No-Fault Decisions, December 2004

Appellate Term, Second Department Dec 22, 2004 2004 NY Slip Op 24527 Split result

Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co.

⚠ Not followed by Inwood Hill Med., P.C. v General Assur. Co. (2005 NY Slip Op 25437)

A proven failure to attend a reasonably requested preclaim IME, timely raised in a denial, does not alone warrant dismissal. Such proof rebuts presumed medical necessity. The Appellate Term, Second Department, modified the order to deny the provider summary judgment while sustaining denial of the insurer's motion. Under former 11 NYCRR 65.12 (e), now 11 NYCRR 65-1.1 (d), an insurer may reasonably request an IME upon notice of claim, before statutory claim forms arrive. The majority distinguished that right from postclaim verification under 11 NYCRR 65-3.5 and 65-3.8. The assignor's nonappearance was uncontroverted and the request's reasonableness unchallenged, requiring independent medical-necessity proof at trial. A partial concurrence and dissent would have granted the insurer summary judgment because nonappearance breached a condition precedent to coverage.

Appellate Term, Second Department Dec 22, 2004 2004 NY Slip Op 51683(U) Split result

S&M Supply Inc. v Peerless Ins. Co.

A proven, unexcused failure to attend a reasonable preclaim IME rebuts the claim forms' presumption of medical necessity. The Appellate Term, Second Department, modified the order to deny the insurer's cross motion and grant the provider partial summary judgment on one claim, remitting for interest, fees, and further proceedings. That claim was denied after 30 days under 11 NYCRR 65-3.8 (a) and (c), precluding defenses. On the other claim, timely denial and proven nonattendance at reasonable preclaim IMEs raised medical-necessity questions, requiring denial of both motions. The majority followed Stephen Fogel Psychological, PC v Progressive Cas. Ins. Co., decided the same day; a dissent would have affirmed the denial of the provider's motion and grant of the insurer's cross motion.

Appellate Term, Second Department Dec 22, 2004 2004 NY Slip Op 24526 Insurer prevailed

NYC Med. & Neurodiagnostic, P.C. v Republic W. Ins. Co.

The provider failed to support personal jurisdiction over the insurer or justify jurisdictional discovery with tangible evidence. The Appellate Term, Second Department, reversed the order, insofar as appealed from, and granted the insurer's motion to dismiss. The provider implicitly abandoned jurisdiction under Insurance Law § 1212 based on authorized-insurer status, instead offering conclusory allegations of business activity under Insurance Law § 1213. Without tangible evidence connecting that activity to the claim, it made no sufficient start for discovery under CPLR 3211 (d). The motion court improperly conducted Internet research outside the record without allowing the parties to respond or establishing the websites' undisputed reliability; a dissent would have upheld judicial notice of the insurer's licensed status from the Insurance Department's website.

Appellate Term, Second Department Dec 22, 2004 2004 NY Slip Op 51682(U) Provider prevailed

A.B. Med. Servs. PLLC v USAA Cas. Ins. Co.

The provider proved mailing of one claim, while the insurer failed to prove mailing of IME notices supporting two other denials. The Appellate Term, Second Department, reversed the order, insofar as appealed from, granted partial summary judgment on those three claims, and remitted for interest, fees, and remaining claims. Counsel's denial of receipt did not rebut the billing manager's personal-mailing affidavit, and a responsive mailing certificate was properly submitted in reply. The insurer missed the 30-day deadline under 11 NYCRR 65.15 (g) (3). Following Stephen Fogel Psychological, PC v Progressive Cas. Ins. Co., decided the same day, preclaim IMEs were permissible, but mailing proof was deficient. Assignor-signature authentication was unnecessary, and assignment defects omitted from the denials were waived.

Appellate Term, Second Department Dec 22, 2004 2004 NY Slip Op 51680(U)

Amaze Med. Supply Inc. v New York Cent. Mut. Ins. Co.

