[*1]

Supreme Court, Appellate Term, Second Department, February 8, 2011

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn (Max Velerio of counsel), for appellant. Jaffe & Koumourdas, LLP, New York City (Jean H. Kang of counsel), for respondent.

{**31 Misc 3d at 22} OPINION OF THE COURT

Memorandum.

Ordered that the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court denied plaintiff’s motion for summary judgment, finding that plaintiff had failed to establish its prima facie entitlement to that relief. We agree.

A no-fault provider establishes its prima facie entitlement to summary judgment by proof of the submission to the defendant of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that the defendant had failed to either pay or deny the claim within the requisite 30-day period (see Insurance Law § 5106 [a]; New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512 [2006]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; see also Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]). In order for the claim forms to constitute prima facie proof of the fact and the amount of the loss sustained, the affidavit submitted by the plaintiff in support of its motion for summary judgment must lay a sufficient foundation to establish that the claim forms annexed thereto are admissible under the business records exception to the hearsay rule, which allows a document to be used as proof of the “act, transaction, occurrence or event” recorded in the document (CPLR 4518 [a]; see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. [*2]Co., 55 AD3d 644 [2008]; Dan{**31 Misc 3d at 23} Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]).

In the case at bar, plaintiff sought to lay the requisite foundation for the admission of its claim forms by submitting an affidavit executed by the owner of its third-party billing company, who alleged that plaintiff had provided its medical records to his billing company, that his company had used those records to create the claim forms at issue and that his company had then mailed those claim forms to defendant. The affiant further asserted that, pursuant to the business relationship existing between his company and his no-fault provider clients, those clients have a business duty to provide the medical records. He alleged, moreover, that the medical records his company relies on are “created near the time in which the events therein described occurred; they are created in the course of the providers’ business; and it is the providers’ business to create these documents as evidence of the services they have rendered.”

In Matter of Carothers v GEICO Indem. Co. (79 AD3d 864 [2d Dept 2010]), where a third-party billing company merely printed no-fault claim forms, which had been created by the healthcare provider, and mailed them to the insurance company, the Appellate Division held that the testimony of an employee of the billing company failed to provide the requisite foundation to demonstrate that the claim forms should be considered under the business records exception to the{**31 Misc 3d at 24} hearsay rule, since the billing company did not create the records and there was no showing that its employee was familiar with the plaintiff’s record-keeping procedures. In this case, unlike in Matter of Carothers (id.), the billing company demonstrated that it had actually created the claim forms at issue. However, the analysis cannot end there because here the billing company used the information contained in the medical records furnished by plaintiff to create the claim forms. As noted by the Court of Appeals, in order for a document, such as the claim forms that are the subject of this lawsuit, to be considered for the truth of the assertions contained therein, “each participant in the chain producing the record, from the initial declarant to the final entrant, must be acting within the course of regular business conduct or the declaration must meet the test of some other hearsay exception” (Matter of Leon RR, 48 NY2d 117, 122 [1979]).

In the case at bar, plaintiff sought to demonstrate, through an affidavit of the owner of its billing company, that its medical records met the test of the business records exception to the hearsay rule in two different ways. First, the owner of its billing company claimed that plaintiff’s medical records were made in a manner consistent with CPLR 4518 (a). However, his affidavit failed to demonstrate that he has personal knowledge of plaintiff’s practices and procedures and that he is competent to testify about those practices and procedures (see CPLR 4518 [a]; Matter of Carothers v GEICO Indem. Co., 79 AD3d 864 [2010]; see also Reiss v Roadhouse Rest., 70 AD3d 1021, 1024-1025 [2010]).

