—[*1]

In an action to recover no-fault medical payments under five insurance contracts, the plaintiffs appeal from so much of an order of the Supreme Court, Nassau County (Galasso, J.), dated October 23, 2003, as denied those branches of their motion which were for summary judgment on the first and fifth causes of action and granted that branch of the defendant’s cross motion which was for summary judgment dismissing the first cause of action and upon, in effect, searching the record, dismissed the fifth cause of action.

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

The Supreme Court properly denied that branch of the plaintiffs’ motion which was for summary judgment on the first cause of action to recover payments for medical services provided by the plaintiff Hospital for Joint Diseases and correctly granted that branch of the defendant’s cross motion which was for summary judgment dismissing that cause of action. An insurer is not required to pay a claim where the policy limits have been exhausted (see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2004]). “[W]here, as here, an insurer has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Presbyterian Hosp. in City of N.Y. v Liberty Mut. Ins. Co., 216 AD2d 448 [1995]; see Presbyterian Hosp. in City of N.Y. v General Acc. Ins. Co. of Am., 229 AD2d 479, 480 [1996]). The evidence submitted by the defendant was [*2]sufficient to establish that the subject policy limits for personal injury protection benefits had been exhausted by prior claims. No triable issue of fact was raised by the plaintiffs in opposition to the defendant’s motion.

Moreover, the Supreme Court properly denied that branch of the plaintiffs’ motion which was for summary judgment on the fifth cause of action to recover payments for medical services provided by the New York Hospital Medical Center of Queens (hereinafter the NYHMCQ) and, in effect, upon searching the record, dismissed that cause of action. An insurer is not obligated to pay or deny a claim until it has received verification of all relevant information requested (see 11 NYCRR 65.15 [g] [1] [i]; [2] [iii]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2002]). It is undisputed that the NYHMCQ failed to respond to the defendant’s verification requests for medical records. Accordingly, the period within which the defendant was required to respond to this claim did not begin to run, and any claim for payment was premature (see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., supra; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., supra).

There is no merit to the argument of the NYHMCQ that the defendant’s verification requests were ineffective to toll the defendant’s time to pay or deny the claims because they were made by letter rather than by prescribed form (see St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., supra at 339; Nyack Hosp. v Progressive Cas. Ins. Co., 296 AD2d 482, 483 [2002]; New York Hosp. Med. Ctr. of Queens v State Farm Mut. Auto. Ins. Co., 293 AD2d 588, 590 [2002]). Ritter, J.P., Goldstein, Crane and Spolzino, JJ., concur.

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

43154/03

Plaintiffs: Inwood Hill Medical P.C. and Bronx Neurodiagnostics P.C., as assignees of Jose Rincon

Plaintiffs represented by: Amos Weinberg, Esq., 49 Somerset Dr. S., Great Neck, NY 11020

Telephone: 516-829-3900

Defendant: Allstate Insurance Company

Defendant represented by: Stern & Montana LLP, 115 Broadway, New York, NY 10006

Telephone: 212-532-8100 (Fax 7271)

Shlomo S. Hagler, J.

In this action to recover first-party no-fault benefits, plaintiffs Inwood Hill Medical P.C. (“IHM” or “assignee”) and Bronx Neurodiagnostics P.C. (“BN” or “assignee”) as assignees of Jose Rincon (“Rincon” or “assignor”) move for an order pursuant to CPLR §3212 granting plaintiffs summary judgment against defendant Allstate Insurance Company (“Allstate” or “defendant”) in the sum of $8,418.49. Defendant opposes the motion.

Background

Rincon was allegedly in a motor vehicle accident on April 11, 2002. He allegedly suffered personal injuries and was treated by health care providers IHM and BN. The next day, Rincon assigned to IHM and BN his right to recover benefits from Allstate for health care services rendered to him. (See, Exhibit “C” to the Motion). Plaintiffs then mailed the executed assignment of benefits forms and an application for motor vehicle no-fault benefits (“NF-2”) to Allstate. Between June 20, 2002 and October 16, 2002, IHM and BN mailed several claim forms denominated as “Verification of Treatment By Attending Physicians or Other Provider of Health Service” (“NF-3” or “claim form”) to Allstate. (See, Exhibits “D” & “E” to the Motion).

By letter dated July 18, 2002, Allstate via its counsel sent Rincon a notice to appear for an Examination Under Oath (“EUO”) on August 23, 2002 to verify his claim for no-fault benefits. Thereafter, by letter dated August 22, 2002, Allstate and Rincon agreed to adjourn the EUO from August 23 to September 16, 2002. (See, Exhibit “G” to the Opposition papers). Allstate conducted Rincon’s EUO on September 16, 2002. Allstate also conducted EUO’s of Rincon’s co-claimants, David Villones (Allstate’s policy holder) and Floyd Spencer on August 22, 2002 and September 16, 2002, respectively. (See, Exhibits “C,” “D,” and “E” to the Opposition papers).

Allstate conceded that it received IHM’s and BN’s claim forms and it issued its denials as follows:

[*2]

(See, Exhibits “D” & “E” to the Motion and Exhibit “F” to the Opposition papers).

Specifically, Allstate denied the bulk of plaintiffs’ claim forms by Denial of Claim Forms (“NF-10” or “denials”) dated October 8, 2002, stating that “No-Fault benefits are denied based on EUO (Examination Under Oath) of the Claimant and Failure to Establish proof of claim.” With respect to a $2,619.20 claim form dated July 8, 2002, Allstate denied it on September 18, 2002 for an additional reason “based on [an unproduced] peer review by Dr. Joseph Cole.”

As a result of nonpayment of first-party no-fault benefits, this action ensued by service of a summons and complaint. (See, Exhibit “A” to the Motion). Allstate interposed

an answer with several affirmative defenses asserting, inter alia, a lack of coverage under the applicable insurance policy. (See, Exhibit “B” to Opposition papers, Answer at ¶ 11).

Summary Judgment

The movant has the initial burden of proving entitlement to summary judgment. Winegrad v New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985). Once such proof has been offered, in order to defend the summary judgment motion, the opposing party must “show facts sufficient to require a trial of any issue of fact.” CPLR § 3212(b); Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986); Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595 (1980); Friends of Animals, Inc. v Associated Fur Mfrs., 46 NY2d 1065, 416 NYS2d 790 (1979); Freedman v Chemical Construction Corp., 43 NY2d 260, 401 NYS2d 176 (1977); Spearmon v Times Square Stores Corp., 96 AD2d 552, 465 NYS2d 230 (2d Dept 1983). “It is incumbent upon a [litigant] who opposes a motion for summary judgment to assemble, lay bare and reveal [his, her, or its] proof, in order to show that the matters set up in [the pleadings] are real and are capable of being established upon a trial.” Spearmon, 96 AD2d at 553 (quoting Di Sabato v Soffes, 9 AD2d 297, 301, 193 NYS2d 184, 189 [1st Dept 1959]). If the opposing party fails to submit evidentiary facts to controvert the facts set forth in the movant’s papers, the movant’s facts may be deemed admitted and summary judgment granted since no triable issue of fact exists. Kuehne & Nagel, Inc. v F. W. Baiden, 36 NY2d 539, 369 NYS2d 667 (1975). In addition, an affidavit or affirmation by an attorney or individual who [*3]does not have personal knowledge of the facts is insufficient in support or opposition to the motion as it lacks probative value. Wehringer v. Helmsley Spear, 91 AD2d 585 (1st Dept 1982), affd 59 NY2d 688, 463 NYS2d 417 (1983).

