May 17, 2019

Island Life Chiropractic Pain Care PLLC v Amica Mut. Ins. Co. (2019 NY Slip Op 51589(U))

Headnote

The court considered the defendant's motion for summary judgement based on the plaintiff's failure to appear for an examination under oath and the defense of policy exhaustion. The plaintiff cross-moved for summary judgment and to dismiss defendant's affirmative defenses. The court held that the defendant failed to establish entitlement to judgment as a matter of law on the issues of proper mailing of the examination under oath request, the nonappearance of the plaintiff's assignor at the examinations under oath, and the timeliness of its denial. The court also held that the defendant failed to establish that its exhaustion of policy defense was based on proper priority of payment of claims. The court ultimately denied all of the motions before the court, except for granting the plaintiff's cross-motion to the extent that it had been established that the bills at issue were mailed to and received by the defendant.

Reported in New York Official Reports at Island Life Chiropractic Pain Care PLLC v Amica Mut. Ins. Co. (2019 NY Slip Op 51589(U))



Island Life Chiropractic Pain Care PLLC a/a/o DABADY, JEAN M., Plaintiff,

against

Amica Mutual Insurance Company, Defendant.

732771/17

Attorney for plaintiff:
Oleg Rybak, Esq.
The Rybak Firm PLLC
1810 Voorhies Avenue
3rd Floor Suite 7
Brooklyn, New York 11235

Attorney for defendant
Lawrence N. Rogak, Esq.
Lawrence N. Rogak LLC
3355 Lawson Boulevard
Oceanside, New York 11572


Odessa Kennedy, J.

Recitation, as required by CPLR 2219 (a) of the papers considered in the review of this motion:

Notice of Motion and Affirmation in Support 1,2

Notice of Cross-Motion and Affirmation in Support 3,4

Affirmation in Opposition to the Cross-Motion 5

The Court hereby sua sponte vacates its decision and order dated November 15, 2017, and substitutes the following:

In an action to recover assigned first-party no-fault insurance benefits arising from an accident which occurred on October 1, 2015, defendant moves for summary judgment based on plaintiff’s assignor’s alleged failure to appear for an examination under oath (“EUO”) and upon the defense of policy exhaustion. Plaintiff cross-moves for an order: 1) awarding summary judgment in favor of plaintiff pursuant to CPLR 3211(c) or CPLR 3212(a); 2) limiting the issues of fact for trial pursuant to CPLR 3212(g) that the statutory billing forms were mailed to and received by the insurance carrier and that payment of no-fault benefits was overdue; and 3) dismissing defendant’s affirmative defenses pursuant to CPLR 3211(b).

It is well settled that summary judgment is a drastic remedy (See Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395 [1957]), which should not be granted if there is any doubt as to the existence of a triable issue of fact. (See Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223 [1978]). Hence, the court’s function in determining such a motion, is issue finding, not issue determination. (Id. Sillman supra at 404).

To prevail, the movant must establish entitlement to judgment as a matter of law, by submitting admissible evidentiary proof. (See Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065 [1979]). Absent such a showing, the motion must be denied regardless of the sufficiency of opposing papers. (See Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]).

EUO NON

APPEARANCE DEFENSE

While plaintiff’s non-appearance at an EUO vitiates defendant’s obligation to provide coverage (see Five Boro Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 39 Misc 3d 141(A), 2013 NY Slip Op. 50753(U) [App Term, 2d Dept, 2d & 11th Jud Dists, 2013]), to show entitlement to summary judgement, defendant must prove that it properly mailed the EUO requests to the plaintiff, who failed to appear for the EUO, and that defendant mailed plaintiff a timely denial. (Interboro Ins. Co. v Clennon, 113 AD3d 596, 979 N.Y.S.2d 83, 2014 NY Slip Op 00092 [2d Dept 2014]).