Plaintiff also sought to demonstrate, through the affidavit, that plaintiff’s medical records were incorporated into its billing company’s records and that its billing company relied upon the medical records in its regular course of business (see Matter of Carothers v GEICO Indem. Co., 79 AD3d 864 [2010]). In People v DiSalvo (284 AD2d 547 [2001]) and Plymouth Rock Fuel Corp. v Leucadia, Inc. (117 AD2d 727 [1986]), the Appellate Division allowed documents into evidence under the business records exception to the hearsay rule, even though the witness laying the foundation for their admission was a recipient of the records and did not have personal knowledge of the maker’s practices and procedures, because there was a showing of meaningful [*3]incorporation and reliance. In each of those cases, an entity sought to admit a third party’s records into evidence, pursuant to the business records exception to the hearsay rule, through the testimony of the entity’s own employee. In the case at bar, however, it was plaintiff that sought to admit its own claim forms, pursuant to the business records exception to the hearsay rule, through the testimony of an employee of its third-party biller. Further, it appears that, in DiSalvo and Plymouth Rock Fuel Corp., the third party had a business duty to report accurate information to the entity seeking to use those records. In this case, although plaintiff’s biller asserted that plaintiff had a contractual duty to provide accurate information to its billing company, plaintiff did not submit any evidence of such a duty (cf. Hochhauser v Electric Ins. Co., 46 AD3d 174 [2007]). Furthermore, in DiSalvo and Plymouth Rock Fuel Corp., the truthfulness of the documents was of paramount importance to the entities claiming to have incorporated them into their own records and to have relied upon them, because those entities relied upon the third party’s documents either to allocate waste-disposal costs or bill their clients for oil deliveries, respectively. Here, there has been no demonstration that the truthfulness or accuracy of plaintiff’s medical records has any relevance to{**31 Misc 3d at 25} whether its billing company is compensated for its services or that the information contained in plaintiff’s medical records was otherwise of paramount importance to its billing company’s business.

As we find that plaintiff failed to make the necessary showing that its billing company incorporated plaintiff’s medical records into its own and relied upon them (see Matter of Carothers v GEICO Indem. Co., 79 AD3d 864 [2010]), plaintiff’s medical records do not meet the test of the business records exception to the hearsay rule. As a result, the claim forms created by plaintiff’s biller from the medical records do not fall within the business records exception to the hearsay rule (see Matter of Leon RR, 48 NY2d 117 [1979]). Consequently, to the extent plaintiff relies on the claim forms to prove the fact and the amount of the loss sustained, plaintiff has failed to demonstrate that they are any more trustworthy than the claim forms in Matter of Carothers v GEICO Indem. Co. (79 AD3d 864 [2010]). We note that, simply because a document has not been shown to be admissible pursuant to the business records exception to the hearsay rule, so that it can be used as proof of the matter asserted therein, this does not mean that the document could not be admissible for another purpose (see Prince, Richardson on Evidence § 4-105 [Farrell 11th ed]).

Plaintiff further argues on appeal that the claim forms are inherently reliable. According to plaintiff, the trustworthiness of the subject claim forms can be established by the fact that plaintiff’s owner’s signature appears on each form. Moreover, plaintiff argues that the claim forms are prescribed by regulation, and, if fraudulently submitted, carry a sanction, making them particularly reliable and trustworthy.

While the statutory NF-3 verification of treatment forms at issue herein contain a statement setting forth the consequences for anyone who “knowingly and with intent to defraud any insurance company” files a claim, the claim forms are not sworn to by one with personal knowledge. (Furthermore, when the owner of plaintiff’s third-party billing company described in his affidavit the procedures his office uses for preparing and mailing claim forms, he did not assert that the claim forms are presented to Dr. Etienne for her signature. This incidentally raises questions about how the instant claim forms ever came to be signed in the first instance.) Finally, the fact that the claim forms are prescribed by regulation does not render them inherently [*4]trustworthy or reliable. As recognized by the Court of Appeals,{**31 Misc 3d at 26} incidents of no-fault fraud are prevalent in New York, including instances where corrupt medical clinics “generate stacks of medical bills for each passenger, detailing treatments and tests that were unnecessary or never performed” (see Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 861 [2003]).

Since the Civil Court properly determined that plaintiff failed to demonstrate its prima facie entitlement to summary judgment, the order is affirmed.

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

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 (Noach Dear, J.), entered May 18, 2009. The order, insofar as appealed from, denied plaintiff’s motion for summary judgment.

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

In this action, a provider seeks to recover assigned first-party no-fault benefits for supplies it allegedly delivered to its assignor. Insofar as is relevant to this appeal, the Civil Court denied plaintiff’s motion for summary judgment, on the ground that there was a triable issue of fact.

In response to plaintiff’s appeal, defendant argues, as it did in the Civil Court, that the affidavit submitted by plaintiff’s “sole shareholder, corporate officer and employee” in support of plaintiff’s motion for summary judgment failed to make out a prima facie case. We agree, and affirm the order appealed from on that ground.

