837 for six items furnished to plaintiff’s assignor on January 29, 2004 (plaintiff’s exhibit 1); the second was for $1,091 for four items furnished to plaintiff’s assignor on February 16, 2004 (plaintiff’s exhibit 2). Defendant’s timely request for verification (and timely follow-up thereto) asked that plaintiff “forward a letter of medical necessity for medical supplies” in order to process the claims (plaintiff’s exhibit 3). Plaintiff received the requests but ignored them. Plaintiff did not respond because it believes the requests to be improper since plaintiff is merely a medical supply company and not a clinician capable of speaking to the medical necessity of the [*2]items furnished. Having received no response to its verification requests, defendant neither paid nor denied the claims. Plaintiff then initiated this action. Both parties subsequently moved for summary judgment. On December 21, 2004, on grounds unrelated to the issue before this court, Judge Ellen Gesmer denied both plaintiff’s and defendant’s motions for summary judgment.

Conclusions of Law

The issue in this case is whether an insurer can direct a request for verification of the necessity of medical supplies to the claimant medical supplier which, it is undisputed, has no clinical expertise. The Insurance Law and the regulations promulgated thereunder provide that “[w]ithin 30 calendar days after proof of claim is received, the insurer shall either pay or deny the claim in whole or in part.” (11 NYCRR 65-3.8 [c]; see Insurance Law § 5106 [a].) An insurer may extend this 30-day period if, within 15 business days after receipt of the claim, the insurer sends a request for further verification of the claim. (11 NYCRR 65-3.5 [b].) If the demanded verification is not received within 30 days, the insurance company must issue a follow-up request within 10 calendar days of the insured’s failure to respond. (11 NYCRR 65-3.6 [b].) The 30-day period which the insurer has to either pay or deny the claim does not begin to run until all demanded verification is provided. (11 NYCRR 65-3.8 [a] [1]; see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2d Dept 2004].) With exceptions not relevant here, the insurer is precluded from issuing a denial while a verification request is outstanding. (11 NYCRR 65-3.8 [b] [3].)

Just as the insurer has a duty to speedily process claims, the claimant for benefits has a duty of cooperation in supplying information reasonably requested by the insurer to process the claim. The regulations provide that the Mandatory Personal Injury Protection Endorsement, or no-fault section, of all insurance policies contain, inter alia, the following condition: “Upon request by the [Insurance] Company, the eligible injured person or that person’s assignee or representative shall . . . provide authorization that will enable the Company to obtain medical records; and . . . provide any other pertinent information that may assist the Company in determining the amount due and payable.” (11 NYCRR 65-1.1 [d] [“Conditions”].) Upon receipt of the initial prescribed verification forms, the insurer may request “any additional verification required by the insurer to establish proof of claim.” (11 NYCRR 65-3.5 [b]; see also Westchester Med. Ctr. v Travelers Prop. & Cas. Ins. Co., 2001 NY Slip Op 50082[U], *2-3 [Sup Ct, Nassau County 2001] [“(T)he requirement that a claim be paid or denied within 30 days is conditioned upon receipt of information requested by the insurer. This information is not necessarily that which can be found on the . . . prescribed verification forms . . . but any information that the carrier finds necessary to properly review and process the claim”].)

Here, defendant timely requested a letter of medical necessity—understood by both plaintiff and defendant to mean a narrative from the injured party’s medical provider explaining why the furnished supplies were necessary—from plaintiff, the party that had submitted the claim.

The substance of defendant’s verification request was both valid and proper—not only did defendant have the right to verify the medical necessity of the supplies, it was required to do so if payment of the claims would turn on a determination of medical necessity. (See 11 NYCRR 65-3.5 [b].) Moreover, under the regulations, “[t]he insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested.” (11 [*3]NYCRR 65-3.5 [c].)

Plaintiff argues, however, that defendant’s request was improper in that it was directed to plaintiff, a mere equipment supplier with no clinical expertise. Plaintiff claims that defendant obviously knew that plaintiff would in turn have to contact either its assignor or his medical provider to obtain the letter of medical necessity. According to plaintiff, defendant should have directed its request to the treating medical provider, or, if defendant did not know the provider’s name or address, requested that information from plaintiff, or asked plaintiff for the prescriptions it had received from its assignor. In support of its argument, plaintiff cites section 65-3.5 (a) of the regulations, which provides: “Within 10 business days after receipt of the completed application for motor vehicle no-fault benefits . . . , the insurer shall forward, to the parties required to complete them, those prescribed verification forms it will require prior to payment of the initial claim.” (11 NYCRR 65-3.5 [a] [emphasis added].)

A plain reading of that provision, however, makes clear that it governs initial requests for verification by which insurers may require parties to complete the requisite forms that comprise the initial claim for benefits—that is, in setting up the injured party’s file. That is not the case here. A request for a letter of medical necessity is a request for additional verification governed by subdivision (b) of this section, and subdivision (b) does not qualify to whom requests for additional verification must be sent. Any additional verification that could be sought from plaintiff’s assignor may be sought from plaintiff^[FN*] because “[a]n assignee stands in the shoes of the assignor.” (Arena Constr. Co. v Sackaris & Sons, 282 AD2d 489, 489 [2d Dept 2001].)

Accordingly, when a claimant submits bills to an insurer for payment, the claimant, who stands in the shoes of his assignor, must deal in good faith and cooperate with the insurer if it wants to get paid. This includes responding to a proper and timely verification request, even if the claimant anticipates that it will not be able to satisfy the insurer’s request. In other words, even if the claimant believes it cannot or need not comply with the insurer’s request, the claimant still has a duty to communicate with the insurer regarding the request.

In so holding, this court follows the reasoning of the Second Department. For example, where a plaintiff medical provider found an insurer’s demands “so lacking in specificity as to be ‘unintelligible’ and that such demands were, therefore, nullities,” the Second Department refused to excuse plaintiff’s nonresponsiveness to defendant’s requests. (Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 [2d Dept 1999].) “[T]he notices clearly constituted demands for further verification of the claim within the no-fault regulatory scheme. Any confusion on the part of the plaintiff as to what was being sought should have been addressed by further communication, not inaction. Accordingly, as the plaintiff does not dispute that the demanded verification was never supplied, the 30-day period in which the defendant had to pay or deny the . . . claim never commenced and that claim is not overdue.” (Id.)

The Second Department has also dismissed no-fault actions where the plaintiff failed to respond because the insurer’s request was allegedly not on a proper form (Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 535 [2d Dept 2004]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338 [2d Dept 2002]) or was sent to the plaintiff’s [*4]attorney rather than directly to plaintiff (St. Vincent’s Hosp. of Richmond, 299 AD2d at 340; New York Hosp. Med. Ctr. of Queens v State Farm Mut. Auto. Ins. Co., 293 AD2d 588 [2d Dept 2002]). The contours of plaintiff’s duty of cooperation are good faith and common sense. “[E]ven if [the insurer’s] request for the hospital records should have been sent directly to the hospital, its attorney, upon receiving the requests, should have contacted State Farm and communicated that requirement, or forwarded State Farm’s requests to the hospital himself.” (New York Hosp. Med. Ctr. of Queens, 293 AD2d at 591.)

When plaintiff received defendant’s verification requests, it had a duty to respond. Plaintiff might have submitted the prescriptions it had received from its assignor. It might have supplied the name and address of the treating physician. It might have contacted its assignor to obtain a letter of medical necessity from his physician, or contacted the physician directly. Because plaintiff simply ignored the requests altogether, however, it is unnecessary for the court to decide what the minimum adequate response would have been.

Because plaintiff failed to respond to defendant’s valid and proper verification requests, the 30-day period within which defendant had to either pay or deny the claim did not begin to run. (See Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534-535 [2d Dept 2004]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2d Dept 2002].) Therefore, plaintiff’s claims for no-fault benefits are not overdue, and this action is premature and must be dismissed. (See Hospital for Joint Diseases, 8 AD3d at 534-535; St. Vincent’s Hosp. of Richmond, 299 AD2d 338 [2002]; New York Hosp. Med. Ctr. of Queens, 293 AD2d at 591.) Accordingly, judgment is for defendant and plaintiff’s complaint is hereby dismissed.

Footnotes

Footnote *: Obviously, in the case of an IME or EUO of the injured party, only the injured party can actually provide the requested verification.

Civil Court, Kings County

046401/04

Loren Baily-Schiffman, J.

This action for first-party No-Fault benefits was tried to completion on February 8, 2005. Plaintiff seeks payment of claims for $708 for services to James Percine and $1600.50 for services provided to Antoine Wekson. Defendant denied plaintiff’s claims on the basis that “[w]e do not provide coverage for any ‘insured’ who has made fraudulent statements or engaged in fraudulent conduct in connection with any accident or loss for which coverage is sought under this policy.” At the start of trial, the parties stipulated that Plaintiff’s bills had been timely submitted and that Defendant’s denial would be admitted into evidence along with a number of exhibits. Plaintiff then made several motions in limine.

Plaintiff first sought the exclusion from evidence of transcripts of Examinations Under Oath (hereinafter “EUO”) of Plaintiff’s assignors. The Court granted this motion on the basis that the transcripts had not been signed by the assignors and that such documents would be hearsay.^[FN1] Plaintiff also sought a determination by the Court that subpoenas for testimony of the assignors are defective and, accordingly, no adverse inference can be drawn from the non-appearance of the assignors at trial. The Court granted this application on the basis that the subpoenas had not been properly served.

The trial then proceeded on defendant’s affirmative defense of fraud. Defendant called Philip Tirone as its only witness. Mr. Tirone is employed by defendant as an investigator in its Special Investigation Unit. He was assigned to investigate the subject claims. Mr. Tirone testified that the assignors allegedly sought treatment from plaintiff as a result of an accident [*2]between two cars. There were several passengers in the cars, including the assignors involved in this action. As part of his investigation, Mr. Tirone attempted to contact his insured, Ms. Paul, and assignor Wekson who gave the same home address as Ms. Paul. He was not able to reach either Ms. Paul or Mr. Wekson. He contacted assignor Percine, but testified that he got no helpful information from Mr. Percine. Mr. Tirone then recommended to defendant’s attorney that EUOs be scheduled of Ms. Paul, Mr. Wekson and the other passengers. After more than one attempt to obtain appearances at EUOs, Mr. Wekson, Mr. Percine and Ms. Jerome appeared for EUOs with their attorneys and their testimony was taken. Mr. Tirone testified that other than his unsuccessful attempts to obtain signatures of the witnesses to their EUO transcripts, no further efforts were made to investigate the subject claims.

