SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Peter Paul Sweeney, J.), entered October 2, 2009. The order, insofar as appealed from, denied the branch of defendant’s motion seeking summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is reversed, without costs, and the branch of defendant’s motion seeking summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from so much of an order as denied the branch of its motion seeking summary judgment dismissing the complaint.

The affidavit submitted by defendant in support of its motion for summary judgment established that defendant had timely denied (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]) the claim at issue on the ground of lack of medical necessity. Defendant annexed to its motion papers an affirmed peer review report which set forth a factual basis and medical rationale for the peer reviewer’s determination that there was a lack of medical necessity for the services rendered (see Delta [*2]Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]). In opposition, plaintiff proffered an unsworn medical report (see CPLR 2106; Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; cf. Continental Med., P.C. v Mercury Cas. Co., 22 Misc 3d 134[A], 2009 NY Slip Op 50234[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).

The purpose of the peer review report submitted by defendant was not to attempt to prove that plaintiff’s assignor was injured as documented in her medical records, or that she was treated as set forth in those records, but to establish that, assuming the facts set forth therein were true, the treatment allegedly provided by plaintiff was not medically necessary (Urban Radiology, P.C. v Tri-State Consumer Ins. Co., 27 Misc 3d 140[A], 2010 NY Slip Op 50987[U] [App Term, 2d, 11th & 13th Jud Dists 2010]). Consequently, defendant was not required to demonstrate that the records fell within an exception to the rule against hearsay (id.). Thus, the Civil Court should have granted the branch of defendant’s motion seeking summary judgment dismissing the complaint.

Accordingly, the order, insofar as appealed from, is reversed and the branch of defendant’s motion seeking summary judgment dismissing the complaint is granted.

Pesce, P.J., Weston and Rios, JJ., concur.
Decision Date: March 02, 2012

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Robert R. Reed, J.), entered January 31, 2011, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Robert R. Reed, J.), entered January 31, 2011, reversed, with $10 costs, motion granted and complaint dismissed. The Clerk is directed to enter judgment accordingly.

The defendant insurer made a prima facie showing of entitlement to summary judgment dismissing the action for first-party no-fault benefits by establishing that it properly mailed the notices for an examination under oath (EUO) to plaintiff’s assignor, and that the assignor failed to appear (see Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [2011], lv denied 17 NY3d 705 [2011]; cf. Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]). In opposition, plaintiff failed to raise a triable issue as to the reasonableness of the requests or the assignor’s failure to attend the EUOs. Contrary to plaintiff’s contention, defendant was not required to demonstrate that the assignor’s failure to appear for the EUOs was willful (see Unitrin at 561).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: February 22, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from a judgment of the Civil Court of the City of New York, Queens County (Cheree A. Buggs, J.), entered January 6, 2010. The judgment, after a nonjury trial, awarded plaintiff the total sum of $3,808.56.

ORDERED that the judgment is reversed, without costs, and the matter is remitted to the Civil Court for a new trial in accordance with the decision herein.

The trial of this action by a provider to recover assigned first-party no-fault benefits was limited, pursuant to CPLR 3212 (g), to the issue of the medical necessity of the billed-for services. At the nonjury trial, the Civil Court essentially precluded the testimony of defendant’s expert witness and granted plaintiff’s motion for a directed verdict. Defendant appeals from the judgment that was subsequently entered.

Defendant’s expert medical witness, who was not the expert who had prepared the peer review report upon which defendant’s denial of the subject claim was based, should have been permitted to testify as to her opinion as to the medical necessity of the supplies at issue in this case, which testimony would be limited to the basis for the denial as set forth in the original peer review report (Radiology Today, P.C. v Progressive Ins. Co., 32 Misc 3d 144[A], 2011 NY Slip Op 51724[U] [App Term, 2d, 11th & 13th Jud Dists 2011]; Dilon Med. Supply Corp. v New York Cent. Mut. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52454[U] [App Term, 2d & 11th Jud Dists 2007]; see also Psychology YM, P.C. v GEICO Gen. Ins. Co., 32 Misc 3d 130[A], 2011 NY Slip Op 51316[U] [App Term, 2d, 11th & 13th Jud Dists 2011]).

