—[*1]

In an action, inter alia, to recover unpaid no-fault benefits, the defendant appeals from an order of the Supreme Court, Nassau County (Alpert, J.), dated October 26, 2004, which denied its motion to vacate a judgment entered upon its default in appearing or answering.

Ordered that the order is reversed, on the law and as a matter of discretion, with costs, the motion is granted, the judgment is vacated, the matter is remitted to the Supreme Court, Nassau County, for further proceedings consistent herewith, and the defendant’s time to answer the complaint is extended until 20 days after service upon it of a copy of this decision and order.

The denial of the defendant’s motion to vacate the judgment entered upon its default in appearing or answering was an improvident exercise of discretion. The defendant insurer’s default was not attributable to the insurer’s mere delay in forwarding the complaint to counsel (cf. Campbell v Ghafoor, 8 AD3d 316 [2004]; O’Shea v Bittrolff, 302 AD2d 439 [2003]; Miles v Blue Label Trucking, 232 AD2d 382 [1996]), but was occasioned by an inexperienced claims adjuster’s reasonable belief that advising opposing counsel, both telephonically and in writing, that no-fault benefits had been exhausted, would suffice to end the matter. The claims adjuster’s letter included a copy of the denial of claim form issued to the plaintiff New York University Hospital Tisch Institute, as assignee of Ira Kalfus (hereinafter the plaintiff), and requested that the plaintiff’s counsel “withdraw your summonses regarding this matter and advise our office upon doing so.” [*2]

Under these circumstances, we find that the defendant demonstrated a reasonable excuse for the default (see Barajas v Toll Bros., 247 AD2d 242 [1998]). When coupled with the meritorious defense of exhaustion of benefits, the brief delay involved, and the complete lack of prejudice to the plaintiff, vacatur of the judgment entered upon the defendant’s default was warranted. This is consistent with the strong public policy favoring the determination of controversies on their merits (see Heskel’s W. 38th St. Corp. v Gotham Constr. Co. LLC, 14 AD3d 306 [2005]; Ray Realty Fulton, Inc. v Lee, 7 AD3d 772 [2004]). Santucci, J.P., Krausman, Mastro and Skelos, JJ., concur.

—[*1]

In an action to recover no-fault insurance medical payments, the plaintiffs, Mount Sinai Hospital, as assignee of Mendel Adolph, White Plains Hospital Center, as assignee of Shehan Guiragossian, and Wyckoff Heights Medical Center, as assignee of Juan Picardo, appeal from so much of an order of the Supreme Court, Nassau County (Feinman, J.), dated March 31, 2004, as denied their motion for summary judgment on the first and third causes of action in the complaint.

Ordered that the appeal by the plaintiff White Plains Hospital Center, as assignee of Shehan Guiragossian, is dismissed, without costs or disbursements, as that plaintiff is not aggrieved by the order; and it is further,

Ordered that the order is modified, on the law, by deleting the provision thereof denying that branch of the motion which was for summary judgment on the third cause of action asserted by Wyckoff Heights Medical Center, as assignee of Juan Picardo, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

The plaintiff Mount Sinai Hospital, as assignee of Mendel Adolph (hereinafter Mount Sinai) demonstrated its entitlement to judgment as a matter of law on the first cause of action by [*2]establishing that it submitted the requisite documents to recover payment for medical services, but the defendant Zurich American Insurance Company (hereinafter Zurich) neither paid nor denied the claims (see New York & Presbyt. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]). However, an insurer is not required to pay a claim where the policy limits have been exhausted (see Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., supra). In opposition to Mount Sinai’s motion, Zurich demonstrated that there were issues of fact as to whether it exhausted the coverage limits of the policy by other “no-fault” payments and whether such payments were in compliance with 11 NYCRR 65.15 (n). Accordingly, that branch of the motion which was for summary judgment on the first cause of action asserted by Mount Sinai was properly denied.

The plaintiff Wyckoff Heights Medical Center, as assignee of Juan Picardo (hereinafter Wyckoff Heights) established its entitlement to judgment as a matter of law on the third cause of action. Therefore, the Supreme Court erred in denying summary judgment to Wyckoff Heights.

Mount Sinai’s remaining contentions are without merit. Schmidt, J.P., Santucci, Crane and Skelos, JJ., concur.