No-Fault Law

History

Approximately thirty years ago, the Legislature enacted sweeping changes to our inadequate tort system of reparations for personal injuries suffered in automobile accidents. This program under Title 18 of the Insurance Law was titled “Comprehensive Automobile Insurance Reparations Act.” (L. 1973, ch. 13, effective February 1, 1974, former Insurance Law ｧ 670, et seq). This legislation is commonly referred to as the No-Fault Law because it provides a plan for compensation of victims of motor vehicle accidents for economic losses without regard to fault or negligence. Montgomery v Daniels, 38 NY2d 41, 378 NYS2d 1 (1975); Overly v Bangs Ambulance, Inc., 96 NY2d 295, 727 NYS2d 378 (2001).

The noble and stated intent of the No-Fault Law was to create a new and improved insurance reparations system:

[W]hich assures that every auto accident victim will be compensated for substantially all of his economic loss, promptly and without regard to fault; [and] will eliminate the vast majority of auto accident negligence suits, thereby freeing our courts for more important tasks. (Governor’s Memorandum of Approval, 1973 N.Y. Legis. Ann. 298). (Emphasis added, quotation marks omitted)

Granger v Urda, 44 NY2d 91, 98, 404 NYS2d 319, 322 (1978). A lynch-pin of the No-Fault Law was the prompt payment of victim’s claims under the so-called “30-day rule” as first-party benefits were “overdue if not paid within thirty-days after the claimant supplies proof of the fact and the amount of loss sustained.” Former Insurance Law § 675(1); Montgomery v Daniels, 38 NY2d 41, 378 NYS2d 1 (1975).

Effective September 1, 1984, the No-Fault Law was re-codified without substantial change from the “Comprehensive Automobile Insurance Reparations Act” to the “Comprehensive Motor Vehicle Insurance Reparations Act” under Article 51 of the Insurance Law. (L. 1984, ch. 367 & ch. 805).

For more than thirty years, the Superintendent of Insurance promulgated regulations implementing the No-Fault Law, which were adopted as Regulation 68 and codified at 11 NYCRR part 65. Matter of Medical Society of the State of N.Y. v Serio, 100 NY2d 854, 768 NYS2d 423 (2003) (“Medical Society II“). In 1999, in an effort to combat abuse of the no-fault laws, the Superintendent proposed an amended Regulation 68. The amended regulation was successfully challenged in the courts. Matter of Medical Society of the State of N.Y., Inc. v Levin, 185 Misc 2d 536 (Sup Ct, N.Y. County 2000), affd 280 AD2d 309 (1st Dept 2001) (“Medical Society I“). However, while the appeal in that case was pending, the Superintendent reinitiated the rule-making process and promulgated another revised Regulation 68, which was also challenged. In Medical Society II, the Court of Appeals upheld the Superintendent’s authority to promulgate the challenged regulations as being fully consistent with Article 51 of the [*4]Insurance Law.

Among the most significant changes adopted in the revised regulations was a reduction in the time frames applicable to the filing of notices and proofs of claim. This was based on the Superintendent’s determination that much of the abuse was associated with the lengthy time frames within which claims could be presented to insurers. Medical Society II, 100 NY2d at 862, 768 NYS2d at 427. The Superintendent also concluded that the shorter time frames would better effectuate the legislative purpose of providing prompt compensation “as the loss is incurred” pursuant to Insurance Law § 5106(a). Id.

The revised regulations reduced the time limit for filing a notice of claim from ninety (90) to thirty (30) days. 11 NYCRR ｧｧ 65-1.1; 65-2.4(b). The revised regulations also reduced the time in which to submit proof of loss due to medical treatment from one hundred eighty (180) to forty-five (45) days, and proof of work loss from “as soon as reasonably practicable” to ninety (90) days. 11 NYCRR ｧｧ 65-1.1; 65-2.4(c). In addition, the revised regulations also increased the time limit for the insurer to seek additional verification requests from ten (10) business days to fifteen (15) business days. 11 NYCRR ｧ 65-3.5(b) and former 11 NYCRR ｧ 65.15(d)(2).

These new regulations have been in effect since April 4, 2002. Medical Society II, 100 NY2d at 862, 768 NYS2d at 427, n 2. This is an important date as the old regulations would apply to a motor vehicle accident occurring prior to April 4, 2002.

Insurance Law § 5106(a)

The general framework for payment of first-party benefits derives from Insurance law § 5106(a). It states as follows:

(a) Payments of first-party benefits and additional first-party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied. All overdue payments shall bear interest at the rate of two percent per month. If a valid claim or portion was overdue, the claimant shall also be entitled to recover his attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim subject to limitations promulgated by the superintendent in regulations.

[*5]Regulation 68, 11 NYCRR ｧ 65

The Insurance Department is the governmental agency responsible for the administration of Article 51 of the Insurance Law. In this capacity, the Superintendent of Insurance, interpreting Insurance Law § 5106, promulgated Regulation 68 and codified it under 11 NYCRR ｧ 65. These regulations contain the specific details for payment of first-party benefits such as notice requirements, claim procedures, follow-up requirements and payment or denial of claims. The courts defer to the special expertise of the Insurance Department in interpreting the Insurance Law except where “the regulation runs counter to the clear wording of a statutory provision [and the regulation then] should not be accorded any weight (citations omitted).” Kurcsics v Merchants Mutual Ins. Co., 49 NY2d 451, 459, 426 NYS2d 454, 458 (1980).

Four sections of these regulations ｧｧ 65-2.4, 65-3.5, 65-3.6 and 65-3.8 form the blueprint or outline for processing of first-party no-fault claims.

The process begins when an injured party provides notice to the insurer within thirty days after the date of the accident. 11 NYCRR § 65-2.4(b). This notice requirement may be deemed satisfied when the injured party submits an “Application for Motor Vehicle No-Fault Benefits (NYS Form NF-2).” The injured party or that party’s assignee (i.e., health care provider) must submit a “written proof of claim” to the insurer for health service expenses within forty-five days after the date services are rendered, and submit proof of work loss within ninety days. 11 NYCRR § 65-2.4(c). For proof of claim for health service expenses, the health care provider usually submits a “Verification of Treatment by Attending Physician or Other Provider of Health Service (NYS Form NF-3),” or less commonly, “Verification of Hospital Treatment (NYS Form NF-4),” or “Hospital Facility Form (NYS Form NF-5).”

Within ten business days after receipt of the completed no-fault application (NF-2), the insurer must forward verification forms for health care or hospital treatment (NF-3, NF-4 or NF-5) to the injured party or that party’s assignee. After receipt of the completed verification of health care or hospital treatment forms (NF-3, NF-4 or NF-5), the insurer may seek “additional verification” or further proof of claim from the injured party or that party’s assignee within fifteen business days thereof. 11 NYCRR § 65-3.5(b). For instance, the insurer may seek an independent medical examination (“IME”) of the injured party which must be held within thirty calendar days from receipt of the initial verification forms (11 NYCRR § 65-3.5[d]), or an examination under oath (“EUO”) which “must be based upon the application of objective standards so that there is specific objective justification supporting the use of such examination.” 11 NYCRR § 65-3.5(e). The injured party must be reimbursed for “any loss of earnings and reasonable transportation expenses.” Id. Of course, the insurer may seek various medical documentation as proof of claim within the prescribed fifteen business days. Id.