Accordingly, the judgment is reversed and the matter is remitted to the Civil Court for a new trial on the limited issue.

Weston and Rios, JJ., concur.

Golia, J.P., concurs in a separate memorandum.

Golia, J.P., concurs in the following memorandum:

While I concur in the result, I would like to briefly clarify two issues about which I am concerned.

First, I am concerned that the majority’s finding that the testimony of defendant’s expert [*2]medical witness “be limited to the basis for the denial as set forth in the original peer review report” risks interpretations which could impose unduly restrictive limitations upon the expert witness’s ability to offer testimony regarding issues properly before the trier of fact. “The admissibility and scope of expert testimony is a determination within the discretion of the trial court” (Christoforatos v City of New York, 90 AD3d 970 [2011]). A defendant insurer in a no-fault case is limited to those defenses properly asserted within the time limits imposed by the rules of New York’s no-fault scheme. The facts at issue in a particular trial may also be limited by a judge’s ruling pursuant to CPLR 3212, as was done here. However, medical experts at trial should be able to bring their expertise to bear in a manner which amounts to more than simply regurgitating those facts included in the original peer review report.

I do not believe the majority intends this directive to result in the undue restriction of expert testimony. However, in the interest of avoiding conflicting interpretations of this opinion, I choose to briefly address this issue. In short, I do not believe that this opinion should be read to prevent expert witnesses from expressing their opinions as to the content and conclusions contained in a properly admitted peer review report written by a doctor other than the testifying doctor. Additionally, when testifying in regard to such peer review reports, expert witnesses should be permitted to form and express their own expert opinions based upon the medical facts contained in the record, including a properly admitted peer review report.

An expert is permitted to testify as to his or her opinion based upon facts properly in evidence and that expert’s particular area of expertise, so long as such testimony does not unduly trod upon the province of the trier of fact as the ultimate arbiter of the question in controversy (see generally People v Cronin, 60 NY2d 430 [*3]
[1983]). For example, an expert should not be prohibited from answering relevant, probative hypothetical questions, a common occurrence at trial.

Second, while not directly addressed in the majority opinion, I wish to briefly discuss the implications of the Civil Court’s ruling pursuant to CPLR 3212 (g) whereby the court held that the issue of medical necessity would be the sole issue of fact to be determined at trial. A claim that billed-for services were not medically necessary is a defense available to a defendant insurer. However, in the present matter, both defendant and plaintiff presented arguments regarding the issue of medical necessity in reciprocal motions for summary judgment. In denying both motions and finding that a determination as to medical necessity required a trial, the Civil Court established that questions existed as to the medical necessity of the billed-for services, as well as defendant’s contrary claim.

Medical necessity is presumed upon the timely submission of a no-fault claim (see All County Open MRI & Diagn. Radiology P.C. v. Travelers Ins. Co., 11 Misc 3d 131[A], 2006 NY Slip Op 50318[U] [App Term, 9th & 10th Jud Dists 2006]). Thus, ordinarily it falls to the defense to establish that the billed-for services were not medically necessary. Here, the motion court denied both plaintiff’s and defendant’s motions for summary judgment and set the only trial issue as to medical necessity. Thus, the presumption of medical necessity no longer exists in the present matter, and, as such, the rationale for burdening the defense with the argument no longer exists. As the law of this case has established that questions of medical necessity exist, it is only reasonable that plaintiff establish at trial that the billed-for services were medically necessary.

To the extent that I may have previously held otherwise, I no longer follow those tenets.
Decision Date: February 21, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Wavny Toussaint, J.), entered July 15, 2010. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, without costs, plaintiff’s motion for summary judgment is granted, defendant’s cross motion for summary judgment dismissing the complaint is denied and the matter is remitted to the Civil Court for the calculation of statutory interest and an assessment of attorney’s fees.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order which denied its motion for summary judgment and granted defendant’s cross motion for summary judgment dismissing the complaint.