Civil Court of the City of New York, Queens County

102975/2002

The Plaintiff: Baker, Barshay & Neuwirth, LLP, by Robert Baker, Esq., 1393 Veterans Memorial Highway, Suite 210N, Hauppauge, NY 11788

For the Defendant: Freiberg & Peck, LLP, by Adam C. Weitz, Esq., 12 East 41st Street, New York, New York 10017

Charles J. Markey, J.

The instant decision, in this action for no-fault first party benefits, addresses the question of the extent of efforts required of a movant before it can secure preclusion or dismissal against the party who failed to honor a so-ordered stipulation. In the present case, plaintiff does not dispute the fact of noncompliance. Yet, plaintiff’s counsel insists that defendant must show that it placed a statement on the record at the deposition session before a court can invoke preclusion.

The defendant moves for preclusion for plaintiff’s failure to comply with a so-ordered stipulation [Siegal, J.], requiring a deposition of the plaintiff on or before February 18, 2004, at a named court-reporting facility, Diamond Reporting, in Jamaica, New York. The defendant attempted to secure compliance by telephoning opposing counsel, on February 17, 2004, to confirm that the deposition would go forward on the next day. Plaintiff’s counsel said that it would not produce a witness.

Defendant did not go to the reporting service named in Judge Bernice Siegal’s order. Instead, it subsequently moved for preclusion of all evidence, the sanction specifically recited in the so-ordered stipulation.

Plaintiff contends that defendant should not be able to secure preclusion without having made a specific statement on the record of an attempted examination before trial (“EBT”) of the failure of plaintiff’s counsel or its client to show up. Plaintiff’s counsel, in papers opposing the motion, argues, in pertinent part:

The defendant’s ability to subsequently preclude the plaintiff from offering evidence should not be a default right. The defendant should be required to offer and prove its attempt at conducting the EBT via a default statement on the record indicating they “showed up.” For the defendant to be able to enter a stipulation naming preclusion as the penalty for plaintiff’s failure to appear and allowing [*2]defendant to successfully preclude plaintiff’s evidence without showing up and taking a default statement at their own EBT would be like “arming” defense counsel with a means with which to circumvent equitable discovery practices. [Affirmation of Robert J. Baker, Esq., page 2].

Plaintiff’s arguments bear no merit for several reasons. First, the reason why some attorneys decide to place the failure of an opposing party to appear at an EBT is to preserve or make a record, especially when the absence of the other party could not have been predicted or the date or circumstances surrounding the deposition are in dispute. The need in those cases to arrange for a court reporter and make a record of the absence of an opposing party is often indispensable as a groundwork for future motion practice.

In the case at bar, in contrast, defense counsel exercised the courtesy of calling opposing counsel the day before the deposition and was advised that neither plaintiff nor its attorneys would appear. In other words, there was no need for a court reporter because plaintiff’s counsel made an advance repudiation of its stipulated undertaking to be present at a deposition to be held on or before February 18, 2004. In the present case, sound lawyering would have required defense counsel to fax a letter to plaintiff’s counsel on February 17, 2004, confirming the conversation of plaintiff’s refusal to attend the Feb. 18 EBT. Nevertheless, such a letter is not necessary for the disposition of the instant motion because plaintiff does not dispute that it did not attend the EBT, but merely implores for another opportunity to attend such a deposition.

Second, to adopt plaintiff’s specious argument would thrust upon a litigant the expense and burden of hiring and paying court-reporting agencies and reserving rooms, even though counsel is advised ahead of time that an opposing party will not attend. Defense counsel would, in effect, be like the proverbial dog chasing its own tail. In other words, where a stipulation is plain on its face, advising a party of the consequences of the failure to appear, and a party notifies its adversary that it will not attend the court-ordered discovery session or deposition, there is no need to force upon a lawyer the expense and effort of making arrangements for a deposition that will never take place.

Third, plaintiff’s counsel’s argument is also a way to extract yet “another bite at the apple,” namely, yet another chance to attend the deposition. Judges Edgar Walker and Bernice Siegal, in their joint decision in Hoss Medical Services v. Government Employees Insurance Co. (4 Misc 3d 521 [NYC Civ Ct Queens County June 17, 2004]), made clear that parties in no fault first party benefits cases will be held accountable for the language they employed in a stipulation and that their failure to comply with a discovery request posed in a court-ordered stipulation will not be tolerated. In Hoss, a case involving the same plaintiff’s law firm, the court stated:

It has long been held that parties may, by stipulation, chart their own procedural course in a case, which the courts are bound to enforce except in certain limited circumstances not even alleged to be present in these cases [citations omitted].

