Civil Court, Kings County

49724/04

Genine D. Edwards, J.

This is a trial of an action for first-party benefits, attorney’s fees and statutory interest commenced by PDG Psychological P.C. (“plaintiff”) as assignee of Sergey Potapov (“assignor”) against State Farm Insurance Company (“defendant”), pursuant to New York Insurance Law and the No-Fault Regulations. Plaintiff billed defendant a total of $2,758.76 for psychological treatment rendered to its assignor from October 2002 to February 2003. Defendant denied the claims due to a violation of the fraud provisions in its policy. The jury rendered a verdict in favor of the defendant. This Court reserved its decision regarding the parties’ directed verdict motions.

No-Fault reform was enacted to ensure speedy recovery of payment to providers of healthcare services rendered to those injured in automobile accidents. Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274 (1997). To this end, the No-Fault Regulations allow certain providers to receive direct payment from insurance companies. 11 NYCRR §65-3.11. Providers must submit forms that include the fact and amount of the loss within 45 days of the services rendered. 11 NYCRR §65-1.1; St. Vincent’s Hospital & Medical Center v. County Wide Insurance Company, 24 AD3d 748 (2nd Dept. 2005). Thereafter, insurers must make payment or deny the claim within thirty days. 11 NYCRR §65.15(g). However, where the insurer denies the claim due to a coverage issue the thirty-day period is not applicable. Central General Hospital v. Chubb Group of Insurance Companies, 90 NY2d 195 (1997).

FACTS

Plaintiff did not offer any witnesses to prove its prima facie case of entitlement to benefits. Instead, plaintiff first argued that pursuant to a prior decision on a summary judgment motion its prima facie case was established. However, a perusal of that decision reveals that Judge George Silver simply denied summary judgment. Judge Silver did not indicate that plaintiff’s prima facie case was made.

Secondly, plaintiff argued that this Court should take judicial notice of the exhibits that were attached to the summary judgment motion and are now a part of the Court file. This Court denied that application. Exhibits attached to motions are not automatically admitted into evidence via the judicial notice doctrine. At trial, a foundation for the admissibility of each [*2]exhibit must be laid. McArthur v. Wal-Mart Stores, Inc., 274 AD2d 378 (2nd Dept. 2000) (no proper foundation was laid for the admission of the exhibit); Funk v. Kaiser-Frazer Sales Corporation, 15 AD2d 548 (2nd Dept. 1961); Petchesky v. Brooklyn Terminal Market Ass’n., 266 A.D. 680 (2nd Dept. 1943); Hogan v. National Sellers, Inc., 256 A.D. 951 (2nd Dept. 1939); Kavanagh v. Passeggio, 222 A.D. 679 (2nd Dept. 1927); A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc. v. State Farm Mutual Automobile Insurance Company, 7 Misc 3d 822 (NY Civ. Ct. Kings County 2005); Universal Open MRI of the Bronx, P.C. v. State Farm Mut. Auto Ins., 12 Misc 3d 1151(A) (NY Civ. Ct. Kings County 2006).

Plaintiff’s third attempt at having the exhibits admitted into evidence was deemed successful. Plaintiff argued that pursuant to its Notice to Admit and defendant’s Statement in Reply to Request for Admissions, the exhibits were admitted by the defendant. Defendant’s Statement in Reply to Request for Admissions was not sworn, was made by an attorney and not the plaintiff, was not verified by the plaintiff and no rationale was articulated as to why the defendant could not admit or deny the requests. Defendant’s Reply to Request for Admissions amounted to a failure to respond. Therefore, according to ELRAC, Inc. v. McDonald, 186 Misc 2d 830 (NY Sup. Ct. Nassau County 2001), the exhibits were deemed admitted by the defendant. Thus, the subject bills, denial of claim form, assignment of benefit form and delay letters were admitted into evidence.

The plaintiff rested. The defendant made a motion for a directed verdict due to plaintiff’s failure to prove a prima facie case. This Court reserved its decision. The burden of production of evidence of an intentional collision shifted to the defendant. Mount Sinai Hospital v. Triboro Coach, Incoporated, 263 AD2d 11 (2nd Dept. 1999).

In support of its case, defendant proffered the testimony of Laura Cevallos, a Special Investigation Unit Investigator for State Farm Insurance Company. Ms. Cevallos explained her educational background and investigative training, including her training with the National Insurance Crime Bureau. Ms. Cevallos testified that the assignor’s policy initiated on August 18, 2002 and the accident occurred two months later. This automatically raised a red flag in Ms. Cevallos’ mind. There were multiple passengers in the vehicle and the assignor had many prior accidents. The subject accident was reported by an attorney and not by the assignor. According to Ms. Cevallos, these factors were all suspect. Ms. Cevallos testified that she reviewed the file maintained by the Special Investigation Unit; the transcripts of the examinations under oath of the passengers and the assignor; she took a statement from the driver of the other car; and attempted to obtain additional testimony from the assignor, but he did not cooperate.

