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February 24, 2021

Alleviation Med. Servs., P.C. v Allstate Ins. Co. (2021 NY Slip Op 08159)

https://www.beynensonlaw.com/case-law/alleviation-med-servs-p-c-v-allstate-ins-co-2021-ny-slip-op-08159/

Court
Appellate Division, Second Department
Decided
February 24, 2021
Citation
2021 NY Slip Op 08159 · 191 AD3d 934
Posture
Summary judgment
Outcome
Provider prevailed
Later treatment
Followed in 8 later decisions (see Cited by)
Issues
Policy issues Trial and evidence
Legal questions
Exhaustion of policy limits (see the maps)
Cite as
Alleviation Med. Servs., P.C. v Allstate Ins. Co., 191 AD3d 934 (2d Dept 2021)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

The insurer failed to support its policy-exhaustion defense with admissible evidence concerning the provider's claim. The Appellate Division, Second Department, affirmed the order upholding denial of the insurer's summary judgment motion, on different grounds. Although records indicated policy exhaustion, the employee affidavit described general claims-handling practices without claim-specific information, and the insurer omitted the application, verification materials and denial. The employee's assertions about the file's contents were inadmissible hearsay; reviewing business records did not confer personal knowledge. Insurance Law § 5106 (a) requires timely payment or denial of verified claims, which are subject to the payment-priority regulation, 11 NYCRR 65-3.15. Factual issues remained concerning the denial's timing, basis and efficacy; the remaining contentions were not reached.

Reported in New York Official Reports at Alleviation Med. Servs., P.C. v Allstate Ins. Co. (2021 NY Slip Op 08159)

Alleviation Med. Servs., P.C. v Allstate Ins. Co.
2021 NY Slip Op 08159 [191 AD3d 934]
February 24, 2021
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, March 31, 2021

[*1]

 Alleviation Medical Services, P.C., as Assignee of Ali Al Rahabi, Respondent,
v
Allstate Insurance Company, Appellant.

Peter C. Merani, P.C., New York, NY, for appellant.

Gary Tsirelman, P.C., Brooklyn, NY (Stefan Belinfanti and David M. Gottlieb of counsel), for respondent.

Rivkin Radler LLP, Uniondale, NY (Evan H. Krinick, Barry I. Levy, and Henry M. Mascia of counsel), for amici curiae New York Insurance Association, Inc., and another.

In an action to recover no-fault benefits, the defendant appeals, by permission, from an order of the Appellate Term of the Supreme Court for the Second, Eleventh, and Thirteenth Judicial Districts dated March 29, 2017. The order affirmed an order of the Civil Court of the City of New York, Queens County (Terrence C. O’Connor, J.), entered April 1, 2015, denying the defendant’s motion for summary judgment dismissing the complaint.

Ordered that the order dated March 29, 2017, is affirmed, with costs.

In June 2011, the plaintiff commenced the instant action against the defendant in the Civil Court of the City of New York, Queens County, seeking to recover the sum of $4,748.69 for treatment provided to its assignor in April 2011, following a motor vehicle accident that occurred on October 20, 2010. The plaintiff alleged, among other things, that a no-fault claim and verification were sent to the defendant on April 19, 2011, and that the defendant failed to properly deny the claim or request additional verification in compliance with no-fault regulations.

In May 2014, the defendant moved for summary judgment dismissing the complaint, arguing that the benefits under the no-fault policy had been exhausted. The Civil Court denied the defendant’s motion, and the Appellate Term of the Supreme Court for the Second, Eleventh, and Thirteenth Judicial Districts affirmed. The defendant appeals, and we affirm, albeit on different grounds than those relied upon by the Civil Court or the Appellate Term.

“Under the no-fault system, payments of benefits ‘shall be made as the loss is incurred’ ” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003], quoting Insurance Law § 5106 [a]). Under this regulatory scheme, “an insurer shall pay benefits directly to the ‘applicant,’ or, upon assignment by the applicant, ‘shall pay benefits directly to providers of health care services’ ” (East Acupuncture, P.C. v Allstate Ins. Co., 61 AD3d 202, 207 [2009], quoting 11 NYCRR 65-3.11 [a]). In addition, “an insurer is required to either pay or deny a claim for no-fault automobile [*2]insurance benefits within 30 days from the date an applicant supplies proof of claim” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]; see Insurance Law § 5106 [a]). However, “[a]n 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]) since, where payments made by an insurer meet or exceed the policy limits, “its duties under the contract of insurance cease” (Presbyterian Hosp. in City of N.Y. v Liberty Mut. Ins. Co., 216 AD2d 448, 448 [1995]; see 11 NYCRR 65-3.15).

“[A]n insurer must pay or deny only a verified claim—that is, a claim that has been verified to the extent compliance with section 65-3.5 dictates in the particular case—within 30 calendar days of receipt; and, conversely, is not obligated to pay any claim until it has been so verified” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 299 [2007]). Once claims have been verified they are subject to the priority of payment regulation, 11 NYCRR 65-3.15 (see Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d at 300).