The Court ruled that the EUO transcripts were not admissible but Mr. Tirone could testify to his recollection of the testimony of the witnesses at their examinations. The basis of the Court’s ruling was that the assignors and the Plaintiff/assignee were united in interest and, therefore, statements made by the assignors are binding on the assignee as admissions.

Mr. Tirone continued his testimony as to the statements made by Mr. Wekson and Mr. Percine at their EUOs and the conclusions he drew from this testimony which resulted in the denial of these claims on the basis of fraud. The testimony that Mr. Tirone says supports his conclusion that the accident in question was staged are as follows:

The two witnesses testified differently concerning the order in which the passengers in their car were picked up and dropped off by the driver;

Mr. Percine delayed his medical treatment until two (2) weeks after the accident and that Mr. Wekson referred him to the provider;

Mr. Wekson sought treatment from a different provider than he had been treated by for injuries from a prior accident;

The provider from which Mr. Wekser sought treatment was not located near his work or his home.

According to the arguments of counsel, other factors that contributed to Mr. Tirone’s recommendation that the claims be denied on the basis of fraud are:

that the driver of the second car appears to have been “selected”; (No basis for this conclusion was presented at trial)

that the witnesses would not sign their EUO transcripts;

that the passengers in the first car refused to give statements to the investigator;

that the witnesses’ statements at EUO seemed to follow a script;

that the driver of the second car was a woman.

At the close of the trial, the Court invited counsel to present legal memoranda on the standard of proof applicable to defendant’s fraud defense and any other legal issues that had been presented in the trial. Defendant submitted a memorandum on the burden of proof issue. [*3]Plaintiff presented a memorandum arguing that Mr. Tirone should not have been permitted to testify to statements made by the assignors at their EUOs as such statements are hearsay and on the standard of proof issue.

STANDARD OF PROOF APPLICABLE TO FRAUD

In New York, proof of fraud must be made by clear and convincing evidence. Rudman v. Cowles Communications, 30 NY2d 1 (1972). Although defendant argued at trial that in a No-Fault case fraud need only be proven by a preponderance of the evidence, no cases could be found to support this position. In a second submission to the Court, dated March 19, 2005, defendant presented a copy of Hon. Jack Battaglia’s decision in AB Medical Services, PLLC v. State Farm Mut. Auto Ins., 2005 NY Slip Op 25089 (Civil Court, Kings Co.) and argued that it supports defendant’s position that the defense of “staged accident” in a No-Fault case only be proven by a preponderance of the evidence and not by clear and convincing evidence. To the extent that Judge Battaglia’s decision finds that the defense of staged accident need only be proven by a preponderance of the evidence, this Court respectfully disagrees with Judge Battaglia. This Court holds that the insurer’s defense of fraud, whether it be a staged accident or other fraud, requires proof by clear and convincing evidence.

ARE ASSIGNEES’ STATEMENTS MADE AT EXAMINATIONS UNDER OATH ADMISSIBLE AS ADMISSIONS AS AGAINST THE ASSIGNEE/PLAINTIFF?

At trial, the Court permitted defendant’s witness to testify to statements made by the assignors at their Examinations Under Oath on the theory that these statements are admissions by persons united in interest with the plaintiff/assignee. Plaintiff objected at trial that this testimony is hearsay. In its Post Trial Memorandum, plaintiff again argues that its objection at trial should have been sustained. Plaintiff cites to Richardson on Evidence, Farrell 11th ed. (hereinafter “Richardson”), §§8-239 and 8-241 for the “New York doctrine” which states the following:

In New York declarations of a vendor or assignor of a chattel or chose in action, whether made before or after the transfer, are inadmissible to affect the claim or title of a subsequent transferee for value.

Richardson, §8-242.

This rule stems from the decision in Paige v. Cagwin, 7 Hill (NY)361 (Sup Ct 1843) (action on a promissory note) and has been followed in Wangner v. Grimm, 169 NY 421 (1902) (action on a promissory note); Kelly v. Beers, 194 NY 60 (1909) (gift of savings bank account); Merkle v. Beidleman, 165 NY 21 (1900) (mortgage foreclosure). Except where the statements were made by the real party in interest, such as a decedent, and are offered against a person who claims through representation, such as the executor of that decedent, the New York doctrine will apply and the statements of the former owner, vendor or assignor will not be admissible to affect [*4]the claim of the subsequent owner or assignee.

Pursuant to the New York doctrine, the Court erred in permitting defendant’s witness, Mr. Tirone, to testify to the statements of the assignees, Mr. Wekson and Mr. Percine at their EUOs. The Court should have sustained plaintiff’s objections to this testimony. The Court now reverses that ruling and strikes from the record so much of the testimony of Mr. Tirone as concerned the statements of Mr. Wekson and Mr. Percine at their EUOs. With that testimony stricken from the record, the conclusion Mr. Tirone reached, that the accident was staged, is without substantial basis in the record and will not be credited by the Court.

TESTIMONY OF DEFENDANT’S WITNESS

It must be noted that even if all of the evidence of defendant’s witness is credited, defendant has not met its burden of establishing by clear and convincing evidence that the accident in question was staged. Mr. Tirone relied on minor inconsistencies in the testimony of passengers in his insured’s car; the statement that Mr. Percine did not seek medical assistance until two (2) weeks after the accident and then went to a provider referred by Mr. Wekson; that Mr. Wekson sought treatment from a different provider than had treated him for injuries in a prior accident; and that Mr. Wekson obtained treatment from a provider not near his home or work, in concluding that the accident was staged. Each of these facts is capable of a motivation other than that of fraud and together they do not establish clear and convincing proof that the accident in question was staged.

Mr. Tirone testified as to his training and experience in the field of insurance investigation, although there was no request that he be treated as an expert witness. An insurer’s “founded belief” that an accident was staged cannot be based upon “unsubstantiated hypotheses and supposition”. AB Medical Services PLLC v. Eagle Ins. Co., 3 Misc 3d 8 at 9 (App. Term 2nd & 11th Jud. Dists., 2003). However, what experience or training led Mr. Tirone to his conclusions based upon the facts adduced in his investigation is missing from the record. The Court is left to wonder why the fact that an assignor sought medical treatment in a neighborhood different from his home or work is significant. Similarly, the significance of the other car being driven by a woman is not provided by Mr. Tirone’s testimony, yet he relies on this as a basis for finding that the accident was staged. While Mr. Tirone’s trained opinion is entitled to some weight, Travelers Indemnity Co. v. Morales, 188 AD2d 350, 351 (1st Dept 1992), here there is no testimony in the record relating Mr. Tirone’s training and experience to the conclusions he reached based upon the facts of this case. Accordingly, even had the Court not stricken any of Mr. Tirone’s testimony from the record, the determination would be the same that defendant has failed to meet its burden to prove fraud by clear and convincing evidence.

CONCLUSION

For all the foregoing reasons, the Court finds that defendant has failed to meet its burden [*5]at trial to prove its defense of fraud by clear and convincing evidence. Accordingly, judgment is granted to plaintiff for $708 on Mr. Percine’s claim and $1600.50 on Mr. Wekson’s claims. In addition, plaintiff is granted statutory attorneys fees, interest and costs to be computed by the Clerk of the Court.

This constitutes the Decision and Order of the Court.

Exhibits may be retrieved in Chambers, Room 705.

Dated:March 23, 2005

_______________________

LOREN BAILY-SCHIFFMAN

J.C.C.

Footnotes

Footnote 1:Notwithstanding the decision of my colleague in PSG Psychological, PC v. State Farm Ins. Co., 2004 WL 2997955, this Court is of the opinion that EUO transcripts are not governed by CPLR §3116 as they are taken prior to the commencement of litigation and are not part of the Article 31 disclosure process.

District Court, Nassau County

33887/02

Freiberg & Peck, LLP, New York City, for defendant.

Belesi, Donovan & Conroy, P.C., Garden City, for plaintiff.

Scott Fairgrieve, J.

Defendant Progressive Insurance Company moves for an order pursuant to Section 2221 of the CPLR to modify this Court’s previous order dated June 29, 2004. Previously, this Court denied defendant’s motion for summary judgment based upon plaintiff commencing this within action to recover no-fault benefits without first having responded to the verification demands sent by defendant.

This Court denied the defendant’s motion for summary judgment and instead, ordered plaintiff to respond to the verification demands within 30 days.

After plaintiff served the responses to the verification requests to the defendant’s attorney (not to the defendant insurance company), defendant allegedly failed to issue a timely denial of no-fault benefits. Based upon this failure, plaintiff cross moves and claims it is now entitled to summary judgment.

This Court has reconsidered this issue based upon a review of all papers submitted. This Court now recalls its initial decision of June 29, 2004 and grants summary to the defendant because defendant was under no duty to issue a denial until plaintiff responded to the verification requests. [*2]Thus, plaintiff’s action to recover no-fault was premature because there was no issue in controversy and the action should have been dismissed.

A case directly on point is Psych & Massage Therapy Association, PLLC v. Progressive Cas. Ins. Co., 5 Misc 3d 723, 2004 WL 2563584 (NY City Civ. Ct, 2004), wherein the court held that the failure of the plaintiff to respond to a proper verification request precludes an action to recover no-fault benefits because:

Accordingly, as defendant complied with the letter and spirit of the No Fault regulations, and plaintiff suffered no prejudice from defendant’s expeditious response to plaintiff’s claim, defendant’s verification requests are deemed timely and proper. As plaintiff never responded to defendant’s timely and proper verification requests, defendant was under no duty to issue a denial. See Westchester Medical v. Travelers Prop., 2001 WL 1682931 (Nass. S.C. 2001). Therefore, plaintiff commenced the action prematurely. As there are no issues of fact in dispute, defendant’s motion is granted. This constitutes the decision and order of the Court.

See also Westchester Medical Center v. Travelers Property & Casualty Ins. Co., 2001 WL 1682931 (Nass. Sup Ct 2001), which also dismissed a plaintiff’s action because it was premature:

Based upon the foregoing, the plaintiff’s lawsuit was premature in that a lawsuit with regard to no-fault benefits cannot be commenced until such time as there is an actual dispute with regard to the payment of the benefits. The benefits were not overdue in light of the fact that the time within which to pay or deny the claim(s) of the plaintiff was extended pending the receipt of further verification. See: 11 NYCRR Section 65.15(h). The First Cause of Action is dismissed.

