Civil Court Of The City Of New York, Richmond County

Index No. 40049/03

For Plaintiffs: Joseph Sparacio, Esq. 2555 Richmond Avenue Staten

Island, NY 10314

(718) 966-0055

For Defendants: Richard C. Mulle , Esq. Martin, Fallon & Mulle 100

East Carver Street Huntington, NY 11743 (631) 421-1211

PHILIP S. STRANIERE, J.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this

MOTIONS TO COMPEL.

Papers Numbered

Notices of Motion and Affidavits Annexed……………………………………..1&2

Order to Show Cause and Affidavits Annexed.………………………………

Answering Affidavits……………………………………………………………………

Replying Affidavits………………………………………………………………………

Exhibits………………………………………………………………………………………..

Other……………………………………………………………………………………………

[*2]Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

“The answer my friend is blowin’ in the wind. The answer is blowin’ in the wind.”

We all are familiar with this refrain from Bob Dylan’s 1960’s protest song. Unfortunately it has become the cry of too many litigants in New York City’s Civil Court. Currently before the Court are three motions made by defendant State Farm Mutual Automobile Insurance Company. In each motion the defendants sought to compel the plaintiff, Richmond Pain Management, P.C. as assignee of Kenneth Bevel (40049/03); as assignee of Clifford Whaley(40050/03); and as assignee of Lorna Sterling (40051/03) to provide discovery previously requested and to reimburse the defendant the $45.00 defendant had to

expend in each action to purchase an index number. The discovery issues were resolved by a “so ordered”stipulation in each action. The defendant however insisted on submitting the issue of its entitlement to be reimbursed the $45.00 to the Court for decision.

The Court is left to decide the rather novel ^[FN1] issue of whether or not a defendant who purchases an index number in Civil Court can recover that money either by making a motion or in a judgment issued at the end of the litigation.

The civil action part of the Civil Court, like some other courts of limited jurisdiction, retains a system for commencement of an action that is a relic of days gone by. The civil action part is governed by a “commence by service” statute, Civil Court Act Article 4. Not only is this system in conflict with “commence by filing” as provided in CPLR 304, it is also not in conformity with how in Civil Court a summary proceeding is commenced in the landlord-tenant part or a small claims action is started in that part. To commence a suit in either of these parts requires the litigant to purchase an index number from the clerk of the court. More importantly, when a self-represented litigant wants to commence an action, CCA 401(a) requires the clerk to issue the summons if “the plaintiff appears without an attorney” and collect the appropriate fee.^[FN2]

When the CPLR was amended to cover actions commenced in the Supreme and County Court, § 400 was added to the Civil Court Act to specifically preclude the Civil Court from the commence by filing provisions and preserve the out-dated system of commencement by service. This was done even though the civil jurisdiction of the County Court and Civil Court are practically identical (NY State Constitution Article 6 § 11 and 15). CCA 400 also provides that [*3]“a special proceeding is commenced by service of a notice of petition or order to show cause.” The implication of CCA 400 in regard to special proceedings, which are governed by CPLR Article 4, is that they too are commenced by service. However, that contradicts CCA 401 (c) which requires the notice of petition and petition in a summary proceeding to be issued by the Court. This sentence probably should read “a special proceeding, other than a summary proceeding commenced under CCA 204” since summary proceedings are currently commenced by filing the notice of petition and petition with the clerk (CCA 401 (c)).

This case points out the serious deficiency in retaining the current commencement by service system in the Civil Court. CCA 401(b) requires that any summons issued contain language that directs the defendant to file an answer with the clerk within 20 days if personally delivered to the defendant in the city of New York, and if served by a means other than personal delivery within the city if New York the defendant must file an answer within thirty days of the plaintiff filing proof of service with the clerk (CCA 402). Meanwhile CCA 409 requires the plaintiff to file a copy of the summons with proof of service with the clerk within fourteen days after service is made within the city of New York regardless of how it was served. This procedure is seemingly not that complicated. However, this is when theory and practice collide.

For instance, defendant is served on March 1 and on March 2 within the time set forth in the summons, files an answer as directed by the summons. The answer is received by the clerk who determines that there is no index number for the action since the plaintiff has not filed the summons. If the answer is personally delivered to the clerk and the clerk checks the filings immediately, perhaps the defendant can be told to hold onto the answer and file it later after the plaintiff comes in and files the summons. This of course punishes the diligent defendant and may require multiple trips to the courthouse for the defendant to protect his or her rights. What if the answer was filed by mail or the clerk accepts the in person filing of the answer and only later determines no index number has been purchased? Invariably after the clerks check the filing and learn there is no index number, the answer is held in the clerk’s office and as summonses are filed by the plaintiff, the clerk will often attempt to check and see if an answer has been filed. A number of times a match can be made. The problem of course is when the answer is received prior to the plaintiff purchasing an index number; the plaintiff finally purchases an index number and files the summons and proof of service as required by statute; a court file is created and the clerk cannot subsequently locate the filed answer from among hundreds if not thousands of other filed answers. In these cases, a default judgment may be entered against a defendant who timely filed an answer. The judgment might not be discovered until the defendant tries to obtain credit, purchase a house or buy a car. The Court will then be entertaining a motion to vacate a wrongfully entered default judgment against the defendant and possibly have to lift restraining orders and executions. All this is a waste of judicial and legal resources and imperils the rights of diligent defendants.