The billing records submitted by plaintiff in support of its motion for summary judgment do not assert that the supplies at issue had been delivered to plaintiff’s assignor. Nor did plaintiff’s affiant state that he had delivered the supplies to plaintiff’s assignor. Indeed, he stated that it is his general practice to either (1) deliver his supplies directly to the eligible injured person or to (2) deliver them to the prescribing healthcare providers for subsequent delivery to the eligible injured person. He did not specify in his affidavit which method of delivery was used in this case. Accordingly, plaintiff’s moving papers failed to demonstrate its prima facie entitlement to summary judgment. [*2]

We note that the holding in Fair Price Med. Supply Corp. v Travelers Indem. Co. (10 NY3d 556 [2008]) does not impact our decision in this case because, in that case, the issue of whether the plaintiff had made out a prima facie case was not dealt with by either the Appellate Division (42 AD3d 277 [2007]) or the Court of Appeals (10 NY3d 556). The Court of Appeals held that a defense that the billed-for services or supplies were never provided is precluded if the insurer fails to timely deny the claim, and both courts limited their discussions to the preclusion issue. Here, we are asked to consider whether plaintiff’s moving papers made out a prima facie case in the first instance so as to even shift the burden to defendant to raise a non-precluded defense (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]), and we conclude that they did not.

Accordingly, plaintiff’s motion for summary judgment was properly denied, albeit on a different ground than that relied upon by the Civil Court.

Rios, J.P., Pesce and Golia, JJ., concur.
Decision Date: January 28, 2011

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 (Diane A. Lebedeff, J.), entered July 17, 2009, deemed from a judgment of the same court entered August 18, 2009 (see CPLR 5501 [c]). The judgment, entered pursuant to the July 17, 2009 order granting defendant’s motion for summary judgment, dismissed the complaint.

ORDERED that the judgment is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint on the ground that it had properly reimbursed plaintiff for services rendered by its licensed acupuncturist to plaintiff’s assignor. Plaintiff opposed the motion. The Civil Court granted defendant’s motion and dismissed the complaint. This appeal by plaintiff ensued. A judgment was subsequently entered, from which the appeal is deemed to be taken (see CPLR 5501 [c]).

It was proper for defendant to use the workers’ compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which plaintiff was entitled to receive for services rendered by a licensed acupuncturist (see AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 17 Misc 3d 41 [App Term, 2d & 11th Jud Dists 2007]; Great Wall Acupuncture v GEICO Gen. Ins. Co., 16 Misc 3d 23 [App Term, 2d & 11th Jud Dists 2007]). As defendant’s motion for summary judgment dismissing the complaint was properly granted, the judgment is affirmed.

Steinhardt, J.P., Pesce and Weston, JJ., concur.
Decision Date: January 26, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Michael A. Ciaffa, J.), dated September 21, 2009. The order denied plaintiffs’ motion to strike defendant’s demand for a trial de novo.

ORDERED that the order is affirmed, without costs.

In this action by providers to recover assigned first-party no-fault benefits, the parties stipulated, among other matters, to plaintiffs’ prima facie case and defendant’s timely denial of the claim. The parties participated in mandatory arbitration (see Rules of the Chief Judge [22 NYCRR] part 28), which resulted in a ruling in plaintiffs’ favor, whereupon defendant served and filed a demand for a trial de novo (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). Plaintiffs moved to strike the demand, arguing that defendant’s limited participation in the arbitration, which consisted of defendant’s attorney’s appearance and his offer of various documents which were excluded upon plaintiffs’ hearsay objection, amounted to a default, barring defendant from demanding a trial de novo. Defendant opposed, and the District Court denied the motion, finding that, on the facts, defendant had not defaulted. Plaintiffs appeal and we affirm.

The Rules of the Chief Judge provide that a demand for a trial de novo “may be made by any party not in default” (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). A party’s failure to appear for an arbitration hearing constitutes a default (Rules of the Chief Judge [22 NYCRR] § 28.7 [a]), as does a party’s appearance by counsel who otherwise “refus[es] to participate in the hearing” (Bitzko v Gamache, 168 AD2d 888 [1990]; see also Finamore v Huntington [*2]Rehabilitation Assn., 150 AD2d 426 [1989]). However, where, as here, a party’s attorney appears at the arbitration, participates in the hearing and submits evidence which, if admissible, would have tended to rebut the plaintiff’s case, there is no default within the contemplation of the Rules of the Chief Judge merely because the arbitrator ruled the proof inadmissible (see Tripp v Reitman Blacktop, 188 Misc 2d 317 [App Term, 9th & 10th Jud Dists 2001]; San-Dar Assoc. v Adams, 167 Misc 2d 727 [App Term, 1st Dept 1996]).

