Beal-Medea Prods., Inc. v GEICO Gen. Ins. Co. (2010 NY Slip Op 50800(U))

Civil Court of the City of New York, Kings County

042765/08

Plaintiff:

Max Valerio, Esq.

Gary Tsirelman, P.C.

55 Washington Street, Suite 606

Brooklyn, New York 11201

Defendant:

Dominick Dale, Esq.

Law Offices of Teresa M. Spina

170 Froehlich Farm Boulevard

Woodbury, New York 11797

Pamela L. Fisher, J.

Plaintiff, Beal-Medea Products, Inc., assignee of Michael Perez, instituted this action to recover first party no-fault benefits from Defendant GEICO. A trial was held before this Court on March 29, 2010 and April 5, 2010. After considering and evaluating the trial evidence and upon weighing and assessing the credibility of the witnesses, the Court makes the following findings of fact and conclusions of law.

The parties stipulated that Plaintiff established its prima facie case, that Defendant established timely denials, and that the sole issue for trial was medical necessity. The parties also stipulated to the admission of the bills and denials. It is Defendant’s burden at trial to show that the supplies provided to Plaintiff’s assignor were medically unnecessary. See Amaze Med. Supply, Inc. v. Eagle Ins. Co., 2003 NY Slip Op 51701U (NY App. Term 2003). To meet its burden, at a minimum, Defendant must establish a factual basis and medical rationale for its asserted lack of medical necessity, which is supported by evidence of the generally accepted medical/professional [*2]practices. See Nir v. Allstate Ins. Co., 2005 NY Slip Op 25090 (NY Civ. Ct. 2005).

At trial, Defendant called Dr. Michael Jacobs to testify regarding the peer review report of Dr. Andrew Miller. Plaintiff objected on hearsay grounds to Dr. Jacob’s testimony because he was not the author of the original peer report. The Court now turns to the question of whether it is permissible for a substitute doctor to testify.

The Appellate Term First and Second Department have held that a substitute peer doctor is permitted to testify as the witness is subject to full cross-examination, however they have limited the substitute peer’s testimony to the basis for denial as set forth in the original peer review report. Bronx Expert Radiology, P.C. v. New York Cent. Mut. Fire Ins. Co., 2009 NY Slip Op 51475U, 1 (NY App. Term 2009). See also Home Care Orthos. Med. Supply v. American Mfrs. Mut. Ins. Co., 14 Misc 3d 139(A) (2007); Spruce Med. and Diagnostic, P.C. v Lumbermen’s Mut. Cas. Co., 15 Misc 3d 143A(2007). Bronx Expert did not limit its holding to cases where documents are in evidence. When the parties have stipulated that either the peer report or the underlying medical records are admitted into evidence applying the Bronx Expert standard is clear. However when the parties have not stipulated documents into evidence the Court must determine to what extent may the witness rely on out-of-court documents without violating the hearsay rule. See Progressive Med., Inc. v Allstate Ins. Co., 2010 NY Slip Op 50219U (NY App. Term 2010).

In SK Med. Servs., P.C. v. New York Cent. Mut. Fire Ins. Co., 2006 NY Slip Op 26227, 1 (NY Civ. Ct. 2006), a lower court case decided before Bronx Expert, the parties stipulated that the peer report was in evidence and the court held that the substitute peer was permitted to testify. The substitute peer was limited to testifying to the facts and opinions contained in the peer review report. Id. The decision was based on the rationale that an insurer may not assert new grounds for its refusal to pay a claim and must adhere to the defense as stated in its denial. Id. Permitting a substitute peer to testify does not violate these principles as long as the substitute peer doctor is limited to the basis for the denial as set forth in the original peer report. Id. As the parties stipulated the peer into evidence, SK Medical did not address the evidentiary concerns associated with admitting the peer report or underlying medical records into evidence when a substitute peer testifies. When documents are not in evidence, the Plaintiff will inevitably object to the testimony of the peer or substitute peer on hearsay grounds. Bronx Expert does not expound upon hearsay concerns. Instead the case states that Defendant’s expert is not precluded from testifying because his opinion may have been based, at least in part, on his review of the assignor’s medical records prepared by plaintiff. See Bronx Expert.