The Office of Court Administration has proposed eliminating commencement by filing in the Civil Court, District Courts and City Courts. In support of the change in the statute OCA pointed out: “Aside from the expenditure of time and resources, the current system causes a [*4]financial toll. The clerks’ futile searches for filed summonses are expenditures of time for which there is no revenue stream in return….A further concern is that the summonses are being served but intentionally not filed in an effort to harass or frighten defendants. Requiring that an index number be purchased before the service of papers would generate revenue, conserve clerks’s time, and protect defendants from untoward use of the suit commencement system….”

What further complicates these matters are the tens of thousands of “no-fault” reimbursement cases filed under the Insurance Law presently flooding the court system. The plaintiffs in hundreds of these cases, as in this case, may be the same medical service provider while the defendant is the same carrier. An additional problem is that the plaintiff may be the assignee of benefits from the same patient on more than one claim against the same defendant. So even if the clerk matches the parties based on the names from the caption, the complaint and answer may not coincide as the provider may have delivered service on more than one occasion to a particular insured. Why should the clerk of the court be burdened with matching the correct complaint to the correct answer as if it were some huge game of “Concentration?” Especially when the plaintiff is the party that caused the situation. The court system is becoming the uncompensated servant for some attorneys’ collection practices. This is not in the job description.

LEGAL ISSUES:

A. Is the Current System Constitutional?

As outlined above, CCA 400 excluded the Civil Court from the application of the commencement by filing statute of the CPLR. On their face CCA 400 and CCA 409 appear to be constitutional. However, it is apparent that in the implementation of the Civil Court’s commencement by service rules, due process and equal protection rights of individuals are being violated. In regard to civil actions, the statute permits lawyers to issue and serve summons without first purchasing an index number, while at the same time requiring a self-represented plaintiff to expend that money. The statute creates two classes of litigants potentially seeking the same relief with the criteria being the financial ability to retain an attorney. An individual who can afford to retain counsel can issue a summons and perhaps collect money due and owing merely by serving the process on the defendant, while a person too poor or for any other reason unable to retain counsel, such as the amount being sought not warranting the hiring of a lawyer, cannot use the threat of suit to collect the debt; that person must actually commence the suit and expend $45.00 for the suit. A credit card company, commercial collection agencies or other business that provides a large volume of litigation to an attorney obtains a benefit that an individual self-represented plaintiff does not get from the court system. Likewise, the defendant in the self-represented plaintiff commenced suit is incurring court costs that have to be reimbursed to the plaintiff that a represented person or entity might not have to pay. Considering that landlord-tenant summary proceedings and small claims actions both require the prepaying for an index number to commence a law suit, it can only be concluded that the statute as written and the system and practice it engendered create two classes of litigants in the Civil Court civil [*5]actions: paying and non-paying customers. This is a clear violation of the equal protection clause of the New York State Constitution Article 1 § 11. There is no reasonable or rational basis for such a distinction, especially when there exists a system used in all other parts of the Civil Court and in the Supreme and County Courts which eliminates these differences. This is an example as to why the New York Court system may be “unified” but not “uniform.”

It is also apparent that the current system violates the due process clause of the New York State Constitution, Article 1 § 6. The prevailing arrangement punishes a defendant who complies with the statute, takes steps to protect his or her rights and timely files an answer, while at the same time it may potentially reward a procrastinating plaintiff who does not immediately purchase an index number or who in an even worse case, purchases it after the statutory fourteen day period. The plaintiff who actually files the summons with proof of service after fourteen days must make a nunc pro tunc application for the late filing of the summons and then give notice to the defendant and an additional opportunity to answer. However, even in this scenario, why would the defendant think it necessary to re-file an answer, since the defendant would not necessarily know that the answer previously submitted was not linked by the clerk to the proper summons.

The current system suffers too many constitutional problems to continue in effect. It must be replaced. “Our cases further establish that a statute or a rule may be held constitutionally invalid as applied when it operates to deprive an individual of a protected right although its general validity as a measure enacted in the legitimate exercise of state power is beyond question….(T)he right to a meaningful opportunity to be heard within the limits of practicality, must be protected against denial by particular laws that operate to jeopardize it for particular individuals…. (S)o too a cost requirement, valid on its face, may offend a particular party’s opportunity to be heard…the State owes to each individual that process, which in light of the values of a free society, can be characterized as due” (Boddie v Connecticut, 401 US 371, (1971)

B. Is the Defendant Entitled to Reimbursement?

In order to protect its rights, the defendant in these three actions purchased the index number so it could file an answer or otherwise move to take steps to protect its legal interests. In none of these cases did the plaintiff purchase an index number. In each case defendant waited thirty days after service of the process to file an answer and at that time learned that no index number was purchased. The defendant then expended $45.00 on each case in order to file its answer. CCA 1911 requires that the clerk collect as a court fee $45.00 upon the issuance of a summons (CCA 1911(a)) or upon the filing of a summons with proof of service or upon filing of the first paper in that county in any action (CCA 1911(b)). There does not appear to be any statutory or case law dealing specifically with the issue of whether the defendant can recover the $45.00 when it and not the plaintiff files the first paper. [*6]

CCA 1906 provides as follows: “Costs allowed by Court. The Court may in its discretion impose costs not exceeding fifty dollars in the following cases: (a) Upon granting or denying a motion….” Since defendant was required to make a motion to compel the plaintiff to comply with discovery demands and to pay the filing fee, the Court in its discretion could award the defendant “costs” involved in making the motion. But is a filing fee a legitimate “cost?”

