[*1]

Civil Court of the City of New York, Queens County, February 17, 2005

APPEARANCES OF COUNSEL

Rossillo & Licata, P.C., Garden City (Tara K. DeMaio of counsel), and Devitt Spellman Barrett, LLP, Smithtown (William J. Barrett of counsel), for State Farm Mutual Automobile Insurance Co. and another, defendants. Carman, Callahan & Ingham, LLP, Farmingdale (Demetrios A. Bothios of counsel), for General Assurance Insurance Co., defendant.[*2]Freiberg & Peck, LLP, New York (Erika Tobias of counsel), for Progressive Northeastern Insurance Co., defendant.

OPINION OF THE COURT

Charles J. Markey, J.

The instant controversy raises issues of immense importance governing the permissible [*3]scope of discovery in litigation for no-fault first-party benefits. To illustrate the significance of the legal issues posed, this court has consolidated six motions only for purposes of this decision.

The six cases have several common denominators. An insurer has served multiple discovery notices on a plaintiff assignee medical provider of no-fault first-party benefit services. In each of the six motions, an insurer seeks to strike plaintiff’s complaint or to preclude plaintiff from testifying at trial for failing to respond to the discovery notices or to compel answers to the various demands. In the six motions, although the movant insurers attached copies of the pleadings, they failed to attach copies of the NF-10, the all-important denial of claim form (11 NYCRR 65-3.8), or a timely demand for verification, the NF-3 or NF-5, or demand for additional verification (11 NYCRR 65-3.5). In none of the motions was there a discussion by the movant insurers of the relevancy of the information sought, especially in terms of a timely denial or a timely demand for verification. In each of the motions, however, the plaintiff’s counsel not only failed to cross-move for a protective order, but also did not oppose the motion or even appear in court on the return date.

The legal issues of first impression raised by the six consolidated motions require resolution of the permissible scope of discovery in no-fault litigation, definition of a barometer or yardstick by which to measure whether a discovery request in a no-fault action is legitimate or simply vexatious and oppressive, and, finally, a determination of the degree of judicial tolerance to be afforded to a palpably improper discovery demand despite a plaintiff’s inaction. These issues are of weighty magnitude because of the thousands of no-fault cases that arise each year throughout this state and the discovery disputes that arise therefrom.

In these six actions for no-fault benefits, a health care provider who rendered medical or chiropractic treatment to the plaintiff’s patient, in exchange for an assignment of the patient’s right to collect no-fault benefits, seeks recovery from a defendant insurer. The No-Fault Law replaced the common-law right to seek tort recovery with a statutory system designed to provide “a quick, sure and efficient system for obtaining compensation for economic loss suffered as a result of [automobile] accidents” (Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 214 [1996]).

Prior to discussing the specifics of each of the motions, a review of the rubrics in No-Fault Law is essential in arriving at judicial holdings in this controversy. First, an insurer must make a timely denial of benefits within 30 days of receipt of a claim in a denial of claim form, the NF-10, or must have timely demanded a verification. Failure to do so will result in a defendant insurer waiving all defenses—except for those of lack of coverage and fraud—to a claim and thus exposing itself to a successful plaintiff’s summary judgment motion (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 6 Misc 3d 70 [App Term, 2d Dept 2004]; Diagnostic Rehab. Medicine Serv. P.C. v Travelers Indem. Co., 6 Misc 3d 685 [App Term, 2d Dept 2004]; King’s Med. Supply Inc. v Country-Wide Ins. Co., 5 Misc 3d 767 [Civ Ct, Kings County 2004]).

No better case illustrates the importance of mailing a timely denial or timely demand for a verification than the Court of Appeals decision in Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co. (90 NY2d 274 [1997] [4-3 decision]). In that case, although it was later established that the plaintiff’s assignor was legally drunk at the time of the motor vehicle accident, the High Court sustained a medical provider’s entitlement to summary judgment. [*4]The insurer’s failure to issue a timely denial or a timely demand for verification was deemed a waiver of all defenses and did not even entitle the insurer to responses to a demand for written interrogatories. During the requisite period for issuing a denial or demand for a verification, “the carrier chose to sit on its rights and do nothing in this respect” (id. at 280).

The Court of Appeals in Presbyterian Hosp. stated that “a core and essential objective” of the insurance regulations is “to provide a tightly timed process of claim, disputation and payment” (id. at 281). The Court of Appeals, in pertinent part, stated:

“No-fault reform was enacted to provide prompt uncontested, first-party insurance benefits . . . The tradeoff of the no-fault reform still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leashed contestable period and process designed to avoid prejudice and red-tape dilatory practices.” (Id. at 285.)

Although the insurer actually later procured proof that the assignor was legally drunk while operating a motor vehicle—certainly conduct that offends our State’s public policy and criminal law—the Court of Appeals refused to permit the assertion of a late defense of intoxication and even to allow discovery on the issue. Since the insurer failed to adhere to the “tightly timed process” (id. at 281), the Court of Appeals expressly did not let the defendant insurer “string out belated and extra bites at the apple” (id. at 286).

The importance of a timely denial is underscored by the Appellate Division’s recent decision forbidding an insurer from relying on a prior blanket denial that simply stated that it would dishonor further claims. In A & S Med. P.C. v Allstate Ins. Co. (15 AD3d 170 [1st Dept 2005]), an insurer’s failure to deny a specific claim in timely fashion, despite a previously issued blanket denial that advised that all future claims would be rejected, warranted the grant of a medical provider’s motion for summary judgment.

An insurer’s denial must be made “with a high degree of specificity of the ground or grounds on which the disclaimer is predicated,” and an insurer will not be permitted to assert a defense not specifically made in the NF-10, even though a denial of claim may have been previously issued in a timely manner (General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979] [per curiam]; accord Paul M. Maintenance, Inc. v Transcontinental Ins. Co., 300 AD2d 209, 212 [1st Dept 2002]; see also, Universal Acupuncture Pain Servs. v Lumbermens Mut. Cas. Co., 195 Misc 2d 352, 354-355 [Civ Ct, Queens County 2003] [citing cases]). Thus, if an insurer’s NF-10 denied a claim only on grounds of intoxication, it cannot later be permitted to assert another defense, such as the invalidity of an assignment, which was not preserved in the denial of claim form (see, e.g., Bonetti v Integon Natl. Ins. Co., 269 AD2d 413 [2d Dept 2000] [defense of allegedly unnecessary surgeries not preserved]; Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co., 233 AD2d 433 [2d Dept 1996] [defense of invalid assignment not preserved]; St. Clare’s Hosp. v Allcity Ins. Co., 201 AD2d 718 [2d Dept 1994] [insurer’s failure to deny claim in 30 days]).

In accord with the Presbyterian Hosp. holding preventing an insurer from stringing out the process by prejudicial, dilatory practices and taking extra bites at the apple (90 NY2d at 285-[*5]286), the bottom line is that a defendant insurer “must ‘stand or fall upon the defense upon which it based its refusal to pay’ ” (King v State Farm Mut. Auto. Ins. Co., 218 AD2d 863, 865 [3d Dept 1995], quoting Beckley v Otsego County Farmers Coop. Fire Ins. Co., 3 AD2d 190, 194 [3d Dept 1957], appeal dismissed 2 NY2d 990 [1957]). The Appellate Division, Second Department, has repeatedly warned insurers against either repudiating liability or defending on one particular ground and then, shifting gears, creating new means or defenses to avoid payment (see, Lee v American Tr. Ins. Co., 304 AD2d 713, 714 [2003]; Matter of State Farm Ins. Co. v Domotor, 266 AD2d 219, 220-221 [1999]; accord Subia v Cosmopolitan Mut. Ins. Co., 80 Misc 2d 1090, 1092 [Sup Ct, Queens County 1975] [striking defense from answer that was not raised in the denial of claim form]).

Comprehension of the foregoing principles is essential for illuminating the way on what matter is discoverable in a litigation for no-fault first-party benefits. The Legislature created the No-Fault Law in derogation of the common law (Walton, 88 NY2d at 214), and Insurance Department regulations and case law make extra demands on the methods of denial, verification, payment, and disputation. If the foregoing holdings are ignored, then no-fault litigation would be treated like any other garden variety common-law litigation with a full panoply of discovery rights, turning no-fault litigation to its present condition—a Frankenstein monster that has assumed a life force of its own, becoming so unmanageable and uncontrollable that it acts out in ways never envisioned by its creator.

In none of the six motions did the movant attach a copy of a denial of claim, the NF-10, or a timely demand for verification. Interestingly, each insurer’s counsel appended the pleadings, including its answer so as to demonstrate, seemingly and superficially, that the demanded discovery of information and documents must surely come within some affirmative defenses contained therein. The discussion above, however, highlights that what is essential is not some invocation of a defense or the inclusion of an answer containing numerous affirmative defenses, but proof that a particularized defense was stated in a denial of claim with a high degree of specificity and was done so timely.

In an unreported short form order, Judge Kevin J. Kerrigan, in Lopes v Liberty Mut. Ins. Co. (Civ Ct, Queens County, Dec. 18, 2003, Index No. 67693/00), required parties to a discovery dispute in a no-fault first-party benefits litigation to include copies of all the pleadings and the denial of claim form. Although copies of the pleadings are desirable, especially if the remedy sought is to strike a pleading, Judge Kerrigan’s insistence for the NF-10 is irrefutable, if the Court of Appeals’ and Appellate Division’s holdings about the centrality of the denial of claim are to retain any vitality. Review of the NF-10 is indispensable; it is the appropriate yardstick for measuring the legitimacy of the demanded discovery.