Proof of mailing may be shown based on actual mailing or that the item was mailed pursuant to the affiant’s standard office practices and procedures designed to ensure proper mailing (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 857 N.Y.S.2d 211, 2008 NY Slip Op 04072 [2d Dept 2008]). Defendant’s affidavit submitted in the case at bar, fails to establish that the described procedures was designed to ensure that the EUO letters were addressed to the correct recipient and properly mailed (see Progressive Cas. Ins. Co. v Infinite Ortho Prods., Inc., 127 AD3d 1050, 7 N.Y.S.3d 429, 2015 NY Slip Op 03340 [2d Dept [*2]2015]).

To establish the proper mailing of the EUO requests, defendant submits an affidavit from its claim representative, Christina Valentin. Ms. Valentin states that an EUO notice was sent to plaintiff’s assignor, on December 9, 2015, scheduling the EUO for January 6, 2016; and upon assignor’s non-appearance, a follow up notice was sent on January 7, 2016 re-scheduling the EUO for February 9, 2016. Ms. Valentin describes the documents which purport to the be the notices as ” true and accurate copies of the scheduling notices sent by the Law offices of Lawrence N. Rogak LLC” to plaintiff’s assignor.

Contrary to Ms. Valentin’s statement, however, the EUO notices which were attached to defendant’s motion are not generated by the Law Office of Lawrence N. Rogak LLC, but by the Law Firm of Milber Makris Plousadis & Beiden, LLP. Ms. Valentin’s assertions are further erroneous in that the notices seek an EUO of the plaintiff’s employee, Dr. Darren T. Mollo, DC, and not of plaintiff’s assigner, who notably is not even among the named claimants listed in the notices. Thus, defendant fails to establish that it requested an EUO of plaintiff’s assignor, and further, that it accurately addressed and mailed the request to him. Each of said deficiencies, warrants denial of defendant’s motion.

In addition, defendant fails to meet its burden of showing that plaintiff’s assignor failed to appear for the EUOs. (Five Boro Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 39 Misc 3d 141(A), 2013 NY Slip Op. 50753(U) [App Term, 2d Dept, 2d & 11th Jud Dists, 2013]). Generally, to establish burden of plaintiff’s failure to appear for a scheduled EUO, a statement from an attorney alleging that he or she was present in the office on the relevant dates and that he or she would have been the one to conduct the EUO is sufficient to demonstrate personal knowledge of the no-show (T & J Chiropractic, P.C. v. State Farm Mut. Auto. Ins. Co., 47 Misc 3d 130[A], 2015 NY Slip Op. 50406(U) [App Term, 2d Dept, 2d 11th & 13th Jud Dists, 2015]).

In the instant matter, the only indication of plaintiff’s assignor’s nonattendance at the EUO is defense counsel’s conclusory affirmation in support of the instant motion which is devoid of evidence of his personal knowledge of the alleged non-attendance. Counsel neither indicates whether he was assigned to conduct the EUO nor whether he was present at the EUO. Accordingly, defendant’s motion is further denied on the basis of failure to establish the assignor’s EUO non-appearance.

Moreover, defendant fails to show the timeliness of its denial. “A claim need not be paid or denied until all demanded verification is provided.” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; 11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1].) If plaintiff fails to provide the requested verification within 120 calendar days from the date of the initial request, the insurer may deny the claim. (11 NYCRR 65-3.5 [o]). No-fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim, (11 NYCRR 65-3.8(a)(1)),

According to the denial, the “final verification” requested was on January 31, 2016. Yet, the moving papers contain no verification request, or any document dated January 31, 2016. As discussed above, the only verification requests annexed to defendant’s papers pertain to claimants whose treatment is not at issue in the instant action.

As defendant has failed to establish entitlement to judgment as a matter of law on the issues of proper mailing of the EUO request, the nonappearance of the plaintiff’s assignor at the EUOs and the timeliness of its denial, its motion for summary judgment, based on the EUO [*3]nonappearance is denied.

POLICY EXHAUSTION DEFENSE

Defendant also seeks to dismiss the complaint on the basis that its policy limits have been properly exhausted.An insurer is not required to pay a claim where the policy limits have been properly exhausted (Hospital for Joint Diseases v. State Farm Mut. Auto Ins. Co., 8 AD3d 533 [2nd Dept., 2004]). An insurer’s payment of full monetary limits set forth in the policy, terminates its duties under the contract (Presbyterian Hosp. in City of New York v. Liberty Mut. Ins. Co., 216 AD2d 448 [2nd Dept., 1995]).