* * * * *

. . . [T]he court is not free to reform the stipulations to conform to what it thinks is proper or to impose a sanction other than that agreed to.

Id. at 523.

It would serve no purpose after a plaintiff’s counsel failed to abide by a court-ordered stipulation to require defense counsel to secure a second stipulation for enforcement of the prior agreement or to make futile arrangements before enjoying the benefit of the penalty that was clearly prescribed in the first stipulation. Any other result would render a mockery of proceedings and of judicial orders and would send a mischievous message that apparent finality actually does not mean final.

In the present case, this Court holds that defense counsel was not required to undergo the expense and trouble of arranging for a deposition before it moves for preclusion or dismissal. Accordingly, the defendant’s motion is, in all respects, granted. The undersigned will enforce the terms of the instant stipulation, and, accordingly, full preclusion is accorded against the plaintiff, and the complaint is dismissed.

The foregoing constitutes the decision, order, and opinion of the Court.

______________________________Hon. Charles J. Markey

Judge, Civil Court, Queens County

Dated: Jamaica, New York

February 18, 2005

Appearances:

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal by plaintiff from an order of the District Court, Nassau County (D. Gross, J), entered January 12, 2004, which denied its motion for summary judgment.

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

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 a claim, setting forth the fact and the amount of the loss 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]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]). While defendant timely denied the claims, it must nevertheless submit proof in admissible form in opposition to plaintiff’s motion to rebut plaintiff’s prima facie showing (A.B. Med. Servs. PLLC, 4 Misc 3d at 87). Since defendant’s submission, an unsworn peer review report, was not in admissible form, it was insufficient to warrant denial of plaintiff’s motion for summary judgment (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; A.B. Med. Servs. PLLC, 4 Misc 3d at 87; A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]).

Accordingly, plaintiff’s motion for summary judgment is granted and the matter is remanded for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.
Decision Date: February 17, 2005

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal by plaintiff from an order of the District Court, Nassau County (J. Spinola, J.), entered December 10, 2003, which denied its motion for summary judgment.

Order unanimously affirmed with $10 costs.

In this action to recover first-party no-fault benefits for medical services rendered to its assignor, plaintiff health care provider established a prima facie entitlement to summary judgment by proof that it submitted a claim, setting forth the fact and the amount of the loss 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]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]). Since defendant failed to pay or deny the claim within the 30-day statutory period (11 NYCRR 65.15 [g] [3]), it is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]).

However, defendant is not precluded from asserting the defense that the collision was in furtherance of an insurance fraud scheme, despite the untimely denial of the claim (see Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]). The affidavit submitted by defendant’s special investigator was sufficient to demonstrate that the defense 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]). Accordingly, since defendant [*2]demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage (see id.; see generally Zuckerman v City of New York, 49 NY2d 557 [1980]), plaintiff’s motion for summary judgment was properly denied.
Decision Date: February 17, 2005

Civil Court, Kings County

046215/02

Loren Baily-Schiffman, J.

This is an action to recover benefits pursuant to the no-fault provisions of Insurance Law §5106 and regulations promulgated thereunder, 11 NYCRR §65-1.1 and for attorneys fees pursuant to 65 NYCRR §65.17 (b)(6)(v). Plaintiff provider, as assignee of Kate Boglio, Julia DeJesus, Lillia Galicia, Fred Korets, Bertha Louis, Nelson Neton, Mozeik Perkins, Shawn Perkins, Maxim Savelyev, and Alexander Yakhshibekov moves this Court for summary judgment. Plaintiff asserts that it is entitled to judgment as defendant has not paid or denied the subject claims within thirty (30) days of receipt and where denials have been made, has not asserted a basis for the denial that is cognizable under the No-Fault Law. Defendant opposes the motion for summary judgment on the following bases: that the motion is premature in that the Court has not yet ruled on defendant’s motion to extend their time to comply with this Court’s [*2]prior discovery Order; the claims concerning Fred Korets, Maxim Savelyn and Alexander Yakhshibekov have been paid; plaintiff lacks standing to recover for its services billed from July 7, 2000 to July 6, 2001 as Michael M. Katz was suspended from practicing medicine during this time; plaintiff lacks standing to recover for its services because it is in violation of Article 15 BCL; a question of fraud exists as to allegedly negligent or fraudulent services provided by plaintiffs, and; plaintiff has failed to establish its prima facie case because the assignments of benefits submitted as part of the claims are not authenticated.