If any requested additional verification (e.g., IME, EUO or other medical documentation) has not been supplied to the insurer thirty calendar days after the original request, the insurer shall, within ten calendar days, follow-up with the recalcitrant party “either by telephone call, properly documented in the file, or by mail.” 11 NYCRR § 65-3.6(b). “At the same time, the insurer shall inform the applicant and such party’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” Id. [*6]

After receipt of the notice and proof of claim, the onus then shifts to the insurer to pay or deny the claim within thirty calendar days. 11 NYCRR § 65-3.8(a)(1) & (c). No-fault benefits are overdue if not paid within thirty calendar days. Id. Hence, this is called the “30-day rule.” If the insurer denies the claim, it often uses a prescribed “Denial of Claim Form (NF-10)” providing a detailed explanation for the denial.

Much confusion has arisen relating to the method of counting the thirty calendar days described in 11 NYCRR § 65-3.8(j). It states as follows:

(j) For the purposes of counting the 30 calendar days after proof of claim, wherein the claim becomes overdue pursuant to section 5106 of the Insurance Law, with the exception of section 65-3.6 of this Subpart, any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.

Example: Where an insurer sends an application for motor vehicle no-fault benefits 15 days after notice is received at the address of the insurer’s proper claim processing office instead of five business days, the 30 calendar days permitted by subdivision (a) of this section are reduced to 20 calendar days.

The best case discussing the method of counting vis-a-vis the 30-day rule is Keith v Liberty Mutual Fire Ins. Co., 118 AD2d 151, 503 NYS2d 441 (2d Dept 1986). “Although the clock does not begin to run on the thirty-day calendar day requirement until the insurer receives all of the necessary verification . . . the insurer’s lack of diligence in obtaining the verification may reduce the thirty-day period even before verification is obtained.” Keith, 118 AD2d at 154, 503 NYS2d at 443. In that case, the insurer was four business days late in requesting verification of hospital records. The Appellate Division, Second Department held that the insurer’s thirty calendar days to pay or deny the claim must be reduced by four days, leaving twenty-six days. Id. However, the Appellate Division also applied the insurer’s follow-up requirements for verification requests set forth in our current regulations, 11 NYCRR § 65-3.6(b), which may be excluded by the plain wording of the regulation. The inconsistency may be resolved by stating that the insurer’s time is not reduced where it sought the additional verification requests late but within the prescribed thirty calendar days (i.e., more than fifteen business days and up to twenty-nine calendar days which would not effectively reduce the thirty days to zero). Where the insurer either seeks additional verification requests or even provides a time to respond outside the thirty calendar days, the proverbial clock has run and there is no need to resort to the 11 NYCRR § 65-3.8(j) counting requirement. A contrary interpretation of the regulation would run counter to the clear wording of Insurance Law § 5106(a) providing for the strict 30-day rule. See, Kurciscs v Merchants Mutual Ins. Co., 49 NY2d 451, 426 NYS2d 454 (1980). [*7]

Prima Facie Case

There is a growing debate as to what constitutes the prima facie case in first-party no-fault benefits actions. See, Metroscan Imaging v American Transit Ins. Co., NYLJ, December 10, 1999, at 27, col 5 (Civ Ct NY County, Smith, J.); Neuro Care Center II v Allstate Ins. Co., NYLJ, January 28, 2003, at 17, col 5 (Civ Ct NY County, Billings, J.).

To establish a prima facie case, plaintiffs have the burden of proof of demonstrating (1) standing to bring the action; and (2) the submission of completed proofs of claims to defendant which defendant did not pay or deny within thirty days.

Standing

Standing is defined as “a party’s right to make a legal claim or seek judicial enforcement of a duty or right.” Black’s Law Dictionary, Seventh Edition, 1999. The United States Supreme Court nicely articulated the meaning of standing as follows:

Have the appellants alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions? This is the gist of the question of standing.

Baker v. Carr, 369 US 186, 204, 82 S Ct 691, 703 (1962) (Brennan, J.).

First-party no-fault benefits actions are no different and require standing to be addressed. Where the injured party assigned his/her claim to a health care provider or hospital, such assignment of benefits forms must be provided as part of the prima facie case. At the very least, the assignment of benefits forms must include the assignor and assignee’s name, the date of the accident, and be signed and dated by the assignor. The plaintiffs’ burden in proving standing is satisfied once they submit properly completed assignment of benefits forms. Defendant must then come forward with evidence of a deficiency or a claimed defect in the assignment or such defense will be waived unless it was alleged in the insurer’s denial of claim. See, Presbyterian Hospital v Aetna Casualty & Surety Co., 233 AD2d 433, 650 NYS2d 602 (2d Dept 1996), lv dismissed 89 NY2d 1030, 658 NYS2d 245 (1997); Quality Medical Healthcare, P.C. v Lumberman’s Mutual Casualty Co., 2002 N.Y. Slip Op 50098(U), 2002 WL 496433 (App Term 1st Dept, March 19, 2002). An example of a waivable defect is the inclusion of a “reservation of rights” provision in the assignment of benefits form. See, Park Health Center a/a/o Sharpe v Eveready Ins. Co., 2001 N.Y. Slip Op 40665(U), 2001 WL 1807733 (App Term 2d & 11th Jud Dists, December 17, 2001).

This analysis may be best analogized to the defendant’s waiver of personal jurisdiction defenses. Plaintiffs must present a completed affidavit of service to satisfy their service requirements. The affidavit of service raises a presumption of delivery which may be either rebutted or waived. See, Slater v Congress of Racial Equality, Inc., 48 AD2d 623, 367 NYS2d 789 (1st Dept 1975).

[*8]Proof of Claims

Plaintiffs must submit completed proofs of claims in similar form to the NYS NF-3, 4, or 5 Forms. Significantly, the forms provide the defendant with the name of the policyholder, name and address of the provider, policy number, date of accident, date of health care service, place of service, description of treatment/service rendered and charges billed. The NF-3 and NF-4 forms also contain an assignment of no-fault benefits option that may be executed by the injured party.

Next, plaintiffs must show that these claims were mailed to the insurer. This can be accomplished in one of at least three ways. First, plaintiffs may provide an affidavit of service and/or proof of mailing. Second, plaintiffs may provide proof of a standard office practice or procedure designed to ensure that claims are properly addressed and mailed. See Amaze Medical Supply Inc. a/a/o Tsigelman v Allstate Ins. Co., 3 Misc 3d 133(A), NYLJ, June 2, 2004, at 27, col 6, 2004 NY Slip Op 50447(U), 2004 WL 1197345 (App Term 2d & 11th Jud Dists, May 20, 2004). Lastly, the date the claim was received as specified on the Denial of Claim (NF-10) form serves as an admission by the insurer and is sufficient proof of mailing. A.B. Medical Services PLLC v New York Central Mutual Fire Ins. Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 50507(U), 2004 WL 1302031 (App Term 2d & 11th Jud Dists, May 26, 2004); Ocean Diagnostic Imaging, P.C. a/a/o Grishchenko v Lumbermens Mutual Casualty Co., NYLJ, June 2, 2004, at 27, col 3, 2004 NY Slip Op 50510(U), 2004 WL 1301952 (App Term 2d & 11th Jud Dists, May 26, 2004).

