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 (Ellen Gesmer, J.), entered September 27, 2004. The order, insofar as appealed from as limited by plaintiffs’ brief, denied so much of a motion as sought partial summary judgment on behalf of plaintiff A.B. Medical Services PLLC.

Order, insofar as appealed from, unanimously reversed without costs, plaintiffs’ motion granted to the extent of awarding plaintiff A.B. Medical Services PLLC partial summary judgment in the principal sum of $4,575.44, and matter remanded to the court
below for the calculation of statutory interest and attorney’s fees thereon, and for all further proceedings on the remaining claims.

Appeal as taken by plaintiffs D.A.V. Chiropractor P.C. and Acupuncture P.C. unanimously dismissed.

Plaintiffs commenced this action to recover $6,080.18 in first-party no-fault benefits for medical services rendered to the assignor. Thereafter, a motion was brought seeking partial summary judgment in the principal sum of $4,575.44 based on some claims made by plaintiff health care provider A.B. Medical Services PLLC. Said 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 it sustained, and that payment of no-fault benefits was overdue (see [*2]Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [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]).

In the case at bar, the defendant’s failure to object to the completeness of the assignments within 10 days of receipt constituted a waiver of any defenses based thereon (New York Hosp. Med. Ctr. of Queens v AIU Ins. Co., 8 AD3d 456 [2004]).

The appeal as taken by the other plaintiffs is dismissed since they lack an interest in the specific sums in controversy upon the appeal (see CPLR 5511).

Accordingly, plaintiff A.B. Medical Services PLLC is awarded partial summary judgment in the principal amount of $4,575.44 and the case is remanded for the calculation of statutory interest and attorney’s fees thereon, as well as for all further proceedings on the remaining claims.
Decision Date: November 04, 2005

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 (Loren Baily-Schiffman, J.), entered on September 10, 2004. The order, insofar as appealed from, denied the motion for summary judgment by plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C., Daniel Kim’s Acupuncture P.C. and Square Square Transportation, Inc.

Order, insofar as appealed from, unanimously modified by granting the motion for summary judgment by plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C. and Daniel Kim’s Acupuncture P.C. and matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees thereon, and upon searching the record, summary judgment is granted in favor of defendant dismissing the cause of action by plaintiff Square Synagogue Transportation Inc.; as so modified, affirmed without costs.

Appeal by plaintiff Somun Acupuncture P.C. unanimously dismissed.

The motion for summary judgment by plaintiff Square Synagogue Transportation Inc. was properly denied. Moreover, in searching the record, the claim by said plaintiff is hereby dismissed. The revised insurance regulations, applicable to claims submitted on or after April 5, 2002, “no longer permit the assignment to health care providers of benefits for non-health-related services (typically housekeeping and transportation expenses) (11 NYCRR 65-3.11 [a]; Insurance Law § 5102 [a] [1])” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 871 [*2][2003]). Accordingly, while “[s]uch reasonable and necessary expenses remain reimbursable (see Insurance Law § 5102 [a] [3] . . . [they are] nonassignable)” (id.). The record herein indicates that plaintiff Square Synagogue Transportation Inc. submitted its transportation costs subsequent to the effective date of the revised regulations. Under the authority of Matter of Medical
Socy. of State of N.Y. v Serio (100 NY2d 854, supra), such costs are nonassignable, and the claim by Square Synagogue Transportation Inc. must be dismissed.

Plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C. and Daniel Kim’s Acupuncture P.C., established a prima facie entitlement to summary judgment by proof that they 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]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). It is uncontroverted on the record that defendant failed to pay or deny the claims of said plaintiffs within the 30-day period, and it is accordingly precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). We note that the court below properly determined that defendant’s failure to seek verification of the assignments and to allege any deficiency in the assignments in its denial of claim forms in any event constitutes a waiver of any defenses with respect thereto (see Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]; New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2004]; Presbyterian Hosp. in City of N. Y. v Aetna Cas. & Sur. Co., 233 AD2d 433 [1996]; A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 6 Misc 3d 70 [App Term, 2d & 11th Jud Dists 2004]; Diagnostic Rehab. Med. Serv. P.C. v Travelers Indem. Co., 6 Misc 3d 68 [App Term, 2d & 11th Jud Dists 2004]; Park Health Ctr. v Eveready Ins. Co., 2001 NY Slip Op 40665[U] [App Term, 2d & 11th Jud Dists]).

