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 August 1, 2007. The order denied defendant’s motion for summary judgment.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the court denied defendant’s motion for summary judgment. Defendant appeals and we affirm.

Defendant’s follow-up verification requests, mailed on the 30th calendar day after it mailed the verification requests, were premature and without effect (see
General Construction Law § 20; Insurance Department Regulations [11 NYCRR] § 65-3.6 [b]; St. Vincent Med. Care, P.C. v Country-Wide Ins. Co., ___ Misc 3d ___, 2009 NY Slip Op _____ [No. 2008-437 Q C], decided herewith; Infinity Health Prods., Ltd. v Eveready Ins. Co., 21 Misc 3d 1 [App Term, 2d & 11th Jud Dists 2008]). Accordingly, defendant’s motion for summary judgment was properly denied.

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

Golia, J., dissents in a separate memorandum.

Golia, J., dissents and votes to reverse the order and grant defendant’s motion for summary judgment for the reasons stated in his dissenting opinion in St. Vincent Med. Care, P.C. v Country-Wide Ins. Co., ___ Misc 3d ___, 2009 NY Slip Op _____ [No. 2008-437 Q C], [*2]decided herewith).
Decision Date: May 08, 2009

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 (Lila Gold, J.), dated July 23, 2007. The order, insofar as appealed from as limited by the brief, granted defendant’s cross motion for summary judgment.

Order, insofar as appealed from, 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 for summary judgment dismissing the complaint on the ground that the action was premature because plaintiff failed to respond to verification requests. The Civil Court denied plaintiff’s motion for summary judgment and granted defendant’s cross motion. Plaintiff appeals, as limited by its brief, from so much of the order as granted defendant’s cross motion.

On appeal, plaintiff argues that defendant failed to establish the mailing of the verification requests because the affidavit of defendant’s claims specialist did not demonstrate personal knowledge of such mailing or set forth defendant’s standard office practices and procedures used to ensure that such requests are properly addressed and mailed. Contrary to plaintiff’s contention, the affidavit of defendant’s claims specialist sufficiently established the mailing of the verification requests (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]).

Plaintiff’s remaining contentions either lack merit or are improperly raised for the first time on appeal.

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

Weston, J.P., Golia and Steinhardt, JJ., concur.
Decision Date: May 08, 2009

[*1]

Supreme Court, Appellate Term, Second Department, May 8, 2009

APPEARANCES OF COUNSEL

Jaffe & Koumourdas, LLP, New York City (Jean H. Kang of counsel), for appellant.

{**26 Misc 3d at 59} OPINION OF THE COURT

Memorandum.

Judgment modified by reducing the amount of the award to the principal sum of $2,627.90 and by providing that plaintiff’s claim for $228.55 for services rendered on February 22, 2006 is severed, so much of the order entered January 23, 2008 as granted plaintiff’s motion for summary judgment on the claim for $228.55 is vacated, and the branch of plaintiff’s motion which sought summary judgment on that claim is denied; as so modified, judgment affirmed without costs, and matter remanded to the Civil Court for all further proceedings.

In this action by a provider to recover assigned first-party no-fault benefits, the court granted plaintiff’s motion for summary judgment on the ground that defendant’s verification requests failed to toll the 30-day claim determination periods. With the exception of the claim for $228.55 for medical services provided on February 22, 2006, we agree.

A provider generally establishes its prima facie entitlement to summary judgment by proof of the submission of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was{**26 Misc 3d at 60} overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). In the instant case, any deficiency in plaintiff’s moving papers regarding proof of mailing of the claim forms was cured by defendant’s claim denial forms, and the affidavit of defendant’s claims representative in which receipt of the claims in question was conceded (see East Acupuncture, P.C. v Electric Ins. Co., [*2]16 Misc 3d 128[A], 2007 NY Slip Op 51281[U] [App Term, 2d & 11th Jud Dists 2007]; Oleg Barshay, D.C., P.C. v State Farm Ins. Co., 14 Misc 3d 74 [App Term, 2d & 11th Jud Dists 2006]). In addition, a review of the record indicates that plaintiff’s affidavit sufficed to establish that the annexed claim forms constituted evidence in admissible form (see CPLR 4518; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, the record establishes plaintiff’s prima facie entitlement to summary judgment.