While the defendant submitted records indicating that the subject no-fault policy had been exhausted in 2013, the defendant’s submissions failed to establish its prima facie entitlement to judgment as a matter of law. Although the defendant submitted an affidavit from one of its employees that set forth the defendant’s ordinary business practice of receiving, recording, and denying no-fault claims from medical providers, the affidavit is bereft of any specific information regarding this claim. The defendant failed to submit the no-fault application, verification, any request for verification, or any denial associated with the plaintiff’s claim for payment. “While a witness may read into the record from the contents of a document which has been admitted into evidence, a witness’s description of a document not admitted into evidence is hearsay” (Wells Fargo Bank, N.A. v Sesey, 183 AD3d 780, 783 [2020] [citation and internal quotation marks omitted]). Because “a review of records maintained in the normal course of business does not vest an affiant with personal knowledge” (JPMorgan Chase Bank, N.A. v Grennan, 175 AD3d 1513, 1517 [2019]), the employee’s assertions as to the contents of the no-fault file are inadmissible hearsay (see Wells Fargo Bank, N.A. v Sesey, 183 AD3d at 783; U.S. Bank N.A. v 22 S. Madison, LLC, 170 AD3d 772, 774 [2019]). Accordingly, there are issues of fact remaining as to when the claim was denied, and the basis and efficacy of the denial (see Paulin v Needham, 28 AD3d 531 [2006]).

The parties’ remaining contentions, including those raised by the amici curiae, need not be reached in light of our determination. Chambers, J.P., LaSalle, Barros and Christopher, JJ., concur.

Legal questions

A question of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.

Exhaustion of policy limits

Open the full map

Did the insurer prove the policy’s no-fault limits were properly exhausted before it became obligated to pay the claim?

This decision: Insurer's proof did not establish exhaustion (or compliance with 65-3.15); defense fails on this record

Held the insurer failed to establish exhaustion because its employee's affidavit gave no information about this claim and described a claim file not in evidence, leaving unproven when and how the claim was denied relative to the exhausting payments.

  • Appellate DivisionApp Div 17
  • Appellate TermApp Term 42
  • Trial courtsTrial 9
2021, Appellate Division: 1 decision (1 Exhaustion not proved)2011, Appellate Division: 3 decisions (1 Triable issue / hearing, 2 Defense not heard)2010, Appellate Division: 2 decisions (1 Limits exhausted, 1 Coverage left when due)2006, Appellate Division: 3 decisions (2 Limits exhausted, 1 Triable issue / hearing)2005, Appellate Division: 3 decisions (1 Limits exhausted, 2 Triable issue / hearing)2004, Appellate Division: 3 decisions (2 Limits exhausted, 1 Triable issue / hearing)2025, Appellate Division: 1 decision (1 Limits exhausted)2018, Appellate Division: 1 decision (1 Limits exhausted)2022, Appellate Term: 1 decision (1 Exhaustion not proved)2020, Appellate Term: 3 decisions (1 Limits exhausted, 1 Coverage left when due, 1 Exhaustion not proved)2019, Appellate Term: 3 decisions (3 Exhaustion not proved)2018, Appellate Term: 5 decisions (1 Limits exhausted, 1 Coverage left when due, 3 Exhaustion not proved)2017, Appellate Term: 6 decisions (2 Limits exhausted, 1 Coverage left when due, 3 Exhaustion not proved)2016, Appellate Term: 2 decisions (1 Limits exhausted, 1 Triable issue / hearing)2013, Appellate Term: 1 decision (1 Limits exhausted)2009, Appellate Term: 1 decision (1 Exhaustion not proved)2006, Appellate Term: 1 decision (1 Triable issue / hearing)2023, Appellate Term: 1 decision (1 Exhaustion not proved)2024, Appellate Term: 7 decisions (7 Exhaustion not proved)2025, Appellate Term: 2 decisions (1 Coverage left when due, 1 Exhaustion not proved)2026, Appellate Term: 7 decisions (5 Exhaustion not proved, 2 Triable issue / hearing)2012, Appellate Term: 1 decision (1 Exhaustion not proved)2021, Appellate Term: 1 decision (1 Exhaustion not proved)2019, Trial courts: 2 decisions (1 Limits exhausted, 1 Exhaustion not proved)2017, Trial courts: 1 decision (1 Defense not heard)2007, Trial courts: 1 decision (1 Limits exhausted)2023, Trial courts: 1 decision (1 Exhaustion not proved)2024, Trial courts: 1 decision (1 Exhaustion not proved)2026, Trial courts: 1 decision (1 Exhaustion not proved)2016, Trial courts: 1 decision (1 Limits exhausted)2018, Trial courts: 1 decision (1 Exhaustion not proved)This decision
20052010201520202025
Limits exhaustedCoverage left when dueExhaustion not provedTriable issue / hearingDefense not heardThis decisionCites it or cited by itCited or followed

Of the 68 decisions on this question in the Second Department courts and the Court of Appeals, 34 (this one included) are in the same category. 3 decisions in other departments that cite or are cited by this one are on the full map.