CCA 1908 permits a prevailing party or a party to whom costs are awarded to recover “disbursements.” All fees paid to the clerk are recoverable as a disbursement (CCA 1908(a)). Under this statute, the defendant, if a prevailing party, could recover as a disbursement the filing fee that it paid to the clerk. The question remains, can the defendant collect the filing fee at this stage of the litigation, that is, before there is a final judgment on the merits.

If the plaintiff bought the index number and prevailed in the suit, the plaintiff would recover the expense as a taxable disbursement under the statute. If the defendant prevailed, the issue would be moot since the defendant did not incur the expense, there would be no money to recover. If the defendant purchased the index number, and the defendant prevailed, the defendant would recover the filing fee. If the defendant purchased the index number and the plaintiff prevailed, the plaintiff would not be able to recover the fee since the plaintiff did not expend the money initially. Since the plaintiff was the one who instituted the suit, the plaintiff would be obtaining a benefit because the defendant purchased the index number in the action and in doing so, permitted the plaintiff to continue the case. There is something inherently unfair in requiring the defendant to subsidize the plaintiff’s cause of action out of a necessity to protect the defendant’s rights. The Court could award the defendant the $45.00 by labeling it as a reasonable cost to be awarded for the motion; however, that would not deal with the underlying issue of the plaintiffs using the Civil Court as its collection agency by filing suits and not purchasing index numbers. As a matter of public policy and to prevent plaintiffs from abusing the system, the defendant is entitled to be reimbursed at this stage of the litigation.

CONCLUSION:

Defendant’s motion in each action is granted to the extent that the plaintiff is directed to reimburse defendant the sum of $45.00 in each of these actions. Defendant’s application for sanctions of $100.00 on each cause of action is dismissed. If plaintiff continues this practice in the future, the Court will consider entertaining an application for sanctions. If plaintiff’s counsel is not being compensated sufficiently by his clients, then he either should not take the cases or re-negotiate his compensation schedule with them.

Since a consumer is not involved as a litigant, the Court does not address the issue of whether if it is shown that a plaintiff had a continuous pattern of not filing or late filing summonses, would such a pattern constitute a “deceptive business practice” under General Business Law 349.

The foregoing constitutes the decision and order of the Court.

[*7]Court Attorney to notify both sides of this Decision/Order.

Dated:

PHILIP S. STRANIERE

Judge, Civil Court

ASN by on

Dated: March 23, 2004

Decision Date: March 23, 2004

Footnotes

Footnote 1: Novel is being used in the sense of unique rather than a reference to a tome by Tolstoy.

Footnote 2: It should also be noted that a name change application in Civil Court requires a filing fee of $65.00. This is another proceeding that is primarily commenced by self-represented individuals. Although CPLR Article 11 provides for access to the courts by persons who qualify as “poor persons” this protection is not relevant to the issues of this case involving two classes of applicants to the Civil Court.

—

Order, Supreme Court, New York County (Richard Braun, J.), entered May 5, 2003, which denied petitioner insurer’s application to stay arbitration of respondent’s underinsured motorist claim, unanimously affirmed, without costs.

The application to stay arbitration was properly denied on the ground that it was not made within 20 days after service of respondent’s demand (CPLR 7503 [c]). It does not avail petitioner that it timely commenced a proceeding to stay the arbitration in Queens County, which the Queens County court ordered transferred to New York County, and that it instituted the instant stay proceeding only because of ministerial difficulties it encountered in effectuating the transfer (cf. Matter of Metropolitan Prop. & Cas. Ins. Co. [Coping], 179 AD2d 499 [1992]). In any event, as the motion court also held, the petition lacks merit. Respondent notified petitioner insurer of the accident immediately after it happened, in connection with a no-fault claim. Neither at this time nor at any other time prior to the grant of summary judgment in the personal injury action respondent had brought, could she have known that the only defendant in that action with significant insurance coverage, the driver of the car in which she was a passenger and also insured by petitioner, would be absolved of liability, and that she therefore had a viable underinsurance claim against petitioner. Under such circumstances, it was the grant of summary judgment to defendant in the personal injury action that marked the commencement of respondent’s obligation to give written notice of claim “as soon as practicable” (see Matter of Allstate Ins. Co. v Sala, 226 AD2d 172 [1996], lv denied 89 NY2d 801 [1996]). Concur—Nardelli, J.P., Mazzarelli, Saxe and Friedman, JJ.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 9th and 10th JUDICIAL DISTRICTS

Appeal by plaintiffs from so much of an order of the District Court, Nassau County (J. Asarch, J.), entered January 2, 2003, as denied its motion for summary judgment.

Order insofar as appealed from unanimously affirmed without costs.

Plaintiffs commenced this action to recover first-party no-fault benefits for medical services rendered to their assignor, as well as statutory interest and attorney’s
fees, pursuant to Insurance Law § 5101 et seq. Thereafter, plaintiffs moved for
summary judgment and defendant cross-moved for consolidation and summary
judgment dismissing the complaint. By order entered January 2, 2003, the court below denied both motions.