This court is also persuaded by another unreported decision. In St. Luke’s Roosevelt Hosp. v American Tr. Ins. Co. (Sup Ct, Nassau County, Dec. 20, 2002, Index No. 8119/02), Justice Ute Wolff Lally, in granting plaintiff’s motion for summary judgment, precluded consideration of two affirmative defenses contained in an insurer’s answer and other objections raised by its counsel that were not specifically contained in the denial of claim or a timely demand for verification (accord Subia, 80 Misc 2d at 1092, supra). This court agrees with both Justice Lally and Judge Kerrigan.

Thus, as an initial matter, this court holds that failure by an insurer to include a copy of [*6]its denial or demand for verification in a discovery motion, whether seeking to strike pleadings, preclude evidence, or compel discovery, or to furnish a justifiable, compelling reason for not including it, will be per se grounds for denial of the motion.

Next, despite the failure by the movants to include proof of either the NF-10 or a timely demand for verification, the court will examine the nature of the discovery demanded by the insurer in each of the six motions.

1. Metropolitan Radiological Imaging, P.C. v State Farm Mut. Auto. Ins. Co.

Plaintiff seeks the sum of $1,758.40 for radiological services. Defendant’s answer includes no less than 39 “separate and distinct” affirmative defenses to the entire action. Since the movant insurer failed to include a denial of claim form as an exhibit to its motion papers, it is impossible to determine whether all 39 defenses were previously stated, “with a high degree of specificity” (General Acc. Ins. Group v Cirucci, 46 NY2d at 864) in the NF-10 and in timely fashion. At any rate, the asserted 39 affirmative defenses run the gamut, ranging from an alleged invalid assignment to accord and satisfaction.

In the demand for written interrogatories, the defendant insurer, by its counsel, Rossillo & Licata, requires the plaintiff to “[s]tate the number of separate rooms maintained by the Plaintiff to render treatment as of the date of the treatment.” Even though an NF-10 was not provided, this court reviewed each of the 39 “separate and distinct” affirmative defenses contained in the answer and still cannot fathom, using a test of “usefulness and reason,” how this interrogatory can possibly lead to “needful” or “material and necessary” information (Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406-408 [1968]; accord Boone v Bender, 11 AD3d 496 [2d Dept 2004]; Wiseman v American Motors Sales Corp., 103 AD2d 230, 238-239 [2d Dept 1984]; Siegel, NY Prac § 344 [3d ed 1999]). Knowing the number of rooms in the plaintiff health care facility is as helpful or “needful” as learning the shoe size of the medical provider’s principal or his/her spouse’s middle name or the make and model of the car that he/she drives. Unless defense counsel is hell-bent in reporting a local administrative fire code violation for excessive occupancy of persons, a request demanding the number of rooms in the plaintiff’s facility is patently abusive.

Defense counsel goes further. It requests that plaintiff supply any verifications that may have been sent to it by the defendant. This request is burdensome because the duty to make the demand for a verification is on the insurer, not the provider. Absent compelling reasons, such as a demonstrated destruction of records, an insurer should not make such a request of a plaintiff provider. Although the offending question was part of a set of interrogatories, a holding by the Appellate Division, Second Department, in condemning a demand for a bill of particulars, noted that defendant should not seek from plaintiff items on which the defendant has the burden of proof (Somma v Sears, Roebuck & Co., 52 AD2d 784, 785 [1976]). Since an insurer generates denial of claim forms (NF-10) and demands for verification (NF-3 and NF-5), and presumably maintains such records in the course of its business, it should not be requesting a plaintiff health care provider to provide those documents.

In another offending question, with 10 subparts, inquiring as to the number of plaintiff health care facility’s employees, the insurer demands to know the number of appointments made [*7]by the assignor, rather than the number of visits actually kept. This court cannot detect the relevancy of the request without knowing the precise defense and whether it was specifically and timely asserted in the NF-10.

In a notice for discovery and inspection, the insurer demands “the names of all individuals present when the subject treatment took place” and the name of any interpreter who may have been present. Overlooking the issue of relevancy—or, more to the point, the irrelevancy—of these demands, they do not belong in a notice for discovery and inspection, but rather in a demand for interrogatories. As will be seen in numerous instances, discussed below, it appears that counsel for defendants either do not have a clue as to the specific use of each of the various discovery notices included in article 31 of the CPLR or are deliberately reinventing them in haphazard fashion. They would be well-advised to study the particular purposes of each of the discovery notices (see, Durst-Fuchsberg-Kleiner, Modern New York Discovery [Lawyers Co-operative Publ. Co. 1983]).

Finally, the insurer served a demand for an examination before trial (EBT) together with a demand for written interrogatories. In Vladimir Zlatnick, M.D., P.C. v Government Empls. Ins. Co. (2 Misc 3d 347 [Civ Ct, Queens County 2003]), the court banned the simultaneous use of a demand for written interrogatories and a demand for an examination before trial. Counsel should first proceed by use of either interrogatories or an EBT and resort only to the other discovery devices to fill in gaps, not to burden by requiring duplication of effort (id.; accord Ostia Med., P.C. v Government Empls. Ins. Co., 1 Misc 3d 907[A], 2003 NY Slip Op 51560[U] [Nassau Dist Ct 2003, Asarch, J.]; see also, Di Lorenzo v Ellison, 114 AD2d 926 [2d Dept 1985] [did not require plaintiff to respond to many items contained in a discovery demand until the completion of EBTs and then only to complete the gaps in disclosure]).

In the present case, the court will deem the simultaneous use of the EBT notice and the demand for written interrogatories to be burdensome per se. For a Zlatnick violation, this court will not only not grant a motion to compel, but will strike the discovery demands.

2. A&J Ultimate Chiropractic, P.C. v General Assur. Co.

In this action, a chiropractic facility seeks the sum of $202.20. The insurer’s answer contains 15 affirmative defenses. Defense counsel has resorted to the simultaneous service of a demand of written interrogatories and an EBT notice, ignoring the holding in Vladimir Zlatnick, M.D., P.C. v Government Empls. Ins. Co. (2 Misc 3d 347 [2003], supra).

In its demand for discovery and inspection, the insurer requests copies of all denials from the health care provider. As stated above with regard to demands for verification, the duty of keeping and maintaining copies of the NF-10 is on the insurer, since it generated the denial of claim. These types of demands are harassing, burdensome, and palpably improper, absent a compelling justification.

The insurer’s demand for written interrogatories inquires how the rate of interest of 2% per month and attorneys’ fees were calculated, although these are legal remedies set forth by statute, regulations, and case law, and the amount of interest and attorneys’ fees are calculated only by the Clerk of the Court after a judgment is rendered.

3. and 4. Preferred Med. Imaging, P.C. v Progressive Northeastern Ins. Co. and Acupuncture Works, P.C. v Progressive Northeastern Ins. Co.

These are two separate actions involving the same plaintiff’s counsel, defense counsel, and defendant. In the action initiated by Preferred Med. Imaging, P.C., the facility seeks the recovery of $1,791.73. In the action commenced by Acupuncture Works, P.C., the health care provider seeks $575.

The magnitude of defendant’s abusive requests is remarkable. Here, too, no NF-10 is included to help the court. Rather, an answer was asserted in each of these two actions containing the same 17 affirmative defenses, identical word-for-word. Computers and word processors were designed to make life more comfortable and efficient; they were not meant for lawyers to suspend their use of reason and judgment by mindlessly tapping the same buttons in every case. The use of generic forms or boiler plate, engaged by defense counsel here, was soundly criticized in King’s Med. Supply Inc. v Country-Wide Ins. Co. (5 Misc 3d at 771, supra).

The function of a demand for a bill of particulars is to amplify pleadings, limit proof, and prevent surprise at trial. It may not be used to call for evidentiary material (Havens v Tucker, 136 AD2d 814, 815 [3d Dept 1988]; Di Lorenzo, 114 AD2d at 926, supra; Somma, 52 AD2d at 784, supra). In both the Preferred and Acupuncture actions, defense counsel, Freiberg & Peck, in its demand for a bill, asserted the identically worded 20 questions calling for detailed evidentiary information, not amplification of a pleading. Again, the conclusion is inescapable that the draftsman of the demand has no understanding of the discovery device of a bill of particulars or consciously chose to defy conventional, well-settled legal usage and reinvent its purpose. Defense counsel, for example, requires a list of all “medical journals, reports, textbooks” relied upon by the medical provider in arriving at a diagnosis! There is no excuse for such a question, especially in the context of a demand for a bill of particulars.

The demands for a bill in the two cases go further. They demand the particulars of any possible revocation of the assignment, details of any treatment plan, details of possible, contemplated treatment plans, and the reasons why the unspecified, alternative treatment plans were not utilized. If deemed relevant, these questions can be explored either in interrogatories or at an EBT (but not at the same time under Zlatnick) if the issue of medical necessity were specifically and timely raised in the NF-10. The demand for a bill also requests whether the assignor was ever treated or examined by any doctor “associated with Assignee” prior to the accident, without defining “association.” Of course, to get this information, a health care facility assignee would have to ask its patient assignor for a complete list of every possible doctor he/she may have seen during his/her lifetime only for the assignee to know whether there was some sort of “association” with it. Again, such a blunderbuss, vague, oppressive demand is made without attaching a copy of the NF-10 to the motion.

5. and 6. Rapid Scan Radiology P.C. v State Farm Mut. Auto. Ins. Co. and GJW Chiropractic, P.C. v State Farm Ins. Co.

In its action, plaintiff Rapid Scan Radiology P.C. seeks $1,791.73. In the action commenced by the chiropractic facility, plaintiff seeks $505.50. Both cases are defended by the [*8]same law firm. In Rapid Scan, the answer sets forth 13 affirmative defenses, whereas in the action by the chiropractic provider, GJW, 14 affirmative defenses are included. Defense counsel exercised, at least, some selectivity, though not much, in approaching the two cases. In neither motion was a copy of a timely denial of claim or a timely demand for verification appended.