Also on point is New York Presbyterian Hosp. v. American Transit Ins. Co., 233 AD2d 431, 650 N.Y.S.2d 258 (2nd Dept 2001).

CONCLUSION

Based upon the foregoing, the plaintiff’s action was filed prematurely because plaintiff had failed to properly respond to the defendant’s verification requests. The decision of this Court dated June 29, 2004, is vacated in light of the above. The plaintiff’s action is dismissed. Thus, the plaintiff’s cross motion is denied.

So ordered:

DISTRICT COURT JUDGE

Dated:March 22, 2005

CC:

[*1]

Supreme Court, Appellate Term, Second Department, March 22, 2005

APPEARANCES OF COUNSEL

Laleh Hawa, Great Neck, for appellant. Amos Weinberg, Great Neck, for respondents.

{**7 Misc 3d at 87} OPINION OF THE COURT

Memorandum.

Order unanimously affirmed without costs.

Plaintiffs commenced the instant action seeking to recover first-party no-fault benefits for medical services rendered to their assignors, Thomas Nelson, the operator of a motor vehicle rented from defendant’s insured, NYRAC, Inc., doing business as Budget-Rent-A-Car, and Patrice Nelson, a passenger in the same vehicle, both of whom were allegedly injured in an automobile accident on April 11, 2002. Plaintiffs thereafter moved for summary judgment. In support of their motion, plaintiffs submitted an affidavit in which Janet Safir stated that she was the “practice and billing manager” of “plaintiff,” even though there were three distinct plaintiffs in this matter. The affidavit did not indicate for which “plaintiff” Safir was the billing manager and this court cannot assume that she was acting on behalf of one particular plaintiff or on behalf of all plaintiffs. Consequently, the affidavit is insufficient to establish that plaintiffs provided defendant with properly completed forms (see A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 83 [App Term, 9th & 10th Jud Dists 2004]; A.B. Med. Servs. PLLC v Travelers Prop. Cas. Corp., 4 Misc 3d 135[A], 2004 NY Slip Op 50779[U] [App Term, 2d & 11th Jud Dists 2004]). Accordingly, plaintiffs failed to make a prima facie showing of entitlement to judgment as a matter law. Thus, we find that their motion was properly denied, albeit on grounds other than those relied upon by the court below.{**7 Misc 3d at 88}

Contrary to defendant’s contention, denial of its cross motion for summary judgment dismissing the complaint was proper. In its supporting papers, defendant alleged that the examination under oath of plaintiffs’ assignor, Thomas Nelson, indicated that the rental vehicle was used as a “temporary substitute” vehicle due to faulty brakes in his own vehicle which was insured by First Beacon Insurance at the time of the accident. Defendant argued that First Beacon Insurance was thereby the primary insurer for the rental vehicle, and that plaintiffs were not entitled to recover no-fault benefits under the Personal Injury Protection Endorsement in the automobile liability policy issued by defendant to NYRAC, Inc., doing business as Budget-Rent-A-Car. The court below denied defendant’s cross motion on the ground that the parties did not provide the insurance policy issued by First Beacon Insurance to plaintiffs’ assignor, Thomas Nelson, in the absence of which it could not be determined whether the policy included a “temporary substitute” clause, “thereby rendering the defendant not responsible for said claim.” We affirm the order insofar as it denied defendant’s cross motion, although not for the reasons set forth by the court below.

Insurance Law § 5105 (b) provides that the mandatory arbitration procedures promulgated or approved by the Superintendent of Insurance for claims arising from section 5105 (a) “shall also be utilized to resolve all disputes arising between insurers concerning their responsibility for the payment of first party benefits” (Matter of Pacific Ins. Co. v State Farm Mut. Auto. Ins. Co., 150 AD2d 455, 456 [1989]). The applicable insurance regulations provide in pertinent part that “an applicant who is an operator or occupant of an insured motor vehicle . . . who sustains a personal injury arising out of the use or operation in New York State of such motor vehicle, shall institute the claim against the insurer of such motor vehicle” (11 NYCRR {**7 Misc 3d at 89}65-3.12 [a] [1]). The regulations further provide:

“If a dispute regarding priority of payment arises among insurers who otherwise are liable for the payment of first-party benefits, then the first insurer to whom notice of claim is given pursuant to section 65-3.3 or 65-3.4 (a) of this Subpart, by or on behalf of an eligible injured person, shall be [*2]responsible for payment to such person. Any such dispute shall be resolved in accordance with the arbitration procedures established pursuant to section 5105 of the Insurance Law and section 65-4.11 of this Part” (11 NYCRR 65-3.12 [b]).

The mandatory arbitration provisions of the insurance regulations expressly set forth that “any controversy between insurers involving the responsibility or the obligation to pay first-party benefits (i.e., priority or payment or sources of payment as provided in section 65-3.12 of this Part) is not considered a coverage question and must be submitted to mandatory arbitration under this section” (11 NYCRR 65-4.11 [a] [6]).

Pursuant to the foregoing authority, it is clear that plaintiffs were entitled to seek recovery of no-fault benefits from defendant under the Personal Injury Protection Endorsement of the defendant’s insurance policy issued to its insured (11 NYCRR 65-3.12 [a] [1]), and that as the first insurer to whom notice of claim was given, defendant was responsible for payment of no-fault benefits (11 NYCRR 65-3.12 [b]). Defendant’s argument that First Beacon Insurance is the primary insurer is no defense to this action and, in any event, raises the disputed issue of priority of payments as between insurers which must be submitted for resolution by mandatory arbitration (see Matter of Pacific Ins. Co., 150 AD2d at 456; Insurance Law § 5105 [b]; 11 NYCRR 65-4.11 [a] [6]). The court below was accordingly without jurisdiction to adjudicate the question of “priority of payments” raised by defendant (see New York Cent. Mut. Fire Ins. Co. v Amica Mut. Ins. Co., 162 AD2d 1009 [1990]; State Farm Mut. Auto. Ins. Co. v Nationwide Mut. Ins. Co., 150 AD2d 976 [1989]; Matter of Pacific Ins. Co. v State Farm Mut. Auto. Ins. Co., 150 AD2d 455 [1989], supra; contra Damadian MRI in Garden City v Progressive Cas. Ins. Co., 196 Misc 2d 245 [Civ Ct, Queens County 2003]). In view of the foregoing, we do not adjudicate the issue of priority of payments between defendant and First Beacon Insurance. We note, however, in passing, that as between a no-fault insurer of a rental vehicle and a no-fault insurer of the nonowner renter, the primary source of coverage for no-fault benefits is the no-fault insurer of the rental vehicle (see Matter of Avis Rent-A-Car Sys., Inc. v GE Auto & Home Assur., 7 AD3d 704 [2004]; Matter of Sea Ins. Co. [Northbrook Prop. & Cas. Ins. Co.], 166 AD2d 327 [1990]; see also Lancer Ins. Co. v Republic Franklin Ins. Co., 304 AD2d 794 [2003]).

McCabe, P.J., Angiolillo and Covello, JJ., concur.

District Court of Nassau County, First District

14267/04 325d

Vito M. DeStefano, J.

This no-fault action arises out of an accident that occurred on December 6, 2002. The plaintiff provided medical treatment to Keith Elman and thereafter submitted Forms N-F5 and UB-92 to the defendant in the amount of $5,567.67. The defendant did not pay or deny the claim within 30 days of receipt. The plaintiff now moves for summary judgment. The defendant opposes, arguing, inter alia, that: plaintiff’s claim is premature because requests for additional verification were made and not responded to; plaintiff’s claim is improper because it failed to obtain a properly executed assignment of benefits; plaintiff has failed to submit proof of medical necessity.

The plaintiff’s motion is granted for the following reasons:

A medical provider makes a prima facie showing of entitlement to summary judgment by submitting evidentiary proof that the necessary billing forms were mailed and received, and that payment of no-fault benefits was overdue (11 NYCRR 65.15 [g]; Insurance Law 5106[a]; New York Hospital Medical Center of Queens v Motor Vehicle Accident Indemnification Corp., 12 AD3d 429 [2d Dept 2004]; Mary Immaculate Hospital v Allstate Insurance Company, 5 AD3d 742 [2d Dept 2004]; A.B. Medical Services PLLC, D.A.V. Chiropractic P.C. v Prudential [*2]Property & Casualty Insurance Co., 2005 NY Slip Op 25032 [App. Term. 1st Dept 2005]). Once the plaintiff meets its burden, the burden shifts to the defendant to show the existence of a triable issue of fact.

Here, plaintiff’s motion papers and supporting exhibits establish that no-fault forms were received by the defendant on January 13, 2003 and that defendant never paid or denied the claim. Indeed, defendant confirms these facts in its opposition papers. Accordingly, plaintiff has satisfied its prima facie burden. Defendant, in contrast, has failed to meet its burden by raising any issues of fact.

In this regard, defendant’s argument that the plaintiff’s claim is premature is without merit. It is true that “[a] claim need not be paid or denied until all demanded verification is provided” (New York Hospital Medical Center of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002] citing 11 NYCRR 65.15 [g][1][I]), however, it is incumbent upon the defendant insurer to demonstrate with sufficient proof that a timely request for verification was actually made.

In Contemp. Med. Diag. & Treatment, P.C. v Government Employees Insurance Co. (2005 NY Slip Op 50254U), decided March 2, 2005, the Appellate Term, Second Department, rejected the insurer’s assertions as to what constituted adequate proof of mailing of a request for verification:

[T]he assertion of defendant’s no-fault claims examiner that it was “the usual and customary course of business at GEICO that all documents are mailed on the same day they are generated” was conclusory and failed to specify either that it was the duty of the claims examiner to ensure compliance with said office procedures or that the claims examiner had actual knowledge that said procedures were complied with. Since defendant’s opposition papers did not contain an affidavit of someone with personal knowledge that its verification requests were actually mailed, or describing the standard office practice 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 [2001]), defendant failed to establish by competent evidence that it timely mailed its verification requests, and the 30-day period within which it was required to pay or deny the claim was therefore not tolled (see S&M Supply Inc. v Lancer Ins. Co., 4 Misc 3d 131[A], 2004 NY Slip Op 50695[U], supra).