The assignor's unexcused failure to attend reasonable preclaim IMEs raised a medical-necessity issue requiring denial of both summary judgment motions. Under 11 NYCRR 65.12 (e), now 11 NYCRR 65-1.1 (d), the insurer had an independent right to request preclaim IMEs. Affidavits describing standard office practices established mailing, and the provider offered neither a valid excuse for nonattendance nor proof that the requests were unreasonable. Following Stephen Fogel Psychological, PC v Progressive Cas. Ins. Co., decided the same day, the majority found the presumption of medical necessity rebutted. The Appellate Term, Second Department, modified the order to deny the insurer's cross motion while leaving the provider's motion denied. A partial dissent would have granted the insurer summary judgment.

Appellate Term, Second Department Dec 22, 2004 2004 NY Slip Op 51685(U) Provider prevailed

King's Med. Supply Inc. v New York Cent. Mut. Fire Ins. Co.

Failure to attend an IME scheduled before the insurer receives the provider's claim is not a proper basis for denying no-fault benefits. The Appellate Term, Second Department, reversed the denial of the medical-supply provider's summary judgment motion, granted the motion, and remanded for statutory interest and attorney fees under Insurance Law § 5106 (a). The provider proved submission of statutory claim forms and overdue payment. Although the insurer could request preclaim IMEs, nonattendance was not sanctionable under the claim rules, following Stephen Fogel Psychological, PC v Progressive Cas. Ins. Co., decided the same day. The insurer asserted no other defense.

Appellate Term, Second Department Dec 15, 2004 2004 NY Slip Op 51629(U) Insurer prevailed

Amaze Med. Supply Inc. v AIU Ins. Co.

The insurer's investigator affidavit raised a factual coverage issue despite an untimely denial of the medical-supply claim. The provider established submission of a claim setting forth the fact and amount of the loss and overdue payment under Insurance Law § 5106 (a), shifting the burden to the insurer. Although the denial was concededly untimely, the defense that the collision furthered an insurance fraud scheme was not precluded. The affidavit supplied sufficient facts to support a founded belief that the alleged injuries did not arise from an insured incident. The Appellate Term, Second Department, affirmed denial of the provider's summary judgment motion.

Appellate Term, Second Department Dec 15, 2004 2004 NY Slip Op 51640(U) Insurer prevailed

Ocean Diagnostic Imaging P.C. v Eagle Ins. Co.

The insurer's investigator affidavit and the assignor's EUO raised a triable issue whether the injuries arose from a covered accident. The provider established submission of a claim and overdue payment under Insurance Law § 5106 (a). Although the insurer failed to pay or deny within 30 days under 11 NYCRR 65.15 (g) (3), the coverage defense survived preclusion under Central Gen. Hosp. v Chubb Group of Ins. Cos. The insurer's evidence supported a founded belief that the injuries did not arise from an insured incident. The Appellate Term, Second Department, affirmed denial of the provider's summary judgment motion.

Appellate Term, Second Department Dec 15, 2004 2004 NY Slip Op 51636(U) Provider prevailed

Amaze Medical Supply Inc. v Allstate Ins. Co.

The insurer's denials issued more than 30 days after submission precluded its medical-necessity defense. The provider established its prima facie case by submitting complete proofs of claim showing the fact and amount of the loss and overdue payment. Applying 11 NYCRR 65-3.8 (a) and (c) and Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., the Appellate Term, Second Department, reversed denial of summary judgment, granted the provider's motion, and remanded for statutory interest and attorney fees. It also rejected the insurer's contention that the appeal was untimely.

Appellate Term, Second Department Dec 15, 2004 2004 NY Slip Op 51639(U) Insurer prevailed

A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co.

The insurer's special-investigator affidavit raised a coverage issue based on a founded belief that the collision furthered an insurance fraud scheme. The providers established submission of a claim and overdue no-fault payment under Insurance Law § 5106 (a). The insurer failed to pay or deny within the 30-day period in 11 NYCRR 65.15 (g) (3), but its defense that the collision furthered an insurance fraud scheme survived the untimely denial. The affidavit supported a founded belief that the alleged injuries did not arise from an insured incident. The Appellate Term, Second Department, affirmed denial of the providers' summary judgment motion.