However, an untimely denial does not preclude defendant from asserting a lack of coverage defense on the ground that the alleged injuries were not causally related to the accident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 18-19 [1999]), or that the collision was in furtherance of an insurance fraud scheme (see Central Gen. Hosp., 90 NY2d at 199; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]; A.B. Med. Servs. v CNA Ins. Co., 2 Misc 3d 138[A], 2004 NY Slip Op 50265[U] [App Term, 2d & 11th Jud Dists]). Defendant’s submissions in the instant case, consisting of, inter alia, excerpts from an examination under oath taken of plaintiffs’ assignor and the affidavit of its claim representative were insufficient to demonstrate that the insurer’s defense was based upon a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp., 90 NY2d at 199; see also A.B. Med. Servs. v CNA Ins. Co., 2 Misc 3d 138[A], 2004 NY Slip Op 50265[U], supra).

Accordingly, since defendant failed to demonstrate the existence of a triable issue of fact as to whether there was a lack of coverage (see Central Gen. Hosp., 90 NY2d at 199; Zuckerman v City of New York, 49 NY2d 557 [1980]), the motion for summary judgment by plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C., and Daniel Kim’s Acupuncture P.C. is [*3]granted, and the matter is remanded for the calculation of statutory interest and attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Inasmuch as no issue is raised by the remaining appellant, Somun Acupuncture P.C., the appeal with respect to it is dismissed (see Praeger v Praeger, 162 AD2d 671 [1990]).
Decision Date: November 04, 2005

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, Queens County (Charles John Markey, J.), entered November 18, 2003. The order denied plaintiff’s motion to dismiss certain affirmative defenses.

Order unanimously affirmed without costs.

Plaintiff commenced the instant action to recover damages for personal injuries he allegedly sustained as a result of an accident which occurred in Queens. He sought to recover under the uninsured motorist endorsement of his automobile liability policy based upon the negligence of an uninsured motorist, as defined by said policy. The policy was issued in Virginia. Defendant insurer, in its answer, interposed various [*2]
affirmative defenses, including three which alleged, in substance, that the action was barred or limited based upon plaintiff’s failure to sustain a “serious injury” as defined by Insurance Law § 5102(d). Plaintiff subsequently moved to dismiss those affirmative defenses on the ground that he was not required to prove “serious injury” inasmuch as there was no “serious injury” requirement under Virginia law or under the Virginia uninsured motorist endorsement. The motion was denied by the court below, predicated upon plaintiff’s invocation of the jurisdiction of the New York courts when he initiated the lawsuit (alleging that he was a New York resident) and upon the occurrence of the accident in New York. The court stated that the law of New York, which imposes a “serious injury” requirement, would apply, and the instant appeal ensued.

Since this case involves a claim by an insured against his insurer for benefits to which he claims he is entitled under the uninsured motorist endorsement of the liability policy, this action is a contract case, and is distinguishable from an action seeking damages for personal injury which would be brought against the alleged tortfeasor. However, claims for uninsured motorist benefits by an insured against an insurer present issues which are actually a mixture of contract and tort. “Such claims are based on the coverage agreement in the insurance contract which typically limits benefits to sums which the insured would be ‘legally entitled to recover as damages’ from the uninsured owner or operator. Thus payment of benefits under the contract [*3]
terms depends upon the uninsured motorist’s tort liability to the insured” (3-32 No-Fault & Uninsured Motorist Auto Insurance § 32-00).