In IAV Med. Supply, Inc. v Progressive Ins. Co., 2010 NY Slip Op 50433U, 5 (NY Civ. Ct. Mar. 15, 2010), the Court relied on the standard set forth in Bronx Expert, and held that a substitute peer doctor was permitted to testify when there were no documents in evidence because the witness would be subject to cross-examination and his testimony would be limited to the original peer review reports. IAV Medical allowed the testimony by relying on the fact that the peer reports had been submitted to the Plaintiff prior to trial as part of a summary judgment motion and expert disclosure, however the court did not address hearsay concerns.When the peer report and/or underlying medical records have not been stipulated into evidence, Defendant must overcome Plaintiff’s hearsay exception in order to elicit testimony from the expert witness. In this instance, the Court may rely on the framework laid by Wagman. Wagman v. Bradshaw, 292 AD2d 84, 85 (NY App. Div. 2d Dep’t 2002). In Wagman, the Appellate Division [*3]held that an expert witness may testify when he or she relied upon inadmissible out-of-court material to formulate an opinion provided: (1) it is of a kind accepted in the profession as reliable as a basis in forming a professional opinion, and (2) there is evidence presented establishing the reliability of the out-of-court material referred to by the witness. Id. See also Hambsch v New York City Tr. Auth., 63 NY2d 723); Supple Mind Acupuncture, P.C. v. State Farm Ins. Co., 2008 NY Slip Op 51856U (NY App. Term 2008). Under the purview of Wagman, it follows that a peer doctor as well as a substitute peer doctor would be permitted to testify as long as the witness is able to satisfy the two prong Wagman test. The testimony of the peer and substitute peer are deemed permissible because of an exception to the hearsay rule. Namely their testimony is deemed permissible when they have established the reliability of the out of court documents relied upon. It is a contradiction to permit the peer doctor to testify based on an exception to the hearsay rule and in turn prohibit a substitute peer from testifying. Both the peer and substitute peer are relying on out of court documents which fall under a hearsay exception. Generally, litigants can satisfy the first prong of Wagman, however establishing the second prong is more difficult.

Courts have held that Plaintiff invariably can not rebuff the reliability of the out of courts documents relied upon by an expert when the out of court documents consist of documents that plaintiff or assignor have prepared. See Andrew Carothers, M.D. (Martinez) v. GEICO, 2008 NY Slip Op 50456[U], 18 Misc 3d 1147[A], 859 NYS2d 892 (Civil Ct., Kings Co. 2008); Home Care Ortho. Med. Supply Inc., v. American MFRS. Mut. Ins. Co., 2007 NY Slip Op 50302[U], 14 Misc 3d 139[A], 836 NYS2d 499 (App. Term, 1st Dept. 2007); Primary Psychiatric Health, P.C., v. State Farm Mutual, 2007 NY Slip Op 50583[U], 15 Misc 3d 1111[A], 839 NYS2d 436 (Civil Ct., Kings Co. 2007). In Popular Imaging, P.C. v State Farm Ins. Co., 2009 NY Slip Op 52355U (NY Civ. Ct. 2009), a peer doctor was permitted to testify with respect to a peer report and underlying medical records which were not in evidence. The Court found that the peer doctor satisfied the Wagman two prong test for permitting expert testimony based upon out of court documents. Id. The Court held that a Plaintiff invariably can not rebuff the permissibility of the expert testimony on reliability grounds when those documents are Plaintiff’s or assignor’s documents.

In PLP Acupuncture, P.C. v. Progressive Cas. Ins. Co., 2009 NY Slip Op 50491U, 1-2 (NY App. Term 2009), the Court permitted a substitute peer doctor to testify. The Court applied the Wagman test and held that the substitute peer could rely upon out of court documents in forming his opinion as long as the substitute peer offers proof of the reliability of the out of court documents. Id. The Court further held that as some of the medical reports relied upon by defendant’s acupuncturist in his peer review report were prepared by plaintiff, plaintiff could not challenge the reliability of its own medical records and reports. Id.

In Dilon Med. Supply Corp. v. New York Cent. Mut. Ins. Co., 2007 NY Slip Op 52454U, 2 (NY App. Term 2007), the Appellate Term reversed a lower court which precluded a substitute doctor from testifying. The Court held that since defendant sought to call a medical expert witness who was available for cross-examination, and his testimony as to the lack of medical necessity of plaintiff’s services would be limited to the basis for the denials as set forth in the original peer review reports, the expert witness should have been permitted to testify. Id.

Applying this standard to the case at hand, the Court will permit the substitute peer doctor to testify and limit his testimony to the basis for denial as set forth in the original peer review. Plaintiff objected to Dr. Jacob’s testimony based upon hearsay grounds. The Court of Appeals has [*4]held that an expert witness may testify that he or she relied upon specific, inadmissible out-of-court material to formulate an opinion provided: (1) it is of a kind accepted in the profession as reliable as a basis in forming a professional opinion and (2) there is evidence presented establishing the reliability of the out-of-court material referred to by the witness. See Wagman. Dr. Jacobs testified that the out-of-court documents he relied upon were professionally reliable, however he did not present evidence establishing the reliability of the out-of-court material. Therefore, Defendant failed to demonstrate either that the testimony did not rely on out-of-court documents for the truth of the matters stated herein, or that the documents were being relied upon for their truth but fell within an exception to the rule against hearsay. See Progressive Med., Inc. v Allstate Ins. Co., 2010 NY Slip Op 50219U (NY App. Term 2010). Accordingly, Dr. Jacobs’ testimony is stricken and the Court finds that Defendant did not establish a factual basis and medical rationale for its asserted lack of medical necessity.

Judgement in favor of Plaintiff in the amount of $563.04, plus costs, disbursements, statutory interest and statutory attorneys fees. This constitutes the decision and order of the Court.

May 6, 2010

Pamela L. Fisher

Judge, Civil Court