Upon a claim committee review of the assignor’s file it was decided that the claims should be denied. Ms. Cevallos was part of the claim committee and prepared the proposal for denial of the claims because the accident was intentional as evidenced by several discrepancies between the transcripts of the examinations under oath of the passengers and the assignor, including where they were going; when they all met; the time of the accident; where the car was at the time of impact; any stops along the way; the names of the passengers. These discrepancies coupled with the other driver’s statement supported a denial of the assignor’s claims. The defendant attempted to have the transcripts of the examinations under oath admitted into evidence, but failed to lay the proper foundation. A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra. [*3]

Ms. Cevallos was not present during the examinations under oath nor did she formulate any of the queries, but she requested that the examinations be conducted in order to compare the testimony with the other driver’s statement. She did not obtain any recorded statements from the passengers that were in the assignor’s car.

On cross-examination, Ms. Cevallos testified that there were also questions regarding damage to the assignor’s car. But she failed to bring any photographs of the assignor’s car and she did not bring her entire file. Ms. Cevallos testified that the other driver who rear-ended the assignor’s car indicated that there was no damage to the cars and “no contact between the cars”. According to Ms. Cevallos, the other driver indicated that the assignor stopped short. Ms. Cevallos admitted that the other driver also indicated that they were traveling at forty miles per hour, the assignor stopped short, but the other driver was able to stop and did not make contact with the assignor’s car. Ms. Cevallos also admitted that no one from State Farm Insurance Company examined the brakes on the assignor’s vehicle.

On re-direct examination, Ms. Cevallos testified that an individual discrepancy in the testimony was not determinative, but all of them taken together, coupled with the other driver’s statement, could not be explained away. In addition, the other driver did not file a claim with State Farm Insurance Company.

At the close of Ms. Cevallos’ testimony the defendant rested. Plaintiff did not provide any rebuttal evidence. Plaintiff made a motion for a directed verdict. This Court reserved its decision on that motion. After deliberation, the jury rendered a verdict in favor of the defendant.

ANALYSIS

Can responses to a Notice to Admit establish Plaintiff’s prima facie case at trial?

A Notice to Admit is a discovery tool used to expedite trial by eliminating proof of undisputed matters. Rosenfeld v. Vorsanger, 5 AD3d 462 (2nd Dept. 2004); Risucci v. Homayoon, 122 AD2d 260 ( 2nd Dept. 1986); ELRAC, Inc., supra. It is not intended to eradicate ultimate facts or fundamental or material issues that can only be resolved by a full trial. Sagiv v. Gamache, 26 AD3d 368 (2nd Dept. 2006); The Hawthorne Group, LLC v. RRE Ventures, 7 AD3d 320 (1st Dept. 2004); Vasquez v. Vengroff, 295 AD2d 421 (2nd Dept. 2002); Singh v. G & A Mounting & Die Cutting, Inc., 292 AD2d 516 (2nd Dept. 2002); Glasser v. City of New York, 265 AD2d 526 (2nd Dept. 1999); DeSilva v. Rosenberg, 236 AD2d 508 (2nd Dept. 1997); Rubino v. City of New York, 209 AD2d 681 (2nd Dept. 1994); Orellana v. City of New York, 203 AD2d 542 (2nd Dept. 1994).

In the case at bar, the plaintiff served a Notice to Admit with attachments that included, inter alia, its subject medical bills, a denial of claim form and an assignment of benefits form. At trial, due to the defendant’s failure to respond to the Notice to Admit, this Court deemed the documents admitted, and they were marked into evidence. However, upon further reflection and review of the relevant caselaw, it is clear that the plaintiff’s Notice to Admit and the documents attached thereto go to the heart of this matter, that is, plaintiff’s prima facie entitlement to no-fault benefits. Hence, according to the relevant caselaw, a Notice to Admit cannot be used to prove plaintiff’s case, which is material in this no-fault action. Indeed, while it may be argued that the defendant should have been able to verify the contents of its own denial of claim form, it is pellucidly clear that the defendant cannot verify the contents of the assignment of benefits form nor the subject bills. The contents of these documents are material to the instant case and [*4]cannot be admitted via a Notice to Admit. Sagiv, supra.

Considering the foregoing, plaintiff failed to prove its prima facie case. Plaintiff did not provide any evidence of the fact and amount of the loss; that the claim was untimely denied or that payment was not made; that its assignor assigned his right to payment of no-fault benefits to plaintiff and that the bills were submitted to the defendant. Amaze Medical Supply Inc. v. Eagle Insurance Company, 2 Misc 3d 128(A) (App. Term 2nd & 11th Jud. Dists. 2003); Mary Immaculate Hospital v. Allstate Insurance Comapany, 5 AD3d 742 (2nd Dept. 2004); New York Craniofacial Care, P.C. v. Allstate Insurance Company, 11 Misc 3d 1071(A) (NY Civ. Ct. Kings County 2006); Inwood Hill Medical P.C. v. Allstate Insurance Company, 3 Misc 3d 1110(A) (NY Civ. Ct. New York County 2004); Ultimate Medical Supplies v. Lancer Insurance Company, 7 Misc 3d 1002(A) (NY Civ. Ct. Kings County 2004).

Although this Court need not consider the remaining issues it is compelled to briefly discuss the issues that plague trials involving staged accidents.

