Perfect Point Acupuncture, P.C. v Auto One Ins. Co. (2010 NY Slip Op 50010(U))

Civil Court of the City of New York, Kings County

97213/2007

Plaintiff’s Counsel:

Law Offices of Melissa Betancourt

155 Kings Highway, 3rd Floor

Brooklyn NY 11223

Tel.: (718)336-8076

Defendant’s Counsel

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, NY 11747

Tel.: (631) 390-0011

Peter P. Sweeney, J.

In this action to recover assigned first-party no-fault benefits, both the plaintiff and defendant move for summary judgment.

Plaintiff established its prima facie entitlement to summary judgment by proving the submission of statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]). The burden then shifted to defendant to raise a triable issue of fact ( see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986] ).

In opposition to the motion and in support of its cross-motion, defendant demonstrated that after receiving the claims for assigned first-party no-fault benefits, it timely requested additional verification of the claims by sending a letter to plaintiff’s assignor on August 21, 2006, directing her to appear for an independent medical examination (IME) on a September 6, 2006. When she failed to appear for the examination, defendant sent her a second letter on September 7th, rescheduling the examination for September 20, 2006. Defendant’s submissions sufficiently demonstrated that the scheduling letters were mailed to plaintiff’s assignor on the above dates and [*2]that plaintiff’s assignor failed to appear for the examinations.

It is well settled that an insurer is required to pay or deny a claim for no-fault benefits within 30 days after the claimant provides proof of the claim (see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 278 [1997]) and that its failure to do so will preclude it from raising most defenses to the claim (see Presbyterian Hosp. in City of NY, supra, 90 NY2d at 282). An insurer may extend the 30 day period in which it has to pay or deny a claim by making a request for additional verification of the claim “within 15 business days of receipt [of one] of the prescribed verification forms” (11 NYCRR 65-3.5[b]; see also Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2nd Dept 2005]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2nd Dept 2002]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 700 [2nd Dept 2001]). If the verification is not provided 30 calendar days after the original request, “[a]t a minimum … the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, or by mail” (11 NYCRR 65-3.6[b]). An insurer does not have to pay or deny a claim until it has received verification of all of the relevant information requested (see e.g. Montefiore Med. Ctr. v Gov’t Empls. Ins. Co., 34 AD3d 771 [2d Dept 2006]; see also Mount Sinai Hosp. v Allstate Ins. Co., 25 AD3d 673, 674 [2d Dept 2006]).

At oral argument, plaintiff’s counsel maintained, inter alia, that since defendant did not strictly comply with the time limitations set forth in 11 NYCRR 65.15[e][2], it lost the toll of the 30-day rule to pay or deny the claim. Plaintiff’s counsel pointed out that the second IME letter was mailed only 17 days after the first. She maintained that pursuant to 11 NYCRR 65.15[e][2], defendant was required to wait a full 30 days after the initial mailing of the IME request before mailing out the second request. The Court finds plaintiff’s argument to be unavailing.

In Infinity Health Products, Ltd. v Eveready Ins. Co., 67 AD3d 862, 2009 NY Slip Op 08585 [2d Dept ]), the Court recently held that it “[i]t would be inequitable to award summary judgment to the plaintiff, which ignored two verification requests, merely because the defendant, slightly prematurely, sent its second verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent” (2009 NY Slip Op 08585 at 2 [citations omitted]) The Court reasoned that “it would be incongruous to conclude that the insurance regulation regarding follow-up verification, or any other statute or rule, warrants a result which would, in effect, penalize an insurer who diligently attempts to obtain the information necessary to make a determination of a claim, and concomitantly, rewards a plaintiff who makes no attempt to even comply with the insurer’s requests…. and [that] [s]uch a result is not contemplated by the no-fault law’ or its regulations, which should be interpreted to promote the expeditious handling of verification requests and prompt claim resolution” (Id.).

The Court held that “inasmuch as the plaintiff did not respond to either of the verification requests, the 30-day period within which the defendant was required to pay or deny the claim did not commence to run . . . and that . . . plaintiff’s action [was therefore] premature” (Id.). The [*3]Court further held that “plaintiff was not entitled to summary judgment on the complaint, and the defendant’s cross motion for summary judgment dismissing the complaint should have been granted . . .without prejudice to commencement of a new action” (Id. [citations omitted]).

In this Court’s view, the holding in Infinity Health Products, Ltd. requires dismissal of the within action, without prejudice to its recommencement. Here, as in Infinity Health Products, Ltd., it would be inequitable to award summary judgment to the plaintiff, whose assignor ignored two verification requests, merely because the defendant did not strictly adhere to the time frames set forth in 11 NYCRR 65-3.6[b] for mailing out second requests for additional verification of a claim . It would be incongruous to conclude that 11 NYCRR 65-3.6[b] mandates a result that would penalize the defendant for its diligent attempts to obtain additional verification of the claims and reward plaintiff whose assignor ignored the requests.

This court recognizes that this case is not on all fours with Infinity Health Products, Ltd.. In Infinity Health Products, Ltd., the defendant sent its second written verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent. Here, the second written verification request was sent out 13 days before the expiration of the 30 day period referred to in 11 NYCRR 65-3.6[b]. Under the facts and circumstances of this case, however, this distinction does not warrant a contrary result.

When plaintiff’s assignor failed to appear for the IME on September 6, 2009, the re-scheduling letter was mailed to her on the following day. Unlike in Infinity Health Products, Ltd., once plaintiff’s assignor failed to appear for the IME, there is no legitimate reason why defendant should have waited a full 30 days from the mailing of the first letter to mail out the re-scheduling letter. Indeed, had defendant waited a full 30 days, it would have had acted in contravention of one of the primary policies underlying the “no-fault law”; which is “to promote the expeditious handling of verification requests and prompt claim resolution” (Infinity Health Products, Ltd., supra, 67 AD3d 862, 2009 NY Slip Op 08585 at 2). Further, the Court notes that when plaintiff’s assignor failed to appear for the re-scheduled IME, 30 days had elapsed from the time that the first scheduling letter had been sent to her.

Based on the foregoing, it is hereby

ORDERED that Plaintiff’s motion for summary Judgment is DENIED; and it is further

ORDERED that defendant’s cross-motion for summary judgment dismissing the complaint is GRANTED to the extent that plaintiff’s complaint is DISMISSED without prejudice to the commencement of a new action.

This constitutes the decision and order of the court.

[*4]Dated: January 6, 2010__________________________

PETER P. SWEENEY

Civil Court Judge