Plaintiff established its prima facie entitlement to summary judgment by proof of the submission to defendant of the claim forms, proof of the fact and the amount of the loss sustained, and proof that defendant had failed to pay or deny the claims within the requisite 30-day period (see Insurance Law § 5106 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d, 11th & 13th Jud Dists 2011]). Consequently, the burden shifted to defendant to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

In opposition to plaintiff’s motion and in support of its own cross motion for summary judgment, defendant failed to establish that the examination under oath (EUO) scheduling letters had been timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]) and that the 30-day claim determination period (see Insurance Department Regulations [11 NYCRR] § 65-3.8) had been tolled. As a result, defendant failed to establish that its denial of claim forms were timely and, thus, that it is not precluded from raising the failure of plaintiff’s assignors to appear at the EUOs as a defense (see Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; Infinity Health Prods., Ltd. v Progressive [*2]Ins. Co., 28 Misc 3d 133[A], 2010 NY Slip Op 51334[U] [App Term, 2d, 11th & 13th Jud Dists 2010]). Accordingly, the order is reversed, plaintiff’s motion for summary judgment is granted, defendant’s cross motion for summary judgment dismissing the complaint is denied and the matter is remitted to the Civil Court for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Weston and Rios, JJ., concur.

Golia, J.P., dissents in a separate memorandum.

Golia, J., dissents and votes to affirm the order in the following memorandum:

I disagree with the majority’s favoring of form over function and consequently find that the letters sent by the insurer qualify as verification requests, and thus tolled the 30-day time limit for denial of plaintiff’s claim. Further, I find that the insurer established that these same letters were sent to plaintiff in a timely fashion.

This Appellate Term has previously held that ” an insurer may not rely on a letter, even if denominated a verification request, that merely informs a claimant that a decision on the claim is delayed pending an investigation, and without specifying a particular form of verification and the person or entity from whom the verification is sought, to toll the 30-day claim determination period'” (Ocean Diagnostic Imaging P.C. v Citywide Auto Leasing Inc., 8 Misc 3d 138[A], 2005 NY Slip Op 51314[U], *1 [App Term, 2d & 11th Jud Dists 2005], quoting Melbourne Med. P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92, 94 [App Term, 2d & 11th Jud Dists 2004]). I understand the holdings in Ocean Diagnostic Imaging P.C. and Melbourne Med. P.C. to place a greater value on function than form (see Prestige Med. & Surgical Supply, Inc. v Clarendon Natl. Ins. Co., 13 Misc 3d 127[A], 2006 NY Slip Op 51672[U], *3 [App Term, 2d & 11th Jud Dists 2006] [Golia, J., concurring] [“(Ocean Diagnostic Imaging P.C.) held that even if a document is labeled a verification request, it will not serve to toll the 30-day period if it merely informs that the claim is delayed pending an investigation but fails to specify the particular information sought”]). Hence, just as the documents in Ocean Diagnostic Imaging P.C. were deemed not to qualify as verification requests despite being labeled as such, the documents in the present matter conversely do qualify as verification requests despite their being labeled otherwise.

Here, despite the document being labeled a “delay letter,” it informed plaintiff of both the delay and the “particular information sought.” The insurer’s letters explicitly state that information necessary for the investigation remains outstanding, namely “[a] statement from our policyholder and/or one of the parties involved in this loss.” Additionally, these letters specifically note that “[a]s soon as we receive the requested information and our investigation is complete, we will be happy to give further consideration to your claim.” These letters contain the very characteristics we identified in Ocean Diagnostic Imaging P.C. as necessary components of a verification request and inform plaintiff of what is required to facilitate the processing of the claim. The fact that these letters have been labeled as “delay letters” is subservient to the fact that the content and purpose of these letters is identical to a verification request.

