KOI Med. Acupuncture v State Farm Ins. Co. (2007 NY Slip Op 51705(U))

Nassau Dist Ct

11579/04

Attorneys for plaintiff: La Sorsa & Beneventano

Attorneys for defendant: McDonnell & Adels, PC

Andrew M. Engel, J.

The Plaintiff commenced this action to recover no-fault first party benefits for medical services allegedly provided to its assignor on February 28, 2003 and on March 3, 2003, in the total sum of $240.00, which has not been paid. The action was commenced on or about May 12, 2004. Issue was joined on or about June 7, 2004. The Plaintiff now moves for summary judgment. The Defendant opposes that motion and cross-moves for summary judgment as well. The Plaintiff opposes the cross-motion.

Summary judgment is a drastic remedy, Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395, 165 NYS2d 498 (1957), which should not be granted where there is any doubt as to the existence of a triable issue of fact. Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 413 NYS2d 141 (1978) To prevail, the movant must first make a showing of entitlement to judgment, as a matter of law, Bank of New York v. Granat, 197 AD2d 653, 602 NYS2d 942 (2nd Dept. 1993), tendering evidentiary proof in admissible form. Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065, 416 NYS2d 790 (1979). It is only thereafter incumbent upon the party opposing summary judgment to “demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action or tender an acceptable excuse for his failure so to do.” Zuckerman v. City of New York, 49 NY2d 557, 427 NYS2d 595 (1980). A movant’s failure to make such a showing, regardless of the sufficiency of opposing papers, mandates the denial of a summary judgment motion. Winegrad v. New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985)

Relying upon the affidavit of Gary Lombardo, an employee of the Plaintiff, and the Office Manager of the Plaintiff’s billing agent, Triborough Healthcare Management, Inc., the Plaintiff alleges that it timely submitted its claim for the services in question to the Defendant and that the [*2]Defendant failed to timely pay or deny this claim. The Defendant admits receipt of the Plaintiff’s claim on March 24, 2003, thereby curing any defect in the Plaintiff’s proof of mailing. Prestige Medical & Surgical Supply Inc. v. Clarendon National Insurance Company, 13 Misc 3d 127(A), 824 NYS2d 758 (App. Term 2nd and 11th Jud. Dists. 2006); Magnezit Medical Care, P.C. v. New York Central Mutual Fire Ins. Co., 12 Misc 3d 144(A), 824 NYS2d 763 (App. Term 2nd and 11th Jud. Dists. 2006), but alleges that the claim was denied due to the Plaintiff’s assignor’s failure to cooperate, and a founded belief that the alleged accident of February 13, 2003 was a staged and intentional act, raising a defense of lack of coverage. The affirmation of counsel, who does not have any personal knowledge of the matter, is without probative value, Wehringer v. Helmsley-Spear, Inc., 91 AD2d 585, 457 NYS2d 78 (1st Dept. 1982) aff’d 59 NY2d 688, 463 NYS2d 417 (1983); McDermott v. South Farmingdale Water District, 167 AD2d 517, 562 NYS2d 191 (2nd Dept. 1990); Di Sabato v. Soffes, 9 AD2d 297, 193 NYS2d 184 (1st Dept. 1959) and cannot supplement Mr. Lombardo’s affidavit.

Relying on the affidavit of Scott Herman, an investigator with the Defendant’s Special Investigative Unit, the Defendant alleges that it had a founded belief that the accident of February 13, 2003 was a staged event. The Defendant bases this defense on Mr. Herman’s belief that this loss occurred shortly after the State Farm policy was issued, that the Plaintiff’s assignor allegedly had numerous prior claims, that there were allegedly multiple individuals claiming injuries in the vehicle insured by the Defendant, that the driver of the vehicle insured by the Defendant had allegedly been involved numerous prior accidents, that there was allegedly a question of whether or not the driver of the vehicle insured by the Defendant had permission to drive the vehicle, that one of the passengers of the vehicle insured by the Defendant allegedly provided a false social security number, and that there were allegedly a number of inconsistencies in the testimony given by the Defendant’s insured and some of the occupants of the insured vehicle their examinations under oath. The Defendant further alleges that the Plaintiff’s assignor failed to appear for two scheduled examinations under oath. As was true for the Plaintiff’s counsel’s affirmation, defense counsel’s affirmation is of no probative value herein.