Once plaintiffs show that properly completed claim forms were submitted to the insurer, they must then demonstrate that the claims were not paid or denied by the insurer within thirty calendar days of receipt thereof, as discussed below.

30-Day Rule

The Court of Appeals in the landmark case of Presbyterian Hospital in the City of N.Y. a/a/o DiGuisto v Maryland Casualty Co., 90 NY2d 274, 282, 660 NYS2d 536, 542 (1997), declared that “an insurer may be precluded from interposing a statutory exclusion defense for failure to deny a claim within 30 days as required by Insurance Law § 5106(a).” The Court of Appeals explained that the strict construction of the “30-day rule” was intended as a “trade-off of the no-fault reform [which] still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leased contestable period and process designed to avoid prejudice and red-tape dilatory practices.” Presbyterian, 90 NY2d at 285, 660 NYS2d at 542.

Lately, the courts have liberally interpreted the plaintiffs’ burden as to require only submission of “complete proofs of claims to defendant which defendant did not pay or deny within 30 days.” Amaze Medical Supply Inc. a/a/o Darlington v Allstate Ins. Co., 2 Misc 3d 134(A), 2004 NY Slip Op 50211(U), 2004 WL 758248 (App Term 2d & 11th Jud Dists, March 26, 2004). See also, Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists); Amaze Medical Supply, Inc. v Colonial Penn Ins. Co., NYLJ, March 3, 2004, at 26, col 1, 2004 NY Slip Op 50471(U), 2004 WL 1243410 (App Term 2d & 11th Jud Dists, March 3, 2004); A.B. Medical Services PLLC a/a/o Suzolyanski v CNA Ins. Company, 1 Misc 3d 137(A), 2004 NY Slip Op 50061(U), 2004 WL 314819 (App Term 1st Dept, February 11, 2004); Damadian MRI in Elmhurst, P.C. a/a/o [*9]Jones v Liberty Mutual Ins. Co., 2 Misc 3d 128(A), 2003 NY Slip Op 51700(U), 2003 WL 23310887 (App Term 9th & 10th Jud Dists, Dec. 24, 2003); A.B. Medical Services PLLC a/a/o Boliere v Lumbermens Mutual Casualty Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 24194, 2004 WL 1301910 (App Term 2d & 11th Jud Dists, May 26, 2004); A.B. Medical Services PLLC v New York Central Mutual Fire Ins. Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 50507(U), 2004 WL 1302031 (App Term 2d & 11th Jud Dists, May 26, 2004); Amaze Medical Supply Inc. a/a/o Bermudez v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003); Amaze Medical Supply Inc. a/a/o Tsigelman v Allstate Ins. Co., 3 Misc 3d 133(A), NYLJ, June 2, 2004, at 27, col 6, 2004 NY Slip Op 50447(U), 2004 WL 1197345 (App Term 2d & 11th Jud Dists, May 20, 2004); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002) (“plaintiff health care provider established a prima facie case by the submission of statutory forms of proof of claim and the amount of the loss . . .” [citations omitted]).

Moreover, the Appellate Term, First Department has recently held that due to an untimely denial, the insurer “waived any defenses relating to the adequacy of plaintiffs’ claim forms, including the alleged absence of necessary signatures.” A.B. Medical Services PLLC a/a/o Suzolyanski v CNA Ins. Co., 1 Misc 3d 137(A), 2004 NY Slip Op 50061(U), 2004 WL 314819 (App Term 1st Dept, February 11, 2004).

The rationale for this standard was best expressed by the Appellate Term, Second Department in both Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003) and Damadian MRI in Elmhurst, P.C. a/a/o Jones v Liberty Mutual Ins. Co., 2 Misc 3d 128(A), 2003 NY Slip Op 51700(U), 2003 WL 23310887 (App Term 9th & 10th Jud Dists, Dec. 24, 2003), as follows:

The situation may be analogized to an account stated where, upon the insurer’s failure to timely and properly deny the bill as embodied in the claim form, the insurer is presumed to have acquiesced to its correctness, thereby rendering the insurer liable thereon.

However, the Court of Appeals has also held that an untimely disclaimer or denial does not prevent the insurer from raising a lack of coverage defense “premised on the fact or founded belief that an alleged injury does not arise out of an insured incident.” Central General Hospital a/a/o Mandrels v Chubb Group of Ins. Cos., 90 NY2d 195, 199, 659 NYS2d 246, 248 (1997). Thus, even if the insurer fails to pay or deny a claim within thirty days of its submission, it may still raise a lack of coverage defense.

Medical Necessity

Courts have held that plaintiffs need not demonstrate medical necessity as part of their prima facie case. Dermatossian v New York City Transit Authority, 67 NY2d 219, 224, 501 NYS2d 784, 787 (1986) (“A claimant to receive payment need only file a ‘proof of claim’ . . [*10]. and the insurers are obligated to honor it promptly or suffer the statutory penalties”); A.B. Medical Services PLLC v Geico Ins., 2 Misc 3d 26, 773 NYS2d 773 (App Term 2d Dept 2003) (“We have rejected arguments that a no-fault benefits claimant is obligated to prove the treatment’s medical necessity, at the claim stage or in support of its motion for summary judgment in a subsequent action on the claim [citations omitted]”); Choicenet Chiropractic, P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672(U), 2003 WL 1904296 (App Term 2d & 11th Jud Dists, January 23, 2003); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002).

The insurer may raise the defense that a claimed procedure was not medically necessary with a timely denial pursuant to the 30-day rule. Presbyterian, 90 NY2d 274, 282, 660 NYS2d 536, 542 (1997); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002). If there is an untimely disclaimer or denial in derogation of the 30-day rule, the insurer’s lack of medical necessity defense is precluded. Amaze Medical Supply Inc. a/a/o Darlington v Allstate Ins. Co., 2 Misc 3d 134(A), 2004 NY Slip Op 50211(U), 2004 WL 758248 (App Term 2d & 11th Jud Dists, March 26, 2004).

Furthermore, in support of or opposition to a summary judgment motion or at trial, the defense that the claim was not medically necessary must be supported by sufficient factual evidence or proof and cannot simply be conclusory. Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003); Choicenet Chiropractic, P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672(U), 2003 WL 1904296 (App Term 2d & 11th Jud Dists, January 23, 2003).

Fraud

No-fault insurance fraud is a rising and significant problem. The Court of Appeals listed alarming statistics as follows:

Between 1992 and 2001, reports of suspected automobile insurance fraud increased by 275%, the bulk of the increase occurring in no-fault insurance fraud. Reports of no-fault fraud rose from 489 cases in 1992 to 9,191 in 2000, a rise of more than 1700%. No-fault fraud accounted for three quarters of the 16,902 reports of automobile-related fraud received by the Insurance Department’s Frauds Bureau in 2000, and more than 55% of the 22,247 reports involving all types of insurance fraud. In 1999, the Superintendent established a No-Fault Unit within the Frauds Bureau to focus specifically on no-fault fraud and abuse. By one estimate, the combined effect of no-fault insurance fraud has been an increase of over $100 per year in annual insurance premium costs for the average New York motorist.