Insurance Department Regulations (11 NYCRR) § 65-3.5 (b), addresses the manner in which additional verification may be requested by an insurer. Therein, it is stated:

“Subsequent to the receipt of one or more of the completed verification forms, any [*3]additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification forms. Any requests by an insurer for additional verification need not be made on any prescribed or particular form.”

Plaintiff did supply defendant with the initial verification forms (NYS Form N-3), and a copy of those forms were attached to plaintiff’s motion submitted below. Hence, any other verification required by defendant subsequent to the receipt of the initial verification would fall under the governance of Insurance Department Regulations (11 NYCRR) § 65-3.5 (b) as “additional verification.” Such “additional verification need not be made on any prescribed or particular form” (Insurance Department Regulations [11 NYCRR] § 65-3.5 [b] [emphasis added]). Thus, not only may an insurer request such verification simply by sending a letter, it would appear even a verbal request would suffice under the wording of section 65-3.5 (b).

Insurance Department Regulations (11 NYCRR) § 65-3.5 (b) provides that if an insurer has not received the additional verification sought within 30 days of the “original request, the insurer shall” make a second request within 10 days. None of the letters sent by the insurer is this case fell outside this 40-day window. The insurer first received the bills from plaintiff on September 9, 2002 (the first Chervyakov claim), September 26, 2002 (the second Chervyakov claim), August 26, 2002 (the first Komarov claim) and September 5 (the second Komarov claim). The letters sent by the insurer concerning the Chervyakov claims were dated September 6, October 7, and October 29. The letters addressing the Komarov claims were dated September 6, September 19, October 7 and October 21.

Indeed, the insurer submitted the affidavit of Marie Murad, a Senior Claims Examiner for defendant, attesting to the fact that these letters were mailed on the dates listed above. Ms. Murad also testified in the affidavit to the fact that the insurer had made efforts to obtain statements from the assignors, however these efforts “proved futile.” As there exists no prescribed form in which additional verification requests must be made, the efforts engaged in by the insurer to obtain needed statements from the allegedly injured parties is more than sufficient to qualify as verification requests.

Finally, when these efforts to obtain statements failed to produce any cooperation, the insurer retained a law firm to conduct examinations under oath (“EUOs”) of the assignors. The first EUO scheduling letter was mailed to both assignors on October 28, 2002. Neither assignor appeared for the EUO scheduled as a result of the first letter. A second scheduling letter was mailed to both assignors on November 11, 2002, and again neither assignor appeared for the scheduled EUO. These letters were sent not only to the assignors, but the assignors’ attorney as well. The record is devoid of any evidence that the assignors or their attorney made any response [*4]to these scheduling letters or attempted to participate in these duly scheduled EUOs. Indeed, the record includes transcripts from both attempted EUOs. Therein, the insurer’s attorney states that having appeared at the duly scheduled time and place to conduct the EUOs, both the assignors and their attorney had failed to appear.

As an assignor’s participation in a reasonably scheduled EUO is a condition precedent for payment of a claim, the insurer was within its rights to deny the claim on that basis. Furthermore, because of the insurer’s diligent efforts to obtain statements from the assignors, as chronicled by the many letters discussed above, the 30-day deadline for a denial had been properly tolled. Thus, the insurer’s denial was timely and proper, and consequently there exists more than enough evidence to defeat plaintiff’s motion for summary judgment as well as give credence to defendant’s cross motion for summary judgment.
Decision Date: February 21, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Dawn Jimenez Salta, J.), entered October 15, 2009. The order, insofar as appealed from as limited by the brief, denied defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is reversed, without costs, and defendant’s cross motion for summary judgment dismissing the complaint is granted.

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. The Civil Court denied the motion and cross motion, and found that the sole issue for trial was the medical necessity of the services provided to plaintiff’s assignor. Defendant appeals from so much of the order as denied its cross motion for summary judgment dismissing the complaint.