Appellate Term, Second Department Dec 14, 2004 2004 NY Slip Op 51624(U) Insurer prevailed

Ocean Diagnostic Imaging, P.C. v State Farm Mut. Auto. Ins. Co.

An insurer's untimely denial does not preclude a defense that the collision furthered an insurance fraud scheme. The provider established its prima facie entitlement to summary judgment by proving submission of a claim stating the fact and amount of the loss and overdue payment under Insurance Law § 5106 (a). Although the insurer failed to pay or deny within the period prescribed by 11 NYCRR 65.15 (g) (3), its investigator's affidavit demonstrated a founded belief that the injuries did not arise from an insured incident. The Appellate Term, Second Department, affirmed denial of the provider's motion because coverage presented a triable issue.

Appellate Term, Second Department Dec 14, 2004 2004 NY Slip Op 51627(U) Insurer prevailed

A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co.

The insurer's special-investigator affidavit raised a triable coverage issue concerning whether the collision furthered an insurance fraud scheme. The providers established submission of a claim stating the fact and amount of the loss and overdue payment under Insurance Law § 5106 (a). The insurer's failure to pay or deny within 30 days under 11 NYCRR 65.15 (g) (3) precluded defenses subject to that deadline, but not its insurance-fraud coverage defense. The affidavit supported a founded belief that the alleged injuries did not arise from an insured incident. The Appellate Term, Second Department, affirmed denial of the providers' summary judgment motion.

Appellate Term, Second Department Dec 10, 2004 2004 NY Slip Op 24506 Insurer prevailed

A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co.

The providers' billing manager affidavit failed to establish submission of properly completed claim forms. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the providers' motion for summary judgment on their assigned no-fault claims. Although the trial court had required admissible proof authenticating the assignor's signature, 11 NYCRR 65-3.11 (b) (2) requires only a properly executed assignment on a prescribed form. A provider satisfies that burden by proving submission of an assignment conforming to the regulations. The insurer also waived assignment defenses by failing to seek verification of the assignment or identify any deficiency in its denial.

Appellate Term, Second Department Dec 10, 2004 2004 NY Slip Op 24505 Provider prevailed

Diagnostic Rehab. Med. Serv. P.C. v Travelers Indem. Co.

The insurer waived the assignment defect by neither seeking additional verification nor identifying the deficiency in its denial. The Appellate Term, Second Department, reversed the order and denied the insurer's motion to dismiss the provider's action for assigned no-fault benefits. The claimant had signed the purported assignment, but the form named no assignee. The insurer's failure to address that defect during claim processing waived the defense. The court expressly declined to adhere to A.B. Med. Servs. v Progressive Ins. to the extent it was inconsistent with this determination.

Appellate Term, Second Department Dec 8, 2004 2004 NY Slip Op 24501 Provider prevailed

Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co.

The insurer's submissions failed to raise a factual issue whether the claimed injuries arose from the accident. The Appellate Term, Second Department, affirmed summary judgment for the provider. The denial exceeded the 30-day period under Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3), and no admissible mailing proof established verification requests tolling that period under 11 NYCRR 65.15 (d) (1) and (2). Under Central Gen. Hosp. v Chubb Group of Ins. Cos., the causation defense survived the late denial, but the claims representative's affidavit did not establish a founded belief that the injuries fell outside coverage. The unsworn engineering report was inadmissible, with no acceptable excuse offered. A dissent would have found the opposing proof sufficient to raise a factual issue.

Appellate Term, Second Department Dec 8, 2004 2004 NY Slip Op 51550(U) Provider prevailed

King's Med. Supply Inc. v New York Cent. Mut. Fire Ins. Co.

An assignor's failure to attend a single IME does not support denial when the insurer has not exhausted follow-up verification procedures. The insurer sought to vacate summary judgment entered on default, relying solely on each assignor's failure to attend a scheduled IME. Under CPLR 5015 (a) (1), it needed a reasonable excuse and a meritorious defense. Its denials, issued within days of the missed examinations, were ineffective because it had not followed the procedures required by 11 NYCRR 65.15 (e) (2). With no other substantive defense and the payment period expired under Insurance Law § 5106 (a), the insurer failed to establish a meritorious defense. The Appellate Term, Second Department, reversed, denied vacatur, and reinstated the provider's judgment.