Accordingly, the District Court properly denied plaintiffs’ motion to strike defendant’s demand for a trial de novo.

Nicolai, P.J., Tanenbaum and LaCava, JJ., concur.
Decision Date: January 18, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Michael A. Ciaffa, J.), dated September 8, 2009. The order denied plaintiffs’ motion to strike defendant’s demand for a trial de novo.

ORDERED that the order is affirmed, without costs.

In this action by providers to recover assigned first-party no-fault benefits, the parties stipulated, among other matters, to plaintiffs’ prima facie case and defendant’s timely denial of the claim. The parties participated in mandatory arbitration (see Rules of the Chief Judge [22 NYCRR] part 28), which resulted in a ruling in plaintiffs’ favor, whereupon defendant served and filed a demand for a trial de novo (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). Plaintiffs moved to strike the demand, arguing that defendant’s limited participation in the arbitration, which consisted of defendant’s attorney’s appearance and the offer of peer review reports, to which the arbitrator sustained plaintiffs’ objection on hearsay grounds, amounted to a default, barring defendant from demanding a trial de novo. Defendant opposed, and the District Court denied the motion, finding that, on the facts, defendant had not defaulted. Plaintiffs appeal and we affirm.

The Rules of the Chief Judge provide that a demand for a trial de novo “may be made by any party not in default” (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). A party’s failure to appear for an arbitration hearing constitutes a default (Rules of the Chief Judge [22 NYCRR] § 28.7 [a]), as does a party’s appearance by counsel who otherwise “refus[es] to participate in the hearing” (Bitzko v Gamache, 168 AD2d 888 [1990]; see also Finamore v Huntington Rehabilitation Assn., 150 AD2d 426 [1989]). However, where, as here, a party’s attorney [*2]appears at the arbitration, participates in the hearing and submits evidence which, if admissible, would have tended to rebut the plaintiff’s case, there is no default within the contemplation of the Rules of the Chief Judge merely because the arbitrator ruled the proof inadmissible (see Tripp v Reitman Blacktop, 188 Misc 2d 317 [App Term, 9th & 10th Jud Dists 2001]; San-Dar Assoc. v Adams, 167 Misc 2d 727 [App Term, 1st Dept 1996]).

Accordingly, the District Court properly denied plaintiffs’ motion to strike defendant’s demand for a trial de novo.

Nicolai, P.J., Tanenbaum and LaCava, JJ., concur.
Decision Date: January 18, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Fred J. Hirsh, J.), dated September 8, 2009. The order denied plaintiff’s motion to strike defendant’s demand for a trial de novo.

ORDERED that the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the parties stipulated, among other matters, to plaintiff’s prima facie case, defendant’s timely denial of the claim, the physician-peer reviewer’s medical qualifications, and the admissibility of the documents on which the reviewer relied. The parties participated in mandatory arbitration (see Rules of the Chief Judge [22 NYCRR] part 28), which resulted in a ruling in plaintiff’s favor, whereupon defendant served and filed a demand for a trial de novo (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). Plaintiff moved to strike the demand, arguing that defendant’s limited participation in the arbitration, which consisted of defendant’s attorney’s appearance and his offer of various documents, which were excluded upon plaintiff’s hearsay objection, amounted to a default, barring defendant from demanding a trial de novo. Defendant opposed, and the District Court denied the motion, finding that, on the facts, defendant had not defaulted. Plaintiff appeals and we affirm.