In support of its cross motion, defendant submitted, among other things, two affirmed peer review reports, each of which set forth the factual basis and medical rationale for the doctor’s determination that there was a lack of medical necessity for the services at issue. The affidavit by plaintiff’s health care practitioner submitted in response failed to meaningfully rebut the conclusions set forth in the peer review reports (see Innovative Chiropractic, P.C. v Mercury Ins. Co., 25 Misc 3d 137[A], 2009 NY Slip Op 52321[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). As plaintiff has not challenged the Civil Court’s finding, in effect, that defendant is otherwise entitled to judgment, defendant’s cross motion for summary judgment dismissing the complaint is granted (see Delta Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Accordingly, the order, insofar as appealed from, is reversed, and defendant’s cross [*2]motion for summary judgment dismissing the complaint is granted.

Pesce, P.J., Weston and Rios, JJ., concur.
Decision Date: February 21, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Ingrid Joseph, J.), entered April 1, 2010. The order, insofar as appealed from, denied defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from so much of an order as denied its motion for summary judgment dismissing the complaint on the ground that there was no medical necessity for the services rendered.

As the affidavit of plaintiff’s psychologist submitted in opposition to defendant’s motion was sufficient to demonstrate the existence of a triable issue of fact as to the medical necessity of the services at issue, the order, insofar as appealed from, is affirmed (see Ozone Park Chiropractic v Clarendon Natl. Ins. Co., 32 Misc 3d 134[A], 2011 NY Slip Op 51453[U] [App Term, 2d, 11th & 13th Jud Dists 2011]).

Pesce, P.J., Weston and Rios, JJ., concur.
Decision Date: February 21, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Pamela L. Fisher, J.), entered June 18, 2010. The order denied defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, without costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order of the Civil Court which denied its motion for summary judgment dismissing the complaint.

In support of its motion, defendant submitted an affidavit by its biomechanical engineer, which affidavit was in admissible form, as it was accompanied by a certificate of conformity pursuant to Real Property Law § 299-a, and was therefore in compliance with CPLR 2309 (c) (cf. Andromeda Med. Care, P.C. v Utica Mut. Ins. Co., 24 Misc 3d 139[A], 2009 NY Slip Op 51629[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). The engineer concluded that the injuries of plaintiff’s assignors could not have arisen out of the accident in question, after he reviewed, among other things, the photographs of the vehicle involved in the accident, the medical records of plaintiff and other providers regarding their treatment of the assignors, and copies of the transcripts of plaintiff’s assignors’ testimony at their examinations under oath, all of which defendant attached to its moving papers.

As defendant established its entitlement to judgment as a matter of law by submitting proof in admissible form showing the lack of a causal connection between the accident and the injuries claimed by plaintiff’s assignors, the burden shifted to plaintiff to rebut defendant’s showing. Plaintiff, in its opposition papers, failed to do so. Defendant’s motion for summary judgment dismissing the complaint should therefore have been granted.

Accordingly, the order is reversed and defendant’s motion for summary judgment dismissing the complaint is granted.

Golia, J.P., and Weston, J., concur. [*2]

Rios, J., dissents in a separate memorandum.

Rios, J., dissents and votes to affirm the order in the following memorandum:

I respectfully dissent and vote to affirm the order.

Contrary to the finding of the majority, the affidavit of defendant’s biomechanical engineer was insufficient to establish as a matter of law that the injuries claimed by plaintiff’s assignors could not have arisen from the accident. Instead, the affidavit merely demonstrated a “founded belief” that the alleged injuries did not arise out of the accident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Accordingly, defendant’s motion for summary judgment dismissing the complaint was properly denied.
Decision Date: February 21, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (William A. Viscovich, J.), entered May 10, 2010. The order, insofar as appealed from, granted the branches of defendant’s motion seeking to compel disclosure and thereafter to produce plaintiff’s owner, Nikolai Lagoduke, for an examination before trial, and denied plaintiff’s cross motion for a protective order.