At bar, the affidavit of litigation representative Jeffrey Stangle submitted in opposition to the motion is wholly inadequate to establish an issue of fact as to whether timely request for additional verification was made, or, in fact, if any request for verification was made at all (see, also, Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374 [2d Dept 2001]). [*3]Notably, Mr. Stangle’s affidavit states only that “my office mailed a request for additional verification,” without indicating any personal knowledge of the mailing. The affidavit does not provide any details concerning when or how the request was allegedly made; nor does it describe any standard office practices to ensure that the requests were properly mailed. Therefore, the plaintiff’s claim is not premature.

The court also rejects defendant’s argument that the plaintiff’s claim is improper due to a defective assignment of benefits. The assignment is not signed by Mr. Keith Elman, but instead contains the notation “signature on file”. Moreover, omitted from the assignment is certain revocation language required by 11 NYCRR 65-3.11(b)(i). Significantly, however, defendant waived any defects in the assignment by failing to timely object to them (e.g., New York Hospital Medical Center of Queens v. New York Central Mutual Fire Ins. Co., 8 AD3d 640 [2d Dept 2004] [Defendant’s “objection to the claim or the basis of lack of proof of assignments were without merit” because it failed to establish that it requested verification of such assignments]; see, also New York Hospital Medical Center of Queens v. Motor Vehicle Accident Indem. Corp., 12 AD3d 429 [2d Dept 2004] [Defendant’s failure to object to the adequacy of plaintiff’s claim form within 10 days of receipt constituted a waiver of any defenses based thereon]; New York Hospital Medical Center of Queens v AIU Insurance Co., 8 AD3d 456 [2d Dept 2004]; Mount Sinai Hosp. v. Triboro Coach, 263 AD2d 11 [2d Dept 1999]; Presbyterian Hosp. in the City of New York v. Aetna Cas. & Sur. Co., 233 AD2d 433 [2d Dept 1996]; St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d 718 [2d Dept 1994]; AB Medical Services, PLLC v. Prudential Property & Casualty Ins. Co., 2005 NY Slip Op 25032 [NY App Term, Jan. 20, 2005]).

The defendant’s opposition papers fail to discuss, or even acknowledge, the controlling appellate authority on the issue of waiver. Instead, in support of its argument that plaintiff’s motion should be denied because of a defective assignment, defendant cites an opinion of the Office of the General Counsel to the Superintendent of Insurance (State of New York Insurance Department, Opinion dated February 18, 2003 [Assignment used by provider must contain prescribed statutory language]) and case law recognizing the Superintendent’s broad power to interpret, clarify and implement legislative policy (Ostrer v Schenck, 41 NY2d 782 [1977]).

The Court notes that there is no conflict between such authority and those cases which hold that defects in plaintiffs’ claim forms, including the assignment, are waived if not timely objected to. Moreover, if a conflict did exist, this court would be bound to follow appellate authority that is directly on point.

As to defendant’s argument regarding the failure of proof of medical necessity, again, defendant waived any such contention by failing to raise it in a timely denial (see, Bonetti v Integon National Ins. Co., 269 AD2d 413 [2d Dept 1999]; Mount Sinai Hosp. v. Triboro Coach, supra; Amaze Medical Supply Inc. v. Eagle Ins. Co., 2 Misc 3d 128A [NY App Term 2003]).

The defendant’s remaining contentions are also without merit. [*4]

Plaintiff is awarded judgment against the defendant in the amount of $5,567.67, plus statutory interest at 2% per month from February 13, 2003, and attorneys’ fees of 20%, not to exceed $850. In addition, plaintiff is awarded $50.00 costs on this motion.

So ordered:

DISTRICT COURT JUDGE

Dated:March 22, 2005

CC:Joseph Henig, P.C.

Freiberg & Peck, LLP

VMD/mp

[*1]

Civil Court of the City of New York, Queens County, March 21, 2005

APPEARANCES OF COUNSEL

Baker & Barshay, LLP (David Barshay of counsel), for plaintiff. Robert P. Tusa (Julie Jassem of counsel), for defendant.

OPINION OF THE COURT

Gerald J. Dunbar, J.

Plaintiff, medical supplies provider Sunnyside Plus, Inc., assignee of Rene Attias, instituted this action pursuant to Insurance Law § 5106 to recover first-party no-fault benefits from defendant insurer Allstate. Plaintiff Sunnyside was denied payment for medical supplies furnished to the assignor Rene Attias, pursuant to a prescription for said supplies issued by the insured’s treating physician, Dr. Viviane Etienne, M.D., associated with the Astoria Wellness Medical, P.C.

The assignor, Rene Attias, was insured under a no-fault policy issued by Allstate which was in force at the time of the accident in which the vehicle driven by the assignor was struck from the rear. The parties stipulated that the no-fault benefits were properly assigned to Sunnyside who submitted a claim form to Allstate in the amount of $1,159.25 for medical equipment of a LSO with APL control custom fitted; the parties further stipulated that the defendant timely denied payment on the grounds of medical necessity based upon a peer review, and that the only issue for trial was the medical necessity of said medical equipment.

The court conducted the bench trial on March 15, 2005. At trial, the defendant stipulated that plaintiff had met its prima facie case and the only issue reserved for trial was the defendant’s defense of lack of medical necessity pursuant to Insurance Law § 5102 (a) (1) as set forth in defendant’s answer as the third affirmative defense.

The defendant called one witness, Dr. William Ross, a licensed medical doctor who was qualified as an expert by agreement between counsel, and author of a peer review upon [*2]which the defendant denied the claim. Dr. Ross testified that his peer review relied upon four items provided to him by a third-party vendor of peer reviews retained by the defendant. These were: (1) the original bill for medical supplies submitted to Allstate, (2) the initial medical examination report of Dr. Viviane Etienne, M.D., (3) Dr. Etienne’s prescription dated November 15, 2001 for a “LSO [with] APL control (custom fitted),” and (4) the radiology report of Dr. C. Beinart, M.D., of Radiology Imaging Associates addressed to Dr. Etienne the treating physician.

After Dr. Ross was asked to render his professional opinion based upon the documents, plaintiff’s counsel objected, and the court allowed a voir dire of the witness. Dr. Ross testified on voir dire that he did not examine Rene Attias, did not view the MRI, and based his peer review solely upon the treating doctor’s reports. Neither Dr. Etienne’s report as the treating physician, nor the radiology report were offered or in evidence. The question before the court was whether the expert witness could base his opinion solely upon out-of-court hearsay documents not in evidence. Clearly, if the MRI itself or either report were in evidence, Dr. Ross could opine on documents in evidence.

To be admissible an expert’s opinion must be based upon either facts personally known to the expert or facts or documents in evidence. (Cassano v Hagstrom, 5 NY2d 643 [1959]; Prince, Richardson on Evidence § 7-308 [Farrell 11th ed].)

“It is well settled that, to be admissible, opinion evidence must be based on one of the following: first, personal knowledge of the facts upon which the opinion rests; second, where the expert does not have personal knowledge of the facts upon which the opinion rests, the opinion may be based upon facts and material in evidence, real or testimonial; third, material not in evidence provided that the out-of-court material is derived from a witness subject to full cross-examination; and fourth, material not in evidence provided the out-of-court material is of the kind accepted in the profession as a basis in forming an opinion and the out-of-court material is accompanied by evidence establishing its reliability.” (Wagman v Bradshaw, 292 AD2d 84, 86-87 [2d Dept 2002].)

The Court of Appeals has held that an expert witness may testify that he or she relied on out-of-court material provided that it is of a kind generally accepted in the profession as reliable and there is evidence presented establishing the reliability of the out-of-court material referred to by the witness. (Hambsch v New York City Tr. Auth., 63 NY2d 723 [1984].) The Court of Appeals went on to take the opportunity to reiterate the requirement that, “[i]n order to qualify for the ‘professional reliability’ exception, there must be evidence establishing the reliability of the out-of-court material” (id. at 726). There was simply no evidence presented regarding Dr. Etienne, the health care professional who prepared the initial examination report, and Dr. Beinart, who prepared the radiologist’s report, or under what circumstances either were prepared. (Faust v New York City Tr. Auth., 4 Misc 3d 89, 91 [App Term, 2d & 11th Jud Dists 2004].) The mere fact that the report was a medical report does not suffice to render it reliable. (Borden v Brady, 92 AD2d 983, 984 [3d Dept 1983]; Wagman, 292 AD2d at 87, supra; People v Sugden, 35 NY2d 453, 460-461 [1974]; see also, Barker, Current Trends on Rules for Hearsay, 75 NY St BJ 28 [May 2003].)

The defendant additionally failed to offer the MRI film under the convenient method established by the Legislature for the admission of MRI film without any foundation. (CPLR [*3]4532-a.) Similarly, the defendant offered no information on the reliability of the out-of-court hearsay treating physician’s reports; to the contrary, Dr. Ross stated he never examined the patient Rene Attias, and that he knew nothing about the practices of either Dr. Etienne or Dr. Beinart, which would allow him to opine about the reliability of their reports. Dr. Ross was left with nothing in evidence upon which to base his opinion, nor were there out-of-court statements by a witness who testified in the proceeding upon which Dr. Ross could opine. Dr. Ross was thereby precluded from offering his opinion, for which there was no factual basis in evidence, as a matter of law. (Adkins v Queens Van-Plan, 293 AD2d 503, 504 [2d Dept 2002]; Flamio v State of New York, 132 AD2d 594 [2d Dept 1987]; see also, Philippe v Ivory, 297 AD2d 666 [2d Dept 2002]; Greggs v Kurlan, 290 AD2d 533 [2d Dept 2002].)

Based upon the credible and admissible evidence, the defendant has failed to prove its defense of lack of medical necessity by a fair preponderance of the evidence. Judgment for the plaintiff to be entered in the amount of $1,159.25, plus statutory interest (11 NYCRR 65.15), statutory attorney’s fees (11 NYCRR 65.17), together with the costs and disbursements of this action.

—[*1]

In an action to recover no-fault insurance medical payments, the defendant appeals from an order of the Supreme Court, Nassau County (Martin, J.), dated December 19, 2003, which granted the plaintiff’s motion for summary judgment and denied its cross motion for summary judgment dismissing the complaint.

Ordered that the order is affirmed, with costs.