Appellate Term, Second Department Dec 1, 2004 2004 NY Slip Op 24482 Provider prevailed

Star Med. Servs. P.C. v Eagle Ins. Co.

The insurer failed to establish that the policy contained an endorsement authorizing EUOs. The Appellate Term, Second Department, reversed the order denying the provider's summary judgment motion, granted the motion, and remanded for statutory interest and attorney's fees under Insurance Law § 5106 (a). The provider proved submission of its claim form and overdue payment; the insurer relied on the assignor's EUO nonappearance. Although the claim was submitted after the revised regulations took effect on April 5, 2002, 11 NYCRR 65-1.1 (d) required the revised endorsement in new or renewal policies issued on or after that date. The policy endorsement in effect governed, and the insurer's submissions did not establish an EUO requirement supporting denial.

Appellate Term, Second Department Dec 1, 2004 2004 NY Slip Op 24481 Split result

A.B. Med. Servs. PLLC v Travelers Prop. Cas. Corp.

The insurer's office-failure excuse was insufficient to open its default, but the providers' proof did not support a default judgment. The Appellate Term, Second Department, modified the order, insofar as appealed from, to deny the insurer's cross motion in its entirety and permit the providers to renew within 30 days of the appellate order upon proper papers. The insurer failed to process the complaint for three months, neglected notice of the intended default motion and delayed seeking relief without explanation. Under CPLR 3215 (f), the attorney-verified complaint lacked a basis for counsel's personal knowledge. An affidavit identifying its maker only as an officer of the provider likewise failed to establish knowledge of either provider's facts. Denial of default judgment remained in effect without prejudice.

Appellate Term, Second Department Dec 1, 2004 2004 NY Slip Op 51495(U) Insurer prevailed

New York Neurology Assoc., P.C. v Travelers Indem. Co.

The provider's petition to vacate a master arbitration award denying benefits for lack of medical necessity was denied. The Appellate Term, Second Department, affirmed because the provider failed to demonstrate any ground under CPLR 7511 (b) for vacating the master arbitrator's affirmance of the underlying award. The court also noted that the special proceeding should terminate in a judgment under CPLR 411.

Trial court, Second Department Dec 23, 2004 2004 NY Slip Op 51702(U) Provider prevailed

Willis Acupuncture, PC v Government Employees Ins. Co.

An earlier blanket medical-necessity disclaimer does not excuse an insurer from timely denying each provider claim. The Civil Court, Kings County, granted the acupuncture provider summary judgment for claims involving five assignors, with interest and attorney fees. Under Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3), the insurer could not rely on blanket disclaimers predating the claims, even though sent to the provider. Those disclaimers also omitted the provider's name and identified the assignors as applicants, making them incomplete. The court accepted mailing proof absent a sworn denial of receipt but found the disclaimers ineffective. Because subsequent denials were late or absent, the insurer was precluded from asserting medical-necessity and fee-schedule defenses.

Trial court, Second Department Dec 23, 2004 2004 NY Slip Op 24524 Insurer prevailed

MZ Dental, P.C. v Progressive Northeastern Ins. Co.

An attorney's affirmation not signed by that attorney has no force or effect. After a hearing in seven actions for assigned no-fault benefits, the District Court, Suffolk County, found that providers' counsel falsely represented personal mailing of bills and submitted papers bearing signatures made by others. Under CPLR 2106 and 22 NYCRR 130-1.1a, the unsigned affirmations nullified the providers' summary judgment motions, which were denied. Three providers also failed to establish a prima facie case because no denial forms acknowledged receipt and the mailing affirmations were not executed by the person who mailed the bills. The complaints were dismissed without prejudice for uncorrected false signatures, rendering the insurers' cross motions moot. The court imposed sanctions on providers' counsel under 22 NYCRR 130-1.2.

