March 17, 2004

A.B. Med. Servs. PLCC v State Farm Mut. Auto. Ins. Co. (2004 NY Slip Op 24181)

Headnote

The main issues in this legal case were whether A.B. Medical Services PLLC, as the assignee of Kanzada McGreath, had the right to recover first-party no-fault benefits from State Farm Automobile Insurance Company. The court considered evidence provided by the plaintiff to establish that they submitted the necessary forms to prove "the fact and amount of loss sustained" and were entitled to the benefits. The court held that the plaintiff had established its entitlement to most of the benefits, for which defendant's failure to timely deny the claims precluded most defenses. However, the preclusion rule did not apply to a defense based on a claim of fraud, and the defendant provided proof that included significant discrepancies in the assignors' accounts and allegations of fraud in the medical services provided. Based on this evidence, the court held that there were triable issues as to whether the accident was deliberate, as well as the necessity of certain medical services, and therefore the plaintiff's motion for summary judgment was properly denied.

Reported in New York Official Reports at A.B. Med. Servs. PLCC v State Farm Mut. Auto. Ins. Co. (2004 NY Slip Op 24181)

[*1]

A.B. Medical Services PLLC, as Assignee of Kanzada McGreath, Appellant,
v
State Farm Mutual Automobile Insurance Company, Respondent. (And Two Other Actions.)

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

APPEARANCES OF COUNSEL

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

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

Memorandum.

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

Order unanimously affirmed without costs.

In these actions to recover $7,393.37 in assigned first-party no-fault benefits provided its assignors, with the exception of the claim for $290.64 in the action appealed under calendar No. 2003-469 N C, the entire claim asserted in the action appealed under calendar No. 2003-470 N C, and the claim for $358.04 in the action appealed under calendar No. 2003-471 N C, plaintiff established its entitlement to the benefits prima facie, by proof that it submitted the completed statutory forms setting forth “the fact and amount of loss sustained” (Insurance Law § 5106 [a]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]; see Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). Defendant’s failure timely to deny any of the claims for which a prima facie case is established (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [d] [1]) precluded most defenses thereto (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]).

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

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

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

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

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