At the outset it is noted that neither the papers submitted in support of the Plaintiff’s motion, nor the papers submitted in support of the Defendant’s cross-motion are in admissible form sufficient to support either motion for summary judgment. Simply annexing documents to the moving papers, without a proper evidentiary foundation is inadequate. Higen Associates v. Serge Elevator Co., Inc., 190 AD2d 712, 593 NYS2d 319 (2nd Dept. 1993) To succeed on their respective motions the parties must lay a proper business record foundation for the documents upon which they rely, by someone with sufficient personal knowledge of the party’s office practices and procedures. Fortune Medical, P.C. v. Allstate Insurance Co., 14 Misc 3d 136, 836 NYS2d 492 (App. Term 9th & 10 Jud. Dists. 2007); Ontario Medical, P.C. v. Sea Side Medical, P.C., 15 Misc 3d 129, 2007 WL 926349 (App. Term 9th & 10 Jud. Dists. 2007); V.S. Medical Services, P.C. v. One Beacon Insurance, 14 Misc 3d 142, 836 NYS2d 504 (App. Term 2nd & 11th Jud. Dists. 2006)

As concerns the Plaintiff’s motion,”[t]o the extent defendant issued denial of claim forms (NF-10)or admitted receipt of plaintiff’s claim forms, such admissions did not concede the facts asserted in the claim forms and it remained plaintiff’s burden to proffer such evidence in admissible form, which it failed to do (see, Midborough Acupuncture, P.C. v. New York Cent. [*3]Mut. Fire Ins. Co., 13 Misc 3d 132 (A), 2006 N.Y.Slip Op. 51879(U), supra ).” Dan Medical, P.C. v. New York Central Mutual Fire Insurance Company, 14 Misc 3d 44, 829 NYS2d 404 (App. Term 2nd & 11th Jud. Dists. 2006); See also: Fortune Medical, P.C. v. Allstate Insurance Co., supra . Similarly, the opinion of the Defendant’s investigator is not based upon his personal knowledge, but is purportedly based upon his review of certain documents allegedly contained in the Defendant’s files, some of which are simply annexed to the Defendant’s motion papers without establishing any evidentiary foundation others of which are omitted altogether.

Neither the statement of Mr. Lombardo, on behalf of the Plaintiff, that the records relied upon are “maintained by Triborough on behalf of KOI Medical Acupuncture, PC in the ordinary course of business,” (Lombardo Affidavit 2/20/07, ¶ 9) nor the statement of Mr. Hermann, on behalf of the Defendant, that he made his “affidavit upon [his] personal knowledge and full review of files and records maintained by State Farm in its ordinary course of business” (Hermann Affidavit 5/1/07, ¶1) establish a business record exception to the hearsay rule, rendering these documents inadmissible.

As noted in People v. Kennedy,68 NY2d 569, 510 NYS2d 853 (1986), “The essence of the business record exception to the hearsay rule is that records systematically made for the conduct of a business as a business are inherently highly trustworthy because they are routine reflections of day-to-day operations and because the entrant’s obligation is to have them truthful and accurate for purposes of the conduct of the enterprise (citation omitted).” See also: People v. Guidice, 83 NY2d 630, 634 NE2d 951 (1994) CPLR § 4518(a) sets forth the exception:

Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter.

As can be seen, the proponent of the offered evidence must establish three general elements, by someone familiar with the habits and customary practices and procedures for the making of the documents, before they will be accepted in admissible form: (1) that the documents were made in the regular course of business; (2) that it was the regular course of the subject business to make the documents; and, (3) that the documents were made contemporaneous with, or within a reasonable time after, the act, transaction, occurrence or event recorded.^[FN1] People v. Kennedy, supra .; People v. Cratsley, 86 NY2d 81, 629 NYS2d 992 (1995). The parties herein, at best, have only made a feigned attempt to satisfy these elements.