The plaintiff made a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms were mailed and received, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g] [3]; Alvarez v Prospect Hosp., 68 NY2d 320, 325 [1986]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). In opposition, the defendant failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

The defendant failed to submit a proper affidavit of service to establish that the denial of claim form was in fact mailed to the plaintiff (see Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374, 375 [2001]; cf. St. Clare’s Hosp. v Allcity Ins. Co., 201 AD2d 718, 719 [1994]). Moreover, even if the defendant timely issued the denial of claim form within 30 days of its receipt of the plaintiff’s medical records, “[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]; see Nyack Hosp. v [*2]State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 665 [2004]). A proper denial of claim must include the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., supra at 664). The denial of claim form issued by the defendant in the case at bar, even if timely, was fatally defective in that it omitted numerous items of requested information, and thus was incomplete (see 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., supra at 665; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613, 614 [1996]). Moreover, the denial of claim form incorrectly listed the injured party, John Watson, as the provider of the health services.

The defendant’s failure to object to the adequacy of the plaintiff’s claim forms within 10 days of receipt constituted a waiver of any defenses based thereon, including the alleged lack of a valid assignment of benefits (see 11 NYCRR 65.15 [d]; New York Hosp. Med. Ctr. of Queens v AIU Ins. Co., 8 AD3d 456, 457 [2004]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 701 [2001]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [1999]; Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co., 233 AD2d 433 [1996]).

The defendant’s remaining contentions either are unpreserved for appellate review or without merit. Schmidt, J.P., Krausman, Crane and Fisher, JJ., concur.

—[*1]

Appeal from an order and judgment (one paper) of the Supreme Court, Ontario County (Craig J. Doran, A.J.), dated April 23, 2004. The order and judgment, insofar as appealed from, denied that part of defendant’s motion for summary judgment dismissing the first cause of action.

It is hereby ordered that the order and judgment so appealed from be and the same hereby is unanimously affirmed without costs.

Memorandum: Plaintiffs commenced this action after defendant refused to continue providing no-fault insurance benefits to Patricia Simmons (plaintiff). Defendant moved for summary judgment dismissing the complaint, and Supreme Court granted defendant’s motion only in part, denying the motion with respect to the first cause of action but otherwise dismissing the complaint. We affirm.

Contrary to the contention of defendant, it failed to meet its “heavy burden of showing lack of cooperation of its insured” as a matter of law (Nationwide Mut. Ins. Co. v Graham, 275 AD2d 1012, 1013 [2000]; see Thrasher v United States Liab. Ins. Co., 19 NY2d 159, 168-169 [1967]). Furthermore, defendant submitted conflicting medical opinions concerning the degree of plaintiff’s disability from work, thereby raising an issue of credibility for the trier of fact to resolve and rendering summary judgment inappropriate (see e.g. Gedon v Bry-Lin Hosps., 286 AD2d 892, 894 [2001], lv denied 98 NY2d 601 [2002]; Cavallaro v Baker, 187 AD2d 976 [1992]). By failing to establish that plaintiff was able to return to work, defendant failed to establish that plaintiff’s alleged refusal to participate in vocational rehabilitation constituted ” ‘willful and avowed obstruction’ ” (Thrasher, 19 NY2d at 168; see Matter of New York Cent. Mut. Fire Ins. Co. [Salomon], 11 AD3d 315, 316 [2004]). Present—Hurlbutt, J.P., Smith, Pine, Lawton and Hayes, JJ.

[*1]

Civil Court of the City of New York, Queens County, March 15, 2005

APPEARANCES OF COUNSEL

Freiberg & Peck, LLP, New York City (Meredith P. Gursky of counsel), for defendant. Baker, Barshay & Neuwirth, LLP, Hauppauge (Michael C. Hayes of counsel), for plaintiff.

OPINION OF THE COURT

Charles J. Markey, J.

The immortal Justice Cardozo stated: “[W]hile the workings of a novel method are untested by a rich experience[,] [t]here must be advance by trial and error” (Louis K. Liggett Co. v Lee, 288 US 517, 586 [1933] [dissenting op]). In the recent, dramatic proliferation of actions for no-fault first-party benefits, Civil Court judges are the foot soldiers required to address, in the first instance, various novel legal issues, until their appellate colleagues, often weighing the pragmatic consequences of a particular holding, get the opportunity to review decisions and thereby formulate a body of governing jurisprudence.

The important, principal issue of first impression in this state raised by the present case is the appropriate scope of an examination before trial (EBT) in an action by a health care provider for no-fault first-party benefits. Even more to the point, the main issue is whether the recent holding of first impression in Metropolitan Radiological Imaging, P.C. v State Farm Mut. Auto. Ins. Co. (7 Misc 3d 675 [Civ Ct, Queens County 2005]), making the insurer’s denial of claim form, the NF-10, “the appropriate yardstick for measuring the legitimacy of the demanded discovery” (7 Misc 3d at 680), concerning various disclosure devices available under CPLR article 31 other than depositions, now should be extended to EBTs in setting their parameters. Alternatively put, the issue is whether the subject matter of the questioning at an EBT in a case for no-fault first-party benefits—absent a case of fraud (e.g., staged accident) or lack of coverage—should be confined, in principal part, to the four corners of the NF-10.

In a summons and complaint dated August 5, 2002 and served on August 16, 2002, Baker & Barshay, LLP, on behalf of its client, plaintiff health care provider Socrates Psychological Services, P.C., sought the sum of $1,061.62 for services allegedly provided to its assignor, Aleksander Romanov. The defendant insurer, Progressive Casualty Insurance Company, was then represented by Delany & O’Brien. [*2]

Progressive’s answer contained 13 “separate and complete” affirmative defenses. With its answer, dated September 30, 2002, Progressive simultaneously served a demand for an EBT. Baker Barshay countered by also serving demands for an EBT and interrogatories. The simultaneous service of an EBT notice with a demand for responses to a set of written interrogatories, done by the attorneys for the parties in 2002, was later barred in Vladimir Zlatnick, M.D., P.C. v Government Empls. Ins. Co. (2 Misc 3d 347 [Civ Ct, Queens County 2003]).

The action was filed with the Clerk of the Court on June 25, 2003. Progressive’s new counsel, Freiberg & Peck, LLP, moved to compel responses to defendant’s discovery demands, and Baker Barshay, on behalf of Socrates, cross-moved for similar relief. On October 27, 2003, the parties’ counsel, resolving the motion and cross motion, prepared a stipulation in court that was so ordered by the undersigned. It required that the parties, at the risk of preclusion at trial, exchange answers to all documentary discovery demands two weeks in advance of Socrates’s deposition. The so-ordered stipulation, dated October 27, 2003, erroneously scheduled plaintiff’s deposition for January 7, 2003, although a letter by defense counsel mailed on October 29, 2003, made clear that the date on the stipulation for the EBT was an obvious typographical error and that it would be held on January 7, 2004.

On January 7, 2004, the deposition of Socrates did not occur, and defense counsel Freiberg & Peck, on the same day, served a motion to strike plaintiff’s pleadings for its absence at the court-ordered EBT. By cross motion, dated February 25, 2004, Socrates’s counsel, then reformed as Baker, Barshay & Neuwirth, LLP, retaliated, seeking to strike defendant Progressive’s answer for its failure to answer plaintiff’s discovery demands, as required by the so-ordered stipulation.

A second round of motions and cross motions was exchanged, again rehashing the parties’ dispute on a matter as basic as discovery, this time occupying the energies of another Judge, the Honorable Kevin J. Kerrigan. Judge Kerrigan so ordered another stipulation dated March 2, 2004, believing that he had successfully brokered an agreement between the two intransigent parties. Since the copy of Judge Kerrigan’s so-ordered stipulation attached to Progressive’s present and third motion to strike Socrates’s complaint is completely illegible and the original is missing from the Court Clerk’s file, this court determined its gist from other exhibits annexed to defendant’s motion (a confirmation letter and a transcript of a deposition noting an absent witness). Judge Kerrigan, in his order, reportedly required both parties to produce witnesses for an EBT on or before May 6, 2004, at the risk of striking a pleading for the failure to so produce.

On May 6, 2004, Meredith Gursky, Esq., an associate of Freiberg & Peck who had arranged for a deposition, made a statement on the record noting her production of a witness on behalf of defendant Progressive and the absence of plaintiff Socrates and its counsel. Her making a record before a court reporter was a smart, protective measure, although not necessary to gain dismissal of the complaint (see, Pueblo Med. Treatment v Progressive Cas. Ins. Co., 6 Misc 3d 1033[A], 2005 NY Slip Op 50287[U] [Civ Ct, Queens County 2005] [involving the same law firms appearing in this case; complaint dismissed for failure to abide by a court-ordered stipulation]).

On June 24, 2004, a third volley of motions and cross motions was launched, constituting the present dispute. Freiberg & Peck served a motion to strike plaintiff’s complaint and sought [*3]sanctions against Baker Barshay in the amount of $132.50 for the wasted deposition session of May 6, 2004, and related costs. The motion first appeared on August 6, 2004, in Part 41, where dispositive motions in no-fault actions are heard. On that date, Judge Denis Butler set a briefing schedule, endorsing it on the motion papers (Socrates was to serve either a cross motion or opposition papers no later than September 28, 2004; Progressive was to serve any opposition to a cross motion or, in the absence of a cross motion, its reply no later than October 27, 2004; and Socrates’s reply, should it have made a cross motion, was to be served by November 16, 2004). The new return date was scheduled for March 3, 2005—a full eight months later, and a “Final” marking was given.^[FN1]

Plaintiff’s counsel, Baker Barshay, timely served and filed the present cross motion seeking summary judgment, predicated on its allegation that Progressive’s denial of claim, the NF-10, was untimely. In its cross motion, Socrates first addressed Progressive’s motion to strike the complaint. First, Socrates complained that Progressive never responded to plaintiff’s demand for verified answers to interrogatories. Without such advance discovery, plaintiff should not be thrown blindly into a deposition. Second, Socrates maintained that the stipulation that was so ordered by the undersigned in 2003 expressly made any EBT contingent on the prior exchange of written discovery between the parties. Baker Barshay had complied with its production, but Freiberg & Peck still had not done so. [*4]

Third, and most significant, Baker Barshay complained that Freiberg & Peck, in numerous other litigations between the two law firms acting as counsel, consistently abused EBT notices. Baker Barshay contended that Freiberg & Peck first takes an EBT of a managing or administrative employee of a plaintiff health care provider only to complain, subsequently and inevitably, that such a deposition proved to be insufficient and that now it needed to depose the actual doctor or health care professional who rendered the services.

