December 3, 2010

Quality Med. Healthcare of NY, P.C. v NY Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 20493)

https://www.beynensonlaw.com/case-law/quality-med-healthcare-of-ny-p-c-v-ny-cent-mut-fire-ins-co-2010-ny-slip-op-20493/

Court: Appellate Term, Second Department
Decided: December 3, 2010
Citation: 2010 NY Slip Op 20493 · 30 Misc 3d 42
Posture: Trial
Later treatment: Followed in 1 later decision (see Cited by)
Issues: Discovery and procedure Fraudulent incorporation (Mallela) Provider's prima facie case
Legal questions: Claimant's prima facie case on motions · Fraudulent incorporation (Mallela) · Mallela defense: preclusion and discovery (see the maps)

Cite as

Quality Med. Healthcare of NY, P.C. v NY Cent. Mut. Fire Ins. Co., 30 Misc 3d 42 (App Term, 2d Dept 2010)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

The provider's prima facie case and licensing eligibility remained disputed, precluding a trial limited to excessive fees. The Appellate Term, Second Department, reversed the provider's directed-verdict judgment, vacated the portion of the prior order limiting trial, and remitted for a new trial. CPLR 3212 (g) permits facts to be deemed established only when undisputed or incontrovertible. The record did not establish submission of proof of loss and nonpayment within 30 days under Insurance Law § 5106 (a), or eliminate the insurer's other defenses. The insurer had raised a triable issue concerning certification to practice acupuncture under 11 NYCRR 65-3.16 (a) (12) and Mallela, but the trial court barred that evidence under its earlier order.

Reported in New York Official Reports at Quality Med. Healthcare of NY, P.C. v NY Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 20493)

Quality Med. Healthcare of NY, P.C. v NY Cent. Mut. Fire Ins. Co.

2010 NY Slip Op 20493 [30 Misc 3d 42]

Accepted for Miscellaneous Reports Publication

AT2

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, March 16, 2011

[*1]

Quality Medical Healthcare of NY, P.C., as Assignee of Bianca Villaroel, Respondent,
v
NY Central Mutual Fire Insurance Company, Appellant.

Supreme Court, Appellate Term, Second Department, December 3, 2010

APPEARANCES OF COUNSEL

Gullo & Associates, LLP, Brooklyn (Cristina Carollo of counsel), for appellant. Law Office of Alden Banniettis, Brooklyn (Jeff Henle of counsel), for respondent.

{**30 Misc 3d at 43} OPINION OF THE COURT

Memorandum.

Ordered that the judgment is reversed, without costs, so much of the order dated August 8, 2006 as provided that the trial was limited to the issue of whether the charges were excessive is vacated and the matter is remitted to the Civil Court for a new trial.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment and defendant cross-moved for summary judgment dismissing the complaint. By order dated August 8, 2006, the Civil Court denied both the motion and the cross motion, found that the only triable issue of fact was whether the fees charged were excessive and stated that the trial was limited to that issue, citing CPLR 3212 (g).

In accordance with the August 8, 2006 order, the nonjury trial began with defendant’s presentation of its defense. Defendant’s attorney sought to present evidence to demonstrate, in effect, that plaintiff was not eligible for reimbursement under the No-Fault Law because plaintiff’s sole shareholder was not licensed or certified to practice acupuncture at the time that the acupuncture services at issue were rendered (see Insurance Department Regulations [11 NYCRR] § 65-3.16 [a] [12]; Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co., 26 [*2]Misc 3d 139[A], 2010 NY Slip Op 50262[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; see also State Farm Mut. Auto. Ins. Co. v Mallela,{**30 Misc 3d at 44} 4 NY3d 313 [2005]). The Civil Court would not allow defendant to present this evidence because, the court found, it was barred by the August 8, 2006 order, which limited the issue for trial to the excessiveness of the fee schedule. When defendant failed to proffer any evidence as to its fee schedule defense, plaintiff moved for a directed verdict and the court granted plaintiff’s motion. Subsequently, a judgment was entered in favor of plaintiff, and the instant appeal by defendant ensued.

On appeal, defendant argues, in effect, that the August 8, 2006 order improperly barred defendant from asserting its defense that plaintiff was not eligible for reimbursement under the No-Fault Law pursuant to Insurance Department Regulations (11 NYCRR) § 65-3.16 (a) (12). Defendant also argues, in effect, that to the extent said order could be interpreted to read that plaintiff did not have to prove its case at trial, the order was improper.

The CPLR authorizes a court, on a motion for summary judgment, to limit issues of fact for trial where it is able to “ascertain what facts are not in dispute or are incontrovertible” (CPLR 3212 [g]). Under that circumstance, the court is directed to “make an order specifying such facts,” which will then “be deemed established for all purposes in the action.” In addition, the court is permitted to “make any order as may aid in the disposition of the action.”