MOTION FOR SUMMARY JUDGMENT

In a motion for summary judgment, the moving party must make out a prima facie case of entitlement to judgment as a matter of law, offering sufficient evidence to establish the absence of any material issues of fact. Alvarez v. Prospect Hosp., 68 NY2d 320, 324 (1986). After making out a prima facie case, the burden shifts to the party opposing the motion to present sufficient evidence to show that there are material issues of fact in controversy which require a trial. Id. In a claim for no-fault benefits by a provider, the Plaintiff’s prima facie case is established by “the submission of a complete proof of claim and the amount of the loss. (See Insurance Law §5106[a]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply Inc. v. Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701{App Term, 2d & 11th Jud Dists])”. Ocean Diagnostic Imaging PC v. State Farm Mutual Automobile Insurance Company, NYLJ, Sept 24, 2004, p. 28, col. 5 (App Term 2d & 11th Jud Dists, 2004).

Pursuant to the Insurance Law and regulation, an insurer must either pay or deny a claim for no-fault benefits within thirty (30) days of receipt. The thirty (30) day period may be extended by an insurer’s request for verification of the claim within ten (10) business days for claims covered by the regulations in effect prior to April 5, 2002 and fifteen (15) business days for claims covered by the regulations that came into effect on April 5, 2002. 11 NYCRR 65.15 (e)(old regs); 11 NYCRR 65-3.5(b)(new regs). If any insurer fails to timely deny a claim, the insurer is precluded from raising any defenses to the claim other than lack of coverage and fraud by the assignor. Presbyterian Hosp. v. Maryland Cas. Co., 90 NY2d 274, 278 (1997); Presbyterian Hosp. v. Aetna Cas. & Sur. Co., 233 AD2d 433 (2d Dept, 1996); Central Hospital v. Chubb, 90 NY2d 195 (1997); Mt. Sinai v. Triboro Coach, 263 AD2d 11 (2d Dept 1999). An insurer’s failure to raise objections within the ten (10) or fifteen (15) day verification period constitutes a waiver of any defenses based thereon. Id.

Plaintiff asserts that it submitted the following proofs of claim for the aforementioned assignors:

AssignorDate of Date Claim Date of Reason for

ServiceReceivedDenialDenial

[*3]Boglio9/8/002/14/017/27/01Investigation Pending

DeJesus2/10/003/23/004/13/00Investigation Pending

Galicia2/10/003/21/004/26/00Investigation Pending

Korets2/2/00unknownNo denial received

Louis9/14/9910/28/9911/2/99Investigation Pending

9/21/9910/28/9911/2/99Investigation Pending

Neton2/10/004/3/005/2/00Investigation Pending

M.Perkins8/11/004/10/016/6/01Investigation Pending

8/18/004/10/016/6/01Investigation Pending

9/6/004/10/016/6/01Investigation Pending

S. Perkins4/30/997/25/9911/19/99Investigation Pending

5/11/997/25/9911/19/99Investigation Pending

5/28/998/3/9911/19/99Investigation Pending

Savelyn2/1/00unknownNo denial received

Yakhshibekov10/3/005/14/015/21/01Investigation Pending

10/26/005/14/015/21/01Investigation Pending

A.Claims Previously Paid

Defendant asserts that the claim for services provided to Fred Korets was settled and payment made. In support its assertion of payment, defendant submits a copy of a cancelled check in the amount of $1488.40, dated April 22, 2003, payable to plaintiff. The check indicates the name of the claimant as Fred Korets and the claim number listed on the check is the same as on the claim form annexed to plaintiff’s motion. The amount of the check is in excess of the amount of the claim listed on the claim form. However, Plaintiff’s reply papers do not in any way challenge defendant’s assertion that this claim was paid. Accordingly, the Court rules that defendant has submitted sufficient support for its assertion that the claim for services provided to Fred Korets has been paid.

Defendant asserts that the claims for services provided to Maxim Savelyn and Alexander Yakhshibekov also have been paid. In support of this assertion, defendant submits copies of cancelled checks issued to plaintiff which have the name of the claimant and the claim number that corresponds to the information provided by plaintiff in its papers. The Court notes that as to the claim for services provided to Maxim Savelyn, the amount of the check and the claim number are the same as for the claim concerning Fred Korets. The Court also notes that the amount of the check issued for services provided to Alexander Yakhshibekov is in excess of the amount of the claim. Plaintiff’s reply does not challenge defendant’s assertion that the claims for services provided to Maxim Savelyn and Alexander Yakhshibekov have been paid. Accordingly, the Court rules that defendant has submitted sufficient support for its assertion that the claims for services provided to Maxim Savelyn and Alexander Yakhshibekov have been paid.