While the Defendant is correct in asserting that its attempts to submit the transcripts of the examinations under oath are not barred by the hearsay rule, because the Defendant is not offering the statements contained therein for their truth, Spensieri v. Lasky, 94 NY2d 231, 701 NYS2d 689 (1999); Nucci v. Proper, 95 NY2d 597, 721 NYS2d 593 (2001); Winant v. Carras, 208 AD2d 618, 617 NYS2d 487 (2nd Dept. 1994) lv. den. 85 NY2d 812, 631 NYS2d 288 (1995) [*4]but for the exact opposite reason, to show their falsity and fraud, Stern v. Waldbaum, Inc., 234 AD2d 534, 651 NYS2d 187 (2nd Dept. 1996); DeLuca v. Ricci, 194 AD2d 457, 599 NYS2d 267 (1st Dept. 1993); Dawson v. Raimon Realty Corporation, 303 AD2d 708, 758 NYS2d 100 (2nd Dept. 2003), the transcripts, nevertheless, are not properly before this court. These transcripts are neither signed nor verified, Krupp v. Aetna Life & Casualty Co., 103 AD2d 252, 479 NYS2d 992 (2nd Dept.1984); Tancos v. Centaur Insurance Company, 133 AD2d 622, 519 NYS2d 730 (2nd Dept.1987); and, the Defendant offers no explanation as to why. McDonald v. Mauss, 38 AD3d 727, 832 NYS2d 291 (2nd Dept. 2007) Additionally, the Plaintiff has not demonstrated any formal requirements for the taking of these individuals’ alleged testimony sufficient to assure their accuracy. Complete Orthopedic Supplies, Inc. v. State Farm Insurance Company, __ Misc 3d __, 838 NYS2d 861 (Civ.Ct. Queens Co. 2007) Notably absent from the transcripts submitted are certifications as to the transcripts’ accuracy, executed by the Notary Public who purportedly took the testimony. cf. Morchik v. Trinity School, 257 AD2d 534, 684 NYS2d 534 (1st Dept.1999); Cox v. Jeffers, 222 AD2d 395, 634 NYS2d 519 (2nd Dept. 1995) Without such certification, the Plaintiff is asking the court to rely on transcripts which may be inaccurate. Jacobs v. Herrera, 4 Misc 3d 1018(A), 798 NYS2d 345 (Dist.Ct. Nassau Co. 2004)

If for no other reason, the parties’ failure to support their respective summary judgment motions with proof in admissible form mandates the denial of the motion and the cross-motion. Even if, however, the papers of one or both of the parties were to be deemed presented in admissible form, these motions would still have to be denied.

Contrary to the Plaintiff’s argument, the Defendant’s lack of coverage defense, based upon the Defendant’s alleged founded belief that the alleged accident in this matter was staged, is not waived by the failure to issue a denial or the issuance of an untimely denial. Central General Hospital v. chubb Group of Insurance Companies, 90 NY2d 195, 659 NYS2d 246 (1997); Metro Medical Diagnostics, P.C. v. Eagle Insurance Company, 293 AD2d 751, 741 NYS2d 284 (2nd Dept. 2002); Fair Price Medical Supply Corp. v. Travelers Indemnity Company, 42 AD3d 277, 837 NYS2d 350 (2nd Dept. 2007); Executive MRI Imaging, P.C. v. New York Central Mut. Fire Insurance Company, 13 Misc 3d 140, 831 NYS2d 359 (App. Term 2nd & 11th Jud Dist. 2006)

Moreover, assuming, for the sake of argument, the submission of documentation in evidentiary form, while the Defendant’s failure to deny or pay the Plaintiff’s timely claim satisfies the Plaintiff’s prima facia case, 11 N.Y.C.R.R. § 65-3.8(a)(1) and (c); Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274, 660 NYS2d 536 (1997); Nyack Hospital v. State Farm Mutual Automobile Insurance Company, 11 AD3d 664, 784 NYS2d 136 (2nd Dept. 2004); Westchester Medical Center v. AIG, Inc., 36 AD3d 900, 829 NYS2d 180 (2nd Dept. 2007), which carries with it a ” presumption of [coverage] which attaches to the claim form'”, A.B. Medical Services, PLLC v. State Farm Mutual Automobile Insurance Company, 7 Misc 3d 822, 795 NYS2d 843 (Civ. Ct. Kings Co. 2005) quoting Stephen Fogel Psychological, P.C. v. Progressive Casualty Insurance Company, 7 Misc 3d 720, 827 NYS2d 217 (App. Term 2nd & 11th Jud. Dists. 2004), aff’d as mod. 35 AD3d 720, 827 NYS2d 217 (2nd Dept. 2006); see also: V.S. Medical Services, P.C. v. Allstate Insurance Company, 11 Misc 3d 334, 811 NYS2d 886 (Civ. Ct. Kings Co. 2006),placing the burden of going forward on the Defendant, See: Mount Sinai Hospital. v. Triboro Coach Inc., 263 AD2d 11, 699 NYS2d 77 (2nd [*5]Dept.1999); New York Message Therapy, P.C. v. State Farm Mutual Insurance Company, 14 Misc 3d 1231, 836 NYS2d 494 (Civ. Ct. Kings Co. 2006); Inwood Hill Medical P.C. v. Allstate Insurance Company, 3 Misc 3d 1110, 787 NYS2d 678 (Civ.Ct. NY Co. 2004), as will be discussed below, assuming the Defendant’s proof was in admissible form, the Defendant has raised questions of fact as to whether or not this was a staged accident sufficient to defeat the Plaintiff’s summary judgment motion. See: A.M. Medical Services, P.C. v. Nationwide Mutual Insurance Company, 12 Misc 3d 143, 824 NYS2d 760 (App. Term 2nd & 11th Dists. 2006); Amaze Medical Supply Inc. v. Lumbermens Mutual Casualty Company, 10 Misc 3d 127, 809 NYS2d 480 (App. Term 2nd & 11th Jud. Dists. 2005)