At a trial involving a claim for no fault benefits, who has the burden of proving that insurance coverage exists?

It is clear that there is a dearth of reported trial cases that discuss this hotly contested issue, and there are no appellate decisions. The plaintiff herein argued that since the defendant alleged “staged accident” as an affirmative defense then the defendant must prove that the staged accident precludes coverage. This Court is not persuaded by that argument.

The plaintiff, as the proponent of a claim for no-fault benefits, always maintains the burden of persuasion. A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra; Universal Open MRI of the Bronx, P.C., supra; V.S. Medical Services, P.C. v. Allstate Insurance Company, 11 Misc 3d 334 (NY Civ. Ct. Kings County 2006). See also, Vasile v. Hartford Accident & Indemnity Company, 213 AD2d 541 (2nd Dept. 1995); Gongolewski v. Travelers Insurance Company, 252 AD2d 569 (2nd Dept. 1998). The plaintiff meets that burden by proving that it submitted the fact and amount of the loss to the defendant as well as nonpayment by the defendant or untimely denial by the defendant. SZ Medical, P.C., JH Chiropractic P.C., New Wave Oriental Acupuncture P.C. v. Country-Wide Insurance Company, 12 Misc 3d 52 (App. Term 2nd & 11th Jud. Dists. 2006); Contemp. Med. Diag. & Treatment, P.C. v. Government Employees Insurance Company, 6 Misc 3d 137(A) (App. Term 2nd & 11th Jud. Dists. 2005); Careplus Medical Supply Inc. v. Allstate Insurance Company, 9 Misc 3d 128(A) (App. Term 2nd & 11th Jud. Dists.2005); A.B. Medical Services PLLC, D.A.V. Chiropractic P.C., LVOV Acupuncture P.C. v. Commercial Mutual Insurance Co., 12 Misc 3d 8 (App. Term 2nd & 11th Jud. Dists. 2006). With this proof comes a presumption of coverage. V.S. Medical Services, P.C., supra; Universal Open MRI of the Bronx, P.C., supra; A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra; Amaze Medical Supply Inc. supra.

Thereafter, the burden of production, that is, providing an explanation for why there is no coverage, shifts to the defendant. Central General Hospital, supra; Mount Sinai Hospital, supra; A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra; V.S. Medical Services, P.C., supra; Universal Open MRI of the Bronx, P.C., supra. This burden, in effect, allows the [*5]defendant to disprove the presumption of coverage, thus demonstrating its denial of plaintiff’s complaints. Palmier v. United States Fidelity and Guaranty Company, 135 AD2d 1057 (3rd Dept. 1987). Of course, there is no set standard by which the defendant will achieve its burden; the evidence must be judged on a case by case basis. The assertion “no insurance coverage” in defendant’s verified answer amounts to a denial of plaintiff’s allegations. Beece v. Guardian Life Insurance Company of America, 110 AD2d 865 (2nd Dept. 1985). The defendant is not proving an affirmative defense, wherein it has the burden of proof. Prime Medical P.C. v. Travelers Indemnity Co., 2 Misc 3d 1009(A) (NY Civ. Ct. Kings County 2004) (insurer has the burden of proving lack of medical necessity); Stand-Up MRI of the Bronx v. General Assurance Insurance, 10 Misc 3d 551 (NY Dist. Ct. Suffolk County 2005).

Here, plaintiff maintains the burden of persuasion, even if the defendant designated its denial as an affirmative defense. Sinacore v. State of New York, 176 Misc 2d 1 (NY Ct. Cl. 1998). If the defendant sustains its burden of production of a fact or founded belief that the accident was staged, then the plaintiff should submit rebuttal evidence proving that coverage existed or risk losing its claim. A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra; Universal Open MRI of the Bronx, P.C, supra.

At trial, what is the standard of proof for proving insurance coverage?

This Court concurs with the recent decisions by Judges Jack Battaglia (A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc. v. State Farm Mutual Automobile Insurance Company ), Arlene Bluth (V.S. Medical Services, P.C. v. Allstate Insurance Company), and Richard Velasquez (Universal Open MRI of the Bronx, P.C. v. State Farm Automobile Insurance Company). These cases have clearly and succinctly indicated that the ultimate question in the staged accident arena is: whether the incident was intentional or not? Thus, the standard of proof as to that issue is preponderance of the evidence. Id. It is plaintiff’s burden to prove by a preponderance of the evidence that coverage existed for the accident. The defendant has the opportunity to explain why there is no coverage. When all of the evidence has been submitted the finder of fact must determine whether the evidence preponderates in favor of the plaintiff or the defendant. V.S. Medical Services, P.C., supra.

Based upon the foregoing, the evidence offered by the defendant did not meet its burden of producing evidence of a fact or founded belief that the collision was intentional. The defendant failed to proffer admissible evidence to rebut the presumption of coverage. The fact that the accident occurred soon after the purchase of the policy and the testimony by Ms. Cevallos indicating that the assignor had a record of prior accidents, taken together or alone does not sustain defendant’s burden. More importantly, the defendant did not provide any admissible evidence regarding the specific discrepancies in the testimonies of the passengers and the assignor or the other driver’s statement. Indeed, the defendant never offered the other driver’s testimony at this trial.