B.Timeliness of the Denials [*4]

The Affirmation of Gilbert Lee, Esq., defendant’s counsel, acknowledges that “defendant issued untimely and/or defective denials with respect to seven of the ten claims identified in Plaintiff’s suit”. Lee Affirmation at ¶7. Neither Mr. Lee nor the Affidavits of Sandra DiSanto or Dietra Tripp in opposition to plaintiff’s motion indicates which claims they admit to having untimely denied, however reference to the above chart of claims leads the Court to the conclusion that the denials of claims concerning services provided to the following assignors were beyond the 30 day period provided for in 11 NYCRR §65.15: Boglio, Galicia, M. Perkins and S. Perkins.

Defendant takes the position that despite the untimeliness of its denials, it should not be precluded from raising its defenses to these claims because its defense is based on a lack of coverage. Defendant cites Central General Hospital v. Chubb Group of Ins. Companies, 90 NY2d 195 (1997) and Metro Medical Diagnostics, PC v. Eagle Insurance Co., 293 AD2d 751, (2 Dept.,2002) for this proposition. Each of these cases is improperly cited for the position that fraud by a provider is a “coverage” defense which can be asserted more than thirty (30) days after a claim is received.

While the Second Department in Central General Hospital, supra, does state that a “coverage” defense may be asserted beyond the thirty (30) day period, it clearly states that claims of fraud by the provider such as excessive billing are not “coverage” defenses. Id at 199. Similarly, Metro Medical, supra is inapplicable to the case at bar because it concerns an allegedly staged accident and not the allegation of fraud by a provider. More recently, Courts have clarified the differences between these two types of fraud allegations as they apply to the timeliness of denials and preclusion of defenses.

In Melbourne Medical, PC v. Utica Mutual Insurance Co., 4 Misc 3d 92 (App. Term 2nd & 11th Jud. Dists., 2004) the Appellate Term stated the following:

With regard to the fraud allegation, raised for the first time in defendant’s motion for summary judgment, defendant did not specify whether the fraudulent conduct was a staged automobile incident or the provider’s unilateral scheme to obtain no-fault benefits for unnecessary or excessive medical treatment. If the latter is the case, the purported defense is precluded by defendant’s untimely claim denial (Central Gen. Hosp. v Chubb Group of Ins. Cos. 90 NY2d 195, 199 [1997]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d at 285). If the former is the case, the defense survives preclusion (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 752 [2002]) and would, if substantiated, constitute a complete defense to the action (Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522 [2003]).

4 Misc 3d 92 at 94. This decision clearly differentiates between fraud by an assignor which implicates the coverage issues that would permit an insurer to submit its denial beyond the thirty [*5](30) day period without waiving its defenses, from fraud by the provider which must be asserted in a timely denial in order to avoid being precluded from asserting the defense.

This issue was determined with even more clarity in PSG Psychological, PC v. State Farm Ins. Co., 6 Misc 2d 1002(A); 2004 NY Slip Op. 51701 (Civ. Ct. Kings Co., 2004). There the Court stated that

[t]he fraud which defendant is claiming as a defense to payment of this claim is fraud by the plaintiff medical provider. Although an untimely denial permits a defendant to assert a defense of fraud by the assignor, a claim of fraud by the assignee must be asserted in a timely denial (Melbourne Medical, PC v. Utica Mutual Ins. Co., 4 Misc 2d 92 [2d Dept 2004]).

See also Careplus Medical Supply Inc. v. State Farm Mutual Auto. Ins. Co., NYLJ 10/13/04, p. 21, col. 1 (Civ. Ct. Kings Co., 2004). Clearly, the law in this Department is that a defense of fraud by the provider does not go to the issue of coverage and, therefore, must be asserted in a timely denial.

C.Propriety of Denial Based On “Pending Investigation”

Each of the claims for which a denial was submitted was denied on the basis of a pending investigation. Plaintiff asserts that the “no-fault regulations” prohibit such a denial but does not cite the Court to any specific regulation. There is case law in the 2nd and 11th Judicial District which supports plaintiff’s view that a denial based on a pending investigation is ineffective.