In both cases, an identically worded, improper demand for a bill of particulars was propounded. The nature of the evidentiary detail sought by the demands is sweeping. For instance, in inquiring about expenses, both questions one and two of both demands for a bill of particulars each contain subparts (a) through (v). Question three about lost earnings contains subparts (a) through (z) in both demands. Question four, also on the issue of expenses, of both demands contains subparts (a) through (v). The Appellate Division, Second Department, in Nazario v Fromchuck (90 AD2d 483 [1982]), reversing a lower court, granted a motion for a protective order where defendant served a demand for a bill of particulars consisting of 18 paragraphs and more than 60 separate requests, much of it calling for evidentiary material. Here, in action Nos. 5 and 6, the two demands for a bill each contain the identical 92 questions, all calling for detailed evidentiary information.

Defense counsel, Devitt Spellman Barrett, LLP, also served, in both actions, an identically worded “Combined Demands,” listing 12 questions. Question six demands that a plaintiff assignee specify the name, address, and telephone number of any other provider—including pharmacists and ambulance services—visited by the patient assignor as a result of the accident. An answer might be proper and required, but only to the extent that the assignee knows the information, without requiring it to chase its assignor to obtain it.

Other questions of the combined demands reach new depths of irrelevancy. Question seven demands the name, address, and telephone number of any health care provider, dentist, pharmacist, therapist, psychologist, or even ambulance service which provided any help to the patient assignor for a 10-year period prior to the accident. Question eight inquires as to the employment of the patient assignor at the time of the accident and requires particularized information about the reason for termination or resignation. Undeterred, defense counsel goes further. Question nine requires the specifics of every position of employment held by the patient assignor for the 10-year period preceding the accident, including the reasons for leaving the job.

It is axiomatic that discovery should be limited to information which bears upon matters in controversy or is reasonably calculated to reveal information regarding the issues (see, Allen, 21 NY2d 403 [1968], supra). The court finds that, in action Nos. 5 and 6, questions regarding the employment history of a patient assignor for the past 10 years and information of every “physician, dentist, hospital, ambulance service, pharmacist, chiropractor, psychologist, therapist and other provider of medical care, any medical treatment or any medical service [seen or used by the patient assignor] . . . during the 10 years which immediately preceded the occurrence” are patently abusive. Defendants, in those two actions, failed to attach a copy of the denial of claim and are, instead, approaching discovery with a shotgun. Answers to such burdensome, blunderbuss questions are of no value to defendants, who obviously set sail on some unchartered fishing expedition.

Similarly, in action Nos. 3 and 4, a recitation of every medical article, journal, and textbook ever read by a health care provider can provide no helpful information from which an [*9]insurer can mount a defense, putting aside the unknown contents of the undisclosed NF-10.

The sole purpose of defense counsel in posing such irrelevant questions and demands is transparent. The intention is to make life so vexatious, burdensome, overwhelming, and oppressive for a plaintiff’s counsel, its client—the health care provider—and also the patient, that they are bludgeoned into abandoning the claim for recovery of payment. If a health care provider cannot recover because of oppressive litigation, it may seek recovery from the patient, thereby totally undermining the intention of the No-Fault Law. The above questions were evidently posited by defense counsel for such purpose and in bad faith.

To the extent that the discovery demands also contained proper requests, it is well settled that a court will not prune an improper demand in order to save the nonobjectionable questions, but, instead, will reject the entire discovery demand (see, Haszinger v Praver, 12 AD3d 485 [2d Dept 2004]; Nazario, 90 AD2d at 484, supra; Forest Bay Homes v Kosinski, 65 AD2d 589 [2d Dept 1978]; Horn Constr. Co. v Icos Corp. of Am., 63 AD2d 939 [1st Dept 1978]).

The final issue is whether this court should strike the demands in the absence of any motion for a protective order. Counsel for the plaintiffs, indeed, did not submit opposition papers to the motions. As a practical consideration, one must surely wonder whether in claims for minor sums of money, such as those in three of the six cases, seeking $202.20, $575, and $505.50 (the other three cases each involving only about $1,800), whether a plaintiff’s counsel will even consider it affordable or “smart business” to spend several hours in drafting opposition papers and traveling to and attending court appearances to challenge a patently oppressive demand.

This court is familiar and disagrees with the holding in MOPS Med. Supply v GEICO Ins. Co. (4 Misc 3d 185 [Civ Ct, Kings County 2004]), requiring plaintiff’s counsel to make a motion for a protective order to deny or limit a patently harassing discovery demand. Although in most instances, the need for such a motion is desirable, the court in MOPS Med. lost sight of the fact that no-fault litigation is carved out by legislative fiat, is clothed with a set of technical and strictly construed Department of Insurance regulations, has a special mission defined in statute, regulations, and case law, carries statutory monthly interest and attorneys’ fees to a prevailing plaintiff, and, therefore, should not be likened to a garden variety litigation of a common-law action. Our appellate courts have further emphasized that, in no-fault litigation, the denial of claim form is the bedrock in resolving no-fault disputes, an insurer must “stand or fall” upon its denial (King v State Farm Mut. Auto. Ins. Co., 218 AD2d at 865, supra), and the entire procedure is to be streamlined, provided that insurers have sufficient opportunity to contest illegitimate and fraudulent claims (Presbyterian Hosp., 90 NY2d at 285).

The consolidated six motions were submitted on default. This court is not a rubberstamp for every motion that is taken on default. Each such motion must be reviewed to determine whether the movant is entitled to the relief sought. In the present case, in light of the interdictions from the Court of Appeals in Presbyterian Hosp. (90 NY2d 274 [1997], supra), this court would be remiss, even derelict, if it were blindly to give its imprimatur to discovery demands that thwart the basic tenets of the No-Fault Law. Since the no-fault enactment is endowed with a special objective, for this court to sustain, even on default, a patently burdensome set of demands would make it complicit in undermining the no-fault scheme and would simply embolden the defense bar to attempt to defeat recovery by unleashing a barrage of mindless, [*10]burdensome, and oppressive discovery demands.

Finally, the court wants to caution the defense bar that, in the future, it will require the inclusion of the NF-10 denial form or proof of a timely demand for verification, the NF-3 or NF-5, in any motion to compel or preclude or strike or dismiss based on alleged failure to cooperate in discovery. Since any reason for the denial of the claim must be specifically stated in the NF-10, that form must be included so that a reviewing court can pass on the propriety of the requested disclosure in an action for no-fault first-party benefits. The need for disclosure must be substantiated by the reasons for denial contained in the NF-10 and not simply predicated upon a plethora of unpreserved affirmative defenses asserted in the answer as an afterthought.

Each of the six motions, accordingly, is, in all respects, denied.

Civil Court of the City of New York, Kings County

97383/04

Eileen N. Nadelson, J.

Plaintiff instituted this action for first party benefits pursuant to New York’s No-Fault Insurance Law. Plaintiff allegedly provided its assignor with psychological services. Its bill was received by Defendant insurer on August 8, 2003, as evidenced by the statements appearing on its Denial of Claim Form.

According to Defendant, on the same day it received Plaintiff’s bill it mailed Plaintiff a verification request. This notice states:

We are writing to advise there will be a delay with regard to the disposition of

your Psychological claim.

Processing of this claim will be delayed pending our receipt of the results of an

independent medical examination scheduled to verify:

the injury is casually related to the motor vehicle accident [*2]

On September 10, 2003, Defendant avers that it mailed a second notice that states:

Pleased be advised we cannot consider payment due to the following:

We are delaying your bill pending the results of the causality IME

Plaintiff denies ever receiving these notices, and Defendant has not provided a legally sufficient proof of mailing said notices to Plaintiff.

On January 13, 2004, more than 30-days after receipt of the claim, Defendant issued its denial of claim, basing its denial of benefits on Plaintiff’s “failure to provide requested verification and examination under oath to support the rendition and necessity of services and to establish your entitlement to benefits.”

In its response to the instant motion, Defendant asserts that Plaintiff has engaged in a consistent pattern of fraud with respect to billing for psychological services under the No-Fault statute. In support of this contention, Defendant provides a form it sent to the Frauds Bureau of the New York State Insurance Department and the affidavits of various assignors in other claims who indicate that they did not receive the services billed for from Plaintiff. The court notes that no such affidavit is provided for the instant assignor.

11 NYCRR sec. 65-3.3 states that an insurer must either pay or deny a claim for first party benefits under the No-Fault law within 30 days of receipt of a properly completed claim. This 30-day time period may be extended if the insurer requests verification of the claim, and until such verification is received the 30-day period is tolled. See generally Westchester County Medical Center v. New York Central Mut. Fire Ins. Co., 262 AD2d 553, 692 N.Y.S. 2d 665 (2d Dept. 1999)

I n order to meet the mandates of the regulations, the insurer must demonstrate that the request for verification was properly mailed to the claimant. See Hospital for Joint Diseases v. Nationwide Mut. Ins. Co., 284 AD2d 374, 726 N.Y.S. 2d 443 (2d Dept. 2001). In the instant case, Plaintiff denies ever receiving such requests and Defendant has not refuted that allegation with an affidavit of a person with personal knowledge of the mailing or of the insurer’s mailing procedures. Allstate Social Work and Psychological Svcs PLLC v. GEICO General Insurance Co., 2005 NY Slip Op. 50024(U), 2005 WL 107046 (NY City Civ. Ct). Therefore, for this reason alone the court may conclude that the 30-day period prescribed under 11 NYCRR sec. 65-3.3 was not properly tolled.