In support of its motion, plaintiffs submitted an affidavit in which Bella Safir states that she is the “practice and billing manager” and “an officer of plaintiff,” even though there are three distinct plaintiffs in this matter. We note that A.B. Medical Services, PLLC and Royalton Chiropractic P.C. have different business addresses, and no address is provided for Franklin St. Marks Medical P.C., for which there is also no assignment. The affidavit does not indicate for which “plaintiff” Safir is the billing manager and this court cannot assume that she is acting on behalf of one particular plaintiff, or on behalf of all of the plaintiffs. Consequently, her affidavit in which she states that “plaintiff” provided defendant with complete claim forms is insufficient to establish said fact inasmuch as the affidavit does not lay the necessary foundation for the admissibility of the claim forms as to any of the named plaintiffs (see A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., Misc 3d [App Term, 9th & 10th Jud Dists, decided Mar. 12, 2004]). Accordingly, plaintiffs have failed to make a prima facie showing of entitlement to judgment as a matter of law (cf. Damadian MRI in Elmhurst, P.C. v Liberty Mut. Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 9th & 10th Jud Dists]; Amaze Med. Supply Inc. [*2]v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists]). Assuming, arguendo, that Safir’s affidavit was sufficient and plaintiffs established their prima facie entitlement to summary judgment, we would nonetheless affirm the order of the court below inasmuch as defendant raised a triable issue of fact as to fraud (see A. B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., Nos. 2003-469, 470, 471 N C [decided herewith]).
Decision Date: March 17, 2004

Supreme Court, Appellate Term, Second Department, March 17, 2004

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. DeSena & Sweeney, LLP, Hauppauge (Lisa M. Dawson of counsel), for respondent.

{**4 Misc 3d at 84} OPINION OF THE COURT

Memorandum.

On the court’s own motion, appeals consolidated for purposes of disposition.

Order unanimously affirmed without costs.

In these actions to recover $7,393.37 in assigned first-party no-fault benefits provided its assignors, with the exception of the claim for $290.64 in the action appealed under calendar No. 2003-469 N C, the entire claim asserted in the action appealed under calendar No. 2003-470 N C, and the claim for $358.04 in the action appealed under calendar No. 2003-471 N C, plaintiff established its entitlement to the benefits prima facie, by proof that it submitted the completed statutory forms setting forth “the fact and amount of loss sustained” (Insurance Law § 5106 [a]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]; see 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 failure timely to deny any of the claims for which a prima facie case is established (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [d] [1]) precluded most defenses thereto (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]).

However, the preclusion rule does not apply to a defense based on a claim of fraud (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 201 [1997]; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 752 [2002]). Defendant’s proof in each case included, inter alia, examinations of the assignors under oath and an investigator’s affidavit which revealed significant discrepancies in the assignors’ accounts of their activities before and after the accident and irregularities with respect to the insured’s various identities and addresses. Moreover, based on the assignors’ statements upon their examination, there are additional questions of fact as to whether certain of the medical services were fraudulently rendered in that they were not medically responsive to the injuries reported by the assignors or continued long after the reported symptoms abated. Under the circumstances herein, such allegations raise triable issues as to whether the automobile accident was a deliberate event staged in furtherance of a scheme to defraud, or whether medical services were fraudulently provided, a defense which survives preclusion, unlike the bare claim of lack of medical necessity here precluded by defendant’s failure timely to deny the claim (cf. Penny v Pembrook Mgt., 280 AD2d 590, 591 [2001]; A.B. Med. Servs. v Eagle Ins. Co., 3 Misc 3d 8 [App Term, 9th & 10th Jud Dists 2003]).

We note that even absent the claim of fraud, the court properly denied summary judgment as to the aforementioned claims for $290.64 and $358.04. The alleged provider claimant was Royalton Chiropractic, P.C., on whose behalf the assignor had executed assignment of benefits forms. However, Royalton is not named as a party plaintiff in either of these two actions, and in the supporting affidavit submitted in each action the deponent, on whose authority [*2]the claim forms are sought to be proved, states only that she is an officer of “plaintiff,” presumably A.B. Medical Services PLLC, the only captioned plaintiff. {**4 Misc 3d at 85}

Likewise, the court also properly denied summary judgment as to all claims asserted in calendar No. 2003-470 N C. In an affidavit in support of the motion, Bella Safir alleges merely that she is the “practice and billing manager” and an “officer” of “plaintiff.” Ms. Safir does not state for which named plaintiff she is a manager and an officer. Consequently, the affidavit in which Safir states that “plaintiff” provided defendant with complete claim forms is insufficient to establish said fact inasmuch as the affidavit does not lay the necessary foundation for the admissibility of said forms as to any of the named plaintiffs (see A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 138[A], 2004 NY Slip Op 50903[U] [App Term, 9th & 10th Jud Dists 2004]).

Accordingly, in view of the foregoing, plaintiff’s motion for summary judgment was properly denied (see A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 138[A], 2004 NY Slip Op 50902[U] [2004] [decided herewith]).

McCabe, P.J., Lifson and Skelos, JJ., concur.{**4 Misc 3d at 86}

Civil Court Of The City Of New York, Kings County

Index No. 40021KCV2003

Baker & Barshay, LLP ( Joaquin J. Lopez, Esq.) for plaintiff.

McDonnell, Adels & Goodstein, P.C.( Joel D. Epstein, Esq.) for defendant.

Manuel J. Mendez, J.