Moreover, when an insurer receives claims for more than $50,000, payments for claims that are submitted prior to the exhaustion of the $50,000 shall be made in the order in which each service was rendered or each expense was incurred (11 NYCRR 65-3.15; Alleviation Medical Services, P.C. v. Allstate Ins. Co., 55 Misc 3d 44 [App. Term, 2nd Dept., 2d, 11th & 13th Jud. Dists., 2017]).

In the case at bar, to demonstrate the policy’s exhaustion based on priority of payment when defendant received the bill, defendant relies on a payment “ledger” which it contends is admissible based on its claim examiner’s statement that the document is “a true and accurate copy of the payment ledger maintained on this claimant.” Defendant, however does not satisfy the evidentiary requirements of CPLR §4518 absent information regarding who or by whom the ledger was created or maintained, or whether the data in the ledger was recorded contemporaneously or soon after the occurrence. As defendant must prove its defense in admissible form, the failure to establish the evidentiary foundation of the ledger, which is the essence of its policy exhaustion defense, warrants denial of its motion.

Aside from its inadmissibility, the ledger’s ambiguity, further prevents defendant from demonstrating the exhaustion defense. The ledger does not specify when defendant received any of the prior bills leading to the exhaustion of the policy, but contains vague headings such as ‘paid date,’ ‘service period start’ and ‘service period end’ without proof that any of the headings represent the date that defendant in fact received or paid the bill at issue.

Finally, defendant fails to establish that its exhaustion of policy defense was based on proper priority of payment of claims. The term “claims,” in the priority of payment regulation excludes claims that are incomplete because verification requests are outstanding (Nyack Hospital v. General Motors Acceptance Corp., 8 NY3d 294 [2007]). Consequently, while an insurer awaits verification of an unverified claim, it may pay subsequently received verified claims, even if that will result in exhaustion of the policy before the requested verification is finally received (Id.).

In the instant matter, defendant admits receipt of the bills at issue on December 16, 2015, when, as per the ledger, the entire $50,000 policy was still available to pay claims since no claims had been yet been paid. Since defendant has failed show that the 30-day period it had to pay the bill was tolled by a properly mailed verification request or by non-compliance with such verification, it failed to justify its nonpayment within the 30-days.

Defendant has failed to establish as a matter of law either the defense of EUO non-appearance or that of policy exhaustion. Thus, its motion for summary judgment is denied.

PLAINTIFF’S CROSS-MOTION

In opposition to the plaintiff’s cross-motion for summary judgment, defendant attaches a copy of a decision in Budget Truck Rental, LLC v. Mollo, Index No.: 150666/15 [Sup. Court, NY County, Lebovits, J.] which included a finding that the time that plaintiff in this case was not [*4]properly incorporated when it submitted its billing in that case which arose from a November 7, 2013 accident and therefore not entitled to payment for those bills.

If it is proven in this case that the plaintiff was ineligible to receive payment as of the date services were rendered, that would constitute a defense. (See, e.g., State Farm Mut. Auto. Ins. Co. v. Mallela, 4 NY3d 313 [2005]) Although the defendant presents no denial of claim on this basis of improper or fraudulent incorporation of the plaintiff, it is nonwaivable and may be asserted at any time notwithstanding the absence of a timely denial. (Lexington Acupuncture, P.C. v. General Assur. Co., 35 Misc 3d 42 [App Term, 2d Dept 2012]). Accordingly, there are material issues of fact as to plaintiff’s corporate status at the time that services were rendered necessitating the denial of plaintiff’s cross-motion.

All of the motions before this court are denied with one exception. Plaintiff’s cross-motion pursuant to pursuant to CPLR 3212(g) is granted only to the extent that it has been established that the bills at issue were mailed to and received by the defendant.

Dated: May 17, 2019
______________________
ODESSA KENNEDY
Judge of the Civil Court