Furthermore, the wording of the notices as written above do not constitute proper verification requests. The notices, as submitted in the papers to the court, merely state that the processing of the claim will be delayed pending the results of the verification, but nowhere has Plaintiff been specifically asked to verify the claim. Consequently, these notices do not constitute proper verification requests that would toll the 30-day period pursuant to 11 NYCRR sec. 65-3.8. [*3]

However, even though Defendant failed to adhere to statutory time requirements, the court must still address Defendant’s argument that Plaintiff’s claims are not covered because of fraud. The lateness of a denial or the absence of a required denial does not prohibit the insurer from raising the defense of lack coverage based upon the fact or founded belief that the alleged injury did not arise out of an insured incident. A.M. Medical Services, P.C. v. AIU Insurance Company, 4 Misc 3d 1027A, 2004 NY Slip Op. 5108(U) (Nassau 2004). The issue of fraud is not intended to escape the notice of the court simply because of a late denial. Valley Psychological, P.C. v. Liberty Mutual Insurance Co., 195 Misc 2d 540, 760 N.Y.S. 2d 627 (Albany 2002). However, although the affidavits submitted indicate serious problems with Plaintiff’s billing practices and services, Defendant has failed to demonstrate any fraud with respect to the instant claim.

All of the documents appearing in the papers refer to different claims with different assignors, and the court cannot rule based on the adage that “where there’s smoke, there’s fire.” The burden is on the Defendant to provide the court with adequate evidence of potential fraud with respect to the parties before it in order for the court to substantiate its decision. Therefore, the court cannot conclude that there was any problem with respect to the claim at bar.

Based on the foregoing, the court is forced to conclude that Plaintiff is entitled to summary judgment in the amount of $1200.92 plus statutory interest, attorney’s fees and costs.

Dated: February 10, 2005

__________________________

EILEEN N. NADELSON, J.C.C.

Civil Court of the City of New York, Kings County

055906/04

Loren Baily-Schiffman, J.

Plaintiff moves for summary judgment on claims for first party No-Fault benefits.^[FN1] Plaintiff, a provider of health services and the assignee of its patient’s claims for payment, seeks $1,559.33 plus statutory interest and attorneys fees for three claims for acupuncture services. For the reasons stated below, Plaintiff’s motion is granted.

In order to establish a prima facie case on behalf of a provider, plaintiff must submit proof that the claim was mailed and received and that defendant did not pay or deny the claim within thirty (30) days. Mary Immaculate Hosp. v. Allstate, 5 AD3d 742 (2d Dept 2004); Liberty Queens Medical P.C. v. Liberty Mutual, 2002 W.L. 31108069 (App. Term 2nd & 11th Dists., 2002). Pursuant to Insurance Law §5101 et seq. and the regulations promulgated [*2]thereunder, an insurer must either pay or deny a claim for No-Fault benefits within thirty (30) days of the date that the proof of claim is received. Insurance Law §5106; 11 NYCRR 65.15 (g)(3). The thirty (30) day period may be extended by an insurer’s request for verification of the claim within ten (10) business days for claims submitted prior to April 5, 2002 and fifteen (15) business days for subsequent claims. 11 NYCRR 65.15 (d) & (e). An insurer who fails to deny or pay a claim within the thirty (30) day period is precluded from raising any defenses to the claim, other than lack of coverage or fraud. Presbyterian Hospital v. Maryland Casualty Co., 90 NY2d 274 (1997); Presbyterian Hospital v. Aetna Casualty & Surety Co., 233 AD2d 433 (2d Dept., 1996); Central Hospital v. Chubb, 90 NY2d 195 (1997); Mt. Sinai v. Triboro Coach, 263 AD2d 11 (2d Dept., 1999). An insurer’s failure to raise objections within the ten (10) or (15) day verification period constitutes a waiver of defenses based thereon. Id.

A party moving for summary judgment must show by admissible proof that there are no material issues of fact in controversy and that they are entitled to judgment as a matter of law. Alvarez v. Prospect Hospital, 68 NY2d 320 (1986); Winegrad v. New York Univ. Medical Center, 64 NY2d 851 (1985). Once that showing is made, the burden shifts to the opponent of summary judgment to come forward with proof in admissible form that there are material issues of fact in controversy that require a trial. Id.

Plaintiff asserts that it is entitled to summary judgment because defendant failed to pay any of the subject claims within thirty (30) days of receipt and denied the claims on an impermissible basis: failure of the assignor to appear for IME’s. Defendant opposes the motion on the following bases: 1) that plaintiff’s motion papers fail to prove the medical necessity of the services provided; 2) that the assignment of benefits is not authenticated; 3) the bills attached to the motion are not in admissible form and, as such, may not be considered in support of plaintiff’s motion; and 4) the claims were timely denied.

DISCUSSION

The case law in this Judicial District is clear that plaintiff need not prove medical necessity, authenticate the assignment of benefits or present its bills in admissible form in order to make out its prima facie case for summary judgment. Plaintiff need only submit proof that the claim was mailed and received and that defendant did not pay or deny the claim within thirty (30) days. Mary Immaculate Hosp. v. Allstate, 5 AD3d 742 (2d Dept 2004); Liberty Queens Medical P.C. v. Liberty Mutual, 2002 W.L. 31108069 (App. Term 2nd & 11th Dists., 2002). Accordingly, the only issues which need be decided by the Court are the timeliness of defendant’s denials of the three claims that are the subject of this action and, if the Court finds any of the denials to be timely, whether failure to appear for IME’s is a proper basis on which to deny a claim.

Defendant responded to plaintiff’s claims dated June 26, 2002, July 23, 2002 and August 19, 2002 with one denial dated September 9, 2002. In that denial, defendant indicates that the June 26, 2002 claim was received on July 29, 2002; the July 23, 2002 claim was received on [*3]August 21, 2002; and the August 19, 2002 claim was received on August 26, 2002. Each of plaintiff’s claims is accompanied by a postal log stamped by the Postal Service indicating that the claim was mailed on the day it is dated. The explanation for why each claim was received by defendant weeks after it was mailed comes from the Affirmation of Gary Coore, a Litigation Supervisor employed by defendant. Mr. Coore states that defendant received the June 26, 2002 claim on July 1, 2002 and on July 18, 2002 sent plaintiff a letter indicating that defendant was delaying investigation of the claim pending receipt of certain identified information. Defendant states that this letter is a request for verification that was timely requested within the fifteen (15) business days permitted by NYCRR §65-3.5. According to Mr. Coore, the requested information was received on July 29, 2002. Independent medical examinations (IMEs) were then scheduled for the assignor, Mason Cory. Mr. Cory allegedly failed to appear for six (6) IMEs scheduled for August 1, 2002 and then re-scheduled for August 15, 2002. A denial was issued on September 9, 2002 on the basis that the assignor failed to appear for IMEs. Defendant asserts that this denial was timely.

The Affidavit of Gary Coore states that the defendant received plaintiff’s July 23, 2002 claim on July 26, 2002 and on July 31, 2002 sent a delay letter to plaintiff requesting certain specified information. Mr. Coore also states that this claim was denied on September 9, 2002 for the assignor’s failure to appear at the IMEs scheduled for August 1, 2002 and then re-scheduled for August 15, 2002. Mr. Coore states that plaintiff’s August 19, 2002 claim was received on August 21, 2002 and denied on September 9, 2002 for failure to appear at the aforementioned IMEs.

Timeliness of June 26, 2002 Claim

This claim was received by defendant on July 1, 2002 accordingly to the admission of Mr. Coore contained in his Affidavit in opposition to the instant motion. Mr. Coore states that a request for verification was sent on July 18, 2002, but no proof of mailing of this document is provided to permit the Court to determine whether the request was timely sent. Mr. Coore goes on to admit that responses to the request for verification were received on July 29, 2002. The claim was denied on September 9, 2002 on several bases: 1) that all No-Fault benefits for injured person were denied effective May 19, 2002; and 2) that the injured person failed to appear for IME’s on August 1, 2002 and August 15, 2002.

Pursuant to 11 NYCRR §65.15(c)(3), after receipt of requested verification information, an insurer has thirty (30) days within which to pay or deny the subject claim. Here, defendant has admitted that it received the requested verification information on July 29, 2002, yet the claim was not denied until September 9, 2002. The actions of the insurer in scheduling IME’s after receipt of the requested information did not extend its time to pay or deny the claim Choicenet Chiropractic, PC v. Elco Administrative Services Co., 2002 NY Slip Op. 40382 (Civil Court, Queens Co.), nor is the failure to appear for IME’s a permissible basis upon which to deny a claim. Urban Medical Diagnostics, PC v. Liberty Mutual Insurance Co. 2001 NY [*4]Slip Op. 40655, (App. Term, 2d & 11th Jud. Dists, 2001); Millenium Medical Diagnostics, PC v. Liberty Mutual Insurance Co., 2001 NY Slip Op. 40654 (App. Term, 2d & 11th Jud. Dists., 2001). Accordingly, the July 26, 2002 claim was not timely denied.

Timeliness of July 23, 2002 Claim

The July 23, 2002 claim was received by the insurer on July 31, 2002 and denied on September 9, 2002. Annexed to Mr. Coore’s Affidavit is a document he refers to as a “pend letter” which by its terms requests that certain information be provided. However, there is no indication in the papers in opposition to the instant motion that this document was mailed to plaintiff, on what date or by what means it was mailed or if any response to the letter was received. Mr. Coore only states that IME’s were scheduled, the assignor failed to appear for the IME’s and a “timely denial” was issued on September 9, 2002.

As indicated above, the assignor’s failure to appear for IME’s is not a proper basis to deny a claim. Urban Medical Diagnostics, PC v. Liberty Mutual Insurance Co., supra; Millenium Medical Diagnostics, PC v. Liberty Mutual Insurance Co., supra. Moreover, as defendant has failed to prove that a request for verification was mailed to plaintiff, if the “pend letter” can be considered a request for verification, the thirty (30) day time period within which to deny a claim was never extended. The claim was received on July 31, 2002 and was not paid or denied within thirty (30) days thereafter. Accordingly, the denial of this claim is untimely.