Plaintiff, Advanced Medical Rehabilitation, P.C., brings this action to recover $4298.37 for first party no-fault benefits provided to its assignor David Briggs, pursuant to the No-Fault provision of his insurance policy (see Insurance Law art 51). A plaintiff assignee will be awarded judgment upon establishing a prima facie case. To establish a prima facie case, plaintiff assignee must show there was a policy in effect issued by defendant insurer covering the treated person and motor vehicle collision in which the person was involved, an assignment of policy benefits, presentation of claims to the insurer for medical expenses arising from the collision and defendant insurer’s failure to deny the claims within 30 days. (11 NYCRR §65.15 (g) (6); Westchester County Medical Center v New York Central Mut. Fire Ins. Co., 262 AD2d 553, 555 [2nd Dept]; Neuro Care Center II v Allstate Insurance Co., NYLJ, Jan. 28, 2003, at 19, col 5; AB Medical Services PLLC v Progressive Insurance, 2003 NY Slip Op 50790[U], 2003 NY Misc. Lexis 463; S&M Supply inc., v Geico Insurance, 2003 NY Slip Op 51192[U], 2003 NY Misc. 1067; AB Medical Services PLLC v Highland Insurance Co., NYLJ, May 27, 2003, at 21, col 3 ).

Valid assignments of insurance benefits to plaintiff health care providers authorized by their patients are key to plaintiff’s recovery of those benefits (A.B. Medical Services PLLC v Highland, supra). To be valid, the assignor’s signature on the assignment of benefits must be authenticated (A.B. Medical Services PLLC v Highland, supra; Acevedo v Audubon Management, 280 AD2d 91 (1st Dept 2001); Fields v S&W Realty Assoc., 301 AD2d 625 (2nd Dept 2003); Neuro Care Center II v Allstate Ins. Co., supra).

The mere signature of the person listed as the assignor on an assignment document does not authenticate that signature (Neurocare Center II, supra., citing Freeman v Kirkland, 184 AD2d 331, 332 [1st Dept. 1992]; Fanelli v Lorenzo, 187 AD2d 1004, 1005 [4th Dept 1992]). Authentication of the signatures of plaintiffs’ assignor requires an attestation by a person familiar [*2]with the assignor’s signatures identifying them as such (Acevedo v Audubon Mgt., 280 AD2d 91, 95 (1st Dept 2001); Fields v S&W Realty Assoc., 301 AD2d 625 (2d Dept 2003); Neuro Care Center II, supra).

If a witness does not authenticate the executed assignment, it is inadmissible (Neurocare Center II, supra; citing People v Michallow, 201 AD2d 915 (4th Dept. 1994); People v Boswell, 167 AD2d 928 (4th Dept 1990) Wilson v Bodian, 130 AD2d 221 (2d Dept 1987).

Absent observing the assignor place his signature on the assignment, it is not sufficient that a witness merely recite that he is familiar with the assignor’s signature. (see Prince, Richardson Evidence §§9-103 at 703 [Farrell 11th ed] ). To admit the assignment in evidence, the witness must state, under oath, how it is that he has obtained familiarity with the assignor’s signature.

The assignee must establish that the claim was presented to the insurer (S&M Supply Inc. v Geico Insurance, 2003 NY Slip Op S1192[U]). Proof of mailing of the claim to the insurer may be established by testimony of the assignee’s employee who has personal knowledge that the claim was mailed (S&M Supply Inc., supra). Testimony of an employee regarding the general mailing practices of assignee’s office is insufficient (Hospital for Joint Diseases v Nationwide Mutual Ins. Co., 284 AD2d 374, 726 NYS2d 443).

This case was tried by the Court on February 19, 2004. Plaintiff presented one witness, Ruben Paez, an assistant office manager at Advanced Medical Rehabilitation. Mr. Paez testified to the practices and procedures utilized by plaintiff when a new patient comes into the office. Although it is the regular practice of the office to have the patient fill out an intake form and sign any required documentation at the initial visit, in this particular case, Mr. Paez did not witness Mr. Briggs sign the assignment or any other document and is not familiar with his signature. Furthermore, the assignment is undated and Mr. Paez could not recall the date when this assignment was actually signed.

CPLR 4518(a) codifies the business record exception to the hearsay rule. It sets forth the foundational requirements necessary to overcome a hearsay objection to the admission of certain documents. The proponent of the evidence must establish that the act, transaction, occurrence or event was made in the regular course of business; that it was the regular course of such business to make such act, transaction, occurrence or event and the entry was made at the time of the act, transaction, occurrence or event or within a reasonable time thereafter.

The essence of the business records exception to the hearsay rule is that records systematically made for the conduct of a business, as a business are inherently highly trustworthy because they are routine reflections of day to day operations and because the “entrant’s obligation” is to have them truthful and accurate for purposes of the conduct of the enterprise (Williams v Alexander, 309 NY 283, 286; People v Kennedy, 68 NY2d 569, 510 NYS2d 853, [1986]).

The Business Record Rule was not intended to permit the receipt in evidence of entries made by third parties not engaged in the business or under any duty to report (Johnson v Lutz, 253 NY 124 [Ct App 1930]). The rule should not be extended so to admit a mere private memorandum, not made in the pursuance of any duty owing by the person making it (Johnson v Lutz, supra at 128; Pector v County of Suffolk, 259 AD2d 605, 686 NYS2d 789 [2nd Dept 1999]).

The assignment of benefits is inadmissible as a business record for a number of reasons. [*3]First, the witness did not see Mr.Briggs sign the assignment and is not familiar with his signature; therefore, he could not properly authenticate the signature. Secondly, the assignment is not dated and the witness could not recall the date it was signed; thus, it could not be said that the assignment was made at the time of the events reflected in it or within a reasonable time thereafter. Finally, the assignment of benefits was made by Mr. Briggs who is not an employee of assignee or a person under a duty to report. Mr. Briggs is merely a third party not engaged in the business and under no duty to report as mandated by CPLR 4518(a). Therefore the assignment is not a business record admissible under the business record exception to the hearsay rule as embodied in CPLR 4518(a).

Mr. Paez testified that the bills for services provided to Mr. Briggs were prepared and mailed by a separate entity. When questioned during direct examination and also while being voir dired on the admissibility of the medical bills, Mr. Paez stated…. “they are not prepared by us, they are prepared for us and mailed.” He has no personal knowledge that the bills were mailed, when they were mailed or to whom. He has no personal knowledge of the general business practice of this billing entity. He is not qualified to testify as to the record keeping of an entity to which he is not related as an employee and about events over which he has no personal knowledge (Standard Textile Company, Inc. v National Equipment Rental, LTD., 80 AD2d 911, 437 NYS2d 398 [2nd dept 1981]; S&M Supply, Inc., supra).

Mr. Paez is not the proper witness to lay a foundation for the admissibility of the billing records. Plaintiff should have called an employee of the billing entity who is familiar with the general business practice of this entity and has personal knowledge that the claim was mailed (Standard Textile Company, Inc. v National Equipment Rental, LTD., supra).

CONCLUSION

The assignment of benefits form is inadmissible. It is not a business record made in the regular course of business by a person with a business duty to report. Furthermore, it was not properly authenticated or dated.

The medical bills are inadmissible because the witness is not qualified to testify as to the record keeping practices of an entity to which he is not related as an employee and about events over which he has no personal knowledge.

Two essential elements in maintaining an action seeking the recovery of first party no-fault benefits are proof of assignment and proof that the claim was mailed to the insurer. Plaintiff has failed to prove these essential elements. Plaintiff has failed to make out a prima facie case of its entitlement to recover no-fault first party benefits. Therefore, this action must be and it is hereby dismissed.

This constitutes the decision and judgment of this Court.

Dated: March 16, 2004

[*4]

Manuel J. Mendez

J.C.C.

Decision Date: March 16, 2004

—

In an action to recover no-fault medical payments under five insurance contracts, the defendant appeals from (1) an order of the Supreme Court, Nassau County (Joseph, J.), dated December 20, 2002, which granted the plaintiffs’ motion for summary judgment and denied its cross motion for summary judgment dismissing the complaint, and (2) a judgment of the same court dated December 27, 2002, which is in favor of the plaintiffs and against it in the principal sum of $37,040.67.

Ordered that the appeal from the order is dismissed, without costs or disbursements; and it is further,

Ordered that the judgment is reversed, on the law, without costs or disbursements, those branches of the plaintiffs’ motion which were for summary judgment on their first, second, and fifth causes of action are denied, those branches of the defendant’s cross motion which were for summary judgment dismissing the first and fifth causes of action are granted, and the order dated December 20, 2002, is modified accordingly.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248 [1976]). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501 [a] [1]).

This action was commenced by three hospitals to recover unpaid no-fault benefits from the defendant Progressive Casualty Insurance Company (hereinafter Progressive), arising from five separate automobile accidents involving persons and/or vehicles it allegedly insured. The Supreme Court granted the plaintiffs’ motion for summary judgment.

The Insurance Law and 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 65.15 [g] [3]; see Insurance Law § 5106 [a]). This 30-day period may be extended by, inter alia, a timely demand by the insurance company for further verification of a claim (see 11 NYCRR 65.15 [d] [1]; [e]). Such a demand must be made within 10 days of receipt of a completed application (see 11 NYCRR 65.15 [d] [1]). If the demanded verification is not received within 30 days, the insurance company must issue a follow-up request within 10 days of the insured’s failure to respond (see 11 NYCRR 65.15 [e] [2]). A claim need not be paid or denied until all demanded verification is provided (see 11 NYCRR 65.15 [g] [1] [i]; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554 [1999]). When a hospital fails to respond to a verification request, the 30-day period in which to pay or deny the claim does not begin to run, and any claim for payment by the hospital is premature (see St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2002]; 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]). No-fault benefits are overdue, however, if not paid within 30 calendar days after the insurer receives verification of all of the relevant information requested pursuant to 11 NYCRR 65.15 (d) (see 11 NYCRR 65.15 [g] [1] [i]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584 [2002]). Additionally, when a claim is submitted, an insurer will be liable only if there is insurance to cover the claim. An insurer is not required to pay a claim where the policy limits have been exhausted (see St. Vincent’s Hosp. & Med. Ctr. v Allstate Ins. Co., 294 AD2d 425 [2002]).

Applying these rules to the facts of this case, the Supreme Court correctly granted those branches of the plaintiffs’ motion which were for summary judgment on the third and fourth causes of action concerning the Sharon Brown and Richard Bochert claims. The plaintiffs demonstrated their entitlement to summary judgment as to each of those causes of action by proving that they submitted the requisite documents for payment, but Progressive neither paid nor denied the claims, nor requested verification within the requisite periods. In opposition, Progressive failed to demonstrate the existence of a triable issue of fact. As to the Brown claim, Progressive offered only conclusory hearsay assertions of telephonic verification requests, unsupported by an affidavit of a representative with personal knowledge. As to the Bochert claim, Progressive proffered prior verification requests relevant to a different claim.

The Supreme Court erred in granting the plaintiffs’ motion as to the Byung Park claim pled in the second cause of action. In opposition to the plaintiffs’ prima facie showing, Progressive demonstrated the existence of a triable issue of fact as to whether the verification requests it submitted related to the same claim as was pleaded in the second cause of action.

The Supreme Court also erred in granting those branches of the plaintiffs’ motion which were for summary judgment on their first and fifth causes of action concerning the Thomas Salese and Margarita Bonilla claims. Furthermore, the court should have granted Progressive’s cross motion for summary judgment dismissing those causes of action. Progressive demonstrated, as a matter of law, that it paid the Salese claim up to the pertinent policy limits, and was not obligated to pay the claim in full (see St. Vincent’s Hosp. & Med. Ctr. v Allstate Ins. Co., supra at 425-426; cf. Nyack Hosp. v Progressive Cas. Ins. Co., supra). As to the Bonilla claim, Progressive established that it did not issue a policy of insurance covering that claim. Notwithstanding that Progressive did not notify the plaintiff Westchester Medical Center of its noncoverage of this claim, Progressive properly proved its freedom from liability thereon (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Zappone v Home Ins. Co., 55 NY2d 131, 134 [1982]; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]).

We do not consider Progressive’s contention that the five claims herein were improperly joined, as this contention was raised for the first time on appeal (see Matter of DelGaudio v Aetna Ins. Co., 262 AD2d 641 [1999]; M.S.N.S. Holding Corp. v City of New York, 253 AD2d 793, 794 [1998]; Matter of Matarrese v New York City Health & Hosps. Corp., 247 AD2d 475, 476 [1998]; cf. Weiner v MKVII-Westchester, 292 AD2d 597, 598 [2002]; Libeson v Copy Realty Corp., 167 AD2d 376, 377 [1990]). S. Miller, J.P., H. Miller, Crane and Rivera, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 9th and 10th JUDICIAL DISTRICTS

Appeal by plaintiffs from so much of an order of the District Court,

Nassau County (S. Kluewer, J.), entered December 2, 2002, as denied their motion for summary judgment.

Order unanimously affirmed without costs.

Plaintiffs commenced this action to recover first-party no-fault benefits
for medical services rendered to their assignor, as well as statutory interest and attorney’s fees, pursuant to Insurance Law § 5101 et seq. Thereafter, plaintiffs moved
for summary judgment and defendant cross-moved for summary judgment dismissing the complaint. Both motions were denied by order entered December 2, 2003.

In support of its motion, plaintiffs submitted an affidavit in which Bella
Safir states that she is the “practice and billing manager” and “an officer of plaintiff,” even though there are four distinct plaintiffs in this matter. Although A.B. Medical Services, PLLC and D.A.V. Chiropractic, P.C. have the same business address, Daniel Kim’s Acupuncture, P.C. has a different address and no address is provided for G.A. Physical Therapy, P.C. The affidavit does not indicate for which plaintiff she is the billing manager, and this court cannot assume that she is acting on behalf of one particular plaintiff, or on behalf of all of the plaintiffs. Consequently, this affidavit is insufficient to establish that plaintiffs provided defendant with properly completed claim forms (see Damadian MRI in Elmhurst, P.C. v Liberty Mut. Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 9th & 10th Jud Dists]; Amaze Med. Supply Inc. v Eagle Ins. Co.,
NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists]), and we find that the court below correctly determined that plaintiffs failed to make out their prima facie entitlement to summary judgment.
Decision Date: March 12, 2004

—

In an action to recover unpaid benefits due under the no-fault provisions of the Insurance Law, the plaintiff appeals from an order of the Supreme Court, Nassau County (Cozzens, J.), dated January 31, 2003, which denied its motion for summary judgment and granted the defendant’s cross motion for summary judgment dismissing the complaint.

Ordered that the order is affirmed, with costs.

The plaintiff Hospital for Joint Diseases, as assignee of its patient, alleged in its complaint that the defendant no-fault insurer was liable for two no-fault claims which were mailed on March 6, 2002, because it neither paid nor denied the claims within 30 days of receipt, as required by Insurance Law § 5106 (a) and the corresponding regulation of the Insurance Department, 11 NYCRR 65.15 (g) (3). Thereafter, the plaintiff made the same argument in a motion for summary judgment.

The defendant cross-moved for summary judgment dismissing the complaint, submitting evidence that before the medical services at issue were rendered, it had notified the plaintiff’s assignor that it had terminated her no-fault benefits based upon an independent medical examination, and that the plaintiff had previously submitted claims for these same billings which the defendant timely denied. The Supreme Court denied the plaintiff’s motion, granted the defendant’s cross motion, and dismissed the complaint. The plaintiff appeals.

We affirm. Under the no-fault law, a claimant whose claim for benefits has been denied is entitled to “seek immediate redress, and to recover both the amount of any overdue claim and reasonable attorney’s fees in securing payment” (Roggio v Nationwide Mut. Ins. Co., 66 NY2d 260, 262 [1985]). A claimant may either file suit seeking payment of the claim, or, pursuant to Insurance Law § 5106 (b), submit the dispute to arbitration, pursuant to simplified procedures promulgated by the Insurance Department. In this case, the plaintiff did neither, opting instead to repeatedly resubmit the denied claims, apparently in the hope that eventually the defendant would fail to issue a denial within 30 days of receipt. We hold, however, that the 30-day period in which to deny a claim for no-fault benefits does not run anew as the result of the re-submission of a previously-denied claim.

Since the plaintiff’s complaint was predicated solely upon the defendant’s failure to pay or deny the claims sent March 6, 2002, within 30 days of receipt, and the defendant established that it previously issued timely denials for identical claims submitted by the plaintiff, the defendant was properly granted summary judgment dismissing the complaint.

In light of the foregoing, we do not reach the parties’ remaining contentions. Smith, J.P., Goldstein, Luciano and Adams, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 2nd and 11th JUDICIAL DISTRICTS

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

(P. Sweeney, J.), entered December 16, 2002, denying its motion for summary judgment.

Order unanimously reversed without costs, plaintiff’s motion for summary judgment granted for the principal sum of $2,670.40 and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees.

In or about September 2001, plaintiff commenced this action to recover $2,670.40 in first-party no-fault benefits for health services it provided to its assignor
pursuant to Insurance Law § 5101 et seq., as well as statutory interest and attorney’s fees. Thereafter, plaintiff moved for summary judgment on the ground that, inter alia, defendant’s denial of its claim was not made within the statutory 30-day period as required by Insurance Law § 5106. By order entered December 16, 2002, the court below denied the motion.

A review of the record indicates that plaintiff established its prima facie entitlement to summary judgment by showing that it submitted a complete proof of claim to defendant which defendant did not pay or deny within the statutory 30-day period (see Insurance Law § 5106 [a]; 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 a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

Defendant’s request to examine the assignor under oath did not toll the statutory period inasmuch as, at the applicable time, there was no provision in the no-fault regulations for such verification (A.B. Med. Serv. PLLC v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 9th & 10th Jud Dists]; see Bronx Med. Serv. P.C. v Lumbermans Mut. Cas. Co., NYLJ, June 13, 2003 [App Term, 1st Dept]; cf. 11 NYCRR
65-3.5 [e]). Moreover, the October 19, 2001 and November 19, 2001 letters defendant allegedly sent to plaintiff did not constitute a proper request for verification, and follow-up letter, and did not toll the statutory period, since the letters failed to indicate to whom the requests were made or what was specifically requested . The [*2]
letters merely state that an investigation was being conducted (see e.g. Sehgal v Royal Ins. Co. of Am., NYLJ, Apr. 15, 1999 [App Term, 9th & 10th Jud Dists] [a letter stating that a peer review was to be conducted did not amount to a request for verification]; see also 11 NYCRR 65.15 [e] [2]). Having failed to timely pay or deny, defendant is precluded from raising defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]).
Accordingly, plaintiff’s motion for summary judgment for the principal sum of $2,670.40 is granted and the matter remanded for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Decision Date: March 04, 2004

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 2nd and 11th JUDICIAL DISTRICTS

Appeal by plaintiff from an order of the Civil Court, Queens County (A. Agate, J.), entered August 23, 2002, denying its motion for summary judgment.

Order unanimously modified by granting partial summary judgment to plaintiff in the sum of $7,643.18, and matter remanded to the court below for the calculation of statutory interest, an assessment of attorney’s fees and for all further proceedings on the remainder of the claims; as so modified, affirmed without costs.

Plaintiff commenced this action to recover first-party no-fault benefits, plus statutory interest and attorney’s fees, for medical services rendered to its assignor,
pursuant to Insurance Law § 5101 et seq. Thereafter, plaintiff moved for summary
judgment, which motion was denied by order of the court below entered August 23, 2002.

A review of the record indicates that plaintiff established its prima facie entitlement to partial summary judgment in the amount of $7,643.18 by showing that it submitted complete proofs of claims to defendant in 2001, which were not timely paid or denied (see Insurance Law § 5106 [a]; 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 a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Defendant contends that said claims were timely denied inasmuch as the statutory period was tolled since it requested verification in the form of an examination under oath of the assignor. However, the letters attached to defendant’s opposition papers do not toll the statutory period since they do not request verification; rather they inform plaintiff that its bills were being delayed because it was requesting examinations of several parties involved in the loss (see e.g. Sehgal v Royal Ins. Co. of Amer., NYLJ, Apr. 15, 1999 [App Term, 9th & 10th Jud Dists] [a letter stating that a peer review was to be conducted did not amount to a request for verification]). Moreover, it is noted that a request for such an examination would not toll the statutory period inasmuch as there was no provision in the no-fault regulations for same prior to April 5, 2002 (see
A.B. Med. Serv. PLLC v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 9th & 10th Jud Dists]; A.B. Med. Serv. PLLC v Lumbermens Mut. Cas. Co., NYLJ, Oct. 27, 2003 [App Term, 2d & 11th Jud Dists]). Consequently, defendant is precluded as to said claims (Amaze Med. Supply Inc. v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists], supra) and has not shown a triable issue of fact (see Alvarez, 68 NY2d at 324).

Plaintiff concedes that defendant timely denied its $820 acupuncture claim, $1,010.74 of its $1,212.16 physical therapy claim, and its $438.10 chiropractor claim, and argues that defendant improperly denied said claims on the ground of concurrent treatment. A review of the record, however, indicates that plaintiff failed to establish its prima facie entitlement to summary judgment for its $438.10 claim since it did not provide a proof of claim therefor (see Amaze Med. Supply Inc. v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists], supra), and we find that defendant validly denied the $820 and $1,010.74 claims on the grounds of “overlapping/excessive and/or concurrent care” and/or “services rendered by more than one physician.”

Accordingly, plaintiff is granted partial summary judgment in the principal sum of $7,643.18, and the matter is remanded to the court below for the calculation of statutory
interest and an assessment of attorney’s fees as to the claims on which defendant is
precluded, pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on the remaining claims.
Decision Date: March 04, 2004