Based upon the evidence provided at trial, the defendant’s motion for a directed verdict is granted based upon plaintiff’s failure to prove its prima facie case.

This constitutes the decision and order of this Court.

Dated: July 14, 2006______________________

Genine D. Edwards, J.C.C.

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court, Bronx County (Julia I. Rodriguez, J.), dated October 11, 2005, which granted plaintiff’s motion for summary judgment.

PER CURIAM:

Order (Julia I. Rodriguez, J.) dated October 31, 2005, affirmed, with $10 costs.

Plaintiff, a health care provider seeking to recover no-fault benefits for services rendered to its assignor, established a prima facie entitlement to summary judgment by proof that it submitted its claim form setting forth the fact and the amount of the loss and that payment of benefits was overdue (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). In opposition, defendant failed to raise a triable issue of fact since its submissions did not establish that the insurance policy in effect contained an endorsement authorizing examinations under oath (EUO) pursuant to 11 NYCRR 65-1.1(d). While plaintiff’s claim was submitted after the effective date of the revised insurance regulations which include EUOs in the Mandatory Personal Injury Protection Endorsement, the provisions of the revised regulations are inapplicable until the issuance of new or renewal policies containing the revised endorsement (see SZ Med. Servs. P.C. v State Farm Mut. Auto. Ins. Co., 9 Misc 3d 139[A][2005]). Nor may defendant base its right to an EUO on the provisions of the policy requiring the claimant’s “cooperation” because the no-fault protection created by statute may not be qualified by the conditions of the liability portion of the insurance policy (see Utica Mut. Ins. Co. v Timms, 293 AD2d 669, 670 [2002], lv dismissed 98 NY2d 727 [2002]).

This constitutes the decision and order of the court.
Decision Date: July 14, 2006

Civil Court, Kings County

047034/2004

Genine D. Edwards, J.

This is a bench trial of an action for first-party benefits, attorney’s fees and statutory interest commenced by Elite Medical Care, P.C. (“plaintiff”) as assignee of Dan Teper (“assignor”) against Travelers Property and Casualty Insurance Company (“defendant”) pursuant to the New York Insurance Law and the No-Fault regulations. Plaintiff billed defendant a total of $5,155.47 for medical treatment rendered to its assignor. The treatment was provided from January 2002 through July 2002.

At the outset, defendant made a motion to dismiss plaintiff’s complaint because the NF-3 forms (proof of claim) were defective. Defendant contended that there was an issue regarding the relationship of a health service provider and the plaintiff. Defense counsel stated that according to New York State information, Ahmed Salem (a named health care provider on several of the NF-3 forms) is the owner of plaintiff, but Mr. Salem allegedly admitted under oath that he is not the owner. Defendant also argued that the NF-3 forms were not pleadings and could not be amended as of right. Plaintiff responded by indicating that the subject treatment was performed in 2002 predating the 2004 NF-3 form. This Court reserved its decision on defendant’s motion.

The applicable insurance regulations regarding direct payment of no-fault benefits establishes that “an insurer shall pay benefits upon assignment directly to providers of health care services ” 11 NYCRR 65-3.11(a). Pursuant to this regulation defendant asserted that the plaintiff is not a “provider”. In support of this contention defendant alleged that the NF-3 forms submitted by plaintiff did not identify the relationship between the plaintiff and the treating physicians.

Defendant also argued that there is contradictory evidence regarding Mr. Salem’s relationship with the plaintiff.

Defendant is correct. No-fault benefits must be paid directly to providers of services. A.B. Medical Services PLLC v. Liberty Mutual Insurance Company, 9 Misc 3d 36 (2nd Dept. 2005); Rockaway Boulevard Medical P.C. v. Progressive Insurance, 9 Misc 3d 52 (2nd Dept. 2005); A.B. Medical Services PLLC, DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C., G.A. Physical Therapy P.C. v. Countrywide Insurance Company, 10 Misc 3d 249 (NY Civ. Ct Kings County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1061(A) (NY Civ. Ct Queens County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1069(A) (NY Civ Ct Queens County 2005). [*2]

If it is demonstrated that the billing entity or its employees are not the actual health care providers then they are not entitled to payment of no-fault benefits directly from the insurance company. A.B. Medical Services PLLC, DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C., G.A. Physical Therapy P.C., supra; Rockaway Boulevard Medical P.C., supra; Health and Endurance Medical P.C. v. State Farm Mutual Automobile Ins., 2006 NY Slip Op. 51191(U) (App. Term 2nd & 11th Jud. Dists. 2006); Boai Zhong Yi Acupuncture Services v. Allstate Insurance Co., 2006 NY Slip Op. 51288(U) (App. Term 2nd & 11th Jud. Dists. 2006). Moreover, this defense cannot be waived and is not subject to preclusion for failure to timely deny. Rockaway Boulevard Medical P.C., supra; M.G.M. Psychiatry Care P.C. v. Utica Mutual Insurance Company, 2006 NY Slip Op. 51286(U) (App. Term 2nd & 11th Jud. Dists. 2006).