The Rules of the Chief Judge provide that a demand for a trial de novo “may be made by any party not in default” (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). A party’s failure to appear for an arbitration hearing constitutes a default (Rules of the Chief Judge [22 NYCRR] § 28.7 [a]), as does a party’s appearance by counsel who otherwise “refus[es] to participate in the hearing” (Bitzko v Gamache, 168 AD2d 888 [1990]; see also Finamore v Huntington [*2]Rehabilitation Assn., 150 AD2d 426 [1989]). However, where, as here, a party’s attorney appears at the arbitration, participates in the hearing and submits evidence which, if admissible, would have tended to rebut the plaintiff’s case, there is no default within the contemplation of the Rules of the Chief Judge merely because the arbitrator ruled the proof inadmissible (see Tripp v Reitman Blacktop, 188 Misc 2d 317 [App Term, 9th & 10th Jud Dists 2001]; San-Dar Assoc. v Adams, 167 Misc 2d 727 [App Term, 1st Dept 1996]).

Accordingly, the District Court properly denied plaintiff’s motion to strike defendant’s demand for a trial de novo.

Nicolai, P.J., Tanenbaum and LaCava, JJ., concur.
Decision Date: January 18, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from those portions of an order of the Civil Court of the City of New York, Bronx County (Elizabeth A. Taylor, J.), dated April 6, 2010, which denied its motion for summary judgment dismissing the claims of plaintiffs Spring Medical, P.C. and Right Aid Diagnostic Medicine, P.C. Per Curiam.

Order (Elizabeth A. Taylor, J.), dated April 6, 2010, insofar as appealed from, modified to grant defendant summary judgment dismissing the claims of plaintiff Spring Medical, P.C.; as modified, order affirmed, without costs.

Defendant made a prima facie showing of entitlement to judgment as a matter of law dismissing plaintiff Spring Medical, P.C.’s claims for assigned first-party no-fault benefits. Defendant established through the affidavit of its claims examiner and excerpts from the Workers’ Compensation Medical Fee Schedule, which may be judicially noticed by this Court (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13, 21 [2009]), that the fees Spring charged for the medical services it rendered to the assignor exceeded the relevant rates set forth in the fee schedule. In opposition, Spring failed to raise a triable issue regarding [*2]defendant’s interpretation of the fee schedule or calculation of the applicable fees. Therefore, defendant’s motion for summary judgment dismissing Spring’s claims — which sought the difference between the amount Spring charged for the services and payments defendant made to Spring pursuant to the fee schedule — should have been granted (see Cornell Med., P.C. v Mercury Cas. Co., 24 Misc 3d 58 [2009]).

Defendant’s motion for summary judgment dismissing the claim of plaintiff Right Aid Diagnostic Medicine, P.C. based on lack of medical necessity was properly denied, since defendant did not demonstrate as a matter of law that it timely denied the claim within the statutory 30-day period (see Country-Wide Ins. Co. v Zablozki, 257 AD2d 506 [1999], lv denied 93 NY2d 809 [1999]) or that the 30-day period was tolled by a proper verification request (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2005]). We note in this connection that the reply affirmation submitted by Right Aid could not be considered for the purpose of showing a prima facie entitlement to summary judgment (see Batista v Santiago, 25 AD3d 326 [2006]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concur
Decision Date: January 14, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, First District (Fred J. Hirsh, J.), dated August 31, 2009. The order denied defendant’s motion for summary judgment dismissing the complaint insofar as asserted by plaintiff Sound Shore Medical Center and granted plaintiff Sound Shore Medical Center’s cross motion for summary judgment.

ORDERED that the order is reversed, without costs, defendant’s motion for summary judgment dismissing the complaint insofar as asserted by plaintiff Sound Shore Medical Center is granted and plaintiff Sound Shore Medical Center’s cross motion for summary judgment is denied.

In this action by providers to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint insofar as asserted by plaintiff Sound Shore Medical Center (plaintiff) on the ground that the action was premature because plaintiff had failed to provide requested verification documents. Plaintiff cross-moved for summary judgment. The District Court denied defendant’s motion for summary judgment and granted plaintiff’s cross motion for summary judgment. The instant appeal by defendant ensued.

Contrary to the determination of the District Court, the affidavit of defendant’s claims [*2]examiner was sufficient to establish that defendant had timely mailed the verification request and follow-up verification request in accordance with defendant’s standard office practices and procedures (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). In addition, defendant’s moving papers established that plaintiff had failed to provide the requested verification.