ORDERED that the order, insofar as appealed from, is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from so much of an order as granted the branches of defendant’s motion seeking to compel disclosure and thereafter to produce plaintiff’s owner, Nikolai Lagoduke, for an examination before trial, and denied plaintiff’s cross motion for a protective order. At issue on this appeal is whether defendant’s failure to assert a defense pursuant to State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]) precludes it from seeking discovery related to that defense. We conclude that, based on the record before us, defendant made sufficient allegations of fraudulent incorporation to warrant disclosure.

It is well settled that a party is entitled to full disclosure of all matter that is “material and necessary in the prosecution or defense of an action” (CPLR 3101 [a]). What is “material and necessary” is left to the sound discretion of the court and includes “any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test is one of usefulness and reason” (Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]; Young v Tierney, 271 AD2d 603 [2000]). Where, as here, an insurer requests discovery concerning a Mallela defense, the request should be granted as long as there are sufficient allegations supporting such a defense (see e.g. Kipor Medicine, P.C. v GEICO, 28 Misc 3d 129[A], 2010 NY Slip Op 51247[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58 [App Term, 2d & 11th Jud Dists 2006]; Lexington Acupuncture, P.C. v State Farm Ins. Co., 12 Misc 3d 90 [App Term, 2d & 11th Jud Dists 2006]). A Mallela defense is nonwaivable and may be asserted at any time notwithstanding the absence of a timely denial (see Midwood Acupuncture, P.C. v State Farm [*2]Auto. Ins. Co., 14 Misc 3d 131[A], 2007 NY Slip Op 50052[U] [App Term, 2d & 11th Jud Dists 2007]).

Here, although defendant never moved to amend its answer to assert a defense based on fraudulent incorporation, it did submit an affidavit containing sufficient allegations of fraudulent incorporation. Defendant included an affidavit from its Senior Special Investigator, who set forth, in detail, plaintiff’s close connection with another medical provider whose owner was convicted of, among other things, fraud and falsifying business records. Since defendant made adequate allegations of fraudulent incorporation, the Civil Court did not abuse its discretion in granting those branches of defendant’s motion seeking to compel disclosure on that issue, and in denying plaintiff’s cross motion for a protective order (see Kipor Medicine, P.C. v GEICO, 28 Misc 3d 129[A], 2010 NY Slip Op 51247[U]).

Accordingly, the order, insofar as appealed from, is affirmed.

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

Golia, J., concurs in a separate memorandum.

Golia, J., concurs in the following memorandum:

I concur for the reasons stated in my concurrence in Lexington Acupuncture, P.C. v General Assur. Co. (___ Misc 3d ___, 2012 NY Slip Op ______ [Appeal No. 2010-165 K C], decided herewith). While there exist certain differing factual elements in these two matters, those facts have no significance here, and consequently play no part in the legal issues in controversy.

Additionally, the failure of the defendant in this matter to assert every affirmative defense asserted in Lexington Acupuncture, P.C. is of no consequence. The inclusion of any one satisfactory affirmative defense would be sufficient. Furthermore, and just as importantly, as stated in my Lexington Acupuncture, P.C. concurrence, a Mallela claim is non-precludable and can be raised at any time (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]).
Decision Date: February 21, 2012

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Sylvia G. Ash, J.), entered December 17, 2009. The order, upon an amended cross motion by defendant for, among other things, leave to amend its answer and to direct plaintiff “to disclose management agreements, lease agreements, corporate records, tax returns and other tax records, and bank records, or in the alternative, granting . . . leave to serve supplemental demands for same,” granted defendant leave to amend its answer and directed that “the plaintiff shall provide verified responses to defendant’s discovery demands within 60 days after defendant serves its amended answer.”