Rather than adhere to the briefing schedule set by Judge Butler, on August 6, 2004, requiring that Progressive’s opposition papers to a cross motion be served on October 27, 2004, Freiberg & Peck, by an associate other than Ms. Gursky, prepared an affirmation in opposition dated March 2, 2005—over four months late—and attempted to hand the original to the undersigned on the return date of March 3, 2005. This court, from the bench, rejected the papers, and endorsed the front sheet of the attempted opposition: “UNTIMELY PAPERS—not to be read.” The court further notes that, not only were Freiberg & Peck’s responsive papers untimely, with no excuse, let alone a compelling justification, offered for the incredible lateness, but they were not even accompanied by an affidavit of service! Adhering to its original position, this court has not read or considered Progressive’s untimely opposition to the present cross motion and declines to number such late papers for purposes of the record. Accordingly, the assertions made by Baker Barshay in its cross motion, on behalf of Socrates, are not refuted.

This case, even before tackling the principal issue of the proper scope of EBTs in a no-fault first-party benefits litigation, raises several important policy decisions. First, this court underscores the importance of adhering to a briefing schedule. In countless short-form orders, this court has indicated that briefing schedules are not mere, precatory guidelines, and it has invariably rejected late responsive papers no matter how serious or worthy the contentions contained therein. If this court seeks to earn the respect of its briefing deadlines by judicial colleagues, it must scrupulously enforce the schedules set forth by fellow judges. Failure to enforce those deadlines, absent a highly compelling circumstance, furthermore, sends the wrong message to the bar and permits lawyers to conclude falsely that such deadlines are malleable (see, Starke v Bergles, 444 F Supp 469, 470 [ED Wis 1978] [United States District Court refused to read and consider reply papers that were untimely under briefing schedule]; accord, Instituto Nacional De Comercializacion Agricola [Indeca] v Continental Ill. Natl. Bank & Trust Co., 858 F2d 1264, 1270-1271 [7th Cir 1988] [violation of briefing schedule is a serious breach]; People v Velit, 2002 NY Slip Op 50066[U] [Crim Ct, Queens County 2002] [briefing schedule is not a mere precatory guideline]; see generally, Pueblo Med. Treatment, 2005 NY Slip Op 50287[U], *3, supra [court, in rejecting a second chance to take a so-ordered deposition, stated: “Any other result . . . would send a mischievous message that apparent finality actually does not mean final”]).

Second, this court is concerned about Baker Barshay’s repeated attempts to sidestep its obligations of providing court-ordered discovery. Freiberg & Peck now has had to bring three motions to compel discovery, in this action alone, on a matter as basic as a deposition. Hardly any discovery has been exchanged, no witnesses have been produced, and this Civil Court action is still languishing—now almost three years since the service of the summons and complaint—despite the efforts of two judges reviewing three motions, three cross motions, and two so-ordered stipulations. [*5]

Whenever this court identifies conduct that is inconsistent with professional norms and then comments on a lawyer’s negligent lapses or active breaches, it does not do so in an effort to upbraid, embarrass, and humiliate, but rather to help eliminate the disrespect exhibited by some lawyers to their obligations, their adversaries, and the courts. By identifying and exposing such conduct, this court hopes to educate the bar and thereby deter similar lapses by other lawyers. The public’s confidence in the operation and integrity of the courts requires no less.

Holmes’s intriguing maxim that “[t]he life of the law has not been logic: it has been experience” (O.W. Holmes, Jr., The Common Law, at 1 [Little, Brown & Co. 1st ed 1881]) can be appreciated by a contextual understanding of events, depicting ruthless posturing even in the cottage industry of the no-fault first-party benefits bar (see, Vladimir Zlatnick, M.D., P.C., 2 Misc 3d 347, 348 [2003], supra). In a seminal case during the proliferation of no-fault first-party benefits litigation, Albatros Med. v Government Empls. Ins. Co. (196 Misc 2d 656 [Civ Ct, Queens County 2003]), discussed in further detail below, Baker Barshay was unsuccessful in arguing to Judge Edgar G. Walker that EBTs were unnecessary in such civil actions. Following Albatros, Baker Barshay and other plaintiffs’ law firms were then hit with tidal waves of EBT notices by defense firms. The service of an EBT notice, together with an answer, is now an automatic, reflexive knee-jerk reaction by every defense firm in the no-fault first-party benefits field (see, Vladimir Zlatnick, M.D., P.C. v Government Empls. Ins. Co., 2 Misc 3d at 348, supra). As discussed below, the EBT notices, like anything else in life, serve a salutary purpose, but are also capable of being abused, even apart from the content of the entire deposition itself.

The next step in the evolution of the use of EBT notices in a no-fault first-party benefits case was the court’s holding in Vladimir Zlatnick, M.D., P.C. (id.). Zlatnick attempted to curb, in no-fault cases, the defense bar’s resorting en masse to EBT notices, coupled to a demand for answers to a set of written interrogatories. In Zlatnick, where Baker Barshay represented the plaintiff, the court, as stated above, prohibited a party from simultaneously serving an EBT notice and a demand for answers to written interrogatories. The court in Zlatnick, employing a line of reasoning from commercial litigation, prohibited such wasteful duplication of discovery. Under Zlatnick, a party would be permitted resort to a second discovery device, either an EBT or interrogatories, solely to fill in any gaps following the use of the first form of disclosure. Thus, if plaintiff provided answers to interrogatories, defendant’s resort to an EBT, if truly needed, should be strictly confined to completing any gaps in the prior disclosure and not be manipulated into a vehicle to harass a plaintiff by taking discovery de novo over the same terrain.

Despite the Zlatnick holding, some litigants, principally defendant insurers, continue to serve simultaneously an EBT notice and a demand to answer a set of interrogatories. To halt such violations of Zlatnick and to put enforcement muscle to that ruling, the court in Metropolitan Radiological Imaging, P.C. v State Farm Mut. Auto. Ins. Co. (7 Misc 3d 675 [2005], supra) recently made clear, inter alia, that it would penalize a Zlatnick violation by striking one or both of the offending, duplicative notices.

In the face of multitudinous defense discovery motions demanding EBTs, Baker Barshay entered into many so-ordered stipulations in this court, agreeing to an EBT and to preclusion of evidence for failure of its plaintiff clients to attend a deposition. Only later, presumably overwhelmed by the number of obligations into which it had contractually entered and eventually cognizant of the full sweep and import of its actions, Baker Barshay sought to sidestep or ignore [*6]the so-ordered stipulations and even tried to redefine the word “preclusion.”

Out of fairness to Baker Barshay, it is conceivable that its attempt to discount its own stipulations may have been the product of client realities. Specifically, the stratagem of some, not all, defense counsel, in many litigations for no-fault first-party benefits, following Albatros, was to serve an EBT notice upon a plaintiff health care provider, not in a genuine desire to procure essential disclosure; it was served to force the plaintiffs’ no-fault bar to buckle under the weight of attending depositions in countless cases for innumerable hours, without any parameters, when each action sought only relatively little amounts of money, such as the sum of $1,061.62 in the present case (see, Metropolitan Radiological Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 7 Misc 3d at 686, supra [“As a practical consideration, one must surely wonder whether in claims for minor sums of money, such as those in three of the six cases, seeking $202.20, $575, and $505.50 (the other three cases each involving only about $1,800), whether a plaintiff’s counsel will even consider it affordable or ‘smart business’ to spend several hours in drafting opposition papers and traveling to and attending court appearances to challenge a patently oppressive demand”]).

A principal of a plaintiff health care provider, its doctors, and managerial staff, moreover, could be pulled away from their practices and livelihoods for a time period that could entail days, litigating over minor sums. Health care providers would bewail their plight to their counsel, whereas defense counsel, well compensated by insurance carriers for both attending and stretching out a deposition, would experience no discomfort.

Mindful of the aforementioned maxim by Holmes, this is the hard core reality of no-fault first-party benefits litigation as it is currently practiced. In many cases, an EBT in a no-fault case may conceivably yield helpful information pertinent to a defense that was specifically contained in a timely served NF-10. However, the undersigned, in over three years of presiding over no-fault first-party benefits bench and jury trials, cannot recall a single instance of a defendant insurer attempting to use a plaintiff’s EBT transcript at trial, either in its case-in-chief or by way of impeachment.

In making the aforementioned observations, this court is not imputing any bad motive to Freiberg & Peck in this action. Quite the contrary, the court believes that Freiberg & Peck was sincere in its desire and genuine in its need, throughout the present case, to depose the health care provider about the psychological services allegedly rendered so that it could competently defend its client. The aforementioned observations are meant solely (1) to supply a backdrop as to Baker Barshay’s actions, although a failure to meet one’s commitments cannot be excused, especially when expressed in a court-ordered stipulation, and (2) to illuminate the latent abuse of EBTs in a no-fault first-party benefits case.

Baker Barshay’s attempts to renounce, sidestep, or wriggle out of its so-ordered commitments went without success, resulting only in dismissals of its cases and judicial condemnation of its practices (see, e.g., Pueblo Med. Treatment, 6 Misc 3d 1033[A], 2005 NY Slip Op 50287[U] [2005], supra; Hoss Med. Servs., P.C. v Government Empls. Ins. Co., 4 Misc 3d 521 [Civ Ct, Queens County 2004, Walker & Siegal, JJ.]).

This court now has to discern how to approach Socrates’s cross motion for summary judgment. Three options are available. One approach would be to reject it summarily. It could [*7]well be argued that the cross motion, following two so-ordered stipulations, was nothing more than plaintiff’s ploy to invoke the automatic stay of discovery that attaches upon making a dispositive motion, thereby further delaying Socrates’s EBT. The two so-ordered stipulations did not contain any language directing that discovery proceed notwithstanding the pendency of any dispositive motion (CPLR 3214 [b]). In the absence of such indispensable language, the fact that the two discovery stipulations in this action were so ordered by a court still does not permit an exception to the general rule that a dispositive motion stays all discovery (see, Rizz Mgt. Inc. v Kemper Ins. Co., 4 Misc 3d 1005[A], 2004 NY Slip Op 50723[U] [Civ Ct, Queens County 2004, Siegal, J.] [reviving a so-ordered stipulation following the denial of a summary judgment motion]).

