February 10, 2005

Delta Diagnostic Radiology, P.C. v Lumbermans Mut. Ins. Co. (2005 NY Slip Op 50326(U))

Headnote

The main issue in this case was whether the defendant, Lumbermans Mutual Insurance Co., had timely denied the claim for no-fault benefits and whether their basis for the denial was sufficient under the Insurance Law. The court found that the insurance company's denial was not timely, as it was sent more than thirty days after the receipt of the claim, and they had failed to provide competent evidence of the timely mailing of the request for verification or the denial. The court also found that the language used by the insurance company in the denial was not specific enough to effectively deny the claim based on fraud. As a result, the court granted the plaintiff, Delta Diagnostic Radiology, P.C., summary judgment and denied the defendant's motion for partial summary judgment. The court also denied the defendant's motion to compel discovery.

Reported in New York Official Reports at Delta Diagnostic Radiology, P.C. v Lumbermans Mut. Ins. Co. (2005 NY Slip Op 50326(U))

Delta Diagnostic Radiology, P.C. v Lumbermans Mut. Ins. Co. (2005 NY Slip Op 50326(U)) [*1]
Delta Diagnostic Radiology, P.C. v Lumbermans Mut. Ins. Co.
2005 NY Slip Op 50326(U)
Decided on February 10, 2005
Civil Court, Kings County
Baily-Schiffman, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.
Decided on February 10, 2005

Civil Court, Kings County



Delta Diagnostic Radiology, P.C., a/a/o Roy Antoine, Plaintiff,

against

Lumbermans Mutual Insurance Co., Defendant.

056085/04

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 patient Roy Antoine, moves this Court for summary judgment. Plaintiff asserts that defendant has not paid the assignor’s claim within thirty (30) days of receipt nor requested verification of the claim and the basis for the denial is insufficiently specific to satisfy the Insurance Law. Defendant opposes the motion on the basis that the Affidavit in support of the motion and the assignment annexed thereto are not in admissible form and the Health Insurance claim form was not signed by the assignor. Defendant moves for partial summary judgment on the basis that its denial is timely. Defendant also seeks to compel a deposition of plaintiff, plaintiff’s assignor and the assignor’s treating physician.

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 [*2]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[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).

Pursuant to Insurance Law §5101 et seq. and the regulations promulgated thereunder, 11 NYCRR §65.15 (g)(3), 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 (d) & (e). 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. 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’s Prima Facie Case

Plaintiff asserts that it submitted its proof of claim to defendant. Defendant’s NF-10 denial form acknowledges receipt of the claim on December 15, 2003. The NF-10 is dated January 23, 2004, more than thirty (30) days after receipt of the claim. Annexed to plaintiff’s motion papers is a mailing log stamped by the Postal Service on December 11, 2003. It is conceded by defendant that this claim remains outstanding. Through this proof plaintiff has established its burden of showing that the subject claim was submitted to defendant and remains outstanding. The burden then shifts to defendant to prove by submission of evidence in admissible form that there are questions of fact in controversy that require a trial and that plaintiff is not entitled to judgment as a matter of law.

Defendant’s Opposition

Defendant submits that it timely denied the subject claim and that summary judgment should, therefore, be denied. Defendant also asserts that there are defects in plaintiff’s motion papers that preclude the grant of summary judgment. A denial of claim (NF-10) must be sent to the claimant within thirty (30) days of receipt in order to be timely unless the time to deny is extended by virtue of a request for verification or if the claim is based on fraud or lack of [*3]coverage. Presbyterian Hosp. v. Maryland Cas. Co., supra. In order to sustain its burden in opposing a motion for summary judgment where the issue is timeliness, the defendant/insurer must establish by competent evidence that the request for verification and the denial were timely mailed. Here, defendant has provided no competent evidence of the mailing of either the request for verification or the denial. Accordingly, all defenses other than fraud are untimely and the insurer is precluded from raising any non-fraud defenses to the claim. Id.; 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).

Fraud Defense

Defendant’s NF-10 states the following as the reason for the denial:

“Our investigation, including but not limited to our SIU investigation, indicates that the alleged injuries were not, and could not have been caused by the alleged accident. Therefore, all no-fault benefits dating back to the alleged date of loss are denied based on a lack of credible proof of claim.”

Plaintiff asserts that the above quoted denial language is insufficiently specific to be effective. General Accident Insurance Group v. Cirucci, 46 NY2d 862 (1979). The court finds that the denial language is sufficient to put plaintiff on notice that the insurer was denying the claim on the basis of fraud. However, at this stage of the litigation, in order not to be precluded from asserting its late denial on the basis of fraud, defendant must present to the Court evidence in admissible form that it had a “founded belief that the alleged injur[ies] do [ ] not arise out of an insured incident”. Central General Hosp v. Chubb Group of Ins. Cos, 90 NY2d 195, supra; Ocean Diagnostic Imaging v. State Farm Automobile Ins. Co., NYLJ, 9/24/04, p.28, col. 5 (App Term, 2d & 11th Jud. Dist., 2004); AB Medical Services, et al v. State Farm Mutual Auto. Ins. Co., NYLJ, 12/24/04, p. 32, col. 2 (App Term, 2d & 11th Jud Dists, 2004).

Here, defendant presented an unsworn “Examination Under Oath Report”, dated December 9, 2003 written on the letterhead of Armienti, DeBellis & Whiten, defendant’s prior attorney; the hearsay Affidavit of Susan Vanditto, a no-fault specialist employed by defendant; and the hearsay Affirmation of defendant’s counsel. None of the information presented in support of defendant’s fraud defense is in admissible form. Defendant, therefore, has failed to raise a triable issue of fact as to whether it had a “founded belief” that the injuries alleged by the assignor do not arise from an insured accident. Accordingly, defendant is precluded from asserting its fraud defense to the instant claim.

As plaintiff has established its prima facie entitlement to summary judgment and defendant has failed to rebut plaintiff’s showing or establish by competent proof that there are material issues of fact in controversy that require a trial, plaintiff’s motion for summary judgment is granted and defendant’s motion for partial summary judgment is denied. The other issues raised by the parties are without merit. Defendant’s motion to compel discovery is denied as [*4]moot.

This constitutes the Decision and Order of the Court.

DATED:February 10, 2005

______________________________

LOREN BAILY-SCHIFFMAN, J.C.C.