In AB Medical Services v. Prudential Property & Casualty Ins. Co., 2005 NY Slip Op 25032 (App Term 2nd & 11th Jud. Dists, 2005) the Appellate Term held that a delay letter does not extend the insurer’s time to pay or deny a claim. Similarly, the same Appellate Term held in Melbourne Medical v. Utica Mutual Ins. Co., supra, that an insurer may not rely on a letter informing a claimant that the claim is delayed pending an investigation to effect an extension of time to pay or deny the claim, even if that letter is denominated a verification request. Id at 94. In Sehgal v. Royal Ins. Co. of America, 1999 WL 1074313 (App Term, 2d & 11th Jud. Dists, 1999) the Court held that an insurer’s submission of a claim to peer review is not a request for verification and does not extend the insurer’s time to pay or deny the claim.

Other Courts are in accord with the Appellate Term, 2nd & 11th Judicial Districts. The Appellate Division, Third Department in LaHendro v. Travelers Ins. Co., 220 AD2d 971 (3d Dept 1995) held that an insurer could not extend the time to pay or deny a claim until it received a report from Health Cost Containment Associates. The statutory thirty (30) day period began to run when the insurer received the claim and responses to requests for verification, if any.

District Court, Nassau County, in Atlantis Medical, PC v. Liberty Mutual Ins. Co., 2002 NY Slip Op 40043 (Dist Ct, Nassau Co, 2002) held, relying on LaHendro, supra and Sehgal, supra that once the insurer has received from claimant all of the information necessary to verify the [*6]claim, “any time spent analyzing the claim is on the insurer’s dime” Atlantis Medical, supra..

In the case at bar, each of the claims that defendant denied was denied on the basis that there was a pending investigation. There is no distinction between the above cited cases concerning delays of the determination of claims based upon a continuing investigation and a denial of the claim based on a pending investigation. The conclusion is the same: an insurer may not delay or deny a claim based upon its desire to further investigate the claim, except in compliance with the regulatory verification procedures. LaHendro v. Travelers Ins. Co., supra; AB Medical Services v. Prudential Property & Casualty Ins. Co., supra; Melbourne Medical v. Utica Mutual Ins. Co., supra; Sehgal v. Royal Ins. Co. of America, supra; Atlantis Medical, PC v. Liberty Mutual Ins. Co., supra.

D.Authentication of Assignment of Benefits;

Invalid Verification of Treatment Forms

Defendant argues in its Memorandum of Law in Opposition to Plaintiff’s motion that plaintiff has failed to establish its prima facie case because it has failed to authenticate the various assignment of benefits forms and, therefore, has no standing to bring the instant action. Defendant also argues that the verification of treatment forms are unsigned. This issue has long been resolved in this Judicial District. A Plaintiff’s prima facie case is established by “the submission of a complete proof of claim and the amount of the loss. (See Insurance Law §5106[a]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply Inc. v. Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U]{App Term, 2d & 11th Jud Dists])”. Ocean Diagnostic Imaging PC A/A/O Jean Baptists Turenne, Johnson Turenne, v. State Farm Mutual Automobile Insurance Company, NYLJ, Sept 24, 2004, p. 28, col. 5 (App Term 2d & 11th Jud Dists, 2004). The defense of invalid assignment must be raised in a timely denial or it is waived. Presbyterian Hosp. v. Maryland Cas. Co., supra.;Presbyterian Hosp. v. Aetna Cas. & Sur. Co., supra; Quality Medical Healthcare, PC v. Lumberman’s Mutual Casualty Co., 2002 NY Slip Op 50098 (App Term 1st Dept, 2002); Inwood Hill Medical OC v. Allstate Ins.Co., NYLJ, Aug. 23, 2004, p. 19, col. 1 (Civ. Ct. Queens Co., 2004).

Here, each claim that was denied was denied because of a pending investigation. As defendant has failed to deny any of the claims on the basis that the authentication is invalid, this defense is waived. Similarly, as defendant has failed to deny any of the claims on the basis that the verification of treatment form is invalid, defendant has waived this defense. Id.

E.Question of Fact as to Whether the Services Billed for Were Provided

Defendant argues in its Memorandum of Law that there is a question of fact as to whether the services billed for and raised in this action were provided. The factual basis for this argument is the suspension of Michael M. Katz’s and Valentino J. Bianchini’s medical licenses. There is no indication in the defendant’s papers that these doctors were the only doctors providing services at plaintiff’s office. Moreover, defendant does not allege that Dr. Bianchini’s license was suspended during a time when services were provided to the assignors in this action. Accordingly, defendant has failed to establish that there is a question of fact sufficient to defeat plaintiff’s motion for [*7]summary judgment as to whether the billed for services were provided.