Medical Society II, 100 NY2d at 861, 768 NYS2d at 426. [*11]

Notwithstanding the above, where a defense is based on fraud, the defendant insurer must allege in detail the particular facts constituting the wrong as mandated by CPLR § 3016(b). The general standard the insurer must assert for a lack of coverage or fraud defense is one “premised on the fact or founded belief that the alleged injury does not arise out of an insured incident” but was a deliberate event staged in furtherance of a scheme to defraud the insurer. Central General Hospital v Chubb Group of Ins. Cos., 90 NY2d at 199, 659 NYS2d at 248. See also, Metro Medical Diagnostic, P.C. v Eagle Ins. Co., 293 AD2d 751, 741 NYS2d 284 (2d Dept 2002). Thus, the insurer has the burden to come forward with proof in admissible form to establish “the fact” or “foundation for its belief” that the alleged incident was a staged event to defraud the insurer. Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d 11, 699 NYS2d 77 (2d Dept 1999). Indeed, unsupported conclusions and “suspicions” as well as “unsubstantiated hypotheses and suppositions” are insufficient to raise a triable issue of the assignor’s alleged fraud. See, A.B. Medical Services PLLC v Eagle Ins. Co., 3 Misc 3d 8, 776 NYS2d 434 (2d Dept 2002); A.B. Medical Services PLLC v Lumbermen’s Mutual Casualty Co., NYLJ, September 30, 2003, at 17, col 1 (Civ Ct Kings County, Schack, J.); Bonetti v Integan National Ins. Co., 269 AD2d 413, 703 NYS2d 217 (2d Dept 2000); Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists); A.M. Medical P.C. v New York Central Mutual Ins. Co., 2 Misc 3d 1012(A), NYLJ, April 29, 2004, at 19, col 1, 2004 N.Y. Slip Op 50298(U), 2004 WL 869595 (Civ Ct Queens County, Butler, J.) (“low impact report” failed to show that incident was a staged event to defraud the insurer).

There is a dearth of case law to provide guidance as to what is required for the insurer to establish a fraud defense. The Appellate Division, Second Department stated that “an expert’s affidavit will usually [but not always] be necessary to effectively establish the basis of an insurer’s founded belief.” Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d at 20, 699 NYS2d at 84 (emphasis added). Also, where it is proven that the vehicles were involved in several collisions within a short period of time after the insurer issued insurance policies for vehicles registered to the insured, that may satisfy the definition of “founded belief.” State Farm Mutual Automobile Ins. Co. v Laguerre, 305 AD2d 490, 759 NYS2d 531 (2d Dept 2003). The proof adduced may be an affidavit of the investigator who has personal knowledge of the alleged fraud investigation and affidavits from individuals involved in the collisions and/or the police accident report for each of the collisions, if any. Id.; Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists).

Specificity of Denial of Claim

It is well settled law that to deny or disclaim coverage for bodily injuries, an insurer must give written notice “as soon as is reasonably possible” to the injured party and the insured with a high degree of specificity of the grounds on which the denial or disclaimer is predicated. See, Insurance Law § 3420(d); General Accident Ins. Group v Cirucci, 46 NY2d 862, 414 NYS2d 512 (1979); State Farm Mutual Automobile Ins. Co. v Cooper, 303 AD2d 414, 756 NYS2d 87 (2d Dept 2003). The Court of Appeals concisely explained the need for specificity as follows:

Absent such specific notice, a claimant might have [*12]difficulty assessing whether the insurer will be able to disclaim successfully. This uncertainty could prejudice the claimant’s ability to ultimately obtain recovery. In addition, the insured’s responsibility to furnish notice of the specific ground on which the disclaimer is based is not unduly burdensome, the insurer being highly experienced and sophisticated in such matters.

General Accident Ins. Group v Cirucci, 46 NY2d at 864, 414 NYS2d at 514. Therefore, the insurer is limited to the specific grounds alleged in its written Denial of Claim.

Discussion

Plaintiffs have demonstrated their prima facie case by submitting executed assignment of benefits forms and completed copies of proofs of claims which were mailed and received by the defendant, but not paid or denied within thirty days of receipt. (See Exhibits “C,” “D,” & “E” to the Motion). The burden then shifts to the defendant to demonstrate the existence of a material issue of fact. See, Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986).

Inasmuch as the lack of coverage defense may essentially be asserted at any time, defendant really does not argue that plaintiffs’ claims were timely denied, but rather that “Mr. Rincon’s [assignor’s] injuries did not arise from the accident, or that the accident may have been staged.” (See Affidavit of Maureen Carbone, Claim Representative, in Opposition to Motion, sworn to on April 21, 2004, at ¶ 7). Defendant’s claim representative bases this conclusion on EUO testimony of Rincon as well as his two co-claimants, Villones and Spencer, as follows:

i)The claimants declined medical treatment at the scene of the accident, did not seek treatment at any hospital, and waited approximately 2-5 days to seek treatment at the same clinic where they received similar to identical treatment. (Rincon Tr: 59, 62; Villones Tr: 40, 48; Spencer Tr: 50, 53)

ii)Claimants missed minimal, if any, time from work as a result of the accident. (Rincon Tr: 10; Spencer Tr: 11)

iii)Claimants did not consult with their regular physicians or medical centers in regard to the accident. (Rincon Tr: 37; Villones Tr: 16; Spencer Tr: 26)

iv)Claimants set forth sharply discrepant accounts as to the arrangements for and purpose of their meeting on the day of the accident, how much time elapsed before the accident occurred after having entered the vehicle, whether [*13]or not the adverse vehicle fled the scene of the accident, how the police were alerted to the scene, and how they learned of the clinic. (Rincon Tr: 43-45, 51-52, 58, 63; Villones Tr: 21-22, 37-38; Spencer Tr: 33-36, 41, 50, 52).

(See Affidavit of Maureen Carbone, Claim Representative, in Opposition to Motion, sworn to on April 21, 2004, at ¶ 6).

In this case, the minor discrepancies in the testimony as well as the claimants’ minimal work loss and use of the same clinic, are insufficient as a matter of law to demonstrate a triable issue as to a fraud defense “premised on the fact or founded belief that the alleged injury does not arise out of an insured incident.” Central General Hospital v Chubb Group of Ins. Cos., 90 NY2d at 199, 659 NYS2d at 248. Defendant failed to present either competent evidence such as expert testimony (e.g., peer review report) that the alleged injuries were not causally related to the accident or even an investigator’s report. Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d at 20, 699 NYS2d at 84. The sum and substance of the defendant’s defense is based on “unsubstantiated hypotheses and suppositions.” A.B. Medical Services PLLC v Eagle Ins. Co., 3 Misc 3d 8, 10, 776 NYS2d 434, 436 (2d Dept 2002).

Moreover, the defendant’s explanation in the denial of claim forms justifying the denial “based on EUO testimony,” is vague and lacks the “high degree of specificity” on which the denials must be predicated. See, Insurance Law § 3420(d); CPLR § 3016(b); General Accident Ins. Group v Cirucci, 46 NY2d 862, 414 NYS2d 512 (1979).

Conclusion

Based on the foregoing, this Court grants plaintiffs summary judgment against defendant in the sum of $8,418.49 with statutory interest at a rate of two percent per month and attorneys’ fees of 20% thereof. 11 NYCRR ｧ§ 65-3.9(a) & 65-3.10; St. Clare’s Hospital v Allstate Ins. Co., 215 AD2d 641, 628 NYS2d 128 (2d Dept 1995). Submit judgment on notice to all parties.