Similarly, even if the documentation submitted were in evidentiary form, the Defendant’s claims of failure to cooperate and lack of coverage cannot be determined as a matter of law, based upon the facts presented to the court.

Effective on April 5, 2002, the revised insurance regulations mandated the inclusion of examinations under oath in the personal injury protection endorsement of all policies issued thereafter, providing that an eligible injured person submit to examinations under oath “as may reasonably be required … by the Company” 11 NYCRR 65-1.1(d). Rigid Medical of Flatbush, P.C. v. New York Central Mutual Fire Insurance Company, 11 Misc 3d 139(A), 816 NYS2d 700 (App. Term 2nd & 11th Jud. Dists. 2006) Before an insurer may assert the defense of failure to appear, however, “the insurer must include the revised prescribed endorsement with new or renewal policies issued on or after April 5, 2002, and the claim rules are to be governed by the policy endorsement in effect.” S & M Supply v. State Farm Mutual Automobile Insurance Company, 4 Misc 3d 130(A), 791 NYS2d 873 (App. Term, 9th & 10th Jud. Dists. 2004);Capio Medical, P.C. v. Progressive Casualty Insurance Company, 7 Misc 3d 129(A), 801 NYS2d 231 (App. Term 2d & 11th Jud. Dists. 2005). Having failed to establish that the insurance policy herein contained an endorsement authorizing examinations under oath, the Plaintiff’s assignor’s alleged failure to appear for such an examination cannot serve as grounds for the denial of Plaintiff’s claim. A.B. Medical Services PLLC v. Allstate Insurance Company, 11 Misc 3d 135(A), 816 NYS2d 693 (App. Term 2nd & 11th Jud. Dists. 2006); Star Medical Services P.C. v. Eagle Insurance Company, 6 Misc 3d 56, 791 NYS2d 266 (App. Term 2nd & 11th Jud. Dists. 2004)

Additionally, like “independent” medical examinations, to successfully deny a claim based upon the Plaintiff’s assignor’s failure to attend an examination under oath, the insurer must establish, inter alia, proper mailing of the request for the examination by someone with knowledge. Stephen Fogel Psychological, P.C. v. Progressive Casualty Insurance Company, 35 AD3d 720, 827 NYS2d 217 (2nd Dept. 2006); Radiology Today, P.C. v. Citiwide Auto Leasing Inc., 15 Misc 3d 92, 838 NYS2d 336 (App. Term 2nd & 11th Jud. Dists. 2007) Neither Defendant’s counsel nor Mr. Hermann, the Defendant’s investigator, indicate that they have any personal knowledge of the alleged mailing of two notices for an examination under oath to the Plaintiff’s assignor; nor do they describe a “standard office practice or procedure designed to ensure that items are properly addressed and mailed” which would give rise to a presumption of receipt by the Plaintiff’s assignor. Residential Holding Corp. v. Scottsdale Insurance Company, 286 AD2d 679, 729 NYS2d 776 (2nd Dept. 2001); Hospital for Joint Diseases v. Nationwide Mutual Insurance Company, 284 AD2d 374, 726 NYS2d 443 (2nd Dept. 2001) That these notices [*6]were allegedly mailed by certified mail, return receipt requested, does not cure the deficiencies in the Defendant’s proof, as there is no proof that these notices were, in fact, mailed in such fashion. Nowhere on the letters is the mailing receipt number indicated; and, the purported mailing receipt fails to indicate what item was mailed and the address to which it was allegedly sent. Similarly, the mailing receipt does not contain a postmark or any other marking from the United States Postal Service. Moreover, although not submitted with the letters, both defense counsel and Mr. Hermann indicate that return receipt postcards were not signed by the Plaintiff’s assignor, but “by an unknown individual ….” (Hermann Affidavit 5/1/07, ¶ 6 and Linwood Affirmation, 4/19/07, ¶ 9) See: New York and Presbyterian Hospital v. Allstate Insurance Company, 29 AD3d 547, 814 NYS2d 687 (2nd Dept. 2006); Compare: Westchester Medical Center v. Liberty Mutual Insurance Company, 40 AD3d 981, 837 NYS2d 210 (2nd Dept. 2007) [the certified receipts contained a postmark and the documents’ identification numbers; and, the return receipt card, bearing the same information, was signed by a representative of the recipient]