In support of its cross motion and in opposition to defendant’s motion for summary judgment, plaintiff did not assert that it had never received the initial and follow-up verification requests nor did it assert that it had fully complied with these requests. Plaintiff’s attorney merely argued that since the affidavit of the hospital biller, taken together with the copy of the certified return receipt card, established that defendant had received the bill on December 22, 2008, defendant’s initial verification request, sent on November 26, 2008, pre-dated defendant’s receipt of the bill and was therefore a nullity. However, the record establishes that defendant’s initial verification request was sent to plaintiff after plaintiff had sent, and defendant had received, a UB-04 form, which specified the treatment rendered. The UB-04 form is the successor to the UB-92 form and the functional equivalent of the NF-5 form (see Insurance Department Regulations [11 NYCRR] § 65-3.5 [a], [f]). Accordingly, defendant’s initial verification request was not untimely (cf. Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11 [1999]).

Since plaintiff has not rebutted defendant’s prima facie showing that defendant’s initial request and follow-up request for verification were timely and that plaintiff failed to respond to same, defendant established that its time to pay or deny the claim was tolled. Consequently, defendant’s motion for summary judgment dismissing the complaint, on the ground that the action was premature, should have been granted (see Hospital for Joint Diseases v New York Cent. Mut. Fire Ins. Co., 44 AD3d 903 [2007]; Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 [2005]; Mary Immaculate Hosp. v New York Cent. Mut. Fire Ins. Co., 21 Misc 3d 130[A], 2008 NY Slip Op 52046[U] [App Term, 9th & 10th Jud Dists 2008]). Accordingly, the order is reversed, defendant’s motion is granted and plaintiff’s cross motion for summary judgment is denied.

Nicolai, P.J., Molia and LaCava, JJ., concur.
Decision Date: January 10, 2011

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 (Diane A. Lebedeff, J.), entered June 11, 2009. The order, insofar as appealed from as limited by the brief, granted the branch of defendant’s cross motion seeking to compel plaintiff to produce copies of its corporate tax returns and its tax records regarding its professional employees, and provided that the complaint would be dismissed in the event plaintiff failed to produce these documents.

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 moved for summary judgment. Defendant cross-moved, pursuant to CPLR
3126, to dismiss the complaint due to plaintiff’s failure to provide the information requested in defendant’s interrogatories and defendant’s notice for discovery and inspection or, in the alternative, to compel plaintiff to provide such information. Plaintiff appeals, as limited by the brief, from so much of the Civil Court’s order as granted the branch of defendant’s cross motion seeking to compel plaintiff to produce copies of its corporate tax returns and its tax records regarding its professional employees, and provided that the complaint would be dismissed in the event plaintiff failed to produce these documents.

Defendant’s cross motion papers set forth detailed and specific reasons for believing that plaintiff is ineligible to recover no-fault benefits because plaintiff fails to meet applicable state and local licensing requirements (see Insurance Department Regulations [11 NYCRR] § 65-3.16 [a] [12]; State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). As defendant’s cross motion papers were sufficient to establish that special circumstances exist which warrant [*2]disclosure of plaintiff’s corporate tax returns and its professional employees’ tax records (see CPLR 3101; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738 [2008]; Great Wall Acupuncture v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 136[A], 2008 NY Slip Op 51529[U] [App Term, 2d & 11th Jud Dists 2008]; Statewide Med. Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 134[A], 2006 NY Slip Op 52014[U] [App Term, 1st Dept 2006], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U] [Civ Ct, Bronx County 2005]; see also Dore v Allstate Indem. Co., 264 AD2d 804 [1999]; cf. Benfeld v Fleming Props., LLC, 44 AD3d 599, 600 [2007]; Altidor v State-Wide Ins. Co., 22 AD3d 435 [2005]), the order, insofar as appealed from, is affirmed.

Golia, J.P., Pesce and Steinhardt, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, January 10, 2011

Lincoln Gen. Ins. Co. v Alev Med. Supply Inc., 25 Misc 3d 1019, reversed.

APPEARANCES OF COUNSEL

Rivkin Radler LLP, Uniondale (Stuart M. Bodoff of counsel), for appellant.

{**30 Misc 3d at 61} OPINION OF THE COURT

Memorandum.

Ordered that the order is reversed, without costs, the complaint is reinstated, and plaintiff’s motion for leave to enter a default judgment is granted.