This court, in its discretion, in light of the procedural history of this case, as a second alternative, could also deny the cross motion for summary judgment without prejudice to its renewal following the completion of the so-ordered discovery (see, McGlynn v Palace Co., 262 AD2d 116, 117 [1st Dept 1999]). However, in light of the circumstances of this case, especially the years of antagonism and hostilities between the parties’ counsel that have produced a lot of motions—but no movement—in this case, this court opts for a third alternative, of tackling Socrates’s present cross motion on its merits.

The court must deny the cross motion for two reasons. First, plaintiff’s counsel failed to include the entire denial of claim form, the NF-10. The copy of the NF-10 attached as an exhibit to plaintiff’s cross motion contained only one sheet of the denial, but it surely must have contained more than one sheet because, in the space provided for stating the reason for the denial, the insurer typed in “see attached.” Perhaps Baker Barshay believed that the chambers of the undersigned was overwhelmed with paper and did not want to further burden the court with the remainder of the exhibit. Obviously, plaintiff’s counsel’s omission raises disturbing questions about either its carelessness or level of candor with the court. This court insists on seeing an entire NF-10 and not simply the page containing only the dates of the claim’s mailing and its receipt by the insurer.

Second, the date of the bill, as reflected on the sole sheet of the NF-10 provided by plaintiff’s counsel, is January 15, 2001. The NF-10 continues, however, to state that the insurer received the bill on June 29, 2001 and allegedly denied it on July 19, 2001. The plaintiff failed to make a prima facie case for summary judgment because it did not include proof of mailing of the claim and also did not offer a proper explanation of the relevant dates (see, SZ Med. P.C. v State-Wide Ins. Co., 6 Misc 3d 132[A], 2005 NY Slip Op 50103[U] [App Term, 2d Dept 2005]; A.B. Med. Servs. PLLC v Motor Veh. Acc. Indem. Corp., 6 Misc 3d 131[A], 2005 NY Slip Op 50088[U] [App Term, 2d Dept 2005]; A.B. Med. Servs. PLLC v USAA Cas. Ins. Co., 6 Misc 3d 126[A], 2004 NY Slip Op 51682[U] [App Term, 2d Dept 2004]; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 133[A], 2004 NY Slip Op 50447[U] [App Term, 2d Dept 2004]; Amaze Med. Supply v New York Cent. Mut. Ins. Co., 6 Misc 3d 126[A], 2004 NY Slip Op 51680[U] [App Term, 2d Dept 2004]; Comprehensive Mental v Lumbermens Mut. Ins. Co., 4 Misc 3d 133[A], 2004 NY Slip Op 50745[U] [App Term, 2d Dept 2004]; PDG Psychological P.C. v State Farm Mut. Ins. Co., 6 Misc 3d 1022[A], 2005 NY Slip Op 50150[U] [Civ Ct, Kings County 2005]; Allstate Social Work & Psychological Svcs PLLC v GEICO Gen. [*8]Ins. Co., 6 Misc 3d 1010[A], 2005 NY Slip Op 50024[U] [Civ Ct, Kings County 2005]).

“[T]he court’s role in a motion for summary judgment is one of issue spotting and not one of issue determination” (Scanlon v Travelers Ins. Co., 849 F Supp 836, 839 [ND NY 1994]; accord, Adickes v S.H. Kress & Co., 398 US 144, 157 [1970] [movant on summary judgment has “the burden of showing the absence of a genuine issue as to any material fact”]; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957] [court’s role on such a motion is issue finding, not issue determination]; Rivera v 2160 Realty Co., L.L.C., 10 AD3d 503, 505 [1st Dept 2004]). The plaintiff’s cross motion for summary judgment is, accordingly, denied.

Since discovery needs to continue in this three-year-old litigation, the court next addresses the primary issue in this case, and one of first impression in this state, of the appropriate parameters of depositions in no-fault first-party benefits litigation. In studying the matter, the court has reviewed each of the pleadings and all the motions and cross motions in the prior proceedings. Baker Barshay, as stated, in opposing the present defense motion, voiced its fear that Freiberg & Peck would not be satiated by one EBT of a managerial employee of a plaintiff health care provider, but predictably would take that deposition and then, claiming dissatisfaction with the testimony procured from the first witness, would demand to depose the doctor or professional who rendered the services.

Baker Barshay’s concern is well-founded. In a prior motion in this case, Freiberg & Peck not only quoted, but put in prominent and isolated boldface type, almost by way of sending a menacing message, the following quotation from Judge Walker’s opinion in Albatros (196 Misc 2d 656, 658 [2003], supra): “Plaintiff, having elected to proceed by way of litigation in the courts, must comply with CPLR article 31. In rejecting the expeditious and economical option of arbitration, plaintiff cannot now seek to use the rules of arbitration in the courts.”

First, Judge Walker’s seminal opinion in Albatros granted to insurers the right to take EBTs in civil actions for no-fault first-party benefits, rejecting Baker Barshay’s position in that case. However, contrary to the implication of defense counsel, nothing in Albatros provides a defendant insurance carrier the right to distort a deposition into a wholesale inquisition of a plaintiff health care provider, to keep its staff hostage under questioning for days, or to demand, as a matter of entitlement in every no-fault case, to take successive EBTs. The Albatros court’s reference to the “expeditious and economical” route afforded by arbitration was not intended as some reason for punishing a plaintiff for not having so proceeded. It was no more than an observation kindred to that given to litigants on a typical evening in the Small Claims Part of this court that if they opt to be heard by an arbitrator, rather than insist upon trial before a judge of the court, their case will be heard quickly and efficiently. Sure, if a litigant chooses, whatever the nature of the dispute, to commence and maintain a civil action, as opposed to proceeding to arbitration, a court will clothe the parties with the panoply of protections provided by law, here, those disclosure devices available under the CPLR.

Baker Barshay’s opposition to the present defense motion to strike also has a substantial basis because of many defendants’ improper use of the various discovery devices afforded by article 31 of the CPLR. The court, in Metropolitan Radiological Imaging, P.C. v State Farm Mut. Auto. Ins. Co. (7 Misc 3d 675 25063 [2005], supra), illustrated, by demonstrating in six different motions consolidated for purposes [*9]of the decision, how defense firms in no-fault first-party benefits cases were ignoring the particular purposes of each type of notice of discovery and using them interchangeably, thereby abusing plaintiffs. The court in Metropolitan Radiological refused to condone the practice and the patently abusive demands contained in the notices and denied each of the six defense motions to compel production, to preclude evidence, or to strike a pleading, although made on default. In light of the prevalent abuses of discovery notices by defense firms in that case—and two of the consolidated six cases in Metropolitan Radiological involved motions by Freiberg & Peck—Baker Barshay’s concern that EBTs will similarly be abused in the present case was not paranoid.

The court in Metropolitan Radiological analyzed, under pertinent appellate rulings, that the lodestar for determining a no-fault first-party benefits case is the denial of claim, the NF-10. To avoid a plaintiff’s successful motion for summary judgment, an insurer must state, with a high degree of specificity, in its NF-10, any applicable defense, except for fraud (presently defined only as a staged accident)^[FN2] or lack of coverage, and must stand or fall upon those defenses. If not raised in a timely fashion and with specificity, those defenses will not be entertained later, no matter how meritorious they may be in substance (Metropolitan Radiological, 7 Misc 3d 675 [2005], supra [citing cases]; see, Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d Dept 2004]; Socrates Psychological Servs., P.C. v Lumbermans Mut. Cas. Co., 4 Misc 3d 130[A], 2004 NY Slip Op 50690[U] [App Term, 1st Dept 2004] [per curiam]).

The court in Metropolitan Radiological continued that the NF-10 is the only appropriate yardstick for measuring a discovery device’s propriety, not a perusal of any number of the “separate and complete” or “separate and distinct” affirmative defenses contained in the defendant insurer’s answer. The court stated:

“In none of the six motions did the movant attach a copy of a denial of claim, the NF-10, or a timely demand for verification. Interestingly, each insurer’s counsel appended the pleadings, including its answer so as to demonstrate, seemingly and superficially, that the demanded discovery of information and documents must surely come within some affirmative defenses contained therein. The discussion above, however, highlights that what is essential is not some invocation of a defense or the inclusion of an answer containing numerous affirmative defenses, but proof that a particularized defense was stated in a denial of claim with a high degree of specificity and [*10]was done so timely. . . .

“Review of the NF-10 is indispensable; it is the appropriate yardstick for measuring the legitimacy of the demanded discovery.” (Metropolitan Radiological, 7 Misc 3d at 679-680.)

The reasoning of Metropolitan Radiological applies equally to the present situation of the appropriate scope of an EBT. This court holds that, apart from eliciting appropriate pedigree and background information of the witness, the subject matter of a deposition in a no-fault first-party benefits case is to be limited to the defenses that were specifically raised in the NF-10. The four corners of the denial of claim form, the NF-10, and defenses there stated with a high degree of specificity (General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979] [per curiam]), should yield the examining attorney at an EBT sufficient and fertile avenues of disclosure.

The questioning at an EBT in appropriate cases of fraud and lack of coverage—as defined by appellate courts as exceptions to the general rule that defenses not specifically and timely asserted in the denial of claim, the NF-10, are deemed waived—is not to be limited to the NF-10, especially in light of the Court of Appeals’ avowed public policy to help combat fraudulent no-fault first-party benefits claims (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854 [2003]; accord, United States v Lucien, 347 F3d 45 [2d Cir 2003] [affirming convictions of defendants who participated as passengers in staged automobile accidents designed to exploit New York’s no-fault automobile insurance regime]; see, e.g., Hempstead Pain & Med. Servs., P.C. v Progressive Cas. Ins. Co., 2003 NY Slip Op 51319[U] [Nassau Dist Ct 2003] [ordering EBT of medical provider]; Matter of National Grange Mut. Ins. Co. v Vitebskaya, 1 Misc 3d 774 [Sup Ct, Kings County 2003] [petitioner insurer’s request to stay arbitration was granted in view of showing that collision was staged]). The present case does not involve any allegations of fraud or lack of coverage.