As for the Defendant’s lack of coverage claim, while the Defendant’s papers raise a number of questions which may reasonably be interpreted as demonstrating that the accident in question either never took place or was staged, the Defendant’s papers are, at times, in conflict with themselves and raise more genuine issues of material fact than they resolve.

By way of example, both defense counsel and Mr. Hermann, in describing this allegedly fraudulent accident aver, “The alleged incident in issue occurred on February 13, 2003 at the intersection of Coney Island Avenue and Avenue H in Brooklyn, New York … According to the police report, the adverse vehicle was traveling northbound on Coney Island Avenue when he slowed down to avoid hitting a double parked car and was rear-ended by the insured vehicle.” [italics in original] (Hermann Affidavit 5/1/07, ¶ 3 and Linwood Affirmation, 4/19/07, ¶ 5) The police report which the Defendant submits, however, indicates that the subject accident occurred on Williamsbridge Road one hundred and fifty feet north of Morris Park Avenue in Bronx County, and that the insured vehicle was allegedly struck on the side by the adverse vehicle which was exiting a Blockbuster parking lot. Similarly, among the number of inconsistencies in the testimony purportedly provided by the insured, the driver and some of the other passengers of the insured vehicle is the claim that the insured, who was not in the vehicle at the time of the accident, testified that he picked up his vehicle at approximately 9:30 p.m. on the night of the accident, while “the police report lists the accident as occurring after 10:00 p.m.” (Hermann Affidavit 5/1/07, ¶ 7j and Linwood Affirmation, 4/19/07, ¶ 11j) The accident report submitted by the Defendant, however, indicates that the accident occurred at 2050 military time, or 8:50 p.m., making it possible for the insured to have picked up his vehicle at 9:30 p.m., as he apparently claims.

As previously indicated, if they were in admissible form, the documentation submitted by the Defendant “demonstrate[d] to the court that it had a founded belief’ that the alleged accident was intentionally caused in order to survive a summary judgment motion by the plaintiff-provider … However, defendant-insurer’s founded belief [is] not enough to obtain judgment on its own.” Universal Open MRI of the Bronx, P.C. v. State Farm Mut. Auto Ins., 12 Misc 3d 1151, 819 NYS2d 852 (Civ. Ct. Kings Co. 2006) The papers presented by the Defendants raise a number of factual issues which are subject to the inferences to be drawn from the evidence presented, many of which involve an assessment of credibility, and all of which must be reserved for the trier of [*7]facts. St. Luke’s Roosevelt Hospital v. Allstate Insurance Company; 303 AD2d 743, 757 NYS2d 457 (2nd Dept. 2003); Kolivas v. Kirchoff, 14 AD3d 493, 787 NYS2d 392 (2nd Dept. 2005); Scott v. Long Island Power Authority, 294 AD2d 348, 741 NYS2d 708 (2nd Dept. 2002); Lacagnino v. Gonzalez, 306 AD2d 250, 760 NYS2d 533 (2nd Dept. 2003); Ocean Diagnostic Imaging P.C. v. State Farm Mutual Automobile Insurance Company, 9 Misc 3d 73, 803 NYS2d 333 (App. Term 2005)

Accordingly, for all of the foregoing reasons, the Plaintiff’s motion and the Defendant’s cross-motion are denied.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

September 10, 2007

___________________________

ANDREW M. ENGEL

J.D.C.

Footnotes

Footnote 1: Other evidentiary issues may still arise affecting admissibility, such as an attempt at admitting photocopies or electronic reproductions, see CPLR § 4539, or the presence of statements made by individuals who had not business duty to impart such information. Johnson v. Lutz, 253 NY 124, 170 N.Y.S. 517 (1930)