Timeliness of August 19, 2002 Claim

This claim was received by the insurer on August 21, 2002. Defendant does not allege in its opposition papers that a request for verification of this claim was sent to plaintiff. Mr. Coore’s Affidavit states that IME’s were scheduled to be held prior to the receipt of this claim. The assignor failed to appear at these IME’s and

the insurer denied the claim on September 9, 2002 on the basis of the failure to appear at these previously scheduled IME’s. The insurer’s actions in response to this claim are analogous to situations where an insurer relies on a previous denial to deny a current claim. The Appellate Division, 1st Department, stated the following in A&S Medical, PC v. Allstate Ins. Co., 2005 NY Slip Op. 00505 (1 Dept., 2005)

When a provider of medical services submits a claim as assignee of an insured, neither the statute nor the regulations contemplate the insurer simply sitting mute and failing to act upon the claim, silently and secretly relying upon an earlier denial issued directly to the insured.

Quoting Atlantis Medical, PC v. Liberty Mutual Ins. Co., 2002 NY Slip Op. 40043 (Dist Ct, Nassau Co,3d Dist, Great Neck Part). The statute and the regulations, similarly, do not permit the insurer after receipt of a claim to

simply sit mute” and deny the claim based upon an earlier failure to appear at IME’s. While this [*5]denial is timely, the basis for the denial is unavailable to defendant. Urban Medical Diagnostics, PC v. Liberty Mutual Insurance Co., supra; Millenium Medical Diagnostics, PC v. Liberty Mutual Insurance Co., supra.

For all the foregoing reasons, summary judgment is granted to plaintiff in the sum of $1559.33 plus statutory interest and attorneys to be computed by the Clerk of the Court.

This constitutes the Decision and Order of the Court.

Dated:February 9, 2005

__________________________

HON. LOREN BAILY-SCHIFFMAN

Footnotes

Footnote 1:Plaintiff has presented motion papers that are generic in nature and are more like a brief on No-Fault law than support for specific relief related to the claims and denials annexed as exhibits to the motion papers. The Court looks with disfavor on this practice which requires the Court to leaf through the exhibits to divine the factual basis for the relief sought in the motion.

Civil Court of the City of New York, Kings County

307729/03

Delores J. Thomas, J.

Plaintiff moves for an order granting it summary judgment. The motion is granted.

Plaintiff, Ocean Diagnostic Imaging P.C. As Assignee of Mohammed Rahman (“Ocean Diagnostic”), commenced this action to recover the sum of $1,758.40 for medical services it provided to the assignor, Mohammed Rahman (“Rahman”), and its attorney’s fees [Summons And Complaint Plaintiff’s Exhibit A].

Defendant, American Protection Insurance Company (“American Protection”), opposes the motion in its entirety. Its counsel maintains that Ocean Diagnostic’s bills were properly denied [Affirmation In Opposition of Lawrence Chiarappo, Esq. dated May 28, 2004 Paragraph Five]. Defendant’s denial was based upon the Physician Peer Review conducted by Dr. Daniel G. Kassan, M.D. on March 2, 2003 [Defendant’s Exhibit B].

Dr. Kassan’s report stated the following: [*2]

There was no evidence of significant injury on physical examination of cervical spine or right knee that would support the need for MRI of cervical spine or right knee. The injuries described could be adequately evaluated with physical examination and close monitoring of progress.

Dr. Kassan concluded that the two MRIs “were inappropriate and without necessity.” He recommended that payment should not be made to the health care provider.

On March 13, 2003, American Protection denied the submitted claim based upon Dr. Kassan’s peer review.

Defendant’s denial stated that:

. . . there was no necessity for the MRI. Therefore, your bill is denied in full. Denial of Claim Form dated March 13, 2003 [Defendant’s Exhibit C].

Defendant sent the denial to plaintiff on March 13, 2003 [Affidavit of Kimberly Palmer dated May 26, 2004 Paragraph Seven].

In an action to recover first-party no-fault benefits for medical services rendered to its assignor, the health care provider establishes a prima facie entitlement to summary judgment by proof it submitted the statutory claim form setting forth the fact and the amount of loss sustained and that the payment of no-fault benefits was overdue (Star Medical Services P.C. v. Eagle Insurance Company, 2004 NY Slip Op. 24482, 2004 WL 2779347 [App Term, 2nd & 11th Jud Dists, December 1, 2004]).

The insurer must submit proof in admissible form to rebut plaintiff’s prima facie showing to oppose a motion for summary judgment (A.B. Medical Services, PLLC v. Lumbermens Mutual Casualty Company, 4 Misc 3d 86, [App Term, 2nd & 11th Jud Dists, 2004]).

An insurer may timely deny a claim on the ground that the medical treatment was medically unnecessary based upon a peer review. The peer review must set forth a sufficient factual foundation and medical rationale for the rejection of the claim (Triboro Chiropractic and Acupuncture P.L.L.C. v. Electric Insurance Company, 2 Misc3rd 135(A) [App Term, 2nd & 11th Jud Dists, 2004]). The peer review must be affirmed (A.B. Medical Services, PLLC v. New York Central Mutual Fire Insurance Company, 3 Misc 3d 136(A), 2004 WL 1302031 [App Term, 2nd & 11th Jud Dists, 2004]) or sworn to (A.B. Medical Services, PLLC v. Lumbermens Mutual Casualty Company, supra). If the report is not affirmed or sworn to, the court may grant summary judgment to the plaintiff (A.B. Medical Services, PLLC v. New York Central Mutual Fire Insurance Company, supra).

Notwithstanding defendant’s counsel’s representation [Chiarappo Affirmation Paragraph Nine], Dr. Kassan’s peer review was not affirmed. Nor did Dr. Kassan swear to the truth of the representations made in his report.

Since the peer review was not sworn to or affirmed, it is not admissible. Therefore, American Protection may not utilize Dr. Kassan’s report to oppose plaintiff’s application for summary relief.

In light of the fact that defendant has not offered any other basis for denying movant’s [*3]application, plaintiff’s motion for summary judgment is granted in its entirety.

The clerk is directed to enter judgment in favor of the plaintiff and against the defendant in the sum of $1,758.40 with statutory interest measured from August 5, 2003, along with statutory attorney’s fees, and applicable costs and disbursements.

This constitutes the decision and order of the court.

Dated:Brooklyn, New York

February 9, 2005

DELORES J. THOMAS

Judge Civil Court

Civil Court of the City of New York, New York County

18739/2003

For Plaintiff

Leon Kucherovsky Esq.

212 West 35th Street, New York, NY 10001

For Defendant

Megan M. Marchick Esq.

Melli, Guerin & Melli

17 Battery Place, New York, NY 10004

Lucy Billings, J.

Plaintiff provider of medical supplies sues to recover insurance benefits under NY Ins. Law § 5106(a) for nerve stimulating electrodes used by AR Medical Art, P.C., in treating the insured for injuries sustained in a motor vehicle collision. Plaintiff claims the insured assigned it his rights to insurance coverage for these medical supplies. Plaintiff moves for summary judgment on the claim. Defendant, without opposition from plaintiff, cross-moves for summary judgment dismissing the action. For the reasons explained below, the court grants defendant’s motion. C.P.L.R. § 3212(b).

I. PLAINTIFF’S PRIMA FACIE CLAIM FOR FIRST PARTY NO-FAULT

INSURANCE BENEFITS

To recover insurance benefits under New York’s “No-Fault” Insurance Law for medical expenses arising from a motor vehicle collision, plaintiff must establish “the fact and amount of loss sustained.” NY Ins. Law § 5106(a). See, e.g., New York Hosp. Med. Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 AD3d 640, 641 (2d Dep’t 2004); Damadian MRI in Garden City v. Windsor Group Ins., 2 Misc 3d 138, 2004 NY Slip Op 50262 (App. Term 2d Dep’t 2004); Damadian MRI in Elmhurst v. Liberty Mut. Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51700 (App. Term 2d Dep’t 2003). For plaintiff, a provider of medical supplies, to establish that it sustained a loss covered by defendant insurer through admissible evidence, plaintiff must present, in admissible form, the treated patient’s assignment of coverage for the treatment expenses to the provider. C.P.L.R. § 3212(b); Rukaj v. Roth, 237 AD2d 503 (2d Dep’t 1997); Columbus Natl. Leasing Corp. v. Perkin-Elmer Corp., 177 AD2d 1035, 1036 (4th Dep’t 1991); Shaw, Licitra, Eisenberg, Esernio & Schwartz v. Friedman, 170 AD2d 1048, 1049 (4th Dep’t [*2]1991); BKS Assocs. v. Kenny, 151 AD2d 535 (2d Dep’t 1989). See, e.g., Colbourn v. ISS Intl. Serv. Sys., 304 AD2d 369, 370 (1st Dep’t 2003); McDonald v. Tishman Interiors Corp., 290 AD2d 266, 267 (1st Dep’t 2002); Seoulbank, NY Agency v. D & J Export & Import Corp., 270 AD2d 193, 194 (1st Dep’t 2000).

An assignment is a contract, which is ineffective without a signature, which in turn must be attested to. Acevedo v. Audubon Mgt., 280 AD2d 91, 95 (1st Dep’t 2001); Fields v. S & W Realty Assoc., 301 AD2d 625 (2d Dep’t 2003). This requirement is not onerous: the provider’s personnel who obtain the signed assignment at the provider’s facility can authenticate the patient’s signature. Regardless of summary judgment standards, an assignee claiming insurance benefits must submit to the insurer “a properly executed assignment.” 11 N.Y.C.R.R. § 65-3.11(b)(2).