As to Freiberg & Peck’s alleged penchant for needlessly taking successive EBTs, not every no-fault first-party benefits case will require a deposition of the actual health care professional. A deposition of the professional could be required where defenses of medical necessity or concurrent care were specifically and timely asserted in the NF-10. In all other cases, the EBT of a managerial or administrative employee of the plaintiff health care provider should be sufficient as to the contents of the health care file on the assignor, its authentication, and the dates of mailing and receipt of pertinent insurance forms. At any rate, this court, for present purposes, considering the issue of first impression of the appropriate contours of an EBT in an action for no-fault first-party benefits, does not need to establish rules for every permutation and nuance that may arise in other cases.

In this case, the court determines that Freiberg & Peck is entitled to depose Socrates, by taking the EBTs of both a managerial employee and the health care professional who actually rendered the services. Since the dates of the mailing and receipt of various important insurance forms, including the claim, the all-important denial of claim form (11 NYCRR 65-3.8), any timely demand for verification, the NF-3 or NF-5, or demand for additional verification (11 NYCRR 65-3.5), may be important at the trial of this action, an EBT of Socrates’s managerial [*11]person with such knowledge is appropriate and hereby ordered. The court also orders the deposition of the psychologist who allegedly rendered the services. Baker Barshay’s inclusion, in its present cross motion, of only the first page of the NF-10 was, as indicated, not forthcoming in candor, and this court thus draws the inference that the sole page’s reference to “see attached [sheets]” regarding the reasons for the claim’s denial, would permit ample justification for the psychologist’s EBT.

Defense counsel, in the present case, should not question the witness as to affirmative defenses raised in the answer that were not included in the NF-10, unless the case involves the currently recognized exemptions of fraud (e.g., staged accident) and lack of coverage. Questions that seek irrelevant facts, such as the number of rooms in the plaintiff health care facility, the plaintiff’s monthly rent, the number of persons in plaintiff’s employ, trivial information, or the reasons that propelled the health care professional to enter schooling in his/her field of expertise, will not be tolerated.

This court cautions members of the defense bar, in no-fault first-party benefits litigation, who move to compel an EBT, to preclude evidence, or to strike a complaint based on the plaintiff’s failure to appear for a noticed deposition, to append a complete copy of the denial of claim form, the NF-10, as an exhibit to the motion—except for a situation identified in the motion papers as involving the exemptions to the rule of waiver of fraud (e.g., staged accident) and lack of coverage. Absent a legitimate, compelling justification for not attaching it, the failure to include the NF-10 as an exhibit will constitute summary grounds for the motion’s denial (see, Metropolitan Radiological Imaging, P.C., 7 Misc 3d 675 [2005], supra). Even on motions to enforce a prior so-ordered stipulation, inclusion of the entire NF-10 is helpful to a court in determining the appropriate relief.

Finally, while appreciating Baker Barshay’s reluctance to proceed to EBTs in this case for the justifiable grounds set forth above, this court is not content with its failure to adhere to the terms of so-ordered stipulations. No citation to a case involving stipulations should be necessary to remind plaintiff’s counsel of the importance of meeting, at the very least, its written commitments and obligations, let alone those bearing the imprimatur of a court (if Baker Barshay needs such reminders, it should consult both Pueblo Med. Treatment, 6 Misc 3d 1033[A], 2005 NY Slip Op 50287[U] [2005], supra, and Hoss Med. Servs., 4 Misc 3d 521 [2004], supra). Plaintiff’s counsel need look only at the namesake of its own client, the Athenian philosopher of the fifth century B.C.E., Socrates, who both lived and died in a manner reflecting an unwavering commitment to truth and integrity. The corporate Socrates in the present case might not be condemned to drink a cup of poisonous hemlock, but it is, by this court’s order, forced to proceed to the deposition to which it had previously committed itself in two so-ordered stipulations.

In light of the evident antagonism between counsel, in this and other pending litigation, and their refusal to budge and seek accommodation, this court is constrained to detail the terms of engagement for discovery. This court directs and orders that, no later than April 20, 2005, with regard to the set of interrogatories served by Baker Barshay on October 17, 2002, Progressive is to serve complete answers upon Socrates to all of plaintiff’s interrogatories. Each answer is to be prefaced by a restatement of the interrogatory, and the set of Progressive’s answers must be served in verified form, so as to be usable by Socrates at an EBT or trial. If Progressive’s answers are not served timely, Socrates’s counsel shall settle an order, upon notice, for the [*12]undersigned’s signature, striking defendant’s answer with prejudice and entering judgment for plaintiff in the amount of $1,061.62, with statutory monthly interest and statutory attorneys fees, and the costs and disbursements of the action. Such a proposed order shall be submitted initially to the Clerk of Special Term, in room 357, for initial review before onward transmission to chambers.

This court agrees with Socrates’s contention that, pursuant to the plain terms of the so-ordered stipulation dated October 27, 2003, and filed with the Clerk of the Court on October 28, 2003, the holding of any EBTs was contingent upon Progressive’s production of discovery, which defendant failed to do. In this regard, and only because of its failure to provide court-ordered disclosure to Socrates in advance of EBTs, Progressive’s demand for sanctions is, in all respects, denied. Before a party invokes sanctions—and this court would unhesitatingly issue such relief in an appropriate case, and for a sum far greater than that demanded in the present motion—a party should be ready to show its “clean hands,” which was not done here. Should another sanctions motion become necessary in this case by either party, it shall be referred to the undersigned for determination. The court puts both counsel on notice that, henceforth, if improper conduct is committed, the sum awarded in sanctions may well include the attorneys’ fees and related costs of all the prior motions, including the preparation of papers and court appearances, and any amount assessed upon a law firm may not be passed on as a charge to its client.

Also, no later than April 20, 2005, and to the extent not previously provided (although the court believes, on the papers provided, that Socrates has done so), Baker Barshay shall mail to defense counsel the complete health care file maintained by Socrates on the assignor.

Provided that the aforementioned directions are followed, Progressive shall depose the plaintiff on May 11 and 12, 2005. First, on May 11, 2005, at 10:00 a.m., at a deposition facility in Queens County, Progressive shall depose a managerial person of Socrates, focusing principally on the dates of the issuance and receipt of the claim, the denial of claim, and the requests for verification and additional verification. Then on May 11, 2005, at 12:00 noon, and continuing on May 12, 2005, at 10:00 a.m., only if necessary, Progressive shall depose Dr. Mitchell Philip Flaum, Ph.D., as to the psychological services provided. Dr. Flaum’s deposition, aside from obtaining relevant pedigree and background information from the psychologist, shall be strictly limited to exploring the defenses asserted in Progressive’s denial of claim form, the NF-10.

On May 18, 2005, at 10:00 a.m., at a deposition facility in Queens County, Socrates shall depose an employee of Progressive with knowledge of the particular dates of mailing and receipt of the aforementioned claim, the denial of claim, and the requests for verification and additional verification. On May 18, at 12:00 noon, and continuing on May 19, at 10:00 a.m., only if necessary, Socrates shall also depose the claims examiner of Progressive who is in charge of the assignor’s file and possesses knowledge of the facts underlying all of the denials contained in the NF-10.

Only for good cause shown, the court may extend any of the above deadlines by the sending of a letter application to chambers, preferably with the consent of both counsel, requesting and marking a designated space for a so-ordered endorsement, provided that it contains dates certain for all of the aforementioned EBTs.

Should the parties require immediate rulings on the appropriateness of any question or [*13]direction not to answer, during any of the aforementioned EBTs, they, in the presence of the court reporter, and by speaker phone if available, shall call the chambers of the undersigned. Only in the event that the undersigned is unavailable for rulings, both counsel shall appear, with the court stenographer and copies of this decision and order, in room 357 of this court, at 3:00 p.m. of the date of the EBT, and request to be heard by the judge then presiding in Special Term, Part II. The court also cautions both law firms that if it determines and concludes that any party or its counsel is being disruptive, it will, after hearing arguments, strike that party’s pleading and also schedule a hearing to determine the amount of sanctions to be assessed against the law firm itself.

Following the conclusion of all depositions, Socrates shall serve and file a notice of trial. No further motions for summary judgment may be filed by either party in this action.

The defendant’s motion is thus granted only to the extent indicated above.

Footnotes

Footnote 1: The adjournment of eight months in Part 41 given by Judge Butler was the standard adjournment given to nearly all cases, barring exceptional circumstances, that appeared on the Part’s August 6, 2004 calendar. When the undersigned presided in the Part on March 3, 2005, the next standard adjournment was over nine months later, requiring counsel to return in mid-December 2005. The lengthy adjournments are given even on simple motions. They reflect the overflowing dockets of no-fault first-party benefits cases. The return dates are understandably intolerably long, and they would, in fact, be longer but for a rule of this court that bars a law firm from filing more than 10 motions in one day. The Clerk of Special Term and the Part Clerk strictly enforce that rule. Where a law firm in a no-fault first-party benefits case has filed more than 10 motions in one day, the excess gets “marked off” during the call of the calendar “as a violation of the Court’s Rules.” This entire situation may warrant the Legislature’s attention and the Office of Court Administration’s scrutiny on how to better control the massive dockets and yet reduce the lengthy adjournments given on even routine motions. For example, if the parties, on the original return date, get an automatic adjournment as of right of over nine months until the next court appearance—when the judge presiding in Part 41 may take a motion on submission, a litigant’s options are paralyzed for a length of time that defeats justice. These reflections about the current morass echo the observations articulated by other courts (see, Vladimir Zlatnick, M.D., P.C., 2 Misc 3d at 348, 354, supra [current, abusive litigation practices represent a “subversion of the legislative scheme” for speedy payment, disputation, and resolution]; Ostia Med. v Government Empls. Ins. Co., 1 Misc 3d 907[A], 2003 NY Slip Op 51560[U] [Nassau Dist Ct 2003, Asarch, J.] [court “swamped” with no-fault litigation]; Universal Acupuncture Pain Servs. v Lumbermens Mut. Cas. Co., 195 Misc 2d 352, 352-353 [Civ Ct, Queens County 2003] [teeming dockets threaten “to engulf the state judiciary”]).

Footnote 2: One legal issue that has not been definitively resolved by the Court of Appeals is whether a fraud of a health care provider that is accused, not of excessive or unnecessary billing, but of submitting claims to an insurance carrier for services that were never rendered, should be likened to a staged accident and, therefore, exempt from the general rule of waiver, even though the defense of such a scheme’s existence was not timely and specifically asserted in the NF-10 (but see, Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d Dept 2004]).