The foregoing constitutes the decision and order of this Court. Courtesy copies of this decision and order have been mailed to counsel for the parties.

Dated: New York, New York________________________________

June 18, 2004J. C. C.

[*1]

Civil Court of the City of New York, Queens County, June 17, 2004

APPEARANCES OF COUNSEL

Teresa Spina, Woodbury, for defendant. Baker & Barshay, LLP, Hauppauge, for plaintiffs.

{**4 Misc 3d at 521} OPINION OF THE COURT

Edgar G. Walker and Bernice D. Siegal, JJ.{**4 Misc 3d at 522}

The above-captioned actions (still in the discovery stage), commenced to recover first-party no-fault benefits, have been consolidated, sua sponte, for the sole purpose of deciding the motions brought by defendant to dismiss plaintiffs’ complaints pursuant to CPLR 3126. Although it is not unusual to consolidate matters presenting the same issues before one judge, it is perhaps unorthodox for two judges in Civil Court to join in an opinion deciding motions submitted to them individually for decision. In the interest of judicial economy and as all these motions present one manifest legal conundrum within the identical procedural posture, as will become clear, we join in granting defendant’s motion and, accordingly, dismiss plaintiffs’ complaints.

The actions were commenced by service of summons and complaint. Along with its answer, defendant served various discovery demands upon plaintiffs including a notice to take a deposition upon oral examination. Each such demand was noticed for a specific date, whereupon the plaintiffs did not appear. Upon plaintiffs’ default, defendant made its initial motion to dismiss for failure to appear at said depositions. Each motion was resolved by a stipulation, drafted and executed by respective counsel, wherein the plaintiffs agreed to produce, for examination before trial (EBT), on or before a date certain, an individual with personal knowledge to establish its prima facie case and, if “medical necessity” was the basis of defendant’s denial, an individual having “personal knowledge of the treatment allegedly rendered.” The parties further agreed that “[i]n the event that plaintiff fails to appear for said examination or fails to produce someone with personal knowledge as to the medical necessity of the services allegedly provided (if so required) plaintiff will be precluded from offering evidence at trial” (emphasis added).

The stipulation was then “so ordered” by the judge sitting in Special Term. [*2]Defendant, by affirmation of the attorney with personal knowledge of the steps taken to ensure compliance, indicated telephonic and written communication to plaintiffs’ counsel concerning the depositions. Upon plaintiffs’ failure to appear on the outside dates, a record of default was taken and these motions ensued. To date no one has appeared for any of the depositions on behalf of plaintiffs herein.

The issue is not, as noted by plaintiffs’ attorney in his affirmation in opposition, “what penalty is appropriate for plaintiff[s’] non-compliance.” That question was answered by the parties {**4 Misc 3d at 523}themselves when they entered into the stipulations. It has long been held that parties may, by stipulation, chart their own procedural course in a case, which the courts are bound to enforce except in certain limited circumstances not even alleged to be present in these cases. (Nishman v De Marco, 76 AD2d 360 [2d Dept 1980]; Siltan v City of New York, 300 AD2d 298 [2d Dept 2002]; Matter of Evelyn P., 135 AD2d 716 [2d Dept 1987].)

What is striking about plaintiffs’ papers is the utter lack of showing of any excuse or reason for their failure to appear or produce any witness for the agreed upon depositions, nor is there any commitment to do so if given still another opportunity. Even at this stage of the litigation, the court might have considered yet another conditional order, if plaintiffs had requested same and offered a sufficient excuse for their failure to comply with the prior order and provided reasonable assurances that they would comply in the future. (See e.g., Bohlman v Reichman, 97 AD2d 426 [2d Dept 1983].)

Rather, plaintiffs seek to be relieved of the consequences of an agreement, which, in hindsight they regret having made. It may well be that had plaintiffs not entered into the stipulations to resolve the prior motions, the court would not have ordered depositions or imposed the sanction specified in the stipulations for plaintiffs’ failure to comply. However, the court is not free to reform the stipulations to conform to what it thinks is proper or to impose a sanction other than that agreed to. (Tinter v Tinter, 96 AD2d 556 [2d Dept 1983]; Siltan v City of New York, supra.) Plaintiffs, not having pursued their arguments that defendant was not entitled to an EBT in opposition to the initial motion, may not now raise those arguments to excuse their failure to comply with the stipulation.

The so-ordered stipulations functioned as conditional orders of preclusion, which became absolute upon the plaintiffs’ failure to comply. (Id.) If preclusion will prevent plaintiffs from making a prima facie case, the motion to dismiss should be granted. (Jenkinson v Naccarato, 286 AD2d 420 [2d Dept 2001].)

Plaintiffs argue that they can prove their prima facie case by calling an employee of the defendant to testify at trial. However, what is provided for in the stipulation is evidence preclusion, not merely witness preclusion. The plaintiffs are precluded from “offering evidence,” not merely calling a specified witness. Therefore, {**4 Misc 3d at 524}the plaintiffs will be unable to establish a prima facie case.

Defendant’s motions to dismiss are granted.

—[*1]

In an action to recover no-fault benefits under an insurance contract, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Joseph, J.), dated July 7, 2003, as denied that branch of their motion which was for summary judgment on the first and second causes of action to recover no-fault benefits for medical services rendered by the plaintiff New York Hospital Medical Center of Queens.

Ordered that the order is reversed insofar as appealed from, on the law, with costs, the motion is granted, and the matter remitted to the Supreme Court, Nassau County, for further proceedings consistent herewith.

The Supreme Court erred in denying the plaintiffs’ motion for summary judgment on the first and second causes of action on the ground that the hospital facility forms submitted by the plaintiffs lacked necessary signatures. The defendant’s failure to object to the completeness of the hospital facility forms within 10 days of receipt constituted a waiver of any defenses based thereon (see 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]; St. Clare’s Hosp. v Allcity Ins. Co., 201 AD2d 718, 720 [1994]). In opposition to the plaintiffs’ prima facie showing of entitlement to judgment as a matter of law (see Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g] [3]), the defendant failed to raise a triable issue of fact (see New York & Presbyt. Hosp. v Allstate Ins. Co., 295 AD2d 412 [2002]; cf. Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374, 375 [2001]). [*2]

As the plaintiffs established their entitlement to the no-fault benefits, as well as to statutory interest and attorney’s fees (see Insurance Law § 5106 [a]; 11 NYCRR 65-4.6), we remit the matter to the Supreme Court, Nassau County, to calculate the amount owed to the plaintiff for no-fault benefits, statutory interest, and attorney’s fees. S. Miller, J.P., Adams, Cozier and Rivera, JJ., concur.

—[*1]

Order, Supreme Court, New York County (Doris Ling-Cohan, J.), entered July 10, 2003, which denied the application of Utica Mutual Insurance Company to vacate its default in failing to answer a petition brought by Victoria Insurance Company to confirm three arbitration awards, unanimously affirmed, with costs.

Utica Mutual did not, in support of its vacatur application, make the necessary showing of merit. Contrary to its contention, the arbitrator did not commit misconduct in refusing to grant an adjournment to permit Utica’s investigator to appear, since Utica had not given notice that it would call a witness. In any event, the investigator’s testimony would have been duplicative of reports previously submitted in an attempt to establish that the claims paid by Victoria Insurance and for which it sought reimbursement from Utica were fraudulent. Furthermore, since Utica has not offered any affidavit from its insured, the owners of the truck that caused the accident, to show that, contrary to Department of Motor Vehicles records, the truck was not modified to increase its weight to more than 6,500 pounds, we perceive no basis to conclude that there is merit to Utica’s argument that this was not an instance in which reimbursement of otherwise nonreimbursable no-fault benefits was permitted pursuant to Insurance Law § 5105 (a).