Upon a review of the record, we find that there was no basis in this case for the Civil Court to have limited issues for trial pursuant to CPLR 3212 (g). First, the record does not demonstrate that there is no dispute, or that it is incontrovertible, that plaintiff had submitted “proof of the fact and amount of loss sustained” to defendant and that defendant had failed to pay the claim within 30 days of receipt of such proof (see Insurance Law § 5106 [a]). Furthermore, the record does not demonstrate that, of the 31 defenses raised by defendant in its answer, none were viable except for the excessiveness of the fee schedule, which is the implication of an order limiting the trial to this defense. Indeed, it is noted that, in opposition to plaintiff’s motion, defendant submitted sufficient evidence to raise a triable issue of fact as to whether plaintiff was certified to practice acupuncture at the time that the acupuncture services at issue were rendered (see Insurance Department Regulations [11 NYCRR] § 65-3.16 [a] [12]; Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co., 26 Misc 3d 139[A], 2010 NY Slip Op 50262[U] [2010]; see also State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]).{**30 Misc 3d at 45}

Accordingly, the judgment is reversed, so much of the order dated August 8, 2006 as stated that the trial was limited to the issue of whether the charges were excessive is vacated and the matter is remitted to the Civil Court for a new trial.

Weston, J.P., Golia and Rios, JJ., concur.

Legal questions (3)

Questions of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.

Claimant's prima facie case on motions

Open the full map

On summary judgment or another pretrial motion, what must a no-fault claimant show to establish its prima facie case?

This decision: Insufficient: claimant did not prove the claim was submitted (mailed to and received by the insurer) (rules on the question, but another ground decided the case)

Held the record did not show as incontrovertible that the provider submitted proof of claim and went unpaid for 30 days, so its prima facie elements could not be deemed established under CPLR 3212 (g).

Proof sufficientMailing/receipt not shownOverdue not shownBusiness-record foundation lackingOther element missingThis decision

Of the 1,065 decisions on this question in the Second Department courts and the Court of Appeals, 78 (this one included) are in the same category.

Fraudulent incorporation (Mallela)

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On the merits, when may a no-fault insurer withhold payment because unlicensed persons own or control the provider (Mallela)?

This decision: Evidence of unlicensed ownership/control enough to proceed, but not resolved (rules on the question, but another ground decided the case)

Held the insurer's evidence raised a triable issue whether the provider's sole shareholder was certified to practice acupuncture when the billed services were rendered, so the trial could not be limited to the fee defense.

Defense establishedTriable issueDefense not establishedNot a Mallela groundThis decisionCites it or cited by itCited or followed

Of the 61 decisions on this question in the Second Department courts and the Court of Appeals, 19 (this one included) are in the same category.

Mallela defense: preclusion and discovery

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May the insurer raise and investigate a Mallela (fraudulent incorporation) defense, or is it precluded, waived or denied discovery?

This decision: Insurer may raise or investigate the Mallela defense here (rules on the question, but another ground decided the case)

Held the CPLR 3212 (g) order limiting trial to fee excessiveness had no basis, since neither the prima facie case nor the absence of other viable defenses was incontrovertible and the insurer raised a triable issue on the owner's acupuncture license, so the defense could be tried.

Defense may be pursuedDefense barredThis decisionCites it or cited by itCited or followed

Of the 136 decisions on this question in the Second Department courts and the Court of Appeals, 112 (this one included) are in the same category.

Cited in this decision

A label shows how this decision treated the case it cites.

Quality Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co. (2010 NY Slip Op 50262(U)) FollowedA medical corporation solely owned by a physician uncertified in acupuncture cannot recover no-fault benefits for an employee's acupuncture services.
State Farm Mut. Auto. Ins. Co. v Mallela (2005 NY Slip Op 02416)Fraudulently incorporated medical providers are ineligible for no-fault reimbursement under 11 NYCRR 65-3.16 (a) (12).

Cited by

A label shows how the later decision treated this one.

Advanced Recovery Equip. & Supplies, LLC v Global Liberty Ins. Co. (2020 NY Slip Op 51373(U)) FollowedFactual disputes over medical necessity and timely claim submission precluded summary judgment and a trial limited to the fee schedule.

Similar decisions

Midborough Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co. (2006 NY Slip Op 51879(U))The provider's attorney affirmation failed to establish the admissibility of its claim forms or a prima facie entitlement to judgment.
Gentle Acupuncture, P.C. v Tri-State Consumer Ins. Co. (2017 NY Slip Op 50706(U))The insurer lacked expert fee-schedule proof, and the provider's treating acupuncturist raised a factual issue on medical necessity.
Crossbay Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2007 NY Slip Op 27135)The insurer raised issues concerning the provider's actual operation and control that required discovery before summary judgment.
Fresh Acupuncture, P.C. v Interboro Ins. Co. (2017 NY Slip Op 27214)An insurer's action declaring a provider ineligible for no-fault benefits falls outside Civil Court's declaratory judgment jurisdiction.
Matter of Country-Wide Ins. Co. v Bay Needle Acupuncture, P.C. (2018 NY Slip Op 08238)The insurer's billing-fraud evidence did not establish a Mallela defense exempt from the 30-day denial deadline.