However, as in Multiquest PLLC, 10 Misc 3d 1061(A), supra, the defendant herein failed to provide any competent evidence that Mr. Salem was an independent contractor and not plaintiff’s employee. In addition, the defendant predicated its motion to dismiss upon the insufficiency of the NF-3 forms, without proving that it requested verification of the information provided therein. Rockaway Boulevard Medical P.C., supra. Hence, defendant’s motion must fail.

Turning to the trial, the plaintiff proffered the testimony of Viktoria Beylana, an employee of Maugust, Inc. Plaintiff hired Maugust Inc. to handle its billing and collection matters. Ms. Beylana testified that she received all of the medical paperwork from the plaintiff then prepared and mailed the bills. She also handled plaintiff’s incoming mail, denials and verification requests. Ms. Beylana responded to denials by submitting further information to the insurance company. Ms. Beylana identified nine bills and two letters to the defendant, which were marked into evidence. She had no knowledge as to the employment relationship of the health care providers and the plaintiff. Plaintiff’s counsel never questioned Ms. Beylana about an assignment of benefits form nor did Ms. Beylana identify same. Absolutely no evidence was presented regarding assignment of benefits. Upon the plaintiff resting, the defendant made a motion for a directed verdict due to plaintiff’s failure to prove a prima facie case.

The insurance regulations prescribe when a health care provider may receive direct payment from an insurer. 11 NYCRR 65-3.11(b). Specifically, the provider must have a properly executed assignment. 11 NYCRR 65-3.11(b)(2)(i). It is axiomatic that such assignment must be proved before the provider is entitled to receive “assigned” no-fault benefits. A.B. Medical Services PLLC Daniel Kim’s Acupuncture P.C. D.A.V. Chiropractic P.C. v. State Farm Mutual Automobile Insurance Company, 4 Misc 3d 141(A) (App. Term 9th&10th Jud. Dists. 2004); Siegel, M.D. v. Progressive Casualty Ins. Co., 6 Misc 3d 888 (NY Civ. Ct Kings County 2004); Vista Surgical Supplies, Inc. v. Utica Mutual Insurance Co., 7 Misc 3d 833 (NY Civ. Ct Kings County 2005); Inwood Hill Medical P.C. v. Allstate Insurance Company, 3 Misc 3d 1110(A) (NY Civ. Ct Kings County 2004); Multiquest, PLLC, 10 Misc 3d 1069(A), supra. In the instant case, the plaintiff did not introduce evidence of a “properly executed assignment”. Thus, plaintiff failed to prove a prima facie case of entitlement to no-fault benefits.

This Court is aware of the many summary judgment decisions that have found that the defendant waives its right to raise the deficiencies in the assignment of benefits forms when the denial was untimely and/or did not allege such defects. Nyack Hospital v. Metropolitan Property & Casualty Insurance Company, 16 AD3d 564 (2nd Dept. 2005); Nyack Hospital v. Encompass Insurance Company, 23 AD3d 535 (2nd Dept. 2005); Chiropractic Neurodiagnostics, P.C. v. Travelers Indemnity Co., 11 Misc 3d 644 (NY Civ. Ct New York County 2006); SZ Medical P.C. v. Country -Wide Insurance Company, 2006 NY Slip Op. 26194 (App. Term 2nd & 11th Jud. Dists. 2006); Delta [*3]Diagnostic Radiology, P.C. v. Progressive Casualty Insurance Co., 11 Misc 3d 136(A) (App. Term 2nd & 11th Jud. Dists. 2006); Hospital for Joint Diseases v. Allstate Insurance Company, 21 AD3d 348 (2nd Dept. 2005); Multiquest PLLC, 10 Misc 3d 1061(A), supra. However, those decisions discuss deficiencies in the forms. This Court is faced with rendering a decision in a bench trial of a no-fault action where there is lack of proof of an assignment. To be certain, a broad interpretation of a “technical defect” in the claim forms as discussed in Chiropractic Neurodiagnostics, P.C., supra, does not include the scenario where, at trial, there is no proof of an assignment at all.

Certainly, this Court is not being called upon to assume or speculate that an assignment existed in this matter. Accordingly it is,

ORDERED that, judgment should be entered in favor of defendant and the complaint is dismissed.

This constitutes the decision and order of the Court.

Dated: July 13, 2006 __________________________________

Genine D. Edwards, J.C.C.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Dolores L. Waltrous, J.), entered June 1, 2005. The order denied plaintiff’s motion for summary judgment.

Order reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees. [*2]

Plaintiff commenced this action to recover first-party no-fault benefits for medical services rendered to its assignor. Thereafter, plaintiff moved for summary judgment, which motion defendant opposed. The court below denied said motion by order entered June 1, 2005 and this appeal ensued.

At the outset we find that the letters defendant asserts are verification requests for plaintiff’s $494.37, $359.35 and $815.36 claims are insufficient to act as such and, therefore, did not toll the statutory time period in which defendant had to pay or deny these claims (see e.g. Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]). Consequently, defendant’s denials as to these claims were untimely and it is precluded from raising the defenses proffered herein (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). It is noted that defendant paid $565.70 on plaintiff’s $815.36 claim.