The Virginia statute regarding uninsured motorist coverage provides that the uninsured motorist endorsement must undertake “to pay the insured all sums that he is legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle” (Va. Code § 38.2-2206 [A] [emphasis added]). The statute further provides that an insured relying upon the uninsured motorist endorsement is required to establish “legal liability” (Va. Code § 38.2-2206 [H]). In our opinion, the term “legally entitled to recover” requires an insured to prove fault and damages just as if he or she had proceeded against the uninsured motorist instead of the carrier (see e.g. Matter of De Luca [MVAIC], 17 NY2d 76, 80-81 [1966]). Implicit in this analysis is that the insured be “legally entitled to recover” in the venue in which he chooses to commence the action. The carrier, therefore, should be able to assert any defenses that would be available to the uninsured motorist, in order to show that the insured is not entitled to recover, whether it be due to comparative negligence, immunity from suit, or the failure to reach the “serious injury” threshold, depending upon the laws of the applicable jurisdiction.
In tort cases brought in this state, New York uses an “interest analysis” in order to determine which jurisdiction has the greater interest in having its law applied to the litigation. Laws distributing the loss after the accident happens, such as contribution or charitable immunity, may implicate significant governmental interests (see Matter of Allstate Ins. Co. [Stolarz—N.J. Mfrs. Ins. Co.], 81 NY2d 219, 225 [1993]). Loss-allocating rules are those which “prohibit, assign, or limit liability after the tort occurs” (Padula v Lilarn Props. Corp., 84 NY2d 519, 522 [1994]), such as charitable immunity statutes, guest statutes and vicarious liability statutes. New York’s law requiring a “serious injury” threshold has been held to involve issues of loss allocation (see Kranzler v Austin, 189 Misc 2d 369 [App Term, 2d & 11th Jud Dists 2001]; Jean v Francois, 168 Misc 2d 48 [1996]). Where the specific issue raised relates to allocating losses which result from tortious conduct, both the situs of the tort as well as the domiciles of the litigants will be examined (see Neumeier v Kuehner, 31 NY2d 121 [1973]).

The accident location and situs of the loss or injury are in New York. Plaintiff’s counsel has conceded herein that, at the time of the accident, plaintiff had moved from Virginia to New York, and in fact based venue upon his residence in Queens County. Moreover, strong policy considerations underlie New York’s serious injury threshold requirement. The rationale underlying the “serious injury” requirement was to reduce the number of litigated automobile personal injury accident cases by keeping minor personal injury cases out of court (see Licari v Elliott, 57 NY2d 230 [1982]; Kranzler v Austin, 189 Misc 2d 369, supra; see also Restatement [Second] of Conflict of Laws § [*4]
6). Were the New York courts not to apply the threshold requirement, the rationale for the New York law would be seriously eroded.

In view of the foregoing, the law of New York should be applied, and plaintiff should be required to demonstrate that he sustained a “serious injury.” Accordingly, the court below did not err in denying plaintiff’s motion to dismiss defendant’s first three affirmative defenses.
Decision Date: November 04, 2005

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from that portion an order of the Civil Court, Bronx County entered January 24, 2005 (Larry Schachner, J.) which denied its cross motion for summary judgment dismissing the complaint.

PER CURIAM

Order entered January 24, 2005 (Larry Schachner, J.), modified to the extent of granting summary judgment to defendant dismissing the complaint; as modified, affirmed, without costs.

Plaintiff provided medical services to its assignor and subsequently submitted claims to defendant insurer seeking first-party no-fault benefits. Defendant delayed payment on the ground that plaintiff’s assignor failed to respond to timely requests for additional verification.

Defendant established its entitlement to summary judgment dismissing the complaint. An insurer is not obligated to pay or deny a claim until requested verifications have been provided (see 11 NYCRR § 65-3.8[b][3]). The record reveals that plaintiff and its assignor failed to respond to defendant’s timely requests for additional verification. Accordingly, the period within which defendant was required to respond to plaintiff’s claims did not begin to run, and any claim for payment was premature (see Nyack Hospital v State Farm Mutual Automobile Insurance Company, 19 AD3d 569 [2005]).

This constitutes the decision and order of this court.
I concur
Decision Date: October 26, 2005

Civil Court of the City of New York, Queens County

086471/04

Howard G. Lane, J.

Plaintiff commenced this action to recover first-party no-fault benefits for medical services rendered to its assignor Katina Johnson pursuant to New York’s No-Fault Insurance Law § 5101 et. seq., as well as statutory interest and attorney’s fees. Thereafter, defendant moved for summary judgment on the ground that plaintiff’s claims for No-Fault benefits is not overdue and that this action is premature. Plaintiff cross-moved for summary judgment on its claims in the amount of $759.00, on the ground that defendant failed to pay or to deny its claims within the statutory 30-day period as required by Insurance Law section 5106 [a].

SUMMARY JUDGMENT STANDARD

The rule governing summary judgment requires the proponent of a summary judgment motion to make a prima facie showing of entitlement to judgment as a matter of law, tendering admissible evidence to eliminate any material issues of fact from the case (Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]; Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]; Tortorello v. Carlin, 260 AD2d 201 [1st Dept 1999]). Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers (Matter of Redemption Church of Christ v. Williams, 84 AD2d 648; Greenberg v. Manlon Realty, 43 AD2d 968).

If the moving party satisfies those standards, the burden shifts to the opponent to rebut that prima facie showing by presenting evidence in admissible form establishing the existence of triable issues of fact (see, CPLR §3212, subd [b]; Zuckerman v. City of New York, 49 NY2d 557 [1980]; Davenport v. County of Nassau, 279 AD2d 497 [2d Dept 2001]; Pagano v. Kingsbury, 182 AD2d 268 [2d Dept 1992]; Kaufman v. Silver, 90 NY2d 204 [1997]). It is well settled that summary judgment should be denied if there is any doubt as to the existence of a triable issue of fact (Freese v. Schwartz, 203 AD2d 513 [2d Dept 1994]).

When deciding a motion for summary judgment, the court must review the [*2]evidence in the light most favorable to the non-moving party, and must give that party all of the reasonable inferences that can be drawn from the evidence (Louniakov v. M.R.O.D. Realty Corp., 282 AD2d 657 [2d Dept 2001]; SSBSS Realty Corp. v. Public Service Mut. Ins. Co., 253 AD2d 583[1st Dept 1998]).

DEFENDANT’S MOTION AND PLAINTIFF’S CROSS-MOTION FOR SUMMARY JUDGMENT.

Pursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, within thirty [30] days after a claimant submits proof of the facts and the amount of loss sustained, an insurer is required to either pay or deny a claim for insurance coverage of medical expenses arising from a motor vehicle accident (see, 11 NYCRR §65.15 [g] [3]; Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195 [1997]; Mount Sinai Hosp., v. Triboro Coach, 263 AD2d 11 [2d Dept 1999]; New York Hosp. Med. Center of Queens v. Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002]).

The only exception to the 30 day rule is where an insurer’s untimely denial is based upon the defense of lack of coverage, or where a medical condition for which the patient was treated, was not “related to the accident”. Chubb, supra. To withstand a motion based on this defense, the insurer has the burden to come forward with proof in admissible form to establish “the fact” or the evidentiary foundation for its belief that the patient’s treatment was unrelated to the accident (Metro Med. Diagnostics, P.C., v. Eagle Ins. Co., 293 AD2d 751 [2d Dept 2002]).

Within 10 business days after receipt of the completed no-fault application (NF-2), the insurer must forward verification forms for healthcare or hospital treatment (NF-3, NF4 or NF-5) to the injured party or that party’s assignee. After receipt of the completed verification of healthcare or hospital treatment form, the insurer may seek “additional verification” or further proof of claim from the injured party or that party’s assignee within 15 business days thereof. 11 NYCRR §65-3.5(b). Hence, the 30 day period may be extended by a request for verification. See, New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co.,supra; Presbyterian Hosp. in the City of New York v. Maryland Cas. Co., 90 NY2d 279 [1997]).

If the requested verification has not been supplied to the insurer within 30 calendar days, after the original request, the insurer shall issue within 10 calendar days of the insured’s failure to respond a follow-up request “either by telephone call, properly documented in the file, or by mail.” See 11 NYCRR §65-3.6(b), now 15 days per 11 NYCRR §65-3.5 [b]; S&M Supply v. Allstate Insurance Co., 2003 NY Slip Op 51191 [U] [App Term, 2d & 11th Jud Dists]. “An insurer shall not issue a denial of claim form . . . prior to its receipt of verification of all of the relevant information requested . . . “(New York Hosp. Med. Ctr. Of Queens v. Country-Wide Ins. Co., supra at 585. Glassman D.C., PC v. State Farm Mut. Auto. Ins. Co., 192 Misc 2d 264 [App Term, 2nd & 11 Jud [*3]Dists 2002]).

A legally valid basis for denying a first party benefit claim would be the provider’s assignor failing to comply with an insurer’s requests for verification. See generally, Lopedote v. General Assurance Company, 2004 NY Slip Op 50593[U] [Kings Co. Civil Ct. 2004]. However, any party required to provide verification information must be afforded adequate and proper notice of the request. See generally, Star Medical Services, P.C. v. Allstate Ins. Co., 5 Misc 3d 785 [Kings Co. Civil Ct. 2004].

Failure to pay or deny a claim within the 30-day period requirement, absent a request for additional verification, renders benefits “overdue,” and precludes the insurer from disclaiming liability based on a breach of a policy condition or a statutory exclusion defense (Presbyterian Hosp. in City of New York v. Maryland Cas. Co., 90 NY2d 274 [1997]). All overdue payments bear interest at a rate of 2% per month, and the claimant is entitled to recover attorney’s fees where a “valid claim or portion” was denied or overdue [see, Insurance Law §5106 [a]; Presbyterian Hosp. in the City of New York, supra.

Plaintiff maintains that it is entitled to summary judgment because the defendant failed to pay or deny its claims within 30 days of receipt as required by the Insurance Law §5106 (a). Plaintiff asserts that it submitted to defendant proofs of claims for medical supplies which defendant admits to receiving, that defendant did not request additional verification and that the claim is overdue and owing.

Plaintiff proved that it submitted a timely and proper notice of claim pursuant to the No-Fault statute for medical supplies provided, which defendant acknowledged receiving, and not paying. See, Capio Medical, P.C. ex rel. Berger v. Progressive Cas. Ins. Co., 7 Misc 3d 129(A), 2005 NY Slip Op 50526(U) (App Term, 2nd and 11 th Jud Dists); Park Health Center v. Prudential Prop. and Cas. Ins. Co., 2001 WL 1803364 (App Term 2nd and 11th Jud Dist 2001). The burden then shifted to defendant to show the existence of a triable issue of fact. See, Alvarez v. Prospect Hosp., supra. Defendant asserts that it received the bills at issue on August 20, 2002, “printed” and then mailed a request for additional verification on August 30, 2002, and after receiving no response from plaintiff, followed up with a second written request on September 30, 2002. Plaintiff did not admit to receiving the request for verification. Defendant asserts that the requests for verification were timely sent to plaintiff and establish defendant’s right to a tolling of the 30-day period by its verification requests.

In support of its motion defendant submits copies of the alleged verification request addressed to plaintiff, and proof of mailing of its request for verification (S & M Supply, Inc. v. GEICO, 2003 NY Slip Op 51192[U] [App Term, 2d & 11th Jud Dists 2003]). Specifically, defendant proffers the affidavit of Linda Phillips, a litigation representative employed by defendant who avers in her affidavit in support of defendant’s motion for summary judgment that “[w]ith respect to the mailing of the . . . [*4]verification requests, my office mailed same in accordance with its normal practice and procedure, followed in the regular course of my office’s business. . .” She further avers that “[s]uch request includes the specific claim information and bears the date that it is printed. It is then placed in a bin for the daily 1:15 p.m. collection by my office’s internal mail room personnel. The same day, a mail room employee prepares a post paid envelope bearing the same address of the entity that submitted the claim and seals the verification request in the envelope. Also the same day, a carrier from United States Post Office collects, with the mail, the envelope containing the verification request form at 3:30 P.M.” Additionally, she avers that “any verification request form that is placed in the bin for mail room collection after 1:15 p.m. is collected during the next business day’s internal mail collection.”

The court finds the assertions of defendant’s litigation examiner conclusory and such assertions fail to specify either that it was the duty of the litigation examiner to ensure compliance with said office procedures or that the litigation examiner had actual knowledge that said procedures were complied with. (See, Contemp. Med. Diag. & Treatment, P.C. v. GEICO, 6 Misc 3d 137(A), 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists 2005]). See also, Amaze Medical Supply v. State Farm Automobile Ins. Co., 8 Misc 3d 139(A), 2005 NY Slip Op 51315(U) [2d and 11th Jud Dists 2005]). As defendant’s papers in support of the motion for summary judgment do not contain an affidavit of someone with personal knowledge that its verification requests were actually mailed, or describing the standard office practices or procedures it used to ensure that such requests were properly addressed and mailed (see, Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679 [2d Dept 2001]), defendant failed to establish by competent evidence that it timely mailed its verification requests, and therefore, the 30-day period within which it was required to pay or deny the claim was not tolled (see, S&M Supply Inc. Co. V. Lancer Ins. Co., 4 Misc 3d 131[A], 2004 NY Slip Op 50695[U] [App Term, 2d & 11th Jud Dists 2004]).

Accordingly, defendant’s motion for summary judgment is denied. Plaintiff’s cross-motion for summary judgment is granted and judgment shall be awarded in favor of plaintiff in the amount of $759.00, together with statutory interest and attorneys fees.

The foregoing constitutes the decision and order of this Court.

Dated, October 24, 2005________________________________

Howard G. Lane

Judge, Civil Court

[*1]

District Court of Suffolk County, Second District, October 24, 2005

APPEARANCES OF COUNSEL

Parker Law Firm, Farmingdale (Scott Schwaber of counsel), for plaintiff. Jeena R. Belil, Melville, for defendant.

OPINION OF THE COURT

Patrick J. Barton, J.

The within action for payment of no-fault benefits was commenced on March 19, 2004.

After hearing testimony and examining exhibits, I make the following findings of fact and conclusions of law.

Plaintiff is the assignee of Julia Johnson, who was involved in an automobile accident on July 19, 2003. At the time of the accident, there was an existing insurance policy issued by defendant containing benefits under the No-Fault Law.

Under this policy, plaintiff’s assignor was entitled to health service expenses resulting from the accident. She was referred by her treating physician to plaintiff for MRIs of her lumbar and cervical spine, and on July 29, 2003, the MRIs were performed.

Plaintiff timely submitted a bill for $1,571.80 to defendant on or about September 16, 2003 for these MRIs together with a proper no-fault verification form.

Defendant timely denied payment and its denial of claim form contained the sole affirmative defense of no medical necessity for the MRIs. The defendant bears the burden of proof on this defense (see Choicenet Chiropractic P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672[U] [App Term, 2d & 11th Jud Dists 2003]; Prime Med. v Travelers Indem. Co., 2 Misc 3d 1009[A], 2004 NY Slip Op 50234[U] [Civ Ct, Kings County 2004]). At trial, defendant’s expert, Dr. Joseph C. Cole, testified that he conducted a peer review and came to the conclusion that these MRIs were not medically necessary. Dr. Cole’s report was admitted into evidence as defendant’s exhibit B. I find that Dr. Cole’s testimony was not sufficient to establish by a fair preponderance of the credible evidence defendant’s burden to rebut the presumption of medical necessity.

However, in addition to the defense of no medical necessity, defendant, for the first time at trial, raised an objection to the referral herein as an improper self-referral prohibited by section 238-a of the Public Health Law. This issue is one of first impression in this court. Section 238-a [*2]provides in pertinent part:

“Prohibition of financial arrangements and referrals

“1. (a) A practitioner authorized to order clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services may not make a referral for such services to a health care provider authorized to provide such services where such practitioner or immediate family member of such practitioner has a financial relationship with such health care provider.

“(b) A health care provider or a referring practitioner may not present or cause to be presented to any individual or third party payor or other entity a claim, bill, or other demand for payment for clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services furnished pursuant to a referral prohibited by this subdivision . . .

“7. If a referring practitioner or a health care provider furnishing clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services or any other person or entity collects any amounts that were billed in violation of this section, such referring practitioner and health care provider and other person or entity shall be jointly and severally liable to the payor for any amounts so collected.”

A “financial relationship” is defined in section 238 (3) of the Public Health Law as “an ownership interest, investment interest or compensation arrangement.” A review of the record in the instant matter indicates that the parties stipulated at trial that the referring physician, Dr. Gautam Khakar, was associated with Superior Medical Services, P.C. According to certified records from the New York State Education Department (introduced as defendant’s exhibit C), the single shareholder of Superior Medical Services, P.C. is Raymond V. Damadian. The certified records of the Education Department further revealed that Raymond V. Damadian is also the single shareholder of Stand-Up MRI of the Bronx, the plaintiff herein. As such, I find that this referral falls within the ambit of subdivision (1) of section 238-a. Although the defense of improper referral was not contained in defendant’s denial of claim form, I find that the defense was properly raised at trial, as the 30-day time limitation set forth in section 5106 (a) of the Insurance Law does not apply to cases that fall within the purview of section 238-a (1) of the Public Health Law (see Ozone Park Med. Diagnostic Assoc. v Allstate Ins. Co., 180 Misc 2d 105 [App Term, 9th & 10th Jud Dists 1999]). I also note that this was raised as an affirmative defense in defendant’s answer.

Accordingly, this case is dismissed.

—[*1]

In a proceeding pursuant to CPLR 7511 to vacate an award of a master arbitrator dated September 25, 2003, affirming an award of an arbitrator dated July 9, 2003, the appeal is from an order of the Supreme Court, Suffolk County (Cohalan, J.), dated November 12, 2004, which denied the petition and dismissed the proceeding.

Ordered that the order is affirmed, with costs.

Consistent with the public policy in favor of arbitration, the grounds specified in CPLR 7511 for vacating or modifying a no-fault arbitration award are few in number and narrowly applied (see Matter of Domotor v State Farm Mut. Ins. Co., 9 AD3d 367 [2004]). Here, the petitioner failed to demonstrate the existence of any of the statutory grounds for vacating the master arbitrator’s award. The arbitrator acted within his discretionary authority in refusing to entertain late submissions from each of the parties. Moreover, the determination of the master arbitrator affirming the original award had a rational basis (see Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 231-232 [1982]; Matter of Liberty Mut. Ins. Co. v Spine Americare Med., 294 AD2d 574, 576 [2002]). Crane, J.P., Santucci, Mastro and Dillon, JJ., concur.

—[*1]

In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from an order of the Supreme Court, Queens County (Satterfield, J.), dated February 24, 2004, which granted the defendant’s motion for summary judgment dismissing the complaint.

Ordered that the order is affirmed, with costs.

The plaintiff sustained personal injuries in an automobile accident on August 22, 1994. Since that time, she has pursued two prior actions and an arbitration against her insurer, the defendant Country-Wide Insurance Company, to recover, inter alia, both uninsured and no-fault benefits under her policy. As a result thereof, the plaintiff recovered the full amounts of her policy limits, as well as statutory penalties for the defendant’s delay in paying her claims. As relevant to the instant appeal, in connection with the settlement of the plaintiff’s second action, which was commenced on or about January 24, 2000, the plaintiff executed, inter alia, a general release, dated January 25, 2002. In the instant action, the plaintiff seeks, inter alia, damages for breach of contract based on the defendant’s alleged bad faith in delaying the processing of her insurance claims.

The general release, dated January 25, 2002, which the plaintiff signed, bars the instant action (see Falconieri v A & A Discount Auto Rental, 262 AD2d 446, 447 [1999]; DeQuatro v Zhen Yu Li, 211 AD2d 609, 609-610 [1995]). [*2]

The plaintiff’s remaining contentions are either unpreserved for appellate review or without merit. H. Miller, J.P., Adams, Spolzino and Fisher, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal by defendant from an order of the Civil Court, Kings County (M. Mendez, J.), entered May 5, 2004, which denied defendant’s motion to preclude, or in the alternative, to compel compliance with discovery demands and granted plaintiff’s cross motion for summary judgment.

Order affirmed without costs.

In this action to recover assigned first-party no-fault benefits, plaintiff health care provider established its prima facie entitlement to summary judgment by proof that it submitted a statutory claim form, setting forth the fact and amount 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]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). The burden then shifted to defendant to create a triable issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

Absent tolling of the statutory time (Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 434 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]), defendant’s conceded failure to deny the claim, received September 25, 2002, until March 28, 2003, violated the 30-day claim determination period and precluded it from interposing its defenses aside from the claim that the incident was staged to defraud. All post-claim requests for examinations under oath (EUO) pursuant to the verification regulations must [*2]be made within prescribed time frames (11 NYCRR 65-3.5 [a], [d]; 11 NYCRR 65-3.6 [b]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2002]). “Any attempt by the insurer to deny the claim prior to exhausting the verification protocols is premature and of no effect” (King’s Med. Supply Inc. v Allstate Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50451[U] [App Term, 9th & 10th Jud Dists]; see also New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d at 570; King’s Med. Supply v New York Cent. Mut. Fire Ins. Co., 5 Misc 3d 136[A], 2004 NY Slip Op 51550[U] [App Term, 2d & 11th Jud Dists]). Here, defendant’s initial EUO request, its letter dated December 10, 2002, was itself untimely and did not schedule the EUO within the prescribed time. The assignor was therefore under no duty to appear for the first scheduled EUO and it is irrelevant that defendant may have duly rescheduled the EUO upon assignor’s initial non-appearance.

As to the fraud claim, which survives the preclusion sanction (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]), defendant’s proof thereof was not submitted in admissible form. None of the investigators’ reports or operators’ statements were sworn, and neither the affirmation of counsel, which alleged no basis to support an inference that any of the facts asserted in his statements were based on personal knowledge, nor the affidavit of defendant’s employee, which asserted merely the conclusory statement that “material misrepresentations [were] made in the presentation of the claim,” sufficed to allege the necessary facts. Thus, defendant failed to establish a triable issue of fraud and summary judgment was properly granted (see e.g. Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists] [claims examiner’s conclusory assertions as to fraud insufficient]; Ocean Diagnostic Imaging P.C. v Lancer Ins. Co., 6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004] [unsworn investigation reports inadmissible in opposition to summary judgment motion]; Melbourne Med. P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004] [attorney’s factual allegations, without personal knowledge of the investigation, mere unsubstantiated hearsay]; Dotzel v Allstate Ins. Co., 2003 NY Slip Op 50853[U] [App Term, 9th & 10th Jud Dists] [unsworn investigation reports inadmissible in opposition to summary judgment motion]).

In light of the foregoing, we need not address defendant’s remaining claims of error.

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

Golia, J., dissents in part in a separate memorandum. [*3]
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE TERM : 2nd and 11th JUDICIAL DISTRICTS
PRESENT : PESCE, P.J., PATTERSON and GOLIA, JJ.
OCEAN DIAGNOSTIC IMAGING, P.C.
a/a/o ALICIA PRINCE,

Respondent,

-against-
UTICA MUTUAL INSURANCE COMPANY,

Appellant.

Golia, J., dissents in part and votes to modify the order and deny plaintiff’s motion for summary judgment in the following memorandum:

Contrary to the holding of the majority, I find that the papers submitted by the defendant in opposition to the plaintiff’s motion for summary judgment were sufficient to raise an issue of fact as to whether the defense of fraud was based upon a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]).

For the reasons stated in my dissent in Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co. (6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004]), I find that the unsworn reports when submitted in opposition to a motion for summary judgment and accompanied by an affidavit which makes reference to such reports, are sufficient for the purpose of raising a triable issue of fact. This Court must, when deciding a motion for summary judgment, interpret the evidence in the light most favorable to the non-movant (see Weiss v Garfield, 21 AD2d 156 [1964]). This is especially true where there is an allegation of fraud.

Accordingly, I would modify the order of the lower court and would deny the plaintiff’s motion for summary judgment.
Decision Date: October 21, 2005