Although the awards did not meet the requirements of CPLR 7507 that they be signed and affirmed by the arbitrator, and the issue is a question of law that can be raised for the first time on appeal (see Chateau D’If Corp. v City of New York, 219 AD2d 205, 209-210 [1996], lv denied 88 NY2d 811 [1996]), Utica is estopped from now raising the issue. Had it been raised as one of the affirmative defenses asserted by Utica in its proposed answer, Victoria would have been able to obtain a signed copy of the award from the arbitrator within the one-year period for bringing a proceeding to confirm an award. [*2]

We have reviewed Utica’s remaining arguments and find them unavailing. Concur—Tom, J.P., Saxe, Ellerin, Williams and Gonzalez, JJ.

[*1]

Supreme Court, Appellate Term, Second Department, June 7, 2004

APPEARANCES OF COUNSEL

Bruno Gerbino & Soriano LLP, Melville (Charles W. Benton of counsel), for appellant. Israel, Israel & Purdy LLP, Great Neck (William M. Purdy of counsel), for respondent.

{**4 Misc 3d at 93} OPINION OF THE COURT

Memorandum.

Orders unanimously affirmed without costs.

In this action to recover $765 in first-party no-fault benefits for medical treatment provided its assignor, plaintiff established its prima facie case for summary judgment by proof it submitted properly executed statutory claim forms (Dermatossian v New York City Tr. Auth., 67 NY2d 219, 224 [1986]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). Defendant’s conceded failure to pay or reject the claim within 30 days of receipt precluded defendant from interposing most defenses (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g] [3]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]). We cannot agree that defendant’s repeated requests of the assignor for an examination under oath (EUO) tolled the claim determination period because the insurance regulations then in effect did not provide for EUOs as a form of verification (Ocean Diagnostic Imaging P.C. v Nationwide Mut. Ins. Co., 4 Misc 3d 142[A], 2004 NY Slip Op 51041[U] [App Term, 2d & 11th Jud Dists]; Triboro Chiropractic & Acupuncture P.L.L.C. v Kemper Auto & Home Ins. Co., 4 Misc 3d 138[A], 2004 NY Slip Op 50905[U] [App Term, 2d & 11th Jud Dists]). A new regulation, effective April 5, 2002, which explicitly provides for such [*2]verification, is inapplicable to the instant claim (see 11 NYCRR 65-3.5 [e]; Kings Med. Supply Inc. v GEICO Ins., 4 Misc 3d 138[A], 2004 NY Slip Op 50904[U] [App Term, 2d & 11th Jud Dists]). We have also rejected the argument that the absence of an EUO provision in the former verification scheme may be remedied by reference to policy provisions requiring that an insured cooperate with the insurer’s investigation of a claim, even if a clause therein explicitly provides for cooperation in that form (e.g. King’s Med. Supply v Kemper Auto & Home Ins. Co., 3 Misc 3d 131[A], 2004 NY Slip Op 50401[U] [App Term, 2d & 11th Jud Dists]). Such provisions {**4 Misc 3d at 94}may not be invoked to alter the terms of the mandatory no-fault endorsement because the “internally complete and distinct part of the insurance policy . . . cannot be qualified by . . . conditions . . . of the liability portions of the policy” (Utica Mut. Ins. Co. v Timms, 293 AD2d 669, 670 [2002]; A.B. Med. Servs. v State Farm Mut. Auto. Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50387[U] [App Term, 2d & 11th Jud Dists]). Finally, an insurer may not rely on a letter, even if denominated a verification request, that merely informs a claimant that a decision on the claim is delayed pending an investigation, and without specifying a particular form of verification and the person or entity from whom the verification is sought, to toll the 30-day claim determination period (Ocean Diagnostic Imaging v Nationwide Mut. Ins. Co., supra; see also 11 NYCRR 65.15 [e] [2]; Sehgal v Royal Ins. Co. of Am., NYLJ, Apr. 15, 1999, at 31, col 4 [App Term, 9th & 10th Jud Dists] [letter informing claimant that a peer review was to be conducted is not a proper verification request]).

With regard to the fraud allegation, raised for the first time in defendant’s motion for summary judgment, defendant did not specify whether the fraudulent conduct was a staged automobile incident or the provider’s unilateral scheme to obtain no-fault benefits for unnecessary or excessive medical treatment. If the latter is the case, the purported defense is precluded by defendant’s untimely claim denial (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d at 285). If the former is the case, the defense survives preclusion (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 752 [2002]) and would, if substantiated, constitute a complete defense to the action (Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522 [2003]). However, defendant failed to adduce proof in admissible form sufficient to create a triable issue of fraud, having submitted no affidavit by anyone with personal knowledge of the investigation. The herein allegations of fact, by an attorney who does not allege such knowledge, amount to mere unsubstantiated hearsay (e.g. Amstel Chiropractic v Omni Indem. Co., 2 Misc 3d 129[A], 2004 NY Slip Op 50088[U], *1-2 [App Term, 2d & 11th Jud Dists] [“(An) attorney’s affidavit, consisting of unsubstantiated hypotheses and suppositions, is legally insufficient to support defendant’s fraud allegation”]).

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

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 9th and 10th JUDICIAL DISTRICTS

Appeal by plaintiffs from an order of the District Court, Nassau County (J. Spinola, J.), entered May 19, 2003, which denied their motion for summary judgment.

Order unanimously affirmed with $10 costs.

Plaintiffs commenced the instant action to recover assigned first-party no-fault benefits. In opposition to plaintiffs’ motion for summary judgment, defendant submitted an affidavit from an investigator employed within defendant’s Special Investigations Unit. Contrary to plaintiffs’ contention, the investigator’s detailed affidavit set forth ample facts and founded beliefs to establish the existence of a triable issue of fact as to whether there was a lack of coverage because the alleged injuries did not arise from an insured incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). As a result, plaintiffs’ motion for summary judgment was properly denied.

Plaintiffs’ remaining contentions are also lacking in merit.
Decision Date: June 04, 2004

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 2nd and 11th JUDICIAL DISTRICTS

Appeal by plaintiff from so much of an order of the Civil Court, Kings County

(B. Bayne, J.), entered April 7, 2003, as denied its motion for summary judgment.

Order unanimously modified by granting plaintiff’s motion for summary judgment and matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees; as so modified, affirmed without costs.

Plaintiff, a medical supply house, commenced this action to recover first-party no-fault benefits for medical supplies provided to its assignor. Thereafter, it moved for summary judgment on the ground that defendant delayed more than 30 days in denying its claim, in violation of Insurance Law § 5106 (a) (see also former 11 NYCRR 65.15 [g] [3] [now 11 NYCRR 65-3.8 (c)]). Defendant cross-moved for summary judgment seeking dismissal based upon the failure of plaintiff’s assignor to submit to
examinations under oath. Both motions were denied and this appeal by plaintiff ensued.