Trial court, Second Department Dec 21, 2004 2004 NY Slip Op 24532 Insurer prevailed

Siegel v Progressive Cas. Ins. Co.

An assignment is an essential element of a provider's no-fault claim, and an insurer cannot waive its complete absence. The Civil Court, Kings County, denied the provider's summary judgment motion because no assignment accompanied its moving or reply papers, and the provider had not proved submission of one with its claim. Although the insurer concededly omitted that objection from its denial, the court distinguished decisions finding waiver of defects in existing assignments. Following A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co. and the noncoverage principles of Central Gen. Hosp. v Chubb Group of Ins. Cos., it reasoned that an assignment creates the insurer's contractual obligation to the provider and that waiver cannot create contractual liability.

Trial court, Second Department Dec 17, 2004 2004 NY Slip Op 51860(U) Provider prevailed

Ultimate Med. Supplies v Lancer Ins. Co.

The insurer's peer review was found biased and not credible, defeating its medical-necessity defense at trial. The Civil Court, Kings County, directed judgment for the provider for orthopedic devices, with statutory legal fees and interest. Although qualified as an expert, the reviewing physician relied on personal experience and admitted selecting favorable test results while omitting contrary ones. The provider's medical report supported the lumbar device prescription. The insurer's concession admitting the delivery receipt as an assignment, together with stipulated mailing, established the provider's prima facie case. The court also declined a missing-witness inference from the assignor's failure to obey a subpoena because the insurer had not supplied the required notice or established the prerequisites for the inference.

Trial court, Second Department Dec 10, 2004 2004 NY Slip Op 51835(U) Split result

Hartford Acc. & Indem. Co. v Rose

The insurer obtained a temporary stay of UM/SUM arbitration pending the personal injury action, but its coverage and late-notice objections failed. The Supreme Court, Queens County, found that the insured vehicle became uninsured when a prior order determined that the livery exclusion barred liability coverage. The policy's exclusion of vehicles insured under its liability coverage could not defeat mandatory benefits under Insurance Law § 3420 (f) (1), and the arbitration demand was timely in these circumstances. However, Insurance Law § 3420 (f) (2) and the SUM endorsement required exhaustion of applicable bodily-injury liability coverage. The court temporarily stayed arbitration pending resolution of the claimants' personal injury action and directed them to provide the insurer's requested discovery.

Trial court, Second Department Dec 8, 2004 2004 NY Slip Op 51701(U) Provider prevailed

PSG Psychological, P.C. v State Farm Ins. Co.

The insurer failed to establish timely denial or admissible proof of the provider's alleged fraudulent billing. The Civil Court, Kings County, denied the insurer's unopposed summary judgment motion. Its investigator established neither personal knowledge of mailing verification requests nor a standard mailing procedure, so the insurer did not prove tolling or timely denial. Provider fraud, unlike assignor fraud, required a timely denial under Melbourne Medical. Independently, unsigned EUO and deposition transcripts were inadmissible because the insurer did not establish compliance with CPLR 3116 (a). Unidentified investigative materials, inadequately identified redacted bills, and a press release concerning an unrelated indictment did not supply admissible proof under CPLR 3212 (b). The investigator's conclusions therefore failed to establish fraud.

Trial court, First Department Dec 1, 2004 2004 NY Slip Op 24472 Provider prevailed

Healing Hands Chiropractic, P.C. v Nationwide Assur. Co.

Prior arbitration decisions rejecting a diagnostic test do not supply the medical evidence needed to establish lack of medical necessity. The Civil Court, New York County, granted the provider summary judgment for current perception threshold testing and denied the insurer's cross motion. The insurer timely denied the claim based solely on two arbitration decisions finding the testing medically unnecessary. Those arbitrators had relied on medical testimony, but their decisions were not proof of medical necessity in this action. The insurer submitted no medical evidence supporting its defense. Without an IME, peer review or other competent proof supplying a factual basis and medical rationale, it failed to raise a triable issue.