F.Plaintiff’s Standing to Bring This Action

Defendant argues that plaintiff does not have standing to bring the instant action because Michael M. Katz, the owner of plaintiff corporation, was suspended from practicing medicine from July 7, 2000 to July 6, 2001, surrendered his license on or about November 18, 2003 and the subsequent owner, Valentino J. Bianchini, surrendered his license to practice medicine on or about November 21, 2002. Essentially, defendant is making two arguments: 1) that plaintiff may not be compensated for services provided by an unlicensed medical professional and 2) that a professional corporation that is not properly licensed may not sue to recover no-fault benefits.

Plaintiff opposes defendant’s argument on standing in its reply affirmation of counsel. Plaintiff states that no services involved in this action were provided during a period when the plaintiff or its principal were not properly licensed and that a physician may recover for medical services rendered when it was licensed, even if no longer licensed and/or registered, citing CKC Chiropractic v. Republic Western Ins. Co., 2004 NY Slip Op 24351 (Civ. Ct. Kings Co., 2004) . Defendant has properly raised an issue of fact as to whether the alleged principal of plaintiff corporation was properly licensed when the services sued for herein were provided to assignors Boglio and M. Perkins. These services were provided during a period of time when Dr. Michael Katz, the principal of plaintiff corporation, was allegedly suspended from the practice of medicine. The information provided by defendant is in the form of Orders of the New York Department of Health indicating that Dr. Katz was suspended from practicing medicine for one year from July 7, 2000 to July 6, 2001 and surrendered his license to practice medicine by signed Order, signed by him on November 18, 2003. As to the second standing issue raised by defendant, the only information provided concerning the ownership of plaintiff corporation is a purported copy of a web site listing. The Court holds that the web site information is hearsay and insufficient to establish or even raise a question of fact as to the ownership of plaintiff corporation.

There is no question that medical services must be provided by a licensed professional. The only services provided during the period of Dr. Katz’s suspension that are involved in this action are services provided to Kate Boglio on September 8, 2000 and to Mozeik Perkins on August 11, August 18 and September 6, 2000. As a question of fact has been raised as to whether Dr. Katz performed these services, the Court holds that summary judgment is denied only as to the claims of Kate Boglio and Mozeik Perkins and only on the issue of whether Dr. Katz performed these services. As to plaintiff’s standing to bring this action because of the status of the corporation’s license, its relationship to the corporation’s principal’s license and the ability to collect no-fault benefits, the Court holds that further discovery is necessary on the factual issues that underlie defendant’s argument.

DISCOVERY MOTION

Defendant moves this Court for an extension of the discovery ordered by this court in a discovery Order dated November 20, 2003, approximately three (3) months prior to defendant’s [*8]making their motion. Plaintiff’s opposition to the discovery motion was made five (5) months later. Defendant’s basis for its motion is law office failure: it neglected to timely attend to discovery in this matter after the Court Order on November 20, 2003. It should be noted that the discovery Order provides for discovery of all parties. Neither plaintiff nor defendant conducted any discovery pursuant to the Court’s Order. It should also be noted that defendant’s counsel attempted to resolve the discovery dispute by communicating with plaintiff’s counsel prior to making a motion to the Court. Defendant’s attempt at resolution of the discovery issue was unsuccessful and a motion was then necessary.

Because of the relative timeliness of defendant’s attempt to resolve the discovery dispute and neither party’s compliance with the Court’s Order, the Court is inclined to grant defendant’s motion to a limited extent consistent with the Court’s other rulings contained in this Decision and Order.

Generally, discovery should be completed before a motion for summary judgment is made. In the instant case plaintiff’s motion for summary judgment was made only after defendant moved to extend discovery after unsuccessful attempts to obtain consent from plaintiff’s counsel to do so by stipulation. Plaintiff submitted its motion at the same time as its opposition to defendant’s motion and should have denominated its motion a cross-motion. Defendant properly argues that plaintiff’s motion is premature. However, consistent with the Court’s rulings herein on plaintiff’s motion for summary judgment, the only issues that survive those rulings are related to plaintiff’s standing to bring this action, Further discovery on any other issues would have no effect on the Court’s decision.