There is no merit to plaintiff’s contention that the defense of lack of medical necessity is precluded as to its $1,972.08 and $1,573.24 claims because defendant failed to provide it with a copy of the peer review report. We note that defendant failed to establish that it sent a copy of the peer review report within the 30-day claim denial period. Although the regulations set forth that plaintiff may request a copy of the peer review report (see 11 NYCRR 65-3.8 [b] [4], formerly 11 NYCRR 65.15 [g] [2] [iv]), they provide no sanctions for an insurer’s failure to do so. Nevertheless, the lack of medical necessity defense is precluded on another ground. To preserve the defense of lack of medical necessity, defendant’s denial of claim forms must assert, with the requisite specificity, the necessary facts and medical rationale to establish such defense (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]), thereby satisfying the NF-10 form’s requirement that the basis of any denial be “fully and explicitly” set forth (see A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 7 Misc 3d 132[A], 2005 NY Slip Op 50605[U] [App Term, 2d & 11th Jud Dists]; Park Neurological Servs. P.C. v Geico Ins., 4 Misc 3d 95, 96 [App Term, 9th and 10th Jud Dists 2004]). Herein, the denials were factually insufficient and thus, while timely, did not avoid preclusion (see A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50, 53 [App Term, 2d & 11th Jud Dists 2005]). Moreover, the affirmed peer review report defendant submitted in opposition to plaintiff’s motion for summary judgment (the contents of which, contrary to plaintiff’s contention, established a triable issue as to the medical necessity of the services rendered) does not remedy the factual insufficiencies of the denials (see A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 11th Jud Dists]).

In view of the foregoing, plaintiff’s motion for summary judgment is granted, and the matter is remanded to the court below for the calculation of statutory interest and an [*3]
assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

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

Golia, J., concurs in a separate memorandum.

Golia, J., concurs with the result only, in the following memorandum:

I am constrained to agree with the ultimate disposition in the decision reached by the majority. I, however, wish to note that I do not agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

In this regard, I note my dissent in A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co. (10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 1th Jud Dists]), and in further support of my argument, I cite 11 NYCRR 65-3.8 (b) (4) which states: [*4]

“If the specific reason for a denial of a no-fault claim…is a…peer review report…the insurer shall release a copy of that report…upon the written request of any of these parties.” (emphasis added)

To hold as the majority does, in my opinion, would usurp the role of the Legislature. It would require defendant to produce the peer review report within 30 days despite the fact that the regulations do not require that the report be produced at all, unless requested in writing by the plaintiff, a burden the rules did not impose upon the defendant.
Decision Date: July 12, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Eileen Nadelson, J.), entered March 18, 2005. The order denied plaintiff’s motion for summary judgment.

Order affirmed without costs.

In this action to recover first-party no-fault benefits for medical supplies furnished to its assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud
Dists 2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]).

Defendant timely denied the claims on the ground of lack of medical necessity based upon a peer review report. The peer reviewer set forth a “factual basis and medical rationale” (Park Neurological Servs. P.C. v GEICO Ins., 4 Misc 3d 95, 97 [App Term, 9th & 10th Jud Dists 2004]) for his conclusion that there was no medical necessity for the supplies furnished based on the documentation provided to him. This was sufficient to raise a triable issue of the supplies’ medical necessity. We note that contrary to plaintiff’s contention, under the facts presented the [*2]reviewer’s mere reference to unavailable reports and notes does not require the inference that the reviewer considered the information in his possession insufficient to permit a medical necessity determination and that recourse to the verification process was necessary to amplify the record. Accordingly, plaintiff’s motion for summary judgment was properly denied.

Weston Patterson, J.P., and Belen, J., concur.

Golia, J., concurs in a separate memorandum.

Golia, J., concurs with the result only, in the following memorandum:

While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.
Decision Date: July 12, 2006

Nassau District Court

1422/04

Scott Fairgrieve, J.

The defendant’s motion, by way of order to show cause, for an order pursuant to CPLR 5015(a)(1) vacating the court’s decision and order dated May 9, 2005 granting plaintiff’s unopposed motion for summary judgment, which was thereafter served with Notice of Entry on May 18, 2005, and the default judgment entered thereupon on August 30, 2005, is denied.

Plaintiff brought this action to recover $912.00 for medical services rendered to the defendant’s insured pursuant to New York State’s No-fault law. Defendant claimed that plaintiff is not entitled to payment because its assignor failed to appear for two IMEs. Plaintiff alleges that this fact is irrelevant because the services at issue were rendered before the date of the first scheduled IME. For the reasons set forth below, the Court need not reach this issue.