In opposition, defendant argued that it timely denied plaintiff’s claim seeking to recover the sum of $228.55 for services rendered on February 22, 2006 on the ground that the fee sought was in excess of the amount permitted by the workers’ compensation fee schedule because the services for which payment was sought were part of another service and, thus, were not separately reimbursable. Defendant established that it timely denied this claim (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Accordingly, plaintiff was not entitled to summary judgment upon this claim.

Defendant also opposed plaintiff’s motion for summary judgment on the ground that its verification and follow-up verification requests tolled defendant’s claim determination periods. However, since defendant mailed its follow-up requests for verification on the 30th calendar day after it mailed its verification requests, the follow-up requests were premature and without effect (see General Construction Law § 20; Insurance Department Regulations [11 NYCRR] § 65-3.6 [b]; Infinity Health Prods., Ltd. v Eveready Ins. Co., 21 Misc 3d 1 [App Term, 2d & 11th Jud Dists 2008]). Accordingly, as to the remaining claims, defendant failed to timely deny same and is precluded from raising most defenses, with exceptions not here relevant (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Thus, plaintiff was properly granted summary judgment as to the remaining claims. For the foregoing{**26 Misc 3d at 61} reason, defendant’s cross motion for summary judgment was properly denied.

Golia, J. (dissenting and voting to reverse the judgment, vacate the order entered January 23, 2008, deny plaintiff’s motion for summary judgment and grant defendant’s cross motion for summary judgment, in the following memorandum). I need not discuss the factual and procedural history of this case as it has, for the most part, been addressed by the majority. Instead, I submit that the majority has erred in its judgment as to a matter of law. It has, in my opinion, misconstrued established principles of common law as well as the Appellate Division’s decision in New York & Presbyt. Hosp. v American Tr. Ins. Co. (287 AD2d 699 [2001]). In addition, the majority has misinterpreted Insurance Department Regulations (11 NYCRR) § 65-3.6 (b), the contents and purposes of which will be discussed below.

I should first, however, address the majority’s reluctance to require that plaintiff submit a proper and complete motion upon which summary judgment could be granted. I submit that the majority’s grant of summary judgment in favor of plaintiff is contrary to the Court of Appeals’ holding in Alvarez v Prospect Hosp. (68 NY2d 320 [1986]). In that case, the Court found that a[*3]“[f]ailure to make . . . [a] prima facie showing [of entitlement to judgment as a matter of law] requires a denial of the motion, regardless of the sufficiency of the opposing papers” (id. at 324). This well-established principle, with its roots at common law, provides that all assertions made in a summary judgment motion remain unsubstantiated unless they are accompanied by sufficient evidence in admissible form contained within the four corners of the motion papers (see e.g. Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395 [1957]). In the present case, that principle was not met.

The current state of the law in no-fault cases requires that a plaintiff establish (1) that it mailed a claim, and (2) that payment is overdue. Nothing else. This plaintiff’s motion for summary judgment, however, should have been denied inasmuch as its moving papers failed to establish, by a proper affidavit, the mailing of plaintiff’s claim forms. The majority of the Appellate Term has often held that the inclusion of an NF-10 denial of claim form in the moving papers is sufficient to establish the mailing of a claim, a proposition with which I have previously disagreed. In the present case, the majority states that “any deficiency in plaintiff’s moving papers regarding proof of mailing of the claim forms was cured by defendant’s claim denial forms,{**26 Misc 3d at 62} and the affidavit of defendant’s claims representative.” What it does not state is that the NF-10 denial of claim forms were not attached to the moving papers, despite the fact that the moving plaintiff, intentionally or otherwise, asserted that such documents were, in fact, included. The majority then searches the record in order to establish mailing and found the NF-10 denial of claim forms in defendant’s opposing papers. Indeed, the Court of Appeals, in Winegrad v New York Univ. Med. Ctr. (64 NY2d 851, 853 [1985]), unanimously found that “bare conclusory assertions . . . do not establish that the cause of action has no merit so as to entitle defendants to summary judgment.” Clearly, if the moving papers fail to warrant granting summary judgment, then the court should not look to the opposing papers, as was done here. I have found no opposition to this principle except in relation to the no-fault line of cases. Yet, notwithstanding controlling law and the principles outlined in the above-mentioned cases, the majority chooses to establish an exception thereto by finding that while the moving papers are clearly deficient, nevertheless summary judgment should be awarded to the moving plaintiff based upon information obtained from a search of the opposing papers.

I further disagree with the majority’s interpretation of Insurance Department Regulations (11 NYCRR) § 65-3.6 (b) (the regulation). This provision states, as relevant here:

“At a minimum, if any requested verifications has [sic] not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, or by mail.”

In the underlying case, it is uncontroverted that defendant sent timely and properly mailed initial requests for verification and that on the 30th day after the first mailing, not having received the information requested, defendant mailed second requests for verification. There is no assertion that the mailing procedure was insufficient or that defendant actually received the [*4]requested items on the 30th day just after the second requests issued. Clearly, defendant did not receive the items requested on the 30th day, or the 31st day, or the 60th day, or at any time, to my knowledge. The issue that we are presently addressing then is: Whether or not defendant’s mailing of follow-up requests on the 30th day constitutes a fatal violation{**26 Misc 3d at 63} of the language of the regulation, while plaintiff’s failure to ever provide the material sought by the requests for verification as required by the regulation is properly excused? I do not believe that form over substance is to be exalted.

I agree with the majority in that there is no dispute regarding the fact that the follow-up requests were mailed to plaintiff on the 30th day after the initial requests were sent. Pursuant to General Construction Law § 20, the 30-day computation period is exclusive of the initial day of sending, i.e., the first day of computation begins on the day after the initial notice was mailed. This said, in judicial decision making, it is imperative that judges give effect to the laws and regulations that have been created or sanctioned by the democratically elected representatives of the people and that it be done in accordance with the intentions behind their creation insofar as such enforcement does not occasion “great inconvenience, or produce inequality, injustice or absurdity” (Zappone v Home Ins. Co., 55 NY2d 131, 137 [1982]). To selectively choose segments of the body of no-fault regulations and then to enforce them solely against the defendant and not the plaintiff is to eviscerate the doctrine of the separation of powers as enshrined in the State Constitution. Under the rubric of that doctrine, this court is bound to give effect to the disputed regulation as intended by the Insurance Department and not according to its own interpretation.

In addition, Zappone also elucidates what should always be the very essence of the judicial prerogative, i.e., the promotion of justice, the cornerstone of which is fairness. In expressing this principle, the majority in Zappone held that it is “always presumed that no unjust or unreasonable result was intended and the statute must be construed consonant with that presumption” (id.). Therefore, we should not create additional hurdles for a defendant to traverse that are not already included in the regulation, as promulgated by the Insurance Department, or in legislation.

In further support of this proposition, it is instructive to examine the intent of the Insurance Department in drafting Insurance Department Regulations (11 NYCRR) § 65-3.6 (b). I ardently believe that the Insurance Department’s reasoning behind section 65-3.6 (b) was to ensure that a claimant be given adequate notice of, and the opportunity to respond to, a verification request, inasmuch as a claim is not considered complete until the verification request is answered (Insurance Department{**26 Misc 3d at 64} Regulations [11 NYCRR] § 65-3.8 [b] [3]). The follow-up request serves as a reminder to the provider that the actual initial request remains open and unanswered. Otherwise, the insurance company would be pleased to wait forever to receive a response to the verification request. If there is no response, the 30-day time limit to pay or deny a claim never begins. I believe that the regulation was never intended to add another layer of judicial interpretation, a default of which would result in an automatic judgment given to a plaintiff who has utterly failed or refused to provide any verification of the genuineness of its claim. This is particularly so when one casts one’s mind back to the reason behind the creation of the no-fault system in the first instance, which was to speed up the resolution of all claims as well as the undeniable and inexcusable level of unchecked and unchallenged fraudulent no-fault claims. [*5]

The latest available New York State Insurance Department Annual Report to the Governor and the Legislature of the State of New York on the Operations of the Insurance Frauds Prevention Act (Report), dated January 15, 2008, states that of the 22,079 Insurance Frauds Bureau (IFB) insurance fraud reports received in 2007, 11,242 of those claims were no-fault-related. This is particularly staggering considering that there were 34 different categories of insurance fraud recorded and included in that data. Excluding the no-fault related IFB reports, the average number of reports of fraud per different category of insurance fraud was approximately 328. In simpler terms, out of the 34 possible categories of insurance fraud, approximately 51% of those reports received by the Insurance Department in 2007 pertained to the singular category of no-fault auto insurance (see Report). The disparity between the numbers of fraudulent no-fault reports in comparison to other categories of insurance fraud in 2007 is both unambiguous, inexcusable and unsustainable. I suggest that the number for the year 2008 will be no less damning.

The Comprehensive Automobile Insurance Reparations Act of 1973 was enacted to force downward pressure on insurance premiums and alleviate the already overburdened court system through stemming what was then considered a rampant tide of insurance claims. Due to an unexpected and exponential rise in no-fault fraud since the system’s inception, that flood has now grown into a tsunami of fraudulent activity. Those fraudulent claims cannot be discouraged, or indeed stopped, by awarding summary judgment in favor of plaintiff providers without them{**26 Misc 3d at 65} first having to satisfy the conditions precedent required of them by law. More specifically, and with reference to the case in point, despite plaintiff’s failure to tender any adequate and admissible evidence to prove defendant’s receipt of the initial claim form, the majority herein searched the opposing papers to satisfy plaintiff’s evidentiary burden in lieu of plaintiff satisfying the burden itself as required by statute or Court of Appeals’ precedent and indeed common sense. My colleagues’ willingness to discount plaintiff’s complete disregard of its obligation to provide verification of the claim and then to award plaintiff summary judgment, notwithstanding an initial and timely request for verification in admissible form by defendant, can, I submit, further encourage the rise of fraudulent claims.

Anyone who has even a modicum of familiarity with the no-fault regulations will note the distinction between the strict protocols for filing claims and issuing denials on the proper forms, and this particular regulation, which provides for a follow-up verification by a “telephone call” which need only be “documented in the file.” I am unaware of any other set of protocols in the no-fault regulations which provide for a follow up by a telephone call and which need only be documented in the insurer’s own file. Such comparative leniency lends support, at least to me, to the view that the sole purpose of Insurance Department Regulations (11 NYCRR) § 65-3.6 (b) is to ensure that the claimant is made aware that there is an outstanding unsatisfied request for verification so that it might supply such information to the insurer in order to complete the claim and begin the 30-day time limit for payment, denial or a further request for verification.

When consideration is given to the justness and reasonableness of the state of the No-Fault Law in New York as it currently stands, one must be struck by the inequality of responsibilities between provider and insurer. The double standard that currently exists in relation to time limits is neither hidden nor excused. Currently, pursuant to Insurance Department Regulations (11 NYCRR) § 65-1.1, “Conditions,” the period of time in which a [*6]claimant provider has to file a claim after the date of treatment is not strictly enforced provided there is a “clear and reasonable justification” for the delay. Indeed, if the insurer denies the claim without informing the claimant of its right to present such excuse, the denial is deemed invalid. This is in stark contrast to the majority’s contention that defendant should be liable to compensate plaintiff for unverified, unsubstantiated{**26 Misc 3d at 66} claims for medical services because it sent follow-up verification requests on the 30th, instead of the 31st day after sending its initial requests. This is so despite the first requests being legitimate, in that they were both sent on time and in proper form. This is so despite the fact that the clear and sole intention of the disputed regulation was to ensure that the provider is made aware of the pending request for verification and not, as the majority would have it, to have defendant suffer a preclusion and an award of summary judgment in favor of the plaintiff because defendant, arguably, sent follow-up requests less than 24 hours earlier than what was stipulated in the regulation.

In effect, the early service of a follow-up request causes no prejudice to a plaintiff as it is not bound by any time restraints similar to those that burden a defendant. Had the regulation required a plaintiff claimant to respond to verification requests within 30 days of receipt, it is conceivable that the early mailing of a follow-up request would deny a plaintiff the full period of time to which it was entitled. Consequently, it could constitute unfair grounds for summary judgment to be entered in favor of a defendant. However, the no-fault regulations, as written, impose no time limit on a plaintiff to respond to the verification request. The obvious reason is that it is in a plaintiff’s best interest to provide the verification as quickly as practicable so as to trigger the 30-day clock in which the insurer must pay or deny the claim. In the present circumstances, however, plaintiff, who still reasonably received the second notice of the pending verification, as was the original intention of the regulation, suffered no detriment and no prejudice as a result of the early mailing.

Pesce, P.J., and Rios, J., concur; Golia, J., dissents in a separate memorandum.

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, Richmond County (Katherine A. Levine, J.), entered February 11, 2008. The order denied defendant’s motion for summary judgment dismissing the complaint.

Order reversed without costs and defendant’s motion for summary judgment dismissing the complaint granted.

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 of lack of medical necessity. Plaintiff did not submit opposition papers. The Civil Court denied defendant’s motion for summary judgment, finding that an issue of fact exists as to whether the services rendered were medically necessary. The instant appeal by defendant ensued.

Defendant, through the submission of the affidavit of its claims support services supervisor and the affirmed independent medical examination report, made a prima facie showing that plaintiff’s claims were properly and timely denied based upon a lack of medical necessity (see A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2007]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins. Cos., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Since plaintiff did not oppose defendant’s motion, defendant’s prima facie showing was unrebutted, thereby entitling defendant to summary judgment dismissing the complaint (see A. Khodadadi Radiology, P.C. v New York Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op [*2]51342[U] [App Term, 2d & 11th Jud Dists 2007]). Accordingly, the order is reversed and defendant’s motion for summary judgment dismissing the complaint is granted.

Weston Patterson, J.P., Golia and Rios, JJ., concur.
Decision Date: April 28, 2009

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 (Lee A. Mayersohn, J.), entered October 24, 2007. The order denied the petition of State Farm Mutual Automobile Insurance Company to vacate the arbitrator’s awards in favor of the New York City Transit Authority dismissing the claims.

Order modified by adding thereto a provision confirming the arbitrator’s awards; as so modified, affirmed without costs.

State Farm Mutual Automobile Insurance Company (State Farm) commenced compulsory arbitration proceedings against the New York City Transit Authority (Transit Authority), pursuant to Insurance Department Regulations (11 NYCRR) § 65-4.10 (see Insurance Law § 5105), seeking reimbursement for no-fault benefits paid on behalf of its subrogors. After the arbitration hearing, the arbitrator issued two awards in favor of the Transit Authority dismissing State Farm’s claims. State Farm thereafter commenced this special proceeding to vacate the arbitrator’s awards. The Civil Court denied the petition. The instant appeal by State Farm ensued.

Upon a review of the record, we find that the determination of the arbitrator, which denied State Farm’s claims for assigned first-party no-fault benefits, was supported by a reasonable hypothesis and was not arbitrary and capricious (see e.g. Matter of Motor Veh. Acc. Indem. Corp. v. Aetna Cas. & Sur. Co., 89 NY2d 214, 224 [1996]; Matter of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d 762, 763 [2005]). Accordingly, the Civil Court properly denied the petition to vacate the arbitrator’s awards. However, upon denying the petition, the court was required, pursuant to CPLR 7511 (e), to confirm the awards (see Matter of [*2]Exclusive Med. & Diagnostic v Government Empls. Ins. Co., 306 AD2d 476 [2003]).

Weston Patterson, J.P., Golia and Rios, JJ., concur.
Decision Date: April 24, 2009

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Plaintiff appeals from an order of the Civil Court of the City of New York, New York County (Joan M. Kenney, J.), entered August 17, 2007, which denied its motion for summary judgment.

Per Curiam.

Order (Joan M. Kenney, J.), entered August 17, 2007, reversed, with $10 costs, and plaintiff’s motion for summary judgment in the principal sum of $554.76 is granted. The Clerk is directed to enter judgment accordingly.

Plaintiff established a prima facie entitlement to summary judgment by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). In opposition, defendant failed to raise a triable issue. Even assuming that defendant timely denied plaintiff’s no-fault claims, the unsworn chiropractor’s report submitted by defendant in support of its defense of lack of medical necessity was not in admissible form, a defect which requires its exclusion from consideration (see CPLR 2106; Shinn v Catanzaro, 1 AD3d 195, 197 [2003]; Mollins v Motor Veh. Acc. Indem. Corp., 14 Misc 3d 133[A], 2007 NY Slip Op 50138[U] [2007]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concurI concur
Decision Date: April 22, 2009

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 (Fernando Tapia, J.), entered September 4, 2007, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Fernando Tapia, J.), entered September 4,
2007, affirmed, with $10 costs.

Although plaintiff’s claim for no-fault benefits was concededly submitted to defendant beyond the 45-day statutory period (see 11 NYCRR 65-1.1), the record shows that plaintiff’s claim submission included correspondence attempting to explain its delay in filing. Under the regulations, an insurer must not only provide a claimant the opportunity to submit a reasonable justification for any late notice (see 11 NYCRR 65-3.3[a]), but must also establish procedures to “ensure due consideration of denial of claims based upon late filings” and must give “appropriate consideration for situations where the claimant has difficulty ascertaining the insurer’s identity or inadvertently submits a claim to the incorrect insurer” (Matter of Medical Socy. of the State of New York v Serio, 100 NY2d 854, 863 [2003]). Inasmuch as the record does not indicate whether defendant gave any consideration to plaintiff’s explanation for its tardy submission as required by the regulations, we sustain the denial of defendant’s motion for summary judgment.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: April 20, 2009

[*1]

Supreme Court, Appellate Term, Second Department, April 20, 2009

APPEARANCES OF COUNSEL

Rivkin Radler LLP, Uniondale (Evan H. Krinick, Cheryl F. Korman, Stuart M. Bodoff and Melissa M. Murphy of counsel), for appellant.

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

Memorandum.

Order, insofar as appealed from, reversed without costs, defendant’s cross motion for leave to amend its answer and, upon such amendment, for summary judgment dismissing the complaint granted, and complaint dismissed.

In this action by a provider to recover assigned first-party no-fault benefits for services rendered, plaintiff moved for summary judgment. Defendant cross-moved for leave to amend its answer to assert the affirmative defense of collateral estoppel, and, upon such amendment, for summary judgment dismissing the complaint. The Civil Court denied plaintiff’s motion and defendant’s cross motion. Defendant appeals from so much of the order as denied its cross motion.

Generally, leave to amend a pleading pursuant to CPLR 3025 (b) should be granted where there is no significant prejudice or surprise to the opposing party and where the proof submitted in support of the motion indicates that the cause of action or defense to be{**23 Misc 3d at 44} asserted in the amendment may have merit (see Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959 [1983]; Ingrami v Rovner, 45 AD3d 806, 808 [2007]). The court must examine the merits of the cause of action or defense to be asserted in the proposed amendment since leave to amend should not be granted where the cause of action or defense to be asserted is totally without merit or is palpably insufficient as a matter of law (see Ingrami, 45 AD3d at 808; Hill v 2016 Realty Assoc., 42 AD3d 432, 433 [2007]). [*2]

Defendant sought leave to amend its answer in order to interpose the affirmative defense of collateral estoppel because there was a prior arbitration proceeding between the parties in which plaintiff had sought to recover assigned first-party no-fault benefits for services rendered to a different assignor. In said proceeding, the arbitrator determined that plaintiff was ineligible to receive reimbursement of no-fault benefits because it was a fraudulently incorporated professional service corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 322 [2005]). Inasmuch as plaintiff failed to demonstrate that prejudice or surprise would result from allowing the proposed amendment (see McCaskey, Davies & Assoc. v New York City Health & Hosps. Corp., 59 NY2d 755 [1983]), and the proposed affirmative defense was neither devoid of merit nor palpably insufficient as a matter of law (see Ingrami, 45 AD3d at 808; Hill, 42 AD3d at 433), defendant should have been granted leave to amend its answer (see Ingrami, 45 AD3d at 808 [a defendant who has failed to assert a defense set forth in CPLR 3211 (a) (5) both in a motion to dismiss and an answer (see CPLR 3211 [e]) may nonetheless be granted leave to amend the answer to assert such defense under appropriate circumstances]).

“The two elements that must be satisfied to invoke the doctrine of collateral estoppel are that (1) the identical issue was decided in the prior action and is decisive in the present action, and (2) the party to be precluded from relitigating the issue had a full and fair opportunity to contest the prior issue (see Kaufman v Lilly & Co. [65 NY2d 449,] at 455)” (Luscher v Arrua, 21 AD3d 1005, 1007 [2005]; see D’Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659 [1990]).

“The burden is on the party attempting to defeat the application of collateral estoppel to establish the absence of a full and fair opportunity to litigate” (D’Arata, 76 NY2d at 664; see also Kaufman, 65 NY2d at 456).

Collateral estoppel effect can, under appropriate circumstances, be given to arbitration awards (see Matter of American Ins. Co. [Messinger—Aetna Cas. & Sur. Co.], 43 NY2d 184 [1977]). Where a plaintiff has freely elected to proceed to arbitration with the assistance of counsel despite the availability{**23 Misc 3d at 45} of an alternate judicial forum and has had the opportunity to employ procedures substantially similar to those utilized in a court of law, it may be found that the plaintiff has had a full and fair opportunity to litigate the issue determined in the arbitration proceeding (Clemens v Apple, 65 NY2d 746 [1985]).

In the instant matter, defendant established that the issue of whether plaintiff was ineligible to receive reimbursement of no-fault benefits because it was a fraudulently incorporated professional service corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d at 322) was identical to the issue previously decided by the arbitrator. In opposition to defendant’s cross motion, plaintiff failed to address the branch of the cross motion which sought summary judgment dismissing the complaint on the ground of collateral estoppel. Therefore, plaintiff failed to establish that it did not receive a full and fair opportunity to litigate in the arbitration proceeding. Thus, the branch of defendant’s cross motion seeking summary judgment should have been granted (see Uptodate Med. Serv., P.C. v State Farm Mut. Auto. Ins. Co., 22 Misc 3d 128[A], 2009 NY Slip Op 50046[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).

Accordingly, the order, insofar as appealed from, is reversed, defendant’s cross motion for leave to amend its answer, and, upon such amendment, for summary judgment dismissing the complaint is granted, and the complaint is dismissed.

Pesce, P.J., Weston Patterson and Golia, 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 (Ellen M. Spodek, J.), entered June 8, 2007. The order, insofar as appealed from as limited by the brief, granted defendant’s cross motion for summary judgment dismissing the complaint.

Order, insofar as appealed from, affirmed without costs.

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, asserting that, based on a peer review report, it timely denied plaintiff’s claim on the ground that the supplies provided were not medically necessary. The Civil Court denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment dismissing the complaint, holding, inter alia, that defendant established its defense of lack of medical necessity based on a peer review report and plaintiff proffered no evidence in opposition thereto showing that the supplies provided were in fact medically necessary. Plaintiff appeals, as limited by its brief, from so much of the order as granted defendant’s cross motion.

Contrary to plaintiff’s contention, the denial of claim form submitted by defendant, which included a defense of lack of medical necessity as per a peer review report, was not fatally defective. Although defendant omitted certain sections from the denial of claim form, the sections were not relevant to the instant claim. The denial of claim form promptly apprise[d] the claimant with a high degree of specificity of the ground . . . on which the disclaimer [wa]s predicated . . .” (New York Univ. Hosp. Rusk Inst. v Hartford Acc. & Indem. Co., 32 AD3d 458, 460 [2006] [internal quotations and citation omitted]), and defendant established that said denial of claim form was approved by the New York State Department of Insurance (id.; see also All Borough Group Med. Supply, Inc. v GEICO Ins. Co., 20 Misc 3d 130[A], 2008 NY Slip Op [*2]51417[U] [App Term, 2d & 11th Jud Dists 2008]). Consequently, defendant’s defense of lack of medical necessity was not precluded.

Defendant’s cross motion papers, including the affirmed peer review report, established prima facie that there was no medical necessity for the supplies provided by plaintiff, which evidence was unrebutted. As a result, the Civil Court properly granted defendant’s cross motion for summary judgment (see 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 N.Y. Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Plaintiff’s remaining contentions were improperly raised for the first time on appeal and, in any event, lack merit. Accordingly, the order, insofar as appealed from, is affirmed.

Pesce, P.J., Weston and Golia, JJ., concur.
Decision Date: April 16, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from a decision of the Civil Court of the City of New York, Queens County (Anna Culley, J.), dated November 2, 2005, deemed from a judgment of the same court entered December 21, 2007 (see CPLR 5520 [c]). The judgment, after a nonjury trial, dismissed the complaint.

Judgment affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the parties stipulated, prior to trial, that plaintiff proved its prima facie case, and that defendant’s requests for verification and denial of claim forms were all mailed on the days which they were dated. The sole issue at trial was the medical necessity of the supplies which were provided to the assignor. Defendant’s expert medical witness, who had performed a peer review on defendant’s behalf, testified that the durable goods which were provided to plaintiff’s assignor were not medically necessary. In a decision dated November 2, 2005, the Civil Court found in favor of defendant and dismissed the complaint. This appeal by plaintiff ensued. A judgment was subsequently entered.

“A decision rendered by a court after a nonjury trial should not be disturbed on appeal unless it is clear that its conclusions could not have been reached under any fair interpretation of the evidence” (Ardmar Realty Co. v Building Inspector of Vil. of Tuckahoe, 5 AD3d 517, 518 [2004]). The testimony of defendant’s peer review doctor, which the trial court credited, established that there was a lack of medical necessity for the supplies issued to plaintiff’s assignor. Inasmuch as plaintiff failed to offer any rebuttal evidence to show that the supplies were medically necessary, we find that the trial court’s determination was based on a fair interpretation of the evidence. Accordingly, the judgment dismissing the complaint is affirmed. [*2]

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

Decision Date: April 16, 2009