Cited in this decision

  • East Acupuncture, P.C. v Allstate Ins. Co. (2009 NY Slip Op 01191)The interest toll under 11 NYCRR 65-3.9 (c) applies to provider assignees as well as injured claimants.
  • Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co. (2004 NY Slip Op 05413)The hospitals' first and fifth claims were dismissed because policy limits were exhausted and requested verification remained outstanding.

Cited by (19)

A label shows how the later decision treated this one.

  • JFL Med. Care, P.C. v MVAIC (2024 NY Slip Op 50202(U)) FollowedMVAIC failed to establish coverage exhaustion because it omitted the dates claims were received and fully verified.
  • Chiropractic Exam Works, P.C. v Sentry Cas. Co. (2021 NY Slip Op 51125(U)) FollowedAn insurer that repudiates liability for a claim cannot then require compliance with the policy's EUO provision.
  • Healthway Med. Care, P.C. v MVAIC (2026 NY Slip Op 50198(U)) FollowedMVAIC's payment log failed to establish exhaustion of available coverage because it omitted claim receipt and full verification dates.
  • Acupuncture Now, P.C. v MVAIC (2026 NY Slip Op 50197(U)) FollowedMVAIC established overbilling under the acupuncture fee schedule but failed to establish exhaustion of available coverage.
  • Acupuncture Now, P.C. v MVAIC (2026 NY Slip Op 50196(U)) FollowedA licensed acupuncturist's services before October 1, 2020 are reimbursed under the workers' compensation fee schedule for chiropractors.
  • Healthway Med. Care, P.C. v MVAIC (2026 NY Slip Op 50200(U)) FollowedMVAIC failed to establish exhaustion or proper fee schedule payment, and claim-submission timeliness remained disputed.
  • Healthway Med. Care, P.C. v MVAIC (2026 NY Slip Op 50199(U)) FollowedMVAIC failed to establish coverage exhaustion because its payment log omitted claim receipt and full-verification dates.
  • Custom Rx Pharm. v Country Wide Ins. Co. (2021 NY Slip Op 50860(U)) FollowedThe insurer failed to prove late accident notice, and the provider failed to establish entitlement to payment with admissible evidence.
  • JPC Med., P.C. v State Farm Mut. Auto. Ins. Co. (2022 NY Slip Op 50562(U))The insurer failed to establish policy exhaustion because its claim specialist did not lay a sufficient foundation for the payment log.
  • JSJ Anesthesia Pain Mgt., PLLC v Nationwide Ins. Co. (2024 NY Slip Op 50203(U))The insurer failed to prove policy exhaustion because its claim specialist did not lay a sufficient foundation for the payment log.
Show all 19 citing decisions
  • Matter of New Millennium Pain & Spine Medicine, P.C. v Garrison Prop. & Cas. Ins. Co. (2024 NY Slip Op 00599)
  • Matter of Lam Quan, MD, PC v GEICO Gen. Ins. Co. (2024 NY Slip Op 00174)
  • Apazidis, M.D., P.C. v State Farm Mut. Auto. Ins. Co. (2021 NY Slip Op 50498(U))
  • Chiropractic Assoc. of Richmond Hill, P.C. v Nationwide Gen. Ins. Co. (2025 NY Slip Op 50506(U))
  • Pain Med., PLLC v State Farm Mut. Auto. Ins. Co. (2024 NY Slip Op 50069(U))
  • American Tr. Ins. Co. v Trinity Pain Mgt. of Staten Is., PLLC (2023 NY Slip Op 51337(U))
  • Heaven & Earth Acupuncture, P.C. v Hartford Ins. Co. of Ill. (2023 NY Slip Op 51236(U))
  • Matter of New Millennium Pain & Spine Medicine, P.C. v Progressive Cas. Ins. Co. (2023 NY Slip Op 05369)
  • Jiang Acupuncture PC v State Farm Ins. Co. (2023 NY Slip Op 50961(U))

Similar decisions

  • A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co. (2005 NY Slip Op 25032)An insurer may assert a lack-of-coverage defense despite an untimely denial of no-fault claims.
  • Allstate Ins. Co. v Buffalo Neurosurgery Group (2019 NY Slip Op 03749)The insurer established a fee-schedule defense but failed to show that the assignor's spinal fusion surgery was medically unnecessary.
  • Westchester Med. Ctr. v Lincoln Gen. Ins. Co. (2009 NY Slip Op 02589)The insurer's investigation letters did not toll the 30-day period to pay or deny the provider's claim.
  • Westchester Med. Ctr. v Progressive Cas. Ins. Co. (2011 NY Slip Op 08747)The insurer's timely denial defeated summary judgment on the provider's first cause of action alleging failure to pay or deny.
  • New York Univ. Hosp.-Tisch Inst. v Government Empls. Ins. Co. (2014 NY Slip Op 03812)The insurer raised a factual issue as to whether verification requests tolled the deadline and its denial was timely.
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