Plaintiff insurer commenced this action against defendant, a provider of durable medical equipment, seeking to recover, based on a theory of unjust enrichment, $2,846.18 in assigned first-party no-fault benefits which had been paid to defendant as assignee of Andrey Armstrong on December 4, 2008. Before commencing this action, plaintiff conducted an examination under oath of defendant’s assignor on December 18, 2008, in connection with the treatment rendered to him by various health care providers, and concluded that defendant’s assignor had never been supplied with the equipment for which defendant had billed and been reimbursed. After defendant failed to appear or answer the complaint, plaintiff moved, pursuant to CPLR 3215, for leave to enter a default judgment. In support of its motion, plaintiff submitted a copy of the summons and complaint; proof of service thereof on the Secretary of State, pursuant to Business Corporation Law § 306; additional proof of service in compliance with CPLR 3215 (g) (4) (i); an affirmation of counsel; an affidavit of the no-fault supervisor of plaintiff’s managing general agent, which was responsible for processing and paying no-fault claims; and numerous exhibits. There was no opposition to the motion. The District Court denied the motion based on plaintiff’s failure to have raised the fraudulent billing issue in a timely denial of claim. The instant appeal by plaintiff ensued.

With very limited exceptions, an insurer’s failure to pay or deny a claim within the 30-day claim determination period (see Insurance Law § 5106) precludes the insurer from interposing most defenses to payment of no-fault benefits, including the fact that medical services or medical [*2]equipment billed for were never actually provided (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]). If an insurer is precluded from asserting a defense due to its failure to pay or deny a claim within the 30-day claim determination period, it may not{**30 Misc 3d at 62} later seek to recover amounts it paid on the claim based on a theory of unjust enrichment (see e.g. Cornell Med., P.C. v Mercury Cas. Co., 24 Misc 3d 58 [App Term, 2d, 11th & 13th Jud Dists 2009]). However, where, as here, an insurer timely pays a claim within the 30-day claim determination period, the insurer is not foreclosed from affirmatively commencing an action to recover the amounts paid on the claim when the insurer later discovers that the claim is fraudulent (see State Farm Mut. Auto. Ins. Co. v Grafman, 655 F Supp 2d 212, 223-224 [ED NY 2009]; State Farm Mut. Auto. Ins. Co. v James M. Liguori, M.D., P.C., 589 F Supp 2d 221 [ED NY 2008]; see also Carnegie Hill Orthopedic Servs. P.C. v GEICO Ins. Co., 19 Misc 3d 1111[A], 2008 NY Slip Op 50639[U] [Sup Ct, Nassau County 2008, Austin, J.]; Progressive Northeastern Ins. Co. v Advanced Diagnostic & Treatment Med., NYLJ, Aug. 2, 2001, at 18, col 2 [Sup Ct, NY County, Gammerman, J.]). The fact that the insurer chose to pay first-party no-fault benefits within the 30-day claim determination period, at a point when the insurer had no reason to deny the claim, “cannot in any sense be taken as a concession that the claim is legitimate” (Dermatossian v New York City Tr. Auth., 67 NY2d 219, 224 [1986]). Indeed, an opinion issued by the New York State Department of Insurance specifically states that the No-Fault Law “is in no way intended and should not serve as a bar to subsequent actions by an insurer for the recovery of fraudulently obtained benefits from a claimant, where such action is authorized under the auspices of any statute or under common law” (Ops Gen Counsel NY Ins Dept [Nov. 29, 2000]). The rationale behind this interpretation is that

“payment of fraudulently obtained No-Fault benefits, without available recourse, serves to undermine and damage the integrity of the No-Fault system, which was created as a social reparations system for the benefit of consumers . . . To conclude that the No-Fault statute bars the availability of other legal remedies, where the payment of benefits [was] secured through fraudulent means, renders the public as the ultimate victim of such fraud, in the form of higher premiums based upon the resultant increased costs arising from the fraudulent actions” (id.).

Moreover, “[t]here is nothing in the legislative history or case law interpretations of the statute or in Insurance Department regulations, opinions or interpretations of the statute that supports the argument that the statute bars such actions” (id.).{**30 Misc 3d at 63}

Accordingly, contrary to the conclusion of the District Court, plaintiff is not barred from bringing this action seeking recovery of the amount it paid to defendant. As plaintiff demonstrated its compliance with CPLR 3215 (f) and (g) (4) (i), the District Court should have granted plaintiff’s motion for leave to enter a default judgment.

Tanenbaum, J.P., Molia and Iannacci, JJ., concur.