ORDERED that the order is modified by striking so much of the order as directs that “the plaintiff shall provide verified responses to defendant’s discovery demands within 60 days after defendant serves its amended answer” and by providing that the branch of defendant’s cross motion seeking to direct disclosure is denied; as so modified, the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment and, by an amended cross motion, defendant cross-moved for, among other things, leave to amend its answer to assert the additional affirmative defense to the effect that plaintiff was not entitled to receive no-fault benefits because it failed to comply with applicable state or local licensing laws. Defendant’s cross motion also sought an order, pursuant to CPLR 3104, directing plaintiff “to disclose management agreements, lease agreements, corporate records, tax returns and other tax records, and bank records, or in the alternative, granting . . . leave to serve supplemental demands for same.” By order dated November 18, 2009, the Civil Court denied plaintiff’s motion. By order entered December 17, 2009, the Civil Court granted the branch of defendant’s amended cross motion seeking to amend the answer and directed plaintiff to “provide verified responses to defendant’s discovery demands within 60 days after defendant serves its amended answer.”

Leave to amend pleadings should be freely granted absent prejudice or surprise resulting from the delay (see CPLR 3025 [b]; Lucido v Mancuso, 49 AD3d 220, 225 [2008]; see also Worthen-Caldwell v Special Touch Home Care Servs., Inc., 78 AD3d 822 [2010]). As plaintiff was neither prejudiced nor surprised by defendant’s delay in asserting the foregoing affirmative [*2]defense, the Civil Court did not improvidently exercise its discretion in granting the branch of defendant’s amended cross motion seeking leave to amend its answer (see e.g. New York First Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 25 Misc 3d 134[A], 2009 NY Slip Op 52217[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).

A review of the record indicates that defendant’s initial discovery demands had not requested any “management agreements, lease agreements, corporate records, tax returns and other tax records, and bank records,” and were merely comprised of a “Demand for Disclosure of Witness(es),” a “Notice Pursuant to CPLR 3101” for, among other things, the identities of expert witnesses intended to be called at trial, and a “Declination of Service by Electronic Means.” Since defendant had not served any supplemental discovery demands upon plaintiff prior to making its cross motion, and did not submit any proposed supplemental discovery demands with its cross motion, so much of the order as states that “the plaintiff shall provide verified responses to defendant’s discovery demands within 60 days after defendant serves its amended answer” is stricken.

We note that, contrary to plaintiff’s contention, there is no requirement that a CPLR 321 change or withdrawal of attorney form be notarized. We further note that nothing in our decision herein is intended to preclude defendant from serving supplemental discovery demands.

Rios, J.P., Weston and Golia, JJ., concur.
Decision Date: February 21, 2012

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Elizabeth A. Taylor, J.), entered August 31, 2010, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Elizabeth A. Taylor, J.), entered August 31, 2010, reversed, with $10 costs, motion granted and complaint dismissed. The Clerk is directed to enter judgment accordingly.

The defendant insurer made a prima facie showing of entitlement to judgment as a matter of law by submitting, inter alia, a chiropractor’s sworn peer review report, setting forth a factual basis and medical rationale for his stated conclusion that the diagnostic testing giving rise to plaintiff’s no-fault claim lacked medical necessity (see generally CPT Med. Servs., P.C. v New York Cent. Mut. Fire Ins. Co., 18 Misc 3d 87 [2007]). In opposition, plaintiff failed to raise a triable issue of fact. The medical affidavit submitted by plaintiff contained no indication that the generic conclusions reached by the affiant — a physician whose field of practice is unspecified — were based upon either a medical examination of plaintiff or a review of plaintiff’s medical records. Further, plaintiff’s affiant did not refer to, let alone rebut, the contrary findings made by defendant’s peer reviewer (see CPT Med. Servs. P.C., 18 Misc 3d at 88). Nor is the separate, unsigned medical report submitted by plaintiff properly considered (see CPLR 2106; Vista Surgical Supplies, Inc. v Travelers Ins. Co., 50 AD3d 778 [2008]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: February 16, 2012