With respect to CPLR 5015(1), it is well settled that, as a matter of general policy, disposition of cases should be had by a determination on the merits of the action and not by way of a default. (Benadon v. Antonio, 10 AD2d 40) After entry of a default judgment, however, to obtain vacatur of a judgment pursuant to this provision, defendant must demonstrate that the default is excusable and, in addition, allege facts showing a meritorious defense to the underlying action. (Schiller v. Sun Rock Bldg. Corp., 260 AD2d 566; Quis v. Bolden, 298 AD2d 375; Wall v. Bennett, 33 AD2d 827) It is also well settled that conclusory allegations and denials are insufficient to demonstrate a meritorious defense. (St. Luke’s Roosevelt Hosp. v. Blue Ridge Ins. Co., 21 AD3d 946; Rapaport v. Rapaport, 150 AD2d 353; Maines Paper and Food Service Inc. v. Farmington Foods, 233 AD2d 595; Stow Mfg. Co. v. F & K Supply Inc., 232 AD2d 958) [*2]

In the instant matter, plaintiff served its motion for summary judgment upon counsel for the defendant on or about January 6, 2005. On the return date, February 18, 2005, the matter was adjourned by defendant to March 15, 2005 for defendant’s opposition. On that date, the motion was again adjourned to April 15, 2005 for defendant’s opposition. On April 15, 2005, the defendant’s application for yet another adjournment to submit opposition papers was denied and the motion was submitted without opposition. On May 9, 2005, the Court issued its decision and order granting plaintiff summary judgment for the relief demanded in the complaint. On April 10, 2006, nearly one year later, defendant brought the instant motion by way of order to show cause, seeking to vacate the default judgment and for summary judgment dismissing the complaint. The motion to vacate the judgment resulting from the defendant’s default in opposing the motion for summary judgment is untimely.

As held by the Court in Achampong v. Weigelt, 240 AD2d 247:

In this case, the prior default motion was contested by defendants, who, thereafter, neither appealed nor moved for reargument/renewal within the statutory 30 day period pursuant to CPLR 5513. We have previously noted: Where, as here, a party appears and contests an application for entry of a default judgment, CPLR 5511, prohibiting an appeal from an order or judgment entered upon default, is inapplicable, and the judgment predicated upon the party’s default is therefore appealable (Marrocco v. Marrocco, 90 AD2d 989, 456 NYS2d 906). The IAS Court therefore properly determined that the appellant’s prior failure to take a timely appeal from entry of the contested judgment was fatal to the subsequent vacatur motion (Pergamon Press v. Tietze, 81 AD2d 831, 438 NYS2d 831). (Spatz v. Bajramoski, 214 AD2d 436, 624 NYS2d 606).”

In other words, defendant’s remedy in response to the Court’s May 9, 2005 decision and order was to appeal or to renew or reargue within the statutory 30 day period. Where defendant has appeared, it may not sit back for nearly a year and then move to vacate the decision and order pursuant to CPLR §5015(a)(1) as if it had never appeared in the action. This issue has also been addressed by Professor David Siegel. In Siegel, Supplementary Practice Commentaries, McKinney’s Cons.Laws of NY, Book 7B, CPLR 5015, C5015:3 1998 Cumulative Supplementary Pamphlet, at page 268 he writes in relevant part:

Suppose, however, that D contested the default judgment, as where P gave notice of the application for it or D otherwise got wind of it and showed up to resist the application, or where the default was for something the defendant neglected to do in the case after duly appearing, e.g., failing to serve an answer to an amended complaint, failing to particularize defenses, failing to make required disclosure, etc. Suppose further that D’s resistance to P’s default application does not succeed and that P gets the default judgment. Does D in that situation get the year in which to move to vacate the default judgment? Achampong v. Weigelt, 240 AD2d 247, 658 NYS2d 606 (1st Dep’t, June 12, 1997), holds that D does not. In this situation D must appeal the contested default judgment or move to reargue or [*3]renew within the usual 30 days after being served with notice of entry of the judgment.

Accordingly, the motion to vacate the Court’s decision and order of May 9, 2005, and the judgment entered thereupon, is denied.

So Ordered:

DISTRICT COURT JUDGE

Dated:July 12, 2006

CC:Carman, Callahan & Ingham, LLP

Israel, Israel & Purdy, LLP

—[*1]

In an action to recover no-fault benefits under an insurance contract brought by motion for summary judgment in lieu of complaint pursuant to CPLR 3213, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Brennan, J.), dated August 10, 2005, as denied her motion for summary judgment in lieu of complaint.

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

Because the plaintiff’s action was not based upon an instrument for the payment of money only, it was improperly commenced by motion for summary judgment in lieu of complaint (see CPLR 3213; New York Cent. Mut. Fire Ins. Co. v Danaher, 290 AD2d 783, 784 n 3 [2002]; cf. Hellert v Travelers Ins. Co., 52 AD2d 751 [1976]). Nonetheless, since the issues in dispute were fully submitted by the parties, the Supreme Court properly disposed of the motion on the merits (see Schulz v Barrows, 94 NY2d 624, 628 [2000]; New York Cent. Mut. Fire Ins. Co. v Danaher, supra; see also CPLR 103 [c]; Miller v North Shore Towers Assoc., 119 Misc 2d 644 [1983]).