A review of the record indicates that plaintiff established its prima facie entitlement to summary judgment by the submission of a complete proof of claim and the amount of the loss, which defendant did not pay or deny within 30 days (see Insurance Law § 5106 [a]; 11 NYCRR 65.15 [d], [g]; Amaze Med. Supply Inc. v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists]). The burden then shifted to defendant to show the existence of a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

In the instant case, within 10 days of receipt of the proof of claim (see 11 NYCRR 65.15 [*2][d] [1]) defendant sent a verification letter to plaintiff advising it that it was investigating the facts of the loss inasmuch as the policyholder had notified defendant that her vehicle had not been involved in an accident. Further letters sent to plaintiff’s assignor directed him to appear for an examination under oath (EUO) and a follow-up EUO. Plaintiff’s claim was ultimately denied based upon plaintiff’s assignor’s failure to appear for the EUOs.

Inasmuch as the insurance regulation in effect when the claim was submitted contained no provision requiring the injured person to submit to an EUO (see King’s Med. Supply Inc. v Kemper Auto & Home Ins. Co., NYLJ, Mar. 2, 2004 [App Term, 2d & 11th Jud Dists]; cf. 11 NYCRR 65-3.5 [e], eff. April 5, 2002), the time period within which defendant had to pay or deny the claim was not tolled (see King’s Med. Supply Inc. v Geico Ins., NYLJ, Mar. 23, 2004 [App Term, 2d & 11th Jud Dists]) and the denial was therefore untimely.

While generally the failure to timely deny a claim will preclude the insurer from interposing most defenses based upon the propriety of a claim (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]), a defense based upon lack of coverage “premised on the fact or founded belief that the alleged injury does not arise out of an insured incident,” will not be precluded and therefore may still be asserted by the insurer in opposition to summary judgment (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Thus defendant herein was not precluded from raising a defense based on lack of coverage. However, in opposition to the motion, defendant relied upon hearsay statements allegedly uttered by its insured in an attempt to establish its defense. Inasmuch as defendant did not provide an acceptable excuse for its failure to tender such evidence in admissible form, said statements were insufficient to demonstrate the existence of a material issue of fact (see Zuckerman v City of New York, 49 NY2d 557 [1980]; Maniscalco v Liro Eng’g Constr. Mgt., 305 AD2d 378, 380 [2003]; Allstate Ins. Co. v Keil, 268 AD2d 545 [2000]).

It is further noted that defendant’s contention that the assignment executed by plaintiff’s assignor was inadequate lacks merit (see Hamilton Med. Healthcare v Travelers Ins. Co., NYLJ, Feb. 11, 2002 [App Term, 2d & 11th Jud Dists]; Skymed Med., P.C. v New York Cent. Mut. Fire Ins. Co., NYLJ, Jan. 28, 2002 [App Term, 2d & 11th Jud Dists]; Rehab. Med. Care of N. Y. v Travelers Ins. Co., 188 Misc 2d 176 [2001]).

Accordingly, plaintiff’s motion for summary judgment is granted, and the matter is remanded for the calculation of statutory interest and attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.
Decision Date: June 03, 2004

[*1]

Civil Court of the City of New York, Queens County, June 2, 2004

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck (Samuel S. Marcus of counsel), for plaintiffs. Freiberg & Peck, New York City (Meredith Gursky of counsel), for defendant.

{**4 Misc 3d at 444} OPINION OF THE COURT

Edgar G. Walker, J.

{**4 Misc 3d at 445}In this action to recover unpaid benefits claimed to be due for medical services allegedly rendered to its assignor, plaintiff^[FN*] has moved for summary judgment. In support of the motion plaintiff has annexed, inter alia, the claim form it submitted to the defendant which it claims was neither timely paid nor denied. Defendant, in opposition, claims, inter alia, the form is not the prescribed New York State form N-F 3. Rather, plaintiff has utilized the generic health insurance claim form, HCFA/CMS 1500.

The claim form is signed by the treating doctor, Myung Choi. However, Dr. Choi is not a plaintiff herein nor is he the applicant patient’s assignee. The claim was assigned to the plaintiff which submitted the claim form to the defendant. Where, as in this case, the treating provider is different than the billing provider, form N-F 3 (item 16) requires disclosure of the business relationship between the treating provider and the billing provider (employee, independent contractor, other). Form 1500 does not call for such information nor is the relationship disclosed anywhere on the form submitted by the plaintiff to the defendant.

A complete proof of claim is a prerequisite to entitlement to no-fault benefits. (St. Luke’s-Roosevelt Hosp. v American Tr. Ins. Co., 274 AD2d 511 [2000]; Interboro Gen. Hosp. v Allcity Ins. Co., 149 AD2d 569 [1989].) While a form other than the prescribed form may be used, it must contain “substantially the same information as the prescribed form.” (11 NYCRR 65.15 [d] [5].) The court must, therefore, determine whether, in the absence of the information called for in item 16 of form N-F 3, the form submitted by plaintiff is sufficient to establish its right to payment from the defendant.

Plaintiff submitted this claim as the assignee of the applicant for no-fault benefits, but no-[*2]fault benefits are not freely assignable to any person or entity without restriction. The Insurance Department regulations provide, in relevant part, for direct payment of benefits “directly to the applicant . . . or, upon assignment by the applicant . . . [to] the providers of services” (11 NYCRR 65.15 [j] [1] [emphasis supplied]). Pursuant to this regulation, plaintiff would be entitled to payment from the defendant as assignee only if it was the provider of the services billed {**4 Misc 3d at 446}for. If the treating provider was an employee of the billing provider, the billing provider would be considered a provider of services, through its employee, and thereby entitled under the regulation to direct payment. If, however, the treating provider was an independent contractor, the billing provider would not be entitled to direct payment under the regulation since it did not provide services to the applicant patient.

The significance of the information required by item 16 of form N-F 3 is apparent. It relates directly to the right of the billing provider to receive direct payment from the insurer as the assignee of the applicant. At least where, as in this case, the billing provider is not the treating provider, the submission of form 1500 does not constitute a complete proof of claim.

Since plaintiff did not submit a proper proof of claim, it failed to establish a prima facie case of entitlement to payment of no-fault benefits. The motion must, therefore, be denied regardless of the sufficiency of the opposing papers. (Alvarez v Prospect Hosp., 68 NY2d 320 [1986].)

Footnotes

Footnote *: Although there are two named plaintiffs in the caption, the moving papers make no reference to Jamil M. Abraham M.D. P.C., doing business as Park Health Center. As used herein “plaintiff” refers solely to Rockaway Boulevard Medical P.C., doing business as Queens Diagnostic Center.

—[*1]

In an action to recover no-fault benefits, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Parga, J.), dated November 12, 2003, as granted the plaintiff’s motion for summary judgment and denied the defendant’s cross motion for summary judgment.

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

The plaintiff met its initial burden of demonstrating its entitlement to summary judgment by establishing that the defendant did not deny or pay the two claims in question within 30 days (see Insurance Law § 5106 [a]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Bonetti v Integon Natl. Ins. Co., 269 AD2d 413, 414 [2000]). The defendant thereafter failed to submit sufficient evidence in admissible form to raise a triable issue of fact regarding whether the medical treatment alleged in the first cause of action was not causally related to an insured accident and whether the underlying contract of insurance alleged in the third cause of action had been cancelled. Therefore, the plaintiff’s motion for summary judgment was properly granted.

In light of our determination, the defendant’s remaining contentions are academic. Smith, J.P., S. Miller, Crane and Rivera, JJ., concur.