The assignment also confers standing on plaintiff to sue based on defendant’s obligation to pay under an insurance policy issued to plaintiff’s assignor: a related element fundamental to plaintiff’s claim. E.g., Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 (2d Dep’t 1999); Bailey v. Allstate Ins. Co., 243 AD2d 520, 521 (2d Dep’t 1997). If the insured patient, the assignor, had no right to coverage for medical supplies because he never received them or incurred any obligation to pay the supplier for them, he had no rights to assign the supplier. The supplier, the assignee, stands in no better position than the assignor: the assignor assigns no more than he has, and the assignee has no more right or claim than he had. Matter of International Ribbon Mills, 36 NY2d 121, 126 (1975); Trisingh Enters. v. Kessler, 249 AD2d 45, 46 (1st Dep’t 1998); Federal Fin. Co. v. Levine, 248 AD2d 25, 28 (2d Dep’t 1998). Hence plaintiff took its assignment subject to all defendant’s defenses against the assignor. Trisingh Enters. v. Kessler, 249 AD2d at 46.

Here, not only does plaintiff’s witness fail to identify the assignment contract attached to his affidavit or the insured’s signature on the form; this alleged assignment of benefits fails to specify (1) the assignee, that it is in fact plaintiff, (2) the date the collision from which the expenses arise occurred, or (3) the date of the assignment. Thus, even if the contract, the assignor’s signature, and the assignee were identified, nothing indicates that the assignment even postdated the precipitating occurrence, let alone that the assignment pertained to expenses arising from that occurrence.

Plaintiff’s failure to identify the assignment contract or the insured patient’s signature is hardly surprising, because here, the insured was not plaintiff’s patient, but, by plaintiff’s admission, the patient of AR Medical Art, to which plaintiff provided the supplies for which it seeks coverage. The insured patient, the assignor, did not receive the supplies; AR Medical Art did. The assignor did not incur the obligation to pay for them; AR Medical Art did. The insured patient had no right to coverage for supplies he did not receive from plaintiff and was not obligated for; therefore he had nothing to assign plaintiff.

Given the omissions and discrepancies in the claim that plaintiff submitted to defendant and that forms the basis for plaintiff’s claim here, plaintiff has failed to submit a complete claim. 11 N.Y.C.R.R. §§ 65-3.4(c), 65-3.11(b). See, e.g., Ocean Diagnostic Imaging P.C. v. State Farm Mut. Auto. Ins. Co., 5 Misc 3d 53, 54 (App. Term 2d Dep’t 2004); Adam’s Med. Supplies v. Windsor Group Ins. Co., 3 Misc 3d 126, 2004 NY Slip Op 50310 (App. Term 2d Dep’t 2004). A complete claim establishes the “particulars of the nature and extent of the injuries and [health benefits] received.” 11 N.Y.C.R.R. § 65.1-1; Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701 (App. Term 2d Dep’t 2003) (emphasis added). Without the assignee’s name, the claim does not show the party that ultimately incurred the claimed expenses and thus shows no injury. 11 N.Y.C.R.R. § 65.1-1; Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. See, e.g., Colbourn v. ISS Intl. Serv. Sys., 304 AD2d at 370.

The defects in plaintiff’s assignment form, lacking not only the name of any assignee, but other essential facts as to whether the claimed expenses arose from an insured occurrence, at minimum require the denial of plaintiff’s motion for summary judgment. Moreover, insofar as [*3]plaintiff’s own documents supporting its claim reveal that the insured was the patient of AR Medical Art, not plaintiff, and that plaintiff provided the claimed covered supplies to AR Medical Art, not the insured, they affirmatively raise factual issues as to whether the assignor received the supplies and thus was entitled to coverage for them. Amaze Med. Supply v. Eagle Ins. Co., 3 Misc 3d 130, 2004 NY Slip Op 50389 (App. Term 2d Dep’t 2004); King’s Med. Supply v. Allstate Ins. Co., 2 Misc 3d 140, 2004 NY Slip Op 50280 (App. Term 2d Dep’t 2004); Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 139, 2004 NY Slip Op 50279 (App. Term 2d Dep’t 2004). The deficiencies and inconsistencies in plaintiff’s claim, themselves introducing factual issues, in sum, preclude summary judgment in plaintiff’s favor. E.g., King’s Med. Supply v. Allstate Ins. Co., 2 Misc 3d 140, 2004 NY Slip Op 50280; Damadian MRI in Elmhurst v. Liberty Mut. Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51700; S & M Supply Inc. v. Geico Ins., 2003 WL 21960343 at *1, 2003 NY Slip Op 51192 (App. Term 2d Dep’t July 9, 2003); Park Health Ctr. v. Green Bus Lines Inc., 2002 WL 416484 at *1, 2002 NY Slip Op 40029 (App. Term 2d Dep’t Jan. 11, 2002). The further issue is whether any of these defects requires outright dismissal of plaintiff’s action.

II. DISMISSAL

A.LACK OF COVERAGE

Plaintiff mailed its charges for the supplies to defendant February 11, 2003. Defendant acknowledges receiving the bill February 13, 2003.Within 30 days after a claimant submits its claim for insurance coverage of medical expenses arising from a motor vehicle collision, an insurer must pay or deny the claim. 11 N.Y.C.R.R. § 65-3.8(a)(1); Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d 274, 278 (1997); Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195, 200 (1997); New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d 583, 584 (2d Dep’t 2002); Bonetti v. Integon Natl. Ins. Co., 269 AD2d 413, 414 (2d Dep’t 2000). The insurer may delay payment or denial by requesting verification of the claim from the claimant or a third party. Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d at 279; New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d at 584; New York & Presbyt. Hosp. v. American Tr. Ins. Co., 287 AD2d 699, 700 (2d Dep’t 2001). To suspend the 30 day period for payment or denial, the insurer must request verification within 15 days after receiving the completed claim, by forwarding the prescribed form to the party from whom verification is sought. 11 N.Y.C.R.R. § 65-3.5(b); Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d at 280-81; New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d at 584; Mount Sinai Hosp. v. Triboro Coach, 263 AD2d 11, 16 (2d Dep’t 1999).

Defendant did not pay or deny plaintiff’s claim within 30 days. Nor did defendant request verification, regarding the assignment, the insured’s receipt of the supplies for which plaintiff claimed coverage, or any other facts, within 15 days. Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. Defendant’s employee responsible for plaintiff’s claim attests that, instead, defendant sent a letter dated February 27, 2003, notifying plaintiff:

that we are investigating the circumstances of this accident, as well as your patient’s eligibility for No-Fault benefits under our policy of insurance. As a result, all bills submitted . . . are being delayed pending the outcome of this investigation.

Aff. of Jason Fortier, Ex. D (emphasis added).

At an examination under oath August 11, 2003, plaintiff’s president and sole owner testified that plaintiff provides nerve stimulation electrodes “to the medical facility where the patient goes for treatment,” Aff. of Megan M. Marchick, Ex. K at 50, which is electrical stimulation “in conjunction with physical therapy performed at the doctor’s office”; plaintiff does not provide the supplies or treatment to patients. Id. at 72. Defendant subsequently denied plaintiff’s claim because the injured person was not covered under defendant’s insurance policy.

If the insurer fails to deny a claim timely or to suspend the 30 day time frame by timely and properly requesting verification, the insurer is precluded from later disclaiming liability [*4]based on breach of a policy condition or on exclusion from coverage. Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d at 282-83; Country-Wide Ins. Co. v. Zablozki, 257 AD2d 506, 507 (1st Dep’t 1999); New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d at 584; Bonetti v. Integon Natl. Ins. Co., 269 AD2d at 414. These disclaimers are distinguished from a disclaimer based on lack of coverage because no policy is in effect covering the injured person or the incident causing the injury, a defense that is not precluded. 11 N.Y.C.R.R. § 65-3.8(e); Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d at 283; Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d at 199-200; Zappone v. Home Ins. Co., 55 NY2d 131, 137-38 (1982); Bonetti v. Integon Natl. Ins. Co., 269 AD2d at 414.

Although defendant’s investigation yielded plaintiff’s admission that the insured assignor did not receive the supplies for which plaintiff claims coverage, the consequent lack of coverage for the supplies is not because of the absence of a policy covering the assignor or the vehicle or collision involved. While defendant might argue that because plaintiff’s admission demonstrates that the treatment provider, AR Medical Art, incurred the expense for the supplies, the injured party is AR Medical Art, which is not covered by a policy from defendant, the court need not reach that issue.

Regardless of defendant’s investigation, plaintiff’s claim itself establishes the absence of injury to plaintiff’s assignor and the absence of a precipitating vehicle collision. To the extent waiver rules preclude defenses based on defects in the claim not timely raised in the claims process, if plaintiff has injected a fact constituting a complete defense, it estops plaintiff from invoking waiver to avoid that defense. Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. Where defendant demonstrates, through its own evidence or plaintiff’s, that the claimed injury does not arise from an insured incident, this defense is not precluded by the failure to deny the claim or request verification within the requisite periods. Ocean Diagnostic Imaging P.C. v. State Farm Mut. Auto. Ins. Co., 5 Misc 3d at 54; A.B. Med. Servs. PLLC v. State Farm Mut. Auto. Ins. Co., 4 Misc 3d 129, 2004 NY Slip Op 50638 (App. Term 2d Dep’t 2004); A.B. Med. Servs. PLLC v. State Farm Mut. Auto. Ins. Co., 3 Misc 3d 139, 2004 NY Slip Op 50575 (App. Term 2d Dep’t 2004).

B.LACK OF STANDING

These and the other deficiencies in the assignment of benefits to plaintiff, moreover, establish plaintiff’s lack of standing to sue, C.P.L.R. § 3211(a)(3); King’s Med. Supply v. Allstate Ins. Co., 2 Misc 3d 140, 2004 WL 829673 at *1 (App. Term 2d Dep’t Apr. 9, 2004); Rehab. Med. Care of NY v. Travelers Ins. Co., 188 Misc 2d 176, 177 (App. Term 2d Dep’t 2001), which, unlike other defenses, e.g., C.P.L.R. § 3211(a)(5) and (8), is not a waivable defense and may be raised by the court sua sponte. Stark v. Goldberg, 297 AD2d 203, 204 (1st Dep’t 2002); Axelrod v. New York State Teachers’ Retirement Sys., 154 AD2d 827, 828 (3d Dep’t 1989). Regardless whether defendant has objected to plaintiff’s standing, plaintiff may not proceed without it, because its absence negates the court’s authority to adjudicate the litigation. Society of Plastics Indus. v. County of Suffolk, 77 NY2d 761, 769 (1991); Stark v. Goldberg, 297 AD2d at 204; Axelrod v. New York State Teachers’ Retirement Sys., 154 AD2d at 828. The court has no power to act and to right a wrong unless plaintiff’s rights are affected. Society of Plastics Indus. v. County of Suffolk, 77 NY2d at 772-73.

Because the insured assignor did not receive the supplies for which plaintiff claims coverage and did not incur any obligation to pay for them, only AR Medical Art did, the assignor never was injured by defendant’s denial of reimbursement and never would have been, even without the assignment. New York State Assn. of Nurse Anesthetists v. Novello, 2 NY3d 207, 214 (2004); Axelrod v. New York State Teachers’ Retirement Sys., 154 AD2d at 828. Before executing the assignment, he had no stake in pursuing a claim for insurance coverage for the supplies. Society of Plastics Indus. v. County of Suffolk, 77 NY2d at 772. Thus he had no claim of injury or right to compensation to assign plaintiff. Matter of International Ribbon Mills, 36 NY2d at 126; Trisingh Enters. v. Kessler, 249 AD2d at 46; Federal Fin. Co. v. Levine, 248 AD2d at 28. [*5]

Plaintiff’s remedy to secure payment for the supplies is against AR Medical Art. If AR Medical Art in turn passes the charges for the supplies along to its patient, then he may seek coverage of those expenses from his insurer or assign this right to AR Medical Art. The fundamental purpose of New York’s “No-Fault” Insurance Law is to permit persons injured in a motor vehicle collision, not medical services providers in the first instance, to receive reimbursement for resultant medical expenses. NY Ins. Law art. 51; Oberly v. Bangs, 96 NY2d 295, 296 (2001); Argentina v. Emery World Wide Delivery, 93 NY2d 554, 561, 563 (1999); Walton v. Lumbermens Mut. Cas. Co., 88 NY2d 211, 214 (1996). If injured persons free themselves from payment for those expenses by assigning their right to reimbursement to their services provider, that assignment accomplishes the statutory purpose. The assignment here did not accomplish that purpose. Society of Plastics Indus. v. County of Suffolk, 77 NY2d at 774. It purported to give the provider a right to reimbursement that the patient never had nor needed. The principle of standing prohibits precisely what plaintiff seeks to accomplish here: as the patient assignee, pursuing another party’s claim that the patient was prohibited from doing in the first instance. Id. at 773.

Given the effect of standing on plaintiff’s right of access to the court, standing is a threshold determination, and plaintiff bears the burden to establish standing to adjudicate the claim presented. Id. at 769. In these actions where plaintiff seeks to establish that it sustained a loss through the provision of medical services to a patient covered by defendant insurer, a treated patient’s valid assignment of coverage for the treatment expenses to the provider is key to standing.

C.THE ASSIGNEE’S BURDEN TO ESTABLISH STANDING

As shown, if the assignment is ineffective, the claimant lacks coverage by the assignor’s insurance, a defense not precluded by an untimely denial. Because the assignee has no standing as a plaintiff in litigation without an effective assignment, plaintiff has the burden to establish an effective assignment throughout the litigation, as part of plaintiff’s prima facie case, whether or not defendant has raised the lack of an effective assignment, and at any stage. Part of showing the “loss sustained” is showing that the assignor and hence the assignee of the claim sustained a loss at all. NY Ins. Law § 5106(a). See, e.g., New York Hosp. Med. Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 AD3d at 641; Damadian MRI in Garden City v. Windsor Group Ins., 2 Misc 3d 138, 2004 NY Slip Op 50262; Damadian MRI in Elmhurst v. Liberty Mut. Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51700.

Submission to the insurer of a claim with an assignment has been analogized to submission of a bill establishing an account stated. Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. Yet if a bill does not indicate who it is from (the creditor), or whom it is to (the debtor), or who is obligated to pay whom, the bill does not establish an account stated between the creditor and debtor, regardless whether the debtor has objected. E.g., Schneider Fuel Oil v. DeGennaro, 238 AD2d 495, 496 (2d Dep’t 1997); Maines Paper & Food Serv. v. Restaurant Mgt., 229 AD2d 748, 750 (2d Dep’t 1996). Likewise, if the assignment does not indicate who the insured-assignor is, or who the claimant-assignee is, or who claims coverage under whose insurance policy, the claim is not established, regardless whether defendant insurer has raised the defect. See, e.g., Colbourn v. ISS Intl. Serv. Sys., 304 AD2d at 370. It is impossible for the insurer to acquiesce to the correctness of missing information. See Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701.

1.Prior Authority

The principal decision relied on to relieve plaintiff from the standing requirement is Presbyterian Hosp. in City of NY v. Aetna Cas. & Sur. Co., 233 AD2d 433 (2d Dep’t 1996). First of all, this decision did not conclude that the plaintiff had satisfied its prima facie burden to obtain summary judgment in the plaintiff’s favor, but denied the defendant summary judgment. One of the defendant’s grounds that was insufficient for summary dismissal was the patient’s “defective” assignment. Id. The decision indicates neither what the defect was, nor whether it [*6]even was related to the assignor’s signature or the specification of assignor, assignee, and occurrence. A “defect” is not necessarily a substantive omission and is less likely inadmissible form. More significantly, the defendant did not bear the burden to present the assignment in admissible form as part of its prima facie defense.

This decision in turn relies on St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d 718 (2d Dep’t 1994), and Fabian v. Motor Veh. Acc. Indem. Corp., 111 AD2d 366 (2d Dep’t 1985). The more recent of the two, where the defendant contended the claim was deficient and lacking specificity, provides no detail as to the deficiency or there, whether it was related even to an assignment. St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d at 720. The earlier decision simply held, after trial, that the defendant’s disclaimer of coverage was invalid because the disclaimer did not specify its basis: the insured’s noncooperation. Fabian v. Motor Veh. Acc. Indem. Corp., 111 AD2d at 367.

A.B. Med. Servs. v. CNA Ins. Co., 1 Misc 3d 137, 2004 NY Slip Op 500061 (App. Term 1st Dep’t 2004), taking another leap from St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d at 720, held that defendant, by failing to deny the claim timely, waived the absence of signatures, again on the claim forms, again without indication that the absent signatures related to any assignment. Omissions in the claim forms are distinct from plaintiff’s failure to establish, via admissible evidence. that plaintiff is the party that sustained the loss.

This decision in turn relies on Mt. Sinai Hosp. v. Triboro Coach Inc., 263 AD2d at 17, where the defendant’s challenges to the claim forms included lack of medical information as well as absence of signatures. The primary ground for affirming summary judgment to the plaintiff, moreover, was the defendant’s failure to raise the challenges before the lower court. Reference to the failure also to raise the insurer’s challenges within the 10 days for requesting verification, the secondary ground, reveals that any challenges waived in the claims process plausibly relate only to the medical information. 11 N.Y.C.R.R. § 65.15(d)(2) (1999). In fact, where the evidence required for plaintiff to prevail on summary judgment is equated to the evidence required for a complete claim to an insurer, whether or not defendant is precluded from presenting its defense, the defense and evidence at issue relate to the claimed expenses’ medical necessity. See Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701.

2.The Fallacies in Applying That Authority

This action dramatically illustrates why an effective assignment must be established in the litigation, if not in the claims process. Here, even had the insurer requested verification of the assignment, the insured’s signature on the assignment contract, the assignee’s identity, and the dates of the assignment and of the collision precipitating the expenses, these bare details likely would not have revealed that the insured was not the claimant’s patient to whom the claimant provided anything. See New York Hosp. Med. Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 AD3d at 641. Defendant would not have known of the “discrepancy” and the consequent absence of any “loss sustained.” Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. Were plaintiff required, for summary judgment, as well as for trial, to authenticate the assignment’s signature, to render the document both admissible and effective, and thus attest to familiarity with the assignor’s signature, Acevedo v. Audubon Mgt., 280 AD2d at 95; Seoulbank, NY Agency v. D & J Export & Import Corp., 270 AD2d at 194; Fields v. S & W Realty Assoc., 301 AD2d 625, the scheme more likely would be exposed:

Q.Do you ever have any contact at all with the patient?

A.No.

Marchick Aff., Ex. K at 50.

Had defendant not delayed to conduct its investigation through an examination under oath, but instead met the deadlines, the insurer would have either (1) requested and received verification of the assignment’s components that were adequate on their face or (2) denied the claim without specifying inadequacies in the assignment document. See New York Hosp. Med. [*7]Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 AD3d at 641. Without requiring plaintiff to set forth basic evidence for trial or summary judgment, see, e.g., McDonald v. Tishman Interiors Corp., 290 AD2d at 267, and barring the court from unearthing fundamental facts establishing standing, the contortion of the statutory scheme that easily could have happened here will happen.

Since here, the record does conclusively establish that plaintiff is without a claim and is in no position even to raise a factual issue requiring trial, the court grants defendant’s unopposed summary judgment motion and dismisses this action. C.P.L.R. § 3212(b); Hospital for Joint Diseases v. Allstate Ins. Co., 5 AD3d 441, 442 (2d Dep’t 2004). Simply stated, since defendant’s policy covering expenses incurred by plaintiff’s assignor “was never intended to provide coverage” for expenses incurred in a transaction between two other parties, plaintiff and AR Medical Art, “coverage could not be created” by defendant’s late disclaimer. Bailey v. Allstate Ins. Co., 243 AD2d at 521.

DATED: February 4, 2005

______________________________

LUCY BILLINGS, J.C.C.

Civil Court of the City of New York, Kings County

070376/04

Eileen N. Nadelson, J.

Plaintiff, a medical provider, instituted this action to recover first party no-fault benefits from Defendant insurer. Plaintiff moved for summary judgment, alleging that Defendant neither paid nor denied the claim within the statutorily mandated thirty-day period after receipt of the claims. Ins. Law sec. 5106; Regulations sec. 65-3.8.

Defendant, in opposition, claimed that the denials were timely on their face; however, Plaintiff argued that Defendant failed to provide legally sufficient proof of mailing the subject denials within the thirty-day period.

Defendant’s proof of mailing consists of an affidavit from one of its employees who states that it is part of her regular duties and responsibilities to handle claims filed for no-fault benefits. The affidavit goes on to state that she reviewed the records of the instant claim and based on that review, has determined that the denial was mailed on the date appearing on the denial form. She finally states that, “as per the regular course of business of this office, the bill was timely denied .” [*2]

The question before the court, one that has caused much confusion and litigation, is the information that must appear on an affidavit of mailing to meet the requirements of New York’s no-fault law to evidence a proper proof of mailing.

Generally, proof of proper mailing gives rise to a presumption that the item was received by the addressee. This presumption may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed. Residential Holding Corp. v. Scottsdale Insurance Co., 286 A.D> 2d 679, 729 NYS2d 776 (2d Dept. 2001).

In A & S Medical, P.C. v. Allstate Insurance Co., 2002 NY Slip Op. 50121(U) (1st Dept. 2002), the Plaintiff established proof of mailing the claim by an affidavit of one of its employees who actually placed the application in an envelop and then mailed the envelop at the post office herself by return receipt certified mail. This Plaintiff further presented the postal receipts, which the court concluded constituted proof of mailing the claim. In this case, the court further adduced that the defendant’s affidavit of an employee who reviewed the file and concluded that the claim was not received was inadequate to rebut the presumption of the plaintiff’s mailing of the claim.

Proof of proper mailing requires evidence of actual mailing or a standard office practice or procedure designed to ensure that the items are properly addressed and received. Affidavits that make no reference to the specifics of the office mailing practice or procedure, which merely aver that the bills were mailed within the statutory time period, are insufficient to establish proof of actual mailing. Comprehensive Medical v. Lumbermens Mutual Insurance Co., 4 Misc 3d 133(A) (NY Sup. App. Term 2004).

Consequently, in order to meet its burden of proving that denials were mailed within the thirty-day period, an insurer must attach an affidavit of an employee who personally mailed the denial or, conversely, the affidavit of an employee with personal knowledge of the office’s mailing practices and procedures, who describes those practices or procedures in detail, indicating how he or she acquired the knowledge of such practices or procedures, and whose personal review of the file indicates that those practices or procedures were followed with respect to the claim under review.

In the instant case, Defendant has failed to meet its burden of proving that the denials were mailed within the thirty-day period because the affidavit of its employee with respect to the mailing is legally deficient. The employee states that she is familiar with the office practices and procedures, but neglects to specify the details of those procedures. The affiant fails to state how she became familiar with these procedures, and her “personal knowledge’ consists merely of a review of the files, without stating at what point in the claim process she reviewed those files or the basis for her belief that regular office procedures were followed. Without sufficient substantiation that the denials were in fact mailed on the date claimed, the court must find for Plaintiff. [*3]

Summary judgment is awarded to Plaintiff. The clerk of the court is ordered to enter judgment in favor of Plaintiff in the amount of $1,181.63, plus statutory interest, costs, and attorney fees.

Dated: January 17, 2005

__________________________

EILEEN N. NADELSON, J.C.C.

Civil Court of the City of New York, Kings County

55621/03

Delores J. Thomas, J.

Upon the foregoing cited papers, the Decision/Order on this motion is as follows:

Plaintiff moves for an order granting it summary judgment.

Plaintiff commenced this action to recover for medical services it provided to five of its assignors pursuant to the no-fault endorsement contained in an automobile policy issued by defendant.

Plaintiff, as to each of its assignors, submits a copy of an assignment of benefits signed by each assignor and a copy of a verification of treatment form for each assignor. With respect to three of the assignors,^[FN1] plaintiff submits a copy of the denial of claim forms issued by [*2]defendant, which on their face indicate receipt by the defendant, and indicate a failure to deny the claim within thirty (30) days of receipt. With respect to the other two assignors,^[FN2] plaintiff submits an affidavit from Fenelly Olivares, in which he claims that he personally mailed the no-fault claims on January 10, 2003, as indicated in the annexed mailing receipt. In addition, plaintiff submits an affidavit from Shiva Hakimian, in which she claims that she is responsible for handling the claims of said two assignors, and that defendant failed to either pay or deny the claims of the two assignors within thirty (30) days of receipt.

A plaintiff establishes a prima facie case for recovery of no-fault benefits by submitting a statutory verification of treatment form showing the amount of the loss (A. B. Medical Services, PLLC v. Lumbermens Casualty Co., 4 Misc 3d 86, 2004 WL 1301910 [AT 2nd & 11th Jud Dists.]; Choicenet Chiropractic, P.C. v. Allstate Insurance Co., 2003 WL 1904296 [AT 2nd & 11th Jud. Dists.]).

In this case, by submitting copies of the assignments, proofs of claim, copies of defendant’s denial of claim forms as proof of mailing of the claims for three of its assignors, and submitting proof of mailing as to the claims for the other two assignors, plaintiff has presented a prima facie case for summary judgment. Defendant’s denial of claim forms which indicate the date the claims were received is sufficient proof of mailing (A.B. Medical Services v. New York Central Mutual Fire Insurance Co., 3 Misc 3d 136 [A], NYLJ, June 2, 2004, p. 27, col. 4, 2004 WL 1302031 [AT 2nd & 11th Jud Dists.]).

In this case, plaintiff seeks reimbursement for services provided to its assignors from October 22, 2002 through January 6, 2003. Plaintiff sent completed verification of treatment forms for said services to defendant in December 2002 and January 2003. With respect to three assignors, the denial of claim forms sent by defendant, after it received the verification of treatment forms, were sent more than thirty (30) days after receipt of the claims. With respect to two of the assignors, there is no indication that any denial of claim forms were sent after receipt of the verification of treatment forms.

In defense of this action, defendant does not rely on the denial of claim forms sent after receipt of the verification of treatment forms, but rather relies on denial of claim forms sent prior to receipt of the subject verification of treatment forms. Prior to receiving the subject verification of treatment forms, defendant sent denial of claim forms with respect to each assignor, indicating that it was the defendant’s position, based on an independent medical examination, that no further medical treatment was necessary for the injuries suffered by each of the assignors. In addition, each denial of claim form provided a cutoff date after which defendant would not pay for medical services. Annexed to each denial of claim form was a report from a doctor which supported the claim that further medical treatment was unnecessary. These types of denials are called blanket disclaimers. It is defendant’s position that once it sent a blanket disclaimer any treatment provided after the cutoff date contained in the denial form would be covered by the blanket disclaimer; so that even if the denial forms sent after receipt of the verification forms were sent more than thirty (30) days after receipt of the claim, they would be timely, based on the earlier blanket disclaimer.

In A & S Medical, P.C. v. Allstate Insurance Co., 196 Misc 2d 322 (AT 1st Dept. 2003), lv to appeal granted NY App. Div. 2004 Lexis 9836 (1st Dept. July 5, 2004), the court, in [*3]passing on blanket disclaimers, stated as follows:

“Although defendant argues otherwise, its belated denial of plaintiff’s no-fault claim is not properly ‘deemed’ timely on the basis of its earlier blanket disclaimer of responsibility to reimburse plaintiff’s assignor for further orthopedic treatment, a disclaimer which predated plaintiff’s rendition of the services billed for and the filing of plaintiff’s claim form. ‘When a provider of medical services submits a claim as assignee of an insured, neither the statute nor the regulations contemplate[s] the insurer simply sitting mute and failing to act upon the claim, silently and secretly relying upon an earlier denial issued directly to the insured.’

The contrary construction urged by defendant effectively authorizing the sub rosa denial of properly filed no-fault claims is inconsistent with the plain language of Insurance Law § 5106(a) and, if adopted, would serve to vitiate the so-called 30-day rule embodied in 11 NYCRR 65.15(g)(3) and to undermine a core objective of the no-fault scheme ‘to provide a tightly timed process of claim, disputation and payment.” (at p. 323-324, citations omitted).

The distinction between A & S Medical and this case is that in A & S Medical the blanket disclaimer was served on the assignor, while in this case, defendant claims that the blanket disclaimers were served on plaintiff, the medical provider. Phillip Asciolla, an employee of defendant, claims that he handles claims for no-fault benefits filed with defendant, and that he has reviewed defendant’s records which indicate that the annexed copies of the blanket disclaimer were mailed to plaintiff with respect to each assignor.

Plaintiff, citing several cases, claims that the affidavit submitted by defendant’s employee is not sufficient to prove that the blanket disclaimers were mailed. In the cases cited by plaintiff, the plaintