CV-730032-18/KI

The Rybak Firm, PLLC (Oleg Rybak of counsel), New York City, for Barakat P.T., P.C., plaintiff. Law Offices of Rachel Perry, Lake Success (Edward R. Johannes of counsel), for Progressive Insurance Company, defendant.

BACKGROUND

On April 22, 2017, plaintiff’s assignor, Jerrod Bratcher, was allegedly injured in an automobile accident (see plaintiff’s exhibit 4 in support of motion, complaint ¶ 2).

On April 27, 2017, plaintiff allegedly provided the following services to Bratcher:

(see plaintiff’s exhibit 3 in support of motion, NF-3 form dated 5/16/17). According to Amro S Mohamed, P.T., the sole proprietor of plaintiff, the bill was mailed to the insurance carrier on May 16, 2017 (see plaintiff’s exhibit 2 in support of motion, Mohamed aff ¶¶ 1, 21).

On May 30, 2017, defendant allegedly denied the bill in its entirety. According to the Explanation of Benefits (EOB), the amount allowed was $103.95, based on the Workers’ Compensation fee schedule, and the amount fell within a deductible/copay (see defendant’s exhibit C in support of cross motion, NF-10 form and EOB).

The instant action

On July 13, 2018, plaintiff commenced this action seeking to recover assigned first-party no-fault benefits, with interest plus attorneys’ fees (see plaintiff’s exhibit 4 in support of motion, summons and complaint). On August 1, 2018, defendant allegedly answered the complaint (see defendant’s exhibit A in support of cross motion, answer and affidavit of service).

DISCUSSION

“On a motion for summary judgment, the moving party must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. If the moving party produces the required evidence, the burden shifts to the nonmoving party to establish the existence of material issues of fact which require a trial of the action”

(Xiang Fu He v Troon Mgt., Inc., 34 NY3d 167, 175 [2019] [internal citations and quotation marks omitted]).

Defendant generally argues that it is entitled to summary judgment dismissing the complaint because plaintiff billed in excess of the fee schedule, and defendant was reimbursed pursuant to the Workers’ Compensation fee schedule (see affirmation of defendant’s counsel ¶¶ 6-10 ^[FN1] ). Defendant contends that the allowable amount was properly applied to the assignor’s deductible (id. ¶¶ 11-12).

A. Workers’ Compensation Fee Schedule

“Insurance Law § 5108 provides, with some exceptions, that charges for services covered under Insurance Law § 5102 ‘shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board for industrial accidents'” (Government Empls. Ins. Co. v Avanguard Med. Group, PLLC, 127 AD3d 60, 63 [2d Dept 2015], affd 27 NY3d 22 [2016], quoting Insurance Law § 5108 [a]).

To meet its prima facie burden that it fully paid the claims in accordance with the fee schedule, the defendant must submit an affidavit from a no-fault/litigation examiner or from a professional medical coder/biller (Merrick Med., P.C. v A Cent. Ins. Co., 64 Misc 3d 142[A], 2019 NY Slip Op 51264[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Renelique v American Tr. Ins. Co., 53 Misc 3d 141[A], 2016 NY Slip Op 51526[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; Oleg’s Acupuncture, P.C. v Hereford Ins. Co., 58 Misc 3d 151[A], 2018 NY Slip Op 50095[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018][certified medical coder and biller]; Compas Med., P.C. v American Tr. Ins. Co., 56 Misc 3d 133[A], 2017 NY Slip Op 50946[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017] [professional coder]).

The affidavit must show that defendant properly applied the appropriate relative value units and conversion factor assigned to the CPT code(s) for the services rendered in calculating the amount plaintiff was entitled to be reimbursed (see Renelique, 53 Misc 3d 141[A], 2016 NY Slip Op 51526[U]; Renelique v American Tr. Ins. Co., 57 Misc 3d 145[A], 2017 NY Slip Op [*2]51450[U], [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017] [conversion factor not provided]; see also Adelaida Physical Therapy, P.C. v 21st Century Ins. Co., 58 Misc 3d 135[A], 2017 NY Slip Op 51808[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017] [defendant failed to demonstrate that it had used the correct conversion factor]; Liberty Chiropractic, P.C. v 21st Century Ins. Co., 53 Misc 3d 133[A], 2016 NY Slip Op 51409[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016] [defendant failed to demonstrate correct conversion factor was applied]). Lastly, the applicable portion of the fee schedule must be annexed to defendant’s papers (Megacure Acupuncture, P.C. v Clarendon Natl. Ins. Co., 33 Misc 3d 141[A], 2011 NY Slip Op 52199[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]).

Here, defendant failed to meet its prima facie burden demonstrating that plaintiff billed in excess of the fee schedule. Defendant’s counsel argues that, based on an examination of plaintiff’s bill, plaintiff, a physical therapist, used a conversion factor of 8.45, which is reserved for medical doctors, instead of using the conversion factor for physical therapists (affirmation of defendant’s counsel ¶ 8). Defendant’s counsel asserts that the correct conversion factor for plaintiff is 7.70 (id. ¶ 7). However, defendant did not submit an affidavit from a no-fault/litigation examiner or from a professional medical coder/biller, stating that a physical therapist may only bill for services using the conversion factor for physical therapists, or that a physical therapist may not bill for services using the conversion factor for physical medicine, which is 8.45. Neither did defendant’s counsel cite to any ground rules from the fee schedule nor any statutory or case law authority to support his contention. Defendant therefore failed to demonstrate that it had used the correct conversion factor in calculating the reimbursement rate (Laga v GEICO Ins. Co., 58 Misc 3d 127[A], 2017 NY Slip Op 51713[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]).

B. Reduction of the claim due to a policy deductible

Although defendant did not demonstrate that the bill was properly reduced in accordance with the Workers’ Compensation fee schedule, defendant also argues that the policy under which no-fault benefits are being claimed had a $200 deductible. Insofar as the amount of the bill was within the deductible amount, the court must reach defendant’s alternative argument that the bill was validly denied due to the policy deductible.

To meet its prima burden that the bill was properly denied due to application of a deductible, defendant must submit affidavits and documents establishing that that the automobile insurance policy in question had a personal injury protection deductible, and that the claim at issue was timely denied due to said deductible (Healthy Way Acupuncture, P.C. v 21st Century Indem. Ins. Co., 54 Misc 3d 142[A], 2017 NY Slip Op 50204[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Innovative Chiropractic, P.C. v Progressive Ins. Co., 26 Misc 3d 135[A], 2010 NY Slip Op 50148[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]).

1. Policy Deductible

Here, defendant submitted a copy of the policy declarations page, which indicates that the automobile policy that defendant issued to the named insured, Jerrod Bratcher, in effect at the time of the accident, has “Mandatory Personal Injury Protection” up to $50,000 for each person, with a $200 deductible (see defendant’s exhibit E in support of motion, Declarations Page at 2). Plaintiff did not raise any objections to this document (see affirmation of plaintiff’s counsel in further support of motion and in opposition to cross motion ¶¶ 14-52).

[*3] 2. Timely Denial

“[A]n insurer must either pay or deny a claim for motor vehicle no-fault benefits, in whole or in part, within 30 days after an applicant’s proof of claim is received. An insurer can extend the 30-day period within which to pay or deny a claim by making a timely demand for further verification of the claim”

(Infinity Health Prods., Ltd. v Eveready Ins. Co., 67 AD3d 862, 864 [2d Dept 2009] [internal citations omitted]). According to defendant’s counsel, the denial was mailed on May 30, 2017 (see affirmation of defendant’s counsel ¶ 11 [table]).

Generally, “proof that an item was properly mailed gives rise to a rebuttable presumption that the item was received by the addressee” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 114 AD3d 33, 46 [2013], affd 25 NY3d 498 [2015] [internal quotation marks omitted]). A party can establish proof of mailing “through evidence of actual mailing (e.g., an affidavit of mailing or service) or—as relevant here—by proof of a sender’s routine business practice with respect to the creation, addressing, and mailing of documents of that nature” (CIT Bank N.A. v Schiffman, —NY3d&mdash, 2021 NY Slip Op 01933, *3 [2021]; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 547 [2d Dept 2006], quoting Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001]; accord American Tr. Ins. Co. v Lucas, 111 AD3d 423, 424 [1st Dept 2013]).

“Actual mailing may be established by a proper certificate of mailing or by an affidavit of one with personal knowledge” (J.M. Chiropractic Servs., PLLC v State Farm Mut. Ins. Co., 36 Misc 3d 135[A], 2012 NY Slip Op 51348[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012] [internal citation, emendations and quotation marks omitted]). For proof by office practice, “the office practice must be geared so as to ensure the likelihood that the item is always properly addressed and mailed” (Progressive Cas. Ins. Co. v Metro Psychological Servs., P.C., 139 AD3d 693, 694 [2d Dept 2016], citing Nassau Ins. Co. v Murray, 46 NY2d 828, 830 [1978]; Badio v Liberty Mut. Fire Ins. Co., 12 AD3d 229, 229-30 [1st Dept 2004]).

Here, to establish proof of mailing, defendant submitted an affidavit from Tamu Jordan, a Litigation Representative employed by defendant since June 1999 (see defendant’s exhibit B in support of cross motion, Jordan aff ¶ 1), and copies of the denial of claim form and a mailing report (see defendant’s exhibit C in support of motion), which Jordan established were business records (Jordan aff ¶ 6).

According to Jordan, the claims representative electronically creates the document to be mailed, which includes the mailing address, and places the document into a digital file in a centralized computer for mailing (see Jordan aff ¶ 3 [l]). Once the claims representative creates the documents to be mailed, the centralized computer system generates the document with the mailing address (id. ¶ 3 [n]). Documents are printed from the centralized computer system at mailing facilities located in either Highland Heights, Ohio or Colorado Springs, Colorado (see id. ¶ 3 [l]). Once printed, an automated mail machine inserts the document into a windowed envelope so the mailing address is visible (id. ¶ 3 [n]).

Documents mailed in the same windowed envelope are identified with the same Envelope ID, and the sixth and seventh digit of the Envelop ID indicate the facility from which the documents were mailed (id. ¶ 3 [m]). If the sixth and seventh digits are 00 or 02, the documents were mailed from Highland Heights, Ohio; if the sixth and seventh digits are 01, the documents were mailed from Colorado Springs, Colorado (id. ¶ 3 [m]).

In Highland Heights, Ohio, mail is picked up by a United States Postal Service by 1:00 p.m. and 5:00 p.m. Eastern Standard Time, Monday through Friday; in Colorado Springs, Colorado, the mail is picked up by a United States Postal Service by 1:30 p.m. and 5:30 p.m. Mountain Time, Monday through Friday (id. ¶¶ 3[o]-[p]). As the mail is placed into the custody and control the United States Postal Service, information on a Medical Payments Proof of Mailing Report is contemporaneously captured (id. ¶ 3 [a]). The information cannot be altered once it is captured in defendant’s computer system, and the data on the report is compiled the same date that the documents were mailed (id. ¶ 3 [b]).

For denials, two copies are mailed, along with two EOBs (id. ¶ 3 [g]). The information appearing in the NF-10 form and the EOB regarding the recipient, recipient address, patient, dates of service, and the amount billed is obtained from the bill(s) submitted by plaintiff (id. ¶ 3 [i]).

Here, defendant established prima facie proof of mailing of the denial on May 31, 2017, in accordance with a standard office practice or procedure (Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2d Dept 2001]; Ortho-Med Surgical Supply, Inc. v Progressive Cas. Ins. Co., 27 Misc 3d 141[A], 2010 NY Slip Op 50997[U] [App Term, 2d Dept, 2d Dept, 2d, 11th & 13th Jud Dists 2010]). The Medical Payments Proof of Mailing Report indicates that two NF-10s and two EOBs were mailed to plaintiff on May 31, 2017, with Envelope ID CMBPI02Q00566 (see defendant’s exhibit C in support of cross motion). Based on the sixth and seventh digits of the Envelope ID on the mailing report and on Jordan’s affidavit, the denial was therefore mailed from Highland Heights, Ohio.

Plaintiff’s arguments in opposition to proof of mailing are unavailing.

“[T]o rebut the presumption, there must be proof of a material deviation from an aspect of the office procedure that would call into doubt whether the notice was properly mailed, impacting the likelihood of delivery to the intended recipient. Put another way, the crux of the inquiry is whether the evidence of a defect casts doubt on the reliability of a key aspect of the process such that the inference that the notice was properly prepared and mailed is significantly undermined. Minor deviations of little consequence are insufficient”

(CIT Bank N.A. v Schiffman, —NY3d—, 2021 NY Slip Op 01933, *3 [2021]). Contrary to plaintiff’s argument, the affidavit stated Jordan’s current title as Litigation Representative (Jordan aff ¶ 1). Additionally, Jordan established personal knowledge of the standard mailing procedures in both Ohio and Colorado, based on training that Jordan received from the facilities at both Ohio and Colorado (id. ¶ 2).

Acupuncture Prima Care, P.C. v State Farm Mutual Auto Ins. Co. (17 Misc 3d 1135[A], 2007 NY Slip Op 52273[U] [Dist Ct, Nassau County 2007]), which plaintiff cites, is distinguishable.

There, to establish proof of mailing, the defendant submitted two affidavits—an affidavit from a claims representative from the defendant’s office in Ballston Spa, New York and an affidavit from a claims support supervisor from the defendant’s office in Melville New York. The claims representative described the procedure for generating the denial of claim forms, which were then sent to Claims Support Services personnel for processing (id. at *2). The affidavit from the Claims Support Services Supervisor stated, in essence, that the generated denial of claim forms are retrieved from a printer, placed in an envelope, and picked up by a courier who delivers the envelope to the United States Postal Service (id. at *2-3).

The court in Acupuncture Prima Care, P.C. ruled, “while this may describe a ‘standard office practice and procedure,’ it does not describe one “used to ensure that items were properly addressed and mailed” (id. at *3 [internal citation omitted]). The court reasoned that the procedure described did not contain enough safeguards to “take into account the possibility that an item of mail might get misplaced or lost anywhere between the CSA pool and the United States Post Office” (id.) The court also faulted the affiants for not indicating the basis for their knowledge that the office practice and procedure was followed, and the affiants failed to indicate that they were familiar with the defendant’s office practices and procedures when the first of the denials were allegedly mailed (id. at *3-4). Finally, the court indicated that neither of the affiants (who were in Ballston Spa and Melville) indicated from which office the denials were allegedly mailed, when the denials bore an address from Parsippany, New Jersey (id.).

Here, unlike the affiants in Acupuncture Prima Care, P.C., Jordan established personal knowledge of the standard mailing procedures in both Ohio and Colorado, based on training that Jordan received from the facilities at both Ohio and Colorado (Jordan aff ¶ 2). It is part of Jordan’s duties to ensure compliance with those procedures (id. ¶ 5). Unlike the affidavits in Acupuncture Prima Care, P.C., which did not state the office from which the denials were issued, Jordan provided information about the Envelope ID to establish that the denial was issued from Highland Heights, Ohio. In any event, the same court which decided Acupuncture Prima Care, P.C. acknowledged that its prior cases were no longer good law in light of St. Vincent’s Hospital of Richmond v Government Employees Insurance Co. (50 AD3d 1123 [2d Dept 2008]) (see Uniondale Chiropractic Off. v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 1130[A], 2008 NY Slip Op 51687[U] [Dist Ct, Nassau County 2008]).

Defendant’s copies of the NF-3 Form that plaintiff submitted to defendant are date-stamped “Received Date: 05/22/2017” (see defendant’s exhibit C in support of motion), and plaintiff does not dispute that defendant received the bills on May 22, 2017. Even assuming, for the sake of argument, that the NF-3 Form was received on May 16, 2017, the same date on the NF-3 Form, defendant’s denial on May 31, 2017 was well within 30 days of defendant’s receipt of the bill.

Therefore, defendant met its prima facie burden that the claim was properly denied because the amount allowed was within the $200 policy deductible (Healthy Way Acupuncture, P.C., 54 Misc 3d 142[A], 2017 NY Slip Op 50204[U]; Innovative Chiropractic, P.C., 26 Misc 3d 135[A], 2010 NY Slip Op 50148[U]).

Plaintiff failed to raise a triable issue of fact warranting denial of summary judgment.^[FN2]

Therefore, defendant’s motion for summary judgment dismissing the complaint is granted.

“A no-fault provider establishes its prima facie entitlement to summary judgment by proof of the submission to the defendant of a claim form, proof of the fact and the amount of the loss sustained, and proof either that the defendant had failed to pay or deny the claim within the requisite 30-day period, or that the defendant had issued a timely denial of claim that was conclusory, vague or without merit as a matter of law”

(Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]). Once plaintiff meets its prima facie burden, the burden shifts to defendant “to show that it has a meritorious defense and that such a defense is not precluded” (Urban Radiology, P.C. v GEICO Gen. Ins. Co., 39 Misc 3d 146[A], 2013 NY Slip Op 50850[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013] [internal citation omitted]).

Here, any deficiencies in plaintiff’s proof of mailing were cured by defendant’s submission of the denial of claim form in defendant’s motion papers, which admitted receipt of the bill (Bob Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 53 Misc 3d 135[A], 2016 NY Slip Op 51434[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; see Oleg Barshay, DC, P.C. v State Farm Ins. Co., 14 Misc 3d 74, 75 [App Term, 2d Dept, 2d & 11th Jud Dists 2006]).

However, plaintiff’s motion for summary judgment in its favor against defendant is denied. As discussed above, defendant timely denied the bill on the ground that the amount sought was within a $200 deductible.

CONCLUSION

Upon the foregoing cited papers, it is hereby ORDERED that plaintiff’s motion for summary judgment in its favor (Motion Seq. No. 001) is DENIED; and it is further

ORDERED that defendant’s cross motion for summary judgment dismissing the complaint (Motion Seq. No. 002) is GRANTED, and the complaint is dismissed, with costs and disbursements to defendant as taxed by the Clerk upon submission of an appropriate bill of costs; and it is further

ORDERED that the Clerk is directed to enter judgment in defendant’s favor accordingly.

This constitutes the decision and order of the court.

Dated: April 9, 2021

New York, New York

ENTER:

RICHARD TSAI, J.
Judge of the Civil Court

Footnotes

Footnote 1:The paragraphs in defendant’s affirmation in opposition to the motion and in support of the cross motion are misnumbered. The paragraphs are numbered sequentially from 1 through 11, but the paragraphs that follow are numbered 6 through 12. The citation here refers to latter numbering.

Footnote 2:As defendant points out, plaintiff’s affirmation in further support of motion and in opposition to defendant’s cross motion was purportedly served on January 14, 2020, past the December 26, 2019 agreed-upon deadline for opposition to cross motion (see defendant’s exhibit A in reply). However, the court will consider these papers, in the absence of any demonstrable prejudice to defendant (see Lawrence v Celtic Holdings, LLC, 85 AD3d 874, 875 [2d Dept 2011] [“Supreme Court did not abuse or improvidently exercise its discretion in considering the plaintiff’s untimely opposition papers inasmuch as the defendants were not prejudiced thereby”]).

Decided on April 9, 2021

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Peter C. Merani, P.C. (Adam J. Waknine of counsel), for appellant-respondent. Glinkenhouse Queen, Esqs. (Alan Queen of counsel), for respondent-appellant.

Appeal and cross-appeal from an order of the Civil Court of the City of New York, Queens County (Larry Love, J.), entered February 22, 2018. The order, insofar as appealed from by defendant, granted plaintiff’s motion to renew its prior motion to recalculate interest awarded in a judgment entered August 10, 2007, and, upon renewal, ordered that the interest awarded in that judgment be calculated at 2% per month compounded. The order, insofar as cross-appealed from by plaintiff, sua sponte provided that postjudgment interest would accrue at 9% annually pursuant to CPLR 5004.

ORDERED that the cross-appeal by plaintiff is dismissed; and it is further,

ORDERED that the order, insofar as reviewed, is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, a judgment was entered on August 10, 2007 awarding statutory no-fault interest from August 18, 2000 at a simple rate (see 11 NYCRR 65-3.9 [a], effective April 5, 2002). Plaintiff moved, pursuant to CPLR 5019 (a), to have that interest recalculated pursuant to the pre-2002 regulations, which required no-fault interest to be calculated at a compound rate (see former 11 NYCRR 65.15 [h] [1]). Plaintiff’s motion was denied on the ground that the court could not determine the relevant dates, and thus could not determine the appropriate rate of interest to apply.

Plaintiff moved pursuant to CPLR 2221 (e) for leave to renew its motion and, upon renewal, to have the no-fault interest awarded in the August 10, 2007 judgment recalculated at a [*2]compound rate. Plaintiff attached to its motion papers, among other things, claim forms showing that the treatments at issue had been rendered in May 2000. By order entered February 22, 2018, the Civil Court granted plaintiff’s motion, finding that plaintiff had now established the relevant dates and that plaintiff had a reasonable justification for its failure to submit the claim forms with its original motion, and ordered that the interest awarded in the judgment be calculated at a compound rate. In addition, the order sua sponte provided that postjudgment interest would accrue at 9% annually pursuant to CPLR 5004. Defendant appeals from so much of the order as granted plaintiff’s motion to renew and, upon renewal, ordered that the interest in the judgment be calculated at a compound rate, and plaintiff cross-appeals from so much of the order as, sua sponte, provided that postjudgment interest would accrue at 9% annually.

Plaintiff’s cross-appeal is dismissed, as the portion of the order which set forth a rate for postjudgment interest did not address a demand for relief made on notice and was, therefore, sua sponte. Thus, that portion of the order is not appealable as of right (see CCA 1702 [a] [2]), and we decline to grant leave to appeal.

Contrary to defendant’s argument, plaintiff established a reasonable justification for its failure to submit the claim forms in its original motion. Moreover, the record clearly demonstrates that the claims involved herein are all governed by the former regulations providing for compound interest (see Belt Parkway Imaging, P.C. v State Wide Ins. Co., 30 Misc 3d 127[A], 2010 NY Slip Op 52229[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]). Thus, plaintiff’s motion to renew was properly granted, and, upon renewal, the Civil Court properly ordered that the interest awarded in the judgment be calculated at 2% per month compounded.

Accordingly, the order, insofar as reviewed, is affirmed.

ALIOTTA, P.J., ELLIOT and TOUSSAINT, JJ., concur.

656336/2019

Burke, Conway & Stiefeld, White Plains, NY (Asher Grossman of counsel), for plaintiffs.

The Gabriel Law Firm, Rockville Centre, NY (Joseph Padrucco of counsel), for defendants Dos Manos Chiropractic P.C. and Five Borough Supply Inc.

The following e-filed documents, listed by NYSCEF document number (Motion 002) 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 44, 45, 46, 47, 48, 49 were read on this motion for DEFAULT JUDGMENT

This is a no-fault insurance action for a declaration of no-coverage brought by plaintiffs Liberty Mutual Insurance Company and LM General Insurance Company (collectively, Liberty Mutual) against no-fault benefits claimant Jason Carranza and various medical providers to whom Carranza assigned his right to collect no-fault benefits. On this motion, Liberty Mutual moves under CPLR 3215 for a default judgment against defendant Carranza and against defaulting medical-provider assignees of Carranza. Defaulting defendants Dos Manos Chiropractic P.C. and Five Borough Supply Inc. (collectively, defendants) cross-move under CPLR 3012 (d) to compel Liberty Mutual to accept their otherwise-untimely answer.

DISCUSSION

I. Liberty Mutual’s Motion for Default Judgment

Liberty Mutual moves for a default judgment under CPLR 3215 against Carranza and the various defaulting medical-provider assignees of Carranza. The motion is denied.

Liberty Mutual has not shown proof of the facts necessary to constitute its claim, as the CPLR requires. (See CPLR 3215 [f].) In particular, Liberty Mutual has not established that it complied with the regulatory timeliness requirements for the processing of no-fault insurance claims. (See American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) Liberty Mutual’s motion papers do not include claimant’s NF-2 application for benefits or any NF-3 verification forms or bills submitted by the claimant or his treating medical providers. Liberty Mutual thus cannot establish that it requested an examination under oath (EUO) or independent medical examination (IME) within 15 business days of receiving claimant’s verification forms (see 11 NYCRR § 65-3.5 [b]); or that it scheduled the requested IME to be held within 30 calendar days from receipt of the verification forms (see id. § 65-3.5 [d]).

Liberty Mutual contends that it established its compliance with the applicable no-fault regulatory timeframes through the affidavit of Dawn Smith, its “Claims Department Team Manager[,] regarding the bill handling process and timely denials.” (NYSCEF No. 49 at ¶ 30.) This court disagrees. The Smith affidavit states only that “[a]ll the requests that have been made a part of this motion have been timely requested by a member of my team, having been requested within the regulatory time frame after each of the bills was received by Liberty Mutual,” and that “[a]ll verification requests and denials were timely mailed.” (NYSCEF No. 40 at ¶¶ 5, 13.) The affidavit does not identify which bills prompted Liberty Mutual to seek further verification in the form of an EUO or IME, nor when Liberty Mutual received those particular bills.^[FN1] And, as noted above, Liberty Mutual has not provided the bills themselves. The conclusory assertions contained in the Smith affidavit are not sufficient, standing alone, to provide proof of the timeliness element of plaintiffs’ claim.

Liberty Mutual claims, alternatively, that it is “not required to state when Defendants’ bills were received, as Plaintiffs are not requesting the EUO of the Defendants.” (NYSCEF No. 49 at ¶ see also id. at ¶¶ 34-35.) Instead, Liberty Mutual says, it must show only that it timely requested EUOs relative to “receipt of the claim filed by the Individual Defendant since it is the Individual Defendant’s EUO being sought.” (Id. at ¶ 33.) Liberty Mutual asserts that having (supposedly) met that burden, it is entitled to default judgment. This position—for which Liberty Mutual provides no authority—is without merit.

The governing no-fault regulations do not necessarily measure timeliness of an EUO or IME request from receipt of an NF-2 benefits application submitted by the eligible injured person (as Liberty Mutual suggests). Rather, upon receipt of the NF-2, the insurer is directed to [*2]forward its prescribed verification forms “to the parties required to complete them.” (11 NYCRR 65-3.5 [a].) That phrase on its face suggests that the insurer’s request for verification can encompass individuals or entities other than the benefits applicant—a suggestion bolstered by § 65-3.5 [c], which provides that the “insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested.” And it is receipt of those completed verification forms, not the NF-2 alone, that starts running the 15-business-day deadline for request of an EUO or IME, and the 30-calendar-day deadline for conducting a requested IME. (See id. § 65-3.5 [b], [d].)

Relatedly, the regulatory provisions governing an insurer’s request for additional verification upon review of the initial verification forms limit only the timing of that request. They do not say from whom the additional verification shall be sought; nor which verification forms, from which source, may prompt the insurer to seek further verification. (See 11 NYCRR 65-3.5 [b]-[d].) These provisions thus provide no basis for Liberty Mutual’s apparent position, quoted above, that receipt of a medical-provider assignee’s NF-3 verification form will starts the 15-day regulatory clock running for the insurer only if it wishes then to seek the EUO of the provider—as opposed to the injured-claimant assignor.

Indeed, on Liberty Mutual’s interpretation, receipt of a medical provider’s NF-3 form would presumably never start the 15-day and 30-day regulatory clocks running for seeking an IME, because an IME could only be requested from the benefits applicant, as opposed to one of his treating providers. Nothing in the regulations requires (or even supports) such an anomalous result. More broadly, it is often the receipt of substantial treatment bills for a seemingly minor accident that will first prompt an insurer to request an EUO or IME from the applicant, so as to investigate and assess the possibility of a staged accident or medically unnecessary treatment. And in that scenario, exempting the insurer from the regulations’ tight 15-business-day and 30-calendar-day deadlines for requesting and scheduling EUOs and IMEs would undermine the regulatory goal of requiring the insurer to expeditiously investigate—and then expeditiously resolve—the claims for which it needs additional verification. (See 11 NYCRR 65-3.8 [a] [1], [c] [1] [requiring the insurer to pay or deny benefits claims within 30 calendar days from receipt of all requested verification].)

In any event, even if one were to regard receipt of the initial claim as the trigger for the insurer’s regulatory deadlines, Liberty Mutual does not attempt to establish—either in its opening papers or on reply—when it “recei[ved] the claim filed by the Individual Defendant” in this case. (NYSCEF No. 49 at ¶ 33.) At best, Liberty Mutual falls back on the conclusory statements in the Smith affidavit. (See id. at ¶ 30.) That will not do.^[FN2]

II. Defendants’ Cross-Motion to Compel Liberty Mutual to Accept Their Late Answer

Defendants cross-move under CPLR 3012 (d) to compel Liberty Mutual to accept their answer, which was served and filed approximately one month late. The cross-motion is granted.

In considering whether to grant a CPLR 3012 (d) motion or cross-motion, the court should take into account “the length of the delay, the excuse offered, the extent to which the delay was willful, the possibility of prejudice to adverse parties, and the potential merits of any defense.” (Emigrant Bank v Rosabianca, 156 AD3d 468, 472-473 [1st Dept 2017].) Here, the delay was only a matter of weeks. Plaintiff has not attempted to identify any prejudice from that delay. The excuse offered by defendants—essentially law-office failure stemming from a combination of an excessive caseload, service via the Secretary of State, and an ongoing firm reorganization and office move—although “not overwhelming,” is sufficient, particularly given the brief length of the delay. (Cirillo v Macy’s Inc, 61 AD3d 538, 540 [1st Dept 2009].) And for the reasons set forth in Point I, supra, this court concludes that defendants have established a potentially meritorious defense. Given the State’s “policy of resolving disputes on the merits,” defendants should be “granted an opportunity to defend plaintiffs’ claims” rather than having them be resolved on default. (Naber Elec. v Triton Structural Concrete, Inc., 160 AD3d 507, 598 [1st Dept 2018].)

Accordingly, it is hereby

ORDERED that Liberty Mutual’s motion under CPLR 3215 for a default judgment is denied; and it is further

ORDERED that the motion of defendants Dos Manos Chiropractic P.C. and Five Borough Supply Inc. under CPLR 3012 to compel Liberty Mutual to accept their late answer is granted; and it is further

ORDERED that Liberty Mutual has 30 days from service of a copy of this order with notice of its entry to bring a renewed default-judgment motion or the action will be dismissed as to the remaining defaulting defendants; and it is further

ORDERED that Dos Manos Chiropractic and Five Borough Supply shall serve notice of entry on all parties.

DATE 4/7/2021

Footnotes

Footnote 1: The affidavit also does not state that Liberty Mutual had made its request that Carranza appear for an EUO or IME (or both) prior to receiving any bills. (Cf. Mapfre Ins. Co. of New York v Manoo, 140 AD3d 468, 469 [1st Dept 2016] [holding that “notification requirements for verification requests under 11 NYCRR 65—3.5 and 65—3.6 do not apply to EUOs that are scheduled prior to the insurance company’s receipt of [an NF-3] claim form”].)

Footnote 2: Defendants also challenge Liberty Mutual’s basis for requesting that Carranza appear for an EUO. The no-fault regulations require a “specific objective justification” for requiring an EUO. (See 11 NYCRR 65-3.5 [e].) But the only justification that Liberty Mutual has provided for requesting Carranza’s EUO was that it was part of “an investigation . . . begun due to material misrepresentation-financial payments to policy.” (NYSCEF No. 35 at ¶ 3; NYSCEF No. 40 at ¶ 2.) This court is skeptical that this vague and cryptic statement meets Liberty Mutual’s burden under § 65-3.5 [e]. That said, the parties have not addressed whether an insurer seeking a no-coverage declaration based on an EUO no-show must affirmatively establish as an element of its claim the justification for the EUO request, such that an insurer’s failure to do so would warrant denial of a default-judgment motion. This court therefore declines on this motion to reach the merits of defendants’ challenge to Liberty Mutual’s justification for its EUO request.

Decided on March 26, 2021

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

[*1]

Gary Tsirelman, P.C., Brooklyn (Stefan Belinfanti of counsel), for appellant.

Law Office of Goldstein, Flecker & Hopkins, Melville (Lauren Hirschfeld of counsel), for respondent.

Order, Appellate Term, First Department, entered on or about April 13, 2020, which affirmed an order of the Civil Court, New York County (Judy H. Kim, J.), entered April 18, 2019, granting defendant’s motion to vacate, in effect, so much of a judgment, same court (Carol R. Sharpe, J.), entered May 25, 2018, as awarded plaintiff attorneys’ fees pursuant to Insurance Department Regulations (11 NYCRR) § 65-4.6 (c) (former 11 NYCRR 65-4.6 [d]), unanimously reversed, on the law, with costs, and the matter remanded for further proceedings and an amended judgment in accordance herewith.

The issue before us in this action to recover first-party No-Fault insurance benefits is whether the failure of an eligible injured person (EIP) to attend an independent medical examination (IME) is a “policy issue” for the purpose of the no-fault insurance law denial of claim (NYS NF-10) form, as prescribed by 11 NYCRR Appendix 13, and an award of hourly attorneys’ fees, as provided by 11 NYCRR 65-4.6 (c). We conclude that an EIP’s failure to attend an IME is a “policy issue” and therefore that plaintiff may be awarded attorneys’ fees pursuant to 11 NYCRR 65-4.6 (c). However, we remand the matter to Civil Court for further proceedings, as explained below.

“Eligible Injured Person” is defined in the Mandatory Personal Injury Protection Endorsement (MPIPE) that must be contained in every motor vehicle owner’s policy of liability insurance (11 NYCRR 65-1.1 [d]). The MPIPE also sets forth certain conditions of and exclusions from coverage. For example, under the subheading “Proof of Claim. Medical, Work Loss, and Other Necessary Expenses” (subpara d), the MPIPE says, “The [EIP] shall submit to medical examination by physicians selected by, or acceptable to, the Company, when, and as often as, the Company may reasonably require.”

The NYS NF-10 form lists eight “policy issue” reasons for denial of claim: “Policy not in force on date of accident” (box 3); “Injured person excluded under policy conditions or exclusion” (box 4); “Policy conditions violated” (box 5 [a] and [b]), referring to late notices of claim; “Injured person not an ‘Eligible Injured Person’ ” (box 6); “Injuries did not arise out of use or operation of a motor vehicle” (box 7); and “Claim not within the scope of your election under Optional Basic Economic Loss coverage” (box 8).

We find that “policy conditions or exclusion” under which the injured person is excluded from coverage in the “policy issue” reason in box 4 of the NYS NF-10 form refers to the conditions and exclusions of the MPIPE (11 NYCRR 65-1.1 [d]), which include, as noted above, that an EIP must submit to IMEs as required by the insurer. We therefore conclude that an IME no-show defense is a box 4 reason for denial. An EIP who does not attend an IME fails to satisfy a condition precedent to coverage under the policy, voiding the policy ab initio (PV Holding Corp. v Hank Ross Med., P.C., 188 AD3d 429, 430 [1st Dept 2020]). Thus, an insurer who denies a claim [*2]for first-party No-Fault benefits on the basis of the injured person’s failure to attend an IME properly does so by checking box 4 on the denial of claim form, and therefore an injured person’s failure to attend an IME is a “policy issue” both according to the denial of claim form and for purposes of awarding attorneys’ fees under 11 NYCRR 65-4.6 (c). We are unpersuaded by the reasoning of other courts that have reached the contrary conclusion. We also note that it is unclear to what the terms “policy conditions or exclusion” as used in box 4 of the denial of claim form refer, if not to the policy conditions and exclusions listed in the MPIPE.

Moreover, statutes and regulations must be interpreted in a manner that does not render them meaningless, unreasonable, or absurd (see McKinney’s Cons Laws of NY, Book 1, Statutes § 145; Long v State of New York, 7 NY3d 269, 273 [2006]). For this reason, we also reject the overly restrictive reading of 11 NYCRR 65-4.6 (c) urged by defendant, which would interpret “a policy issue as enumerated on the prescribed denial of claim form” (id.) as referring only to those specific justifications delineated on the form, and only as they are delineated on the form. That interpretation would both render some of the reasons on the denial of claim form meaningless and require the Department of Financial Services effectively to reproduce the MPIPE on the form to capture all the possible reasons for which a No-Fault benefits claim may be denied.

Although we conclude, for the foregoing reasons, that plaintiff may be awarded attorneys’ fees in this case under 11 NYCRR 65-4.6 (c), it is entirely unclear from the record whether the amount that was awarded was calculated correctly. There is no documentation supporting plaintiff’s claim for attorneys’ fees, the parties’ calculations as to the amount of attorneys’ fees owed and due differ irreconcilably, and it is uncertain whether the unpaid amount of the judgment was, in fact, unpaid attorneys’ fees in the first place. Accordingly, upon remittal, Civil Court should ascertain the amount of attorneys’ fees owed to plaintiff under 11 NYCRR 65-4.6 (c) and whether any amount either thereof or of the judgment as a whole remains outstanding, crediting defendant for the payments that it has already made. Concur—Renwick, J.P., Mazzarelli, Singh, González, JJ. [Prior Case History: 67 Misc 3d 129(A), 2020 NY Slip Op 50414(U).]

Goldberg, Miller & Rubin (Eli Shmulik of counsel), for appellant. Law Office of Gabriel & Moroff, LLC, for respondent (no brief filed).

Appeal from an order of the District Court of Suffolk County, Third District (C. Stephen Hackeling, J.), dated July 8, 2020. The order denied defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, without costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

Plaintiff commenced this action in the District Court of Suffolk County on July 11, 2018 to recover assigned first-party no-fault benefits for services that had been provided to its assignor, who was allegedly injured in a motor vehicle accident on November 17, 2017. The complaint stated that the claim number was C067157NY17. Defendant served an answer and, thereafter, commenced a declaratory judgment action in the Supreme Court, New York County, against the present provider, among others, and the provider’s assignor. By order and judgment entered on December 10, 2019, the Supreme Court granted, on default, a motion by the insurer herein for a default judgment against, among others, the present provider and its assignor, and ordered, adjudged and declared that the insurer has no duty to pay any no-fault benefits to the provider and its assignor arising out of “the November 17, 2017 collision referenced in the complaint (also known as claim number C067157NY17).” Relying upon the Supreme Court’s order and judgment, defendant moved in the District Court for summary judgment dismissing the complaint. Plaintiff opposed, and, by order dated July 8, 2020, the District Court denied defendant’s motion.

Contrary to the determination of the District Court, plaintiff’s action is barred under the doctrine of res judicata, as the declaratory order and judgment of the Supreme Court is a [*2]conclusive final determination, notwithstanding that it was entered on default, since res judicata applies to a judgment taken by default which has not been vacated (see Lazides v P & G Enters., 58 AD3d 607 [2009]; Matter of Allstate Ins. Co. v Williams, 29 AD3d 688 [2006]; Matter of Eagle Ins Co. v Facey, 272 AD2d 399 [2000]; EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). In light of the Supreme Court’s order and judgment, the District Court should have granted defendant’s motion, as any judgment in favor of plaintiff in the present action would destroy or impair rights or interests established by the order and judgment in the declaratory judgment action (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]).

Accordingly, the order is reversed and defendant’s motion for summary judgment dismissing the complaint is granted.

GARGUILO, J.P., EMERSON and VOUTSINAS, JJ., concur.

Hollander Legal Group, P.C. (Allan S. Hollander of counsel), for appellant. The Rybak Firm, PLLC (Oleg Rybak of counsel), for respondent (no brief filed).

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin Kelly Sheares, J.), entered August 9, 2019. The order, insofar as appealed from, denied defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is reversed, with $30 costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from so much of an order of the Civil Court as denied defendant’s motion which had sought summary judgment dismissing the complaint on the ground that plaintiff’s assignor failed to appear for duly scheduled examinations under oath (EUOs). The Civil Court limited the issues for trial, in effect pursuant to CPLR 3212 (g), to whether plaintiff’s assignor failed to appear for the duly scheduled EUOs. More specifically, the court found, among other things, that “[a]lthough defendant ha[d] established that it mailed EUO scheduling letters to The Rybak [Law] Firm, PLLC and plaintiff’s assignor at the address stated on the NF-2, there is an issue of fact as to the assignor’s non-appearance for examinations under oath as defendant has not established that [the assignor] was represented by counsel.”

To establish its prima facie entitlement to summary judgment dismissing a complaint on the ground that a plaintiff’s assignor failed to appear for an EUO, an insurer must demonstrate, as a matter of law, that it twice duly demanded an EUO from the assignor, that the assignor twice failed to appear, and that the insurer issued a timely denial of the claims (see Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2014]). Contrary to the determination of the Civil Court, the affirmations of defendant’s counsel, as well as the transcripts of the EUOs, were sufficient to establish that plaintiff’s assignor had failed to appear for the EUOs. It is irrelevant whether plaintiff’s assignor was represented by counsel, as defendant was only required to mail the EUO scheduling letters to plaintiff’s assignor (see 11 NYCRR 65-3.5 [e]; 3.6 [b]). Consequently, as plaintiff failed to raise a triable issue of fact in opposition to defendant’s motion or otherwise challenge the implicit CPLR 3212 (g) findings in defendant’s favor, defendant is entitled to summary judgment dismissing the complaint.

Accordingly, the order, insofar as appealed from, is reversed and defendant’s motion for summary judgment dismissing the complaint is granted.

ALIOTTA, P.J., ELLIOT and TOUSSAINT, JJ., concur.

CV- 704318-19/NY

John E. Fagan, Esq.
Restorative Chiropractic Solutions

Dianne M. Galluzzo, Esq. and Michael A. Soriano
State Farm Mutual Automobile Ins. Co.

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

Papers/Numbered

Notices of Motion and Affidavits Annexed 1

Answering Affidavits and Notice of Cross-Motion 2

Replying Affirmation and Opposition to Cross-Motion 3

Exhibits

Email Correspondence 4

Other

BACKGROUND

Plaintiff medical provider, Restorative Chiropractic Solutions, PC, brings this action against insurer defendant State Farm Mutual Automobile Ins. Co., to recover first-party no-fault benefits for medical services provided to its assignor, Lourdes Clyne (“plaintiff assignor”). Defendant makes the instant motion for summary judgment based on its denials of the claims. The bulk of the denials — three out of five of them — allege material misrepresentation in the procurement of the policy. Defendant asks that if this court does not grant summary judgment on a proper denial of material misrepresentation, that it determine its denials were at a minimum timely. Plaintiff [*2]opposes the motion and cross-moves for summary judgment.

Plaintiff assignor was involved in a motor vehicle accident on June 14, 2017, and sought medical treatment. This action seeks reimbursement for five claims corresponding to dates of service between August 1, 2017 to September 7, 2017, totaling $505.98. Defendant supplied the following chart that provides information relevant to its request for verification and denials:

Plaintiff assignor acquired the policy with a residential address in Florida. The subject motor vehicle accident occurred in New York. Defendant’s investigation of the claims prompted questions about plaintiff assignor’s residency and principal garaging location of the insured vehicle (Galluzo Aff., ¶¶ 18-19). Defendant mailed verification request letters to plaintiff seeking an examination under oath (“EUO”) of plaintiff assignor to ascertain if there was a material misrepresentation in procurement of the policy (Galluzo Aff., Exh. E).

The EUO was held on November 3, 2017 (Galluzo Aff., Exh. G). Plaintiff assignor testified that at the time of the subject accident she resided in Brooklyn, New York, and principally garaged the insured vehicle there as well (id.; Galluzo Aff., ¶¶ 20 — 22 ). In fact, plaintiff assignor stated that the subject vehicle never entered the state of Florida (Galluzo Aff., Exh. G, p 44). Defendant claims that had it known plaintiff assignor resided in New York and would principally garage the subject vehicle there, it would not have issued the policy (Galluzo Aff., ¶ 22). Defendant issued Denial of Claim Forms (“NF-10s”) on September 12, 2017, and November 27, 2017 (Galluzo Aff., Exh. D).

DISCUSSION

The movant on a motion for summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence to eliminate any material issues of fact from the case (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). CPLR 3212(b) provides that a summary judgment motion must be supported by an affidavit of a person with knowledge of the facts, as well as other admissible evidence (see JMD Holding Corp. v Congress Fin. Corp., 4 NY3d 373, 384-85 [2005]). Once such a showing is made, “the burden shifts to the party [*3]opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action” (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986], citing Zuckerman v City of New York, 49 NY2d at 562).

The no-fault insurance scheme is designed to provide a quick resolution of the reimbursement of claims, avoid litigation, and incentivize an insurer to seek verification of a claim, deny it, or pay it in short order (see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 506-07 [2015]; Matter of Med. Socy. of State v Serio, 100 NY2d 854, 860 [2003]). The procedure to verify, deny, or pay claims is codified and governed by Insurance Law § 5106(a).

A claimant has 45 days after medical services are rendered to submit claims (see 11 NYCRR 65-1.1). An insurer may request verification of the claim(s) which shall be requested within 15 business days of receipt of the prescribed verification forms (see 11 NYCRR 65-3.5 [b]). If the requested verification has not been received within 30 days of the request, the insurer shall make a second request within 10 calendar days and, at the same time, “inform the applicant and such person’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” (11 NYCRR 65-3.6 [b]). An insurer shall either pay or deny the claim in whole or in part within 30 calendar days after proof of the claim(s), including the requested verification, is received (see 11 NYCRR 65-3.8[c]).

Timeliness of Defendant’s Denials

Even though plaintiff did not submit any evidence, this court searches the record presented and determines that plaintiff’s initial burden is met. There is no dispute that plaintiff timely submitted its claims to defendant. Defendant asks this court to find that it timely denied plaintiff’s claims as a matter of law. The claims for dates of service August 1st through August 10th, were timely denied after partial payment was made. As to claims for dates of service from August 11th through September 11th, defendant mailed verification requests and conducted an EUO before denying the claims for a material misrepresentation in the procurement of the policy. Plaintiff in its cross motion asks that this court determine that all the claims are overdue and unpaid, and thus, it is deserving of summary judgment.

Defendant submits the affidavits of Cathy Shandera, Lisa Edwards, Matthew Allen, and Paul Kosowski to demonstrate that it timely mailed delay letters, explanations of review, and NF-10s to plaintiff on the dates reflected in the chart above. Defendant claims that the affidavits are sufficient to establish the standard office practices and procedures of mailing these forms. Defendant argued that the contents of its delay letters clearly advised that it was investigating the loss and would request an EUO of plaintiff assignor, which consequently tolled the insurer’s obligation to deny or pay the claims (Soriano Aff. in Reply and Opp, ¶17).

In its opposition to defendant’s motion for summary judgment, plaintiff argues that defendant’s delay letters failed to toll the time to pay or deny plaintiff’s claims (Fagan Aff in Opp, ¶¶ 4, 18). Plaintiff claims the contents of the delay letters do not specifically inform it about what verification is needed other than stating an EUO is required (Fagan Aff in Opp, ¶ 18). Plaintiff also claims that defendant failed to provide copies of the EUO requests to plaintiff (Fagan Aff. in Opp, ¶19). As a result, it argues defendant’s NF-10s were untimely and defendant is precluded from the defense of material misrepresentation in the procurement of an insurance [*4]policy (Fagan Aff. in Opp, ¶¶ 17, 22).

Defendant’s affidavits and supporting exhibits establish the dates that the subject claims were received. Also, the delay letters to plaintiff were sufficient to toll the 30-day period (Galluzo Aff., Exh. E). Defendant’s additional verification letters were mailed within 15 days after it received plaintiff’s claims (see 11 NYCRR 65-3.5 [a],[b]; Hertz Vehicles, LLC v Best Touch PT, P.C., 162 AD3d 617, 618 [1st Dept 2018]). The delay letter was specific enough to communicate to plaintiff that an EUO was required. No further specificity is necessary. If plaintiff required any additional explanation of the delay letter, it is plaintiff’s responsibility to communicate about it (see Canarsie Chiropractic, P.C. v State Farm Mut. Auto. Ins. Co., 27 Misc 3d 1228(A) [Civ Ct, Kings Cty 2010]; Dilon Med. Supply Corp. v Travelers Ins. Co., 7 Misc 3d 927, 929 [Civ Ct, Kings Cty 2005]).

As to the claim that defendant failed to provide copies of the EUO request to plaintiff, this claim is controverted by the affidavit of Richard C. Aitken who submitted that his law office mailed plaintiff and the assignor an EUO scheduling letter (Galluzo Aff., p 14 [Aitken affidavit], and Exh. F). After the EUO took place on November 3, 2017, defendant denied those claims for material misrepresentation in procurement of the policy.

Defendant’s summary judgment motion established that plaintiff timely mailed the claims and that the claims were denied in a timely manner. As a result, plaintiff cannot establish that the claims are overdue.

Material Misrepresentation

As to the later three claims that were denied on the basis of material misrepresentation in the procurement of the policy, defendant refers the court to the affidavit of its underwriter, Dawn Thompson (Galluzo Aff., ¶¶4, 22; Soriano Aff. in Reply and Opp, ¶¶17, 38). Plaintiff correctly points out that no such affidavit was annexed to defendant’s submissions.

The insurer may raise the defense of fraudulent procurement of an insurance policy against health service providers seeking to recover assigned no-fault benefits, but this defense must be supported with sufficient proof that the misrepresentation was material (see Quality Medical Care, PC v Progressive Casualty Ins. Co., 56 Misc 3d 1214[A] [Civ Ct, Bronx Cty 2017]). A misrepresentation is material only if the insurer can demonstrate that it would not have issued the insurance policy if the correct information was known (see Interboro Ins. Co. v Fatmir, 89 AD3d 993 [2d Dept 2011]; Novick v Middlesex Mut. Assur. Co., 84 AD3d 1330 [2d Dept 2011]; Varshavskaya v Metropolitan Life Ins. Co., 68 AD3d 855 [2d Dept 2009]). Materiality of a misrepresentation is ordinarily a question for trial (see Kiss Const. NY, Inc. v Rutgers Cas. Ins. Co., 61 AD3d 412, 413-14 [1st Dept 2009]). A court may determine the issue of materiality when evidence is presented that is clear and substantially uncontradicted (see id. citing Process Plants Corp. v Beneficial Natl. Life Ins. Co., 53 AD2d 214 [1st Dept 1976], affd 42 NY2d 928 [1977]).

After reviewing defendant’s 286-page motion, and 14-page reply and opposition to the cross motion, this court emailed the parties on February 22, 2021, for help locating the underwriter’s affidavit. Defendant’s counsel responded by email that the underwriter’s affidavit was not annexed to its papers and any references to the affidavit were “a typographical error.” Without this evidence, defendant cannot establish materiality as a matter of law and therefore, its motion for summary judgment fails.

Accordingly, it is hereby

ORDERED, defendant’s motion for summary judgment and plaintiff’s cross motion for same are granted to the extent that the issues preserved for trial are the bases for the timely denials. Plaintiff’s bills were timely submitted, as were defendant’s denials. An issue of fact exists as to whether plaintiff assignor’s misrepresentation about her residence and garaging of the vehicle was material in the procurement of the insurance policy.

This constitutes the decision and order of the court.

Dated: New York, New York
March 12, 2021
______________________
Ilana J. Marcus
Civil Court Judge

Decided on March 5, 2021

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS