[*1]

Supreme Court, Appellate Term, Second Department, July 26, 2006

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City (David S. Rubackin of counsel), for appellant. Gary Tsirelman, P.C., Brooklyn, for respondent.

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

Memorandum.

Order reversed, without costs, plaintiff’s motion for summary judgment denied and defendant’s cross motion to dismiss the complaint granted to the extent of directing that plaintiff shall respond to those discovery demands which seek information regarding whether plaintiff was fraudulently incorporated, within 30 days of the date of the order entered hereon or within such other reasonable time period as the parties stipulate to in writing.

In this action to recover $1,107.51 in first-party no-fault benefits for health care services rendered to its assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, 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]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]). Defendant failed to deny the claims within the 30-day claim determination period and failed to establish that it tolled the statutory time period by mailing verification and follow-up requests to plaintiff (see e.g. Ocean Diagnostic Imaging P.C. v Travelers Indem. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50644[U] [App Term, 2d & 11th Jud Dists 2005]). Consequently, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Nevertheless, the defense that plaintiff, a provider of health care services, is not eligible for reimbursement of no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) is not subject to preclusion (see A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50504[U] [App Term, 2d & 11th Jud Dists 2006]). Moreover, summary judgment should be denied where{**13 Misc 3d at 60} the opposition papers set forth that facts essential to justify opposition may exist but cannot then be stated (see CPLR 3212 [f]).

In Mallela (4 NY3d 313 [2005], supra), the Court of Appeals found that insurers may withhold payment of first-party no-fault benefits provided by fraudulently licensed medical service corporations to which patients have assigned their claims. Consequently, we find that discovery requests seeking information to determine whether the owners of a medical service corporation are improperly licensed are germane to the question of whether said corporation is eligible for reimbursement. Pursuant to 11 NYCRR 65-3.16 (a) (12),

“A provider of health care services is not eligible for reimbursement under section 5102 (a) (1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service[s] in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed.”

The Education Law provides that only persons licensed or certified can practice acupuncture in the State of New York (see Education Law § 8212). The Business Corporation Law provides that each shareholder, director or officer of the corporation must be licensed to practice the profession for which the corporation was organized (see Business Corporation Law § 1503 [b]; § 1507).

We find that defendant’s papers establish that so much of defendant’s discovery requests as seek information regarding whether plaintiff was fraudulently incorporated are material and necessary (see CPLR 3101) and, thus, defendant’s papers set forth that facts essential to justify opposition may exist but cannot now be stated. Consequently, plaintiff’s motion for summary judgment is premature pending the completion of discovery (see CPLR 3212 [f]). It is noted that plaintiff did not oppose the cross motion in the court below. Accordingly, plaintiff’s motion for summary judgment is denied and defendant’s cross motion is granted to the extent of directing that plaintiff shall respond to defendant’s discovery demands which seek information regarding the ownership, control and licensing of plaintiff corporation within 30 days of the date of the order entered hereon.{**13 Misc 3d at 61}

Golia, J.P. (concurring with the result only). While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

Rios and Belen, JJ., concur; Golia, J.P., concurs in a separate memorandum.

[*1]

Supreme Court, Appellate Term, Second Department, July 26, 2006

Metroscan Imaging, P.C. v GEICO Ins. Co., 8 Misc 3d 829, affirmed.

APPEARANCES OF COUNSEL

Baker, Barshay & Neuwirth, LLP, Mineola (David M. Barshay and Michael C. Rosenberger of counsel), for appellant. Cadwalader, Wickersham & Taft LLP, New York City (William J. Natbony of counsel), and Stern & Montana LLP, New York City (Robert Stern of counsel), for respondent.

{**13 Misc 3d at 36} OPINION OF THE COURT

Memorandum.

Order, insofar as appealed from, affirmed without costs.

This appeal raises the question of whether, as a result of the Court of Appeals decision in State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]), a medical corporation that was fraudulently incorporated under Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c) is entitled to be reimbursed by insurers for medical services rendered by licensed medical practitioners prior to the effective date of 11 NYCRR 65-3.16 (a) (12).^[FN*] In [*2]Mallela, the New York Court of Appeals was asked the following certified question by the United States Court of Appeals, Second Circuit:

“Is a medical corporation that was fraudulently incorporated under N.Y. Business Corporation Law §§ 1507, 1508 and N.Y. Education Law § 6507(4)(c) entitled to be reimbursed by insurers, under New York Insurance Law §§ 5101 et seq. and its implementing regulations, for medical services rendered by licensed medical practitioners” (State Farm Mut. Auto. Ins. Co. v Mallela, 372 F3d 500, 509 [2004]).

The New York Court of Appeals stated that such medical corporations were not entitled to reimbursement (see 4 NY3d at 320). In addition to certifying the preceding question to the New York Court of Appeals, the Second Circuit stated that “defendants raise another issue of New York law that would arise only if the initial question is answered as State Farm wishes. This is: would the applicable revised regulation, 11 N.Y.C.R.R. § 65-3.16(a)(12), if it is read to bar reimbursement, be given retroactive effect” (372 F3d at 508). Consequently, the Second Circuit “welcome[d]” the Court of Appeals’ “guidance with respect to any issues that could arise depending on its answer to the question certified” (id. at 509-510). In Mallela, the Court of Appeals did not explicitly state whether 11 NYCRR 65-3.16 (a) (12) was to be given retroactive effect so as to bar{**13 Misc 3d at 37} reimbursement to a medical corporation that was fraudulently incorporated under Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c). Rather, the only portion of the Court of Appeals decision which expressly dealt with the retroactivity of the regulation concerned an insurer’s ability to maintain a cause of action sounding in fraud or unjust enrichment to recoup payments made by the insurer to a fraudulently incorporated medical corporation prior to the effective date of the regulation. On this question, the Court of Appeals indicated that the regulation was not to be applied retroactively, but rather prospectively (4 NY3d at 322).

The court below concluded that because the claims at issue in Mallela arose prior to the effective date of 11 NYCRR 65-3.16 (a) (12), the Court of Appeals held that the regulation applied to unpaid claims for medical services rendered without regard to the date on which such services were rendered (8 Misc 3d 829 [2005]). Although the court below was not alone in reaching this conclusion (see Allstate Ins. Co. v Belt Parkway Imaging, P.C., 11 Misc 3d 810 [2006]; A.T. Med., P.C. v State Farm Mut. Ins. Co., 10 Misc 3d 568 [2005]; Multiquest, PLLC v Allstate Ins. Co., 9 Misc 3d 1031 [2005]), other trial courts have reached a contrary determination (see Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 1069[A], 2005 NY Slip Op 52209[U] [2005]; Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 1061[A], 2005 NY Slip Op 52071[U] [2005]; Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 1061[A], 2005 NY Slip Op 52069[U] [2005]; Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 877 [2005]). While the Court of Appeals did not expressly address whether 11 NYCRR 65-3.16 (a) (12) was applicable to unpaid claims for assigned first-party no-fault benefits arising from medical services [*3]which were rendered prior to the effective date of said regulation, we nevertheless read the Court of Appeals decision as holding that, irrespective of the date on which the medical services were rendered, a provider of medical services may not recover therefor if it is a fraudulently incorporated medical corporation.

In Mallela, the medical corporation defendants which were allegedly fraudulently incorporated in violation of Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c) asserted that they were entitled to reimbursement notwithstanding their alleged fraudulent incorporation because the medical care rendered to their assignors was within the scope of the licenses of those who treated the assignors and{**13 Misc 3d at 38} thus the medical corporation defendants were within the regulatory framework for reimbursement. In advancing such an argument, some of the defendants’ separate briefs to the Court of Appeals relied, in part, upon the Court of Appeals decision in Charlebois v Weller Assoc. (72 NY2d 587 [1988]).

In Charlebois, the Court of Appeals held that a contract which required payment to an unlicensed business corporation for engineering services performed by an independent licensed professional engineer was valid because the corporation was not engaged in the unauthorized practice of engineering. By contrast, in Mallela, although the medical treatments were rendered by apparently licensed medical practitioners, said licensed practitioners were not the “providers” for billing purposes under the No-Fault Law. Instead, the “providers” for no-fault billing purposes were their employers, medical service corporations, which were incorporated in violation of Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c). This critical distinction apparently prompted the Court of Appeals, in Mallela, to reject the defendants’ position stating, “The fact remains that the reimbursement goes to the medical service corporation that exists to receive payment only because of its willfully and materially false filings with state regulators” (4 NY3d at 321).

In so holding, the Court of Appeals implicitly recognized that medical service corporations which are fraudulently incorporated in violation of Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c), i.e., which “fail[ed] to meet the applicable state licensing requirements” (4 NY3d at 320), were not entitled to reimbursement since their authority to render professional services was obtained through fraudulent means and possession of such authority was a prerequisite to reimbursement (see Education Law § 6507 [4] [c]; see also Business Corporation Law § 1503; Valley Physical Medicine & Rehabilitation v New York Cent. Mut. Ins. Co., 193 Misc 2d 675 [App Term, 9th & 10th Jud Dists 2002]). Such a result is in accord with the common law, which has historically denied compensation to unlicensed providers of services for which a regulatory license is required (see Spivak v Sachs, 16 NY2d 163 [1965]; Bendell v De Dominicis, 251 NY 305 [1929]; Mavco Realty Corp. v M. Slayton Real Estate, Inc., 12 AD3d 575 [2004]; Price v Close, 302 AD2d 374 [2003]; Gordon v Adenbaum, 171 AD2d 841 [1991]; P.C. Chipouras & Assoc. v 212 Realty Corp., 156 AD2d 549{**13 Misc 3d at 39} [1989]; Unger v Travel Arrangements, 25 AD2d 40, 44 [1966]; 13 NY Jur 2d, Businesses and Occupations § 61), and the regulations, which permit a medical service corporation to recover for medical services provided so long as the treating medical practitioner was an employee of the medical service corporation as opposed to an independent contractor (see 11 NYCRR former 65.15 [j] [1], now 11 NYCRR 65-3.11 [a]; Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc 3d 52 [App Term, 2d & 11th Jud Dists 2005] [because a billing [*4]provider is not a “provider” of the medical services if the medical services were rendered by an independent contractor rather than by an employee of the billing provider, it is not permitted to recover direct payment of assigned no-fault benefits from an insurer]; A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 9 Misc 3d 36 [App Term, 2d & 11th Jud Dists 2005]). Indeed, where an action is based upon a contract which violates public policy or which is being used to circumvent public policy, courts have refused to enforce such a contract and have left the parties where they stand (see Spivak v Sachs, 16 NY2d at 168; McConnell v Commonwealth Pictures Corp., 7 NY2d 465 [1960]; Veazey v Allen, 173 NY 359 [1903]; Matter of Ungar v Matarazzo Blumberg & Assoc., 260 AD2d 485 [1999]; LoMagno v Koh, 246 AD2d 579 [1998]; United Calendar Mfg. Corp. v Huang, 94 AD2d 176 [1983]). Accordingly, under the common law, prior to the effective date of 11 NYCRR 65-3.16 (a) (12), such fraudulently incorporated medical corporations were not entitled to recover a judgment against an insurer for assigned first-party no-fault benefits. The promulgation of 11 NYCRR 65-3.16 (a) (12) by the Superintendent of Insurance merely codified the common-law rule to the extent it barred recovery by unincorporated or fraudulently incorporated medical service corporation providers for assigned first-party no-fault benefits.

Our reading of Mallela is buttressed by the Court of Appeals holding therein that a cause of action by an insurance carrier sounding in fraud or unjust enrichment would not lie prior to the effective date of 11 NYCRR 65-3.16 (a) (12). This too comports with the common-law rule, to wit, the lack of a required license will prevent recovery for services rendered, but the lack of a license does not permit recovery of the fee by the payer after it was paid (see Johnston v Dahlgren, 166 NY 354 [1901]; Goldman v Garofalo, 71 AD2d 650 [1979]; see also 13{**13 Misc 3d at 40} NY Jur 2d, Businesses and Occupations § 68). However, we read Mallela as holding that the promulgation of 11 NYCRR 65-3.16 (a) (12) by the Superintendent of Insurance altered the common law prospectively such that an insurance carrier may maintain a cause of action against a fraudulently incorporated medical service corporation to recover assigned first-party no-fault benefits which were paid by the insurer to such medical service corporation after the regulation’s effective date (4 NY3d at 322). [*5]

In light of the foregoing, the order, insofar as appealed from, is affirmed.

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

Footnotes

Footnote *: Insofar as is relevant, the regulation provides: “A provider of health care services is not eligible for reimbursement under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement” (11 NYCRR 65-3.16 [a] [12]).

[*1]

Supreme Court, Appellate Term, Second Department, July 26, 2006

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellants. Carman Callahan & Ingham, LLP, Farmingdale (Paul A. Barrett of counsel), for respondent.

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

Memorandum.

Appeal as taken by plaintiff Lvov Acupuncture P.C. dismissed.

Order modified by granting so much of the motion as sought summary judgment on behalf of plaintiffs A.B. Medical Services PLLC and D.A.V. Chiropractic P.C. to the extent of awarding partial summary judgment to plaintiff D.A.V. Chiropractic P.C. in the principal sum of $370.70 and awarding summary judgment to plaintiff A.B. Medical Services PLLC in the principal sum of $8,682.82, and matter remanded to the court below for the calculation of statutory interest and attorney’s fees thereon and for all further proceedings on the remaining claims; as so modified, affirmed insofar as reviewed without costs.

In this action to recover first-party no-fault benefits for health services rendered to their [*2]assignor, plaintiffs A.B. Medical Services PLLC and D.A.V. Chiropractic P.C. established their prima facie entitlement to summary judgment by proof that they submitted claims, setting forth the fact and the amounts of the losses sustained, 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]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). The burden shifted to defendant to show a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Contrary to the determination of the court below, plaintiffs did not have to establish the validity of the assignments as part of their prima facie case. Defendant’s failure to seek verification of the assignments, or to allege any deficiency in the assignments in its denial of claim forms, constitutes a waiver of any defenses with respect thereto (see New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2004]; Presbyterian{**13 Misc 3d at 27} Hosp. in City of N.Y. v Aetna Cas. & Sur. Co., 233 AD2d 433 [1996]; Medwide Med. Supply Inc. v Country-Wide Ins. Co., 8 Misc 3d 131[A], 2005 NY Slip Op 51078[U] [App Term, 2d & 11th Jud Dists]; A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 6 Misc 3d 70 [App Term, 2d & 11th Jud Dists 2004]).

It is uncontroverted that defendant timely denied plaintiff A.B. Medical Services PLLC’s $604.24 claim based upon the conclusions of an affirmed peer review report which was annexed to the denial. Plaintiff contends that the report is insufficient since defendant did not provide its reviewer with the narrative report and the follow-up reports it had previously provided to defendant. Indeed, the reviewer stated that he was not provided with reports from any of the assignor’s health care providers and, therefore, medical necessity could not be established. In view of the foregoing, since the peer review report was incomplete in that it did not take into account all of the documents plaintiff provided to defendant, the denial was inadequate to establish a factual basis and medical rationale sufficient to demonstrate the lack of medical necessity (see Park Neurological Servs. P.C. v GEICO Ins., 4 Misc 3d 95 [App Term, 9th & 10th Jud Dists 2004]).

Defendant also timely denied plaintiff A.B. Medical Services PLLC’s $1,999.12, $71.40 and $752.62 claims, by its denial of claim form dated April 30, 2003, on the ground that the assignor failed to appear for independent medical examinations (IMEs). However, in opposition to plaintiffs’ motion for summary judgment, defendant merely established the mailing of a single IME request. The insurance regulations provide that if any verification request is not supplied to the insurer within 30 calendar days after the original request, then, within 10 calendar days, the insurer shall follow up with the party from whom the verification was sought (see 11 NYCRR 65-3.6 [b]). Inasmuch as defendant did not show that it complied with the follow-up verification regulation, it has failed to rebut plaintiff’s prima facie showing as to these claims (see e.g. Metro Med. Diagnostics v Lumbermens Ins. Co., 189 Misc 2d 597 [App Term, 2d & 11th Jud Dists 2001]).

As to plaintiff A.B. Medical Services PLLC’s remaining claims, defendant failed to show a triable issue of fact since its denial of claim form dated June 10, 2003 is incompletely filled out and is, thus, insufficient to assert a defense.

“A proper denial of claim must include the information called for in the prescribed denial of claim form{**13 Misc 3d at 28} (see 11 NYCRR 65-3.4 [c] [11]) [*3]and must ‘promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated’ . . . Moreover, ‘[a] timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law’ (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [2004])” (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664-665 [2004]).

Furthermore, although plaintiff D.A.V. Chiropractic P.C. contends that it is entitled to summary judgment in the principal sum of $1,586.44, a review of the claim forms annexed to its moving papers as exhibit E indicates that said plaintiff is only entitled to $370.70 since the mailing receipts annexed to establish its mailing of its other three claims list the provider as A.B. Medical Services PLLC. Accordingly, upon the record presented, there has been an insufficient showing that D.A.V. Chiropractic P.C. mailed said three claims to defendant. As noted above, defendant’s June 2003 denial of claim form is insufficient and, therefore, does not raise a triable issue of fact or rebut plaintiff’s prima facie showing as to its $370.70 claim (see Nyack Hosp., 11 AD3d at 664).

In view of the foregoing, plaintiff A.B. Medical Services PLLC is awarded summary judgment in the principal sum of $8,682.82 and plaintiff D.A.V. Chiropractic P.C. is awarded partial summary judgment in the principal sum of $370.70, and the matter is remanded to the court below for entry of judgment and the calculation of statutory interest and attorney’s fees thereon pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on the remaining claims.

Inasmuch as Lvov Acupuncture P.C. is not an aggrieved party, the appeal as taken by it is dismissed (see CPLR 5511).

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

At the outset, I concur with the majority in the dismissal of the appeal as taken by plaintiff Lvov Acupuncture P.C. As regards the claim of A.B. Medical Services PLLC and D.A.V. Chiropractic P.C., I find that plaintiffs are required, at the very least, to submit proof of a properly executed assignment. Here, plaintiffs A.B. Medical and D.A.V. Chiropractic failed to do so. Consequently, I respectfully dissent and vote to affirm.{**13 Misc 3d at 29}

The insurance regulations provide, in relevant part, that a health care provider must submit to the insurer “a properly executed assignment” on one of the following forms: (1) the prescribed verification of treatment by the attending physician or other provider of service form (NYS Form NF-3); (2) the prescribed verification of hospital treatment form (NYS Form NF-4), or the prescribed hospital facility form (NYS Form NF-5); or (3) the prescribed no-fault assignment of benefits form (NYS Form NF-AOB) (see 11 NYCRR 65-3.11 [b] [2]; see also A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 6 Misc 3d 70, 71 [App Term, 2d & 11th Jud Dists 2004]). The plain language of the regulations clearly mandate submission of a properly executed assignment, and since the No-Fault Law is in derogation of the common law, its regulations must be strictly construed (see Presbyterian Hosp. in City of N.Y. v Atlanta Cas. Co., 210 AD2d 210, 211 [1994]).

In my view, the submissions of A.B. Medical and D.A.V. Chiropractic fail, on their face, to demonstrate a properly executed assignment. As the court below correctly noted, the forms submitted by these plaintiffs appear to be copies of a single assignment form which was signed by the assignor in blank. Plaintiffs’ names were inserted thereafter on copies of the original form. Under these circumstances, it cannot [*4]be said that plaintiffs A.B. Medical and D.A.V. Chiropractic presented evidence of a properly executed assignment as required under the insurance regulations. Accordingly, plaintiffs’ motion for summary judgment was properly denied.

Pesce, P.J., and Weston Patterson, J., concur. Golia, J., dissents in part and concurs in part in a separate memorandum.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin S. Garson, J.), entered May 12, 2005. The order, insofar as appealed from, granted plaintiff’s motion for summary judgment to the extent of awarding plaintiff partial summary judgment upon its claim for $1,546.20 and denied defendant’s cross motion for summary judgment.

Order, insofar as appealed from, modified by providing that, upon searching the record, plaintiff’s motion for summary judgment is granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees; as so modified, affirmed without costs.

In an action to recover first-party no-fault benefits for medical services rendered to its assignor, a health care provider establishes a prima facie entitlement to summary judgment by proof that it submitted the statutory claim forms, setting forth the fact and the amounts of the losses sustained, 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]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). While the affidavit submitted by plaintiff was insufficient to establish the mailing of any of the appended claim forms to defendant, the deficiency in plaintiff’s moving papers concerning proof of its submission of the claims was cured by defendant’s NF-10 denial of claim forms which adequately established that plaintiff sent, and that defendant received, said claim forms (see Careplus Med. Supply Inc. v State-Wide Ins. Co., 11 Misc 3d 29 [App Term, 2d & 11th Jud Dists 2005]; A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 7 Misc 3d 14 [App Term, 2d & 11th Jud Dists 2005]). [*2]

Although defendant’s submissions were sufficient to establish that defendant mailed, within the 30-day claim determination period, its NF-10 forms (see D.A.V. Chiropractic P.C. v American Tr. Ins. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50609[U] [App Term, 2d & 11th Jud Dists]; cf. Gribenko v Allstate Ins. Co., 10 Misc 3d 139[A], 2005 NY Slip Op 52201[U] [App Term, 2d & 11th Jud Dists]; Contemp. Med. Diag. & Treatment, P.C. v Government Empls. Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists]), plaintiff was nevertheless entitled to summary judgment upon said claims. Defendant’s denial of claim forms and the accompanying explanation of benefit forms merely advised plaintiff that the claims were denied pursuant to a peer review report and that a copy of said report would be sent to plaintiff under separate cover. Since there is no evidence that the peer review was sent to plaintiff under separate cover within the 30-day claim determination period, and the denial of claims were otherwise devoid of any factual basis for the denial, defendant is precluded from asserting lack of medical necessity as a defense to said claims (see A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 11th Jud Dists]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], supra). As a result, upon searching the record, we find that plaintiff is entitled to summary judgment on both of its claims and grant plaintiff’s motion for summary judgment in its entirety. The matter is remanded to the[*3]court below for a calculation of the statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

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

Golia, J., concurs in a separate memorandum. [*4]

Golia, J., concurs with the result only, in the following memorandum:

I am constrained to agree with the ultimate disposition in the decision reached by the majority. I, however, wish to note that I do not agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

In this regard, I note my dissent in A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co. (10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 1th Jud Dists]), and in further support of my argument, I cite 11 NYCRR 65-3.8 (b) (4) which states:

“If the specific reason for a denial of a no-fault claim…is a…peer review report…the insurer shall release a copy of that report…upon the written request of any of these parties.” (emphasis added)

To hold as the majority does, in my opinion, would usurp the role of the Legislature. It would require defendant to produce the peer review report within 30 days despite the fact that the regulations do not require that the report be produced at all, unless requested in writing by the plaintiff, a burden the rules did not impose upon the defendant.
Decision Date: July 19, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Arlene Bluth, J.), entered July 15, 2005. The order, insofar as appealed from as limited by plaintiff’s brief, upon granting defendant’s motion for reargument of plaintiff’s summary judgment motion, which was granted in a prior order dated March 2, 2005, denied plaintiff’s motion for summary judgment.

Order, insofar as appealed from, affirmed without costs.

Plaintiff commenced this action to recover $1,791.73 in first-party no-fault benefits for medical services rendered to its assignor. Thereafter, plaintiff moved for summary judgment. Defendant opposed the motion and cross-moved for summary judgment dismissing the complaint. In March 2005, the court below granted plaintiff’s motion and denied defendant’s cross motion as moot. In July 2005, defendant moved by order to show cause for reargument of the court’s March order, which motion plaintiff opposed. By order entered July 15, 2005, the court granted reargument and, insofar as is relevant hereto, denied plaintiff’s motion for summary judgment.

Contrary to the determination of the court below, the affidavit plaintiff submitted in support of its motion for summary judgment was sufficient to allow the annexed claim forms to be considered by the court. The deficiency in plaintiff’s moving papers concerning proof of its submission of the claims to defendant was cured by the acknowledgment of receipt of the claims in the denial of claim forms annexed to plaintiff’s moving papers (see A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]). The burden then shifted to defendant to demonstrate a triable issue of fact (see [*2]Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Upon a review of the record, we find that defendant raised a triable issue of fact by showing that it timely requested verification and made the requisite follow-up requests (see 11 NYCRR 65-3.5 [b]), and, upon receiving the requested verification, timely denied the claims based on lack of medical necessity as set forth in detailed peer review reports (see A.B. Med Servs. PLLC v Travelers Prop Cas. Corp., 8 Misc 3d 139[A], 2005 NY Slip Op 51330[U] [App Term, 2d & 11th Jud Dists]; Park Health Ctr. v Peerless Ins. Co., 2 Misc 3d 127[A], 2003 NY Slip Op 51687 [App Term, 2d & 11th Jud Dists]; Triboro Chiropractic and Acupuncture v Electric Ins. Co., 2 Misc 3d 135[A], 2004 NY Slip Op 50215[U] [App Term, 2d & 11th Jud Dists]). Accordingly, plaintiff’s motion for summary judgment was properly denied.

Pesce, P.J., and Weston Patterson, J., concur.

Golia, J., concurs in a separate memorandum. [*3]

Golia, J., concurs with the result only, in the following memorandum:

While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.
Decision Date: July 18, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Eileen Nadelson, J.), entered March 17, 2005. The order denied plaintiff’s motion for summary judgment.

Order reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees.

Plaintiff commenced this action to recover $1,222.95 in first-party no-fault benefits for medical supplies furnished to its assignor. Thereafter, plaintiff moved for summary judgment. In an affirmation in opposition, defendant’s attorney argued that plaintiff failed to make out a prima facie case entitling it to summary judgment.

The deficiency in plaintiff’s moving papers concerning proof of its submission of its claim to defendant was cured by the denial of claim form, dated April 5, 2004, annexed to plaintiff’s moving papers, which states that defendant received the claim on January 30, 2004 (see e.g. A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 7 Misc 3d 14 [App Term, 2d & 11th Jud Dists 2005]).

While defendant acknowledged in its denial of claim form that it received the requested verification from plaintiff on March 19, 2004 and the denial of claim form is dated April 5, 2004, defendant failed to establish that it timely mailed its denial of claim form since it failed to submit an affidavit by one with personal knowledge that the denial of claim form was timely mailed or an affidavit containing a sufficiently detailed description of standard office mailing procedure so as to give rise to the presumption of the timely mailing of same (see A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term, 2d & 11th Jud Dists 2006]; S&M Supply Inc. v [*2]Progressive Ins. Co., 8 Misc 3d 138[A], 2005 NY Slip Op 51312[U] [App Term, 2d & 11th Jud Dists]). Since defendant failed to raise an issue of fact regarding whether it paid or denied the claim within the 30-day prescribed period (11 NYCRR 65-3.8 [c]), it is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]), including the defense, in effect, of excessive charges (cf. New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 586 [2002]; Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50526[U] [App Term, 2d & 11th Jud Dists]; Triboro Chiropractic & Acupuncture v New York Cent. Mut. Fire Ins. Co., 6 Misc 3d 132[A], 2005 NY Slip Op 50110[U] [App Term, 2d & 11th Jud Dists]). In light of the foregoing, plaintiff’s motion for summary judgment is granted, and the matter is remanded for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., Weston Patterson J., concur.

Golia, J., concurs in a separate memorandum.

Golia, J., concurs with the result only, in the following memorandum:

I am constrained to agree with the ultimate disposition in the decision reached by the majority. I, however, wish to note that I do not agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.
Decision Date: July 18, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Ellen Gesmer, J.), entered December 23, 2004. The order granted plaintiffs’ motion for summary judgment.

Order reversed without costs and plaintiffs’ motion for summary judgment denied. [*2]

In an action to recover first-party no-fault benefits for medical services rendered to its assignors, a plaintiff establishes a prima facie entitlement to summary judgment by proof that it submitted a claim, setting forth the fact and the amount of the loss sustained, 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]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). Although plaintiffs, in their motion papers, did not establish proof of proper mailing of the claim forms, defendant’s opposition papers, which included an affidavit of defendant’s claims examiner acknowledging the dates that defendant received the subject claim forms, as well as claim denial forms indicating the dates of receipt of the claims, adequately established that plaintiffs sent, and that defendant received, the claims (see Ultra Diagnostic Imaging d/b/a/ Kings Highway Diagnostic Imaging P.C. v Liberty Mut. Ins. Co., 9 Misc 3d 97 [App Term, 2d & 11th Jud Dists 2005]; see also A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]).
Notwithstanding defendant’s contention that verification requests were timely made, which requests would operate to toll the 30-day period within which it is required to pay or deny the claim (11 NYCRR 65.15 [g] [3], now 11 NYCRR 65-3.8), it did not establish by competent evidence that it did so (see S & M Supply v GEICO, 3 Misc 3d 136[A], 2004 NY Slip Op 50502[U] [App Term, 2d & 11th Jud Dists]). Accordingly, having failed to pay or deny the claims within the 30-day prescribed period, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). However, defendant is not precluded from asserting the defense that the alleged injuries were not causally related to the accident, despite the untimely denial of the claims (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 18-19 [1999]). The affidavit of Dr. Ovshayev, who described herself as a principal of Magnezit Medical Care, P.C., was annexed to plaintiff’s moving papers, and specifically stated that “injuries sustained by the patient were caused by multiple motor vehicle accidents.” This statement was sufficient to support defendant’s allegations that its defense was based upon a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp., 90 NY2d at 199). Accordingly, since [*3]defendant demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage (see id.; Zuckerman v City of New York, 49 NY2d 557 [1980]), plaintiffs’ motion for summary judgment should have been denied.

Pesce, P.J., Weston Patterson and Belen, JJ., concur.
Decision Date: July 18, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Edgar G. Walker, J.), entered May 1, 2005. The order denied plaintiff’s cross motion for summary judgment and awarded defendant $50 costs.

Order modified by providing that plaintiff’s cross motion for summary judgment is granted to the extent of awarding plaintiff partial summary judgment in the principal sum of $1,125.01 and by deleting the award of $50 costs to defendant, and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees thereon, and for all further proceedings on the remaining claims; as so modified, affirmed without costs.

In this action to recover first-party no-fault benefits for health care services rendered to its assignor, plaintiff health care provider established a prima facie entitlement to summary judgment on its claim for $1,125.01, by proof that it submitted the claim, setting forth the fact and the amount of the loss sustained, 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]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). Contrary to defendant’s contention, its denial of claim form, indicating the date on which the claim was received, adequately established that plaintiff sent and that defendant received said claim (Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50526[U] [App Term, 2d & 11th Jud Dists]).

The defendant failed to establish that the denial for said $1,125.01 claim was mailed within the prescribed 30-day period (11 NYCRR 65-3.8 [c]). The affidavit of defendant’s claims representative was insufficient to establish proper mailing since there is no allegation by one with personal knowledge that the denial was actually mailed. Nor did the affidavit contain a [*2]sufficiently detailed description of standard office mailing procedure so as to give rise to the presumption of mailing (see New York & Presbyt. Hosp. v Allstate Ins. Co., AD3d , 2006 NY Slip Op 03558; Nyack Hosp. v [*3]
Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). Accordingly, defendant is precluded from raising its proffered defense of lack of medical necessity as to said $1,125.01 claim and plaintiff is entitled to summary judgment thereon.

Plaintiff’s moving papers were insufficient to raise a presumption that it submitted the claims in the amounts of $1,200.92 and $540.56. The affidavit of plaintiff’s corporate officer did not state that he actually mailed these claims, nor did he describe his office’s practice and procedure for mailing no-fault claims to insurers. The certified mail receipt does not prove that the particular claims were actually received where, as here, there is no evidence that these claims were mailed to defendant under these certified mail receipts and no signed certified mail return receipt card has been produced (see New York & Presbyt. Hosp. v Allstate Ins. Co., AD3d , 2006 NY Slip Op 03558, supra). Accordingly, plaintiff failed to shift the burden as to said claims.

Consequently, plaintiff’s motion should have been granted to the extent of awarding plaintiff partial summary judgment in the principal sum of $1,125.01 and the matter is remanded to the court below for the calculation of statutory interest and an [*4]
assessment of attorney’s fees thereon, and for all further proceedings on the remaining claims.

In view of the foregoing, the award of $50 costs to defendant should be stricken.

Rios and Belen, JJ., concur.

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

Golia, J., concurs with the result only, in the following memorandum:

I am constrained to agree with the ultimate disposition in the decision reached by the majority. I, however, wish to note that I do not agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.
Decision Date: July 17, 2006

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 (Sondra K. Pardes, J.), dated March 29, 2005. The order granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion for summary judgment.

Order affirmed without costs.

Plaintiff commenced this action to recover $676.61 in first-party no-fault benefits for medical services rendered to its assignor on the ground that payment of no-fault benefits was overdue. Thereafter, defendant moved for summary judgment dismissing the complaint and plaintiff cross-moved for summary judgment. By order dated March 29, 2005, the court below granted defendant’s motion and denied plaintiff’s cross motion. The instant appeal by plaintiff ensued.

In January 2004, plaintiff provided defendant with an assignment of benefits form by submitting a “NYS form NF-AOB” in response to defendant’s timely November 2003 request for verification and December 2003 follow-up request (see 11 NYCRR 65-3.5 [b]; 65-3.6 [b]). However, the statutory NF-AOB form plaintiff submitted contains a section for the signature of the provider (see 11 NYCRR 65-3.11 [b] [2] [iii]) which was left blank. Defendant objected to the incomplete form and informed plaintiff that it wanted an assignment containing the provider’s signature. Since plaintiff has yet to provide the requested verification consisting of an assignment with the provider’s signature, the statutory period in which defendant has to pay or deny the claim has been tolled (see New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2002]). Consequently, defendant has established that payment of no-fault benefits was not overdue. Plaintiff’s remaining contentions regarding the validity of the NF-AOB form it sent to defendant in January 2004 are lacking in merit. [*2]

Accordingly, the court below properly granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion for summary judgment.

Rudolph, P.J., Angiolillo and Lippman, JJ., concur.
Decision Date: July 17, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Charles John Markey, J.), entered June 30, 2005. The order denied plaintiff’s motion for summary judgment.

Order reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees.

In an action to recover first-party no-fault benefits for medical services rendered to its assignor, a health care provider establishes a prima facie entitlement to summary judgment by proof that it submitted the statutory claim forms, setting forth the fact and the amounts of the losses sustained, 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]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). In the instant case, the record establishes a prima facie showing of plaintiff’s entitlement to summary judgment (see e.g. Careplus Med. Supply Inc. v State-Wide Ins. Co., 11 Misc 3d 29 [App Term, 2d & 11th Jud Dists 2005]). Although defendant’s denial of claim form was timely mailed to plaintiff, it simply stated that the claim was denied because a peer reviewer determined that the treatment was not medically necessary. Since there is no evidence that the peer review report was sent to plaintiff within the 30-day claim determination period, and the denial of claim was otherwise devoid of any factual basis or medical rationale for the denial, defendant is precluded from asserting lack of medical necessity as a defense to said claim (see A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 11th Jud Dists]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 [*2]NY Slip Op 51701[U], supra) and plaintiff is entitled to summary judgment upon said claim. [*3]

Consequently, the matter is remanded to the court below for a calculation of the statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 and the regulations promulgated thereunder.

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

Golia, J., concurs in a separate memorandum.

Golia, J., concurs with the result only, in the following memorandum:

I am constrained to agree with the ultimate disposition in the decision reached by the majority. I, however, wish to note that I do not agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

In this regard, I note my dissent in A.B. Med. Servs. PLLC v Liberty Mut. Ins. Co. (10 Misc 3d 128[A], 2005 NY Slip Op 51902[U] [App Term, 2d & 1th Jud Dists]), and in further support of my argument, I cite 11 NYCRR 65-3.8 (b) (4) which states:

“If the specific reason for a denial of a no-fault claim…is a…peer review report…the insurer shall release a copy of that report…upon the written request of any of these parties.” (emphasis added)

To hold as the majority does, in my opinion, would usurp the role of the Legislature. It would require defendant to produce the peer review report within 30 days despite the fact that the regulations do not require that the report be produced at all, unless requested in writing by the plaintiff, a burden the rules did not impose upon the defendant.
Decision Date: July 17, 2006