With respect to the merits, the plaintiff failed to establish her prima facie entitlement to judgment as a matter of law in connection with her cause of action alleging that the defendant insurer is collaterally estopped from rejecting her claim for no-fault benefits. In order to invoke collateral estoppel against the defendant, the plaintiff must demonstrate that a pending issue was [*2]raised, that it was necessarily decided and material in a prior action, and that the party to be estopped had a full and fair opportunity to litigate the issue in the earlier action (see Bansbach v Zinn, 1 NY3d 1, 10 [2003]; Pinnacle Consultants v Leucadia Natl. Corp., 94 NY2d 426, 431-432 [2000]; Matter of Kleiger-Brown v Brown, 306 AD2d 482, 483 [2003]; Airco Alloys Div. v Niagara Mohawk Power Corp., 76 AD2d 68, 81-82 [1980]). Here, the underlying liability action was settled, and the issue of whether the accident in which the plaintiff was injured arose from the use and operation of the insured vehicle was never raised or adjudicated. The defendant is thus not estopped from disclaiming an obligation to pay no-fault benefits to the plaintiff on that ground, particularly where the categories of occurrences covered under the liability provisions of the relevant policy are broader than those covered under the no-fault provisions, and there is no evidence in the record that the defendant, by its conduct, made any actual or implied promises that it would provide no-fault coverage (see Walsh v Prudential Ins. Co. of Am., 101 AD2d 988 [1984], affd 64 NY2d 1053 [1985]).

In addition, the plaintiff failed to sustain her burden of establishing, as a matter of law, that her accident, which occurred when she slipped and fell on an icy sidewalk while attempting to walk around a parked vehicle owned by the defendant’s insured, arose from the use and operation of that vehicle (see Matter of Transcontinental Ins. Co. v Hampton, 10 Misc 3d 1056[A], 2005 NY Slip Op 51988[U] [2004]; Pavone v Aetna Cas. & Sur. Co., 91 Misc 2d 658, 661 [1977]; see generally Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 215 [1996]; Matter of New York Cent. Mut. Fire Ins. Co. [Hayden—Allstate Ins. Co.], 209 AD2d 927).

The parties’ remaining contentions are either academic or without merit. Santucci, J.P., Spolzino, Lifson and Covello, JJ., concur.

—[*1]

In an action to recover no-fault medical payments, the plaintiffs appeal from so much of an order of the Supreme Court, Nassau County (McCarty, J.), dated September 30, 2005, as denied that branch of their motion which was for summary judgment on their first cause of action to recover payments for medical services rendered by the plaintiff New York and Presbyterian Hospital, and granted that branch of the defendant’s cross motion which was for summary judgment dismissing the first cause of action.

Ordered that the appeal by the plaintiff Mount Vernon Hospital is dismissed, without costs or disbursements, as that plaintiff is not aggrieved by the order appealed from (see CPLR 5511); and it is further,

Ordered that the order is modified, on the law, by deleting the provision thereof granting that branch of the defendant’s cross motion which was for summary judgment dismissing the first cause of action and substituting therefor a provision denying that branch of the cross motion; as so modified, the order is affirmed insofar as appealed from by the plaintiff New York and Presbyterian Hospital, without costs or disbursements, and the first cause of action is reinstated.

Pursuant to the statutory and regulatory framework governing the payment of no-fault automobile benefits, insurance companies are required to either pay or deny a claim for benefits within 30 days of receipt of the claim (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]). [*2]However, the 30-day period may be extended where the insurer makes a request for additional information within 15 business days of its receipt of the claim (see 11 NYCRR 65-3.5 [b]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96, 100 [2005]; Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 434 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 569-570 [2004]), and an insurer is not obligated to pay or deny a claim until all demanded verification is provided (see Nyack Hosp. v General Motors Acceptance Corp., supra at 100-101; Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2005], lv denied 7 NY3d 704 [2006]).

The plaintiff New York and Presbyterian Hospital (hereinafter the plaintiff) made a prima facie showing that it was entitled to judgment as a matter of law on its first cause of action by submitting evidence that the prescribed statutory billing forms had been mailed and received, and that the defendant had failed to either pay or deny the claim within the requisite 30-day period (see Nyack Hosp. v General Motors Acceptance Corp., supra at 100; New York & Presbyt. Hosp. v AIU Ins. Co., 20 AD3d 515, 516 [2005]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., supra at 570). However, in opposition to the motion, the defendant established that it had made a timely request for additional information and that it timely denied the claim within 30 days of receipt of the hospital records it had requested to verify the claim. Accordingly, the Supreme Court properly denied that branch of the plaintiffs’ motion which was for summary judgment on the first cause of action.

However, the Supreme Court should have denied that branch of the defendant’s cross motion which was for summary judgment dismissing the first cause of action. Although the defendant established that its denial of the subject claim was timely, it failed to submit sufficient evidentiary proof, in admissible form, to make a prima facie showing that it properly denied the claim upon the ground that the medical treatment provided was unrelated to the accident (see New York & Presbyt. Hosp. v AIU Ins. Co., supra; Hospital for Joint Diseases v Hertz Corp., 9 AD3d 392 [2004]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 8 AD3d 250 [2004]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 20 [1999]). Crane, J.P., Ritter, Krausman and Skelos, JJ., concur.