The Court rules that the Discovery Order, dated November 20, 2003, is extended for forty-five (45) days from the date of this Decision and Order for discovery solely on the issues of the licensing of plaintiff and plaintiff’s principals and which medical professional performed the services provided to assignors Boglio and M. Perkins. Consistent with the Court’s rulings herein, in the event that plaintiff is found to have standing to bring this action, plaintiff would be entitled to summary judgment on all claims that have not already been paid.

CONCLUSION

Three of the claims brought, for services to assignors Korets, Savelyn and Yakhshibekov, have already been paid and are not considered in this motion. Either because of untimeliness or denials based on pending investigations, defendant has waived its defenses to all of the other claims. Defendant has also waived its defenses on the bases of the authentication of the assignment of benefits and the alleged invalidity of the verification of treatment forms for failure to raise these defenses in their denials. The Court has insufficient information to rule that plaintiff does or does not have standing to bring this action. Accordingly, on defendant’s discovery motion the Court’s prior discovery Order, dated November 20, 2003, is extended for forty- five (45) days from the date of this Order for the parties to engage in discovery solely on the issues of the licensing of plaintiff and plaintiff’s principals and which medical professional performed the services provided to assignors Boglio and M. Perkins. In the event that plaintiff is found to have standing to bring this action, plaintiff is entitled to summary judgment on all claims that have not already been paid. [*9]

This constitutes the Decision and Order of this Court.

DATED:February 17, 2005

______________________________

LOREN BAILY-SCHIFFMAN, J.C.C.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal by defendant from an order of the District Court, Nassau County (S. Yeager, J.), entered February 17, 2004, which granted plaintiff’s motion for summary judgment.

Order unanimously affirmed without costs.

In this action to recover $2,670.40 in assigned first-party no-fault benefits for medical services rendered to its assignor, plaintiff health care provider established a prima facie entitlement to summary judgment by proof that it submitted a claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]). Defendant’s failure to pay or deny the claim within the prescribed 30-day period, or to demonstrate that said period had been tolled, precludes defendant from interposing most defenses to the action (Insurance Law § 5106 [a]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 701 [2001]; A.B. Med. Servs. v USAA Cas. Ins. Co., 6 Misc 3d 126[A] 2004 NY Slip Op 51682[U] [App Term, 2d & 11th Jud Dists]; Diagnostic Rehab. Med. Servs. v Travelers Indem. Co., ___ Misc 3d ___, [*2]2004 NY Slip Op 24505 [App Term, 2d & 11th Jud Dists]; Amaze Med. Supply v Colonial Penn Ins. Co., 3 Misc 3d 135[A], 2004 NY Slip Op 50471[U] [App Term, 2d & 11th Jud Dists]). However, defendant was not precluded from asserting the defense that the alleged injuries did not arise out of a covered accident (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]; Ocean Diagnostic Imaging v Eagle Ins. Co., 5 Misc 3d 139[A], 2004 NY Slip Op 51640[U] [App Term, 9th & 10th Jud Dists]) which, if substantiated, would constitute a complete defense to the action (Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522 [2003]).

To interpose a defense of staged-accident fraud sufficient to raise a triable issue of fact, defendant must establish “the fact or 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]; Ocean Diagnostic Imaging v Eagle Ins. Co., 5 Misc 3d 139[A], 2004 NY Slip Op 51640[U], supra). The facts alleged in an entirely conclusory fashion in the attorney’s affirmation in opposition to the summary judgment motion were not based on counsel’s personal knowledge and, as unsubstantiated hearsay, were clearly of no probative value (Penny v Pembrook Mgt., 280 AD2d 590, 591 [2001]; Amstel Chiropractic v Omni Indem. Co., 2 Misc 3d 129[A], 2004 NY Slip Op 50088[U] [App Term, 2d & 11th Jud Dists]). The bare conclusory statement in a claims representative’s affidavit, that her file review “reveal[ed] that based upon Allstate’s investigation of this claim, [assignor] engaged in staging a fraudulent accident,” merited the lower court’s determination that defendant failed to interpose a triable issue of fraud (id.; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92, 94 [App Term, 2d & 11th [*3]
Jud Dists 2004]; A.B. Med. Servs. v State Farm Mut. Auto. Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50387[U] [App Term, 2d & 11th Jud Dists]; A.B. Med. Servs. v Eagle Ins. Co., 3 Misc 3d 8, 9-10 [App Term, 9th & 10th Jud Dists 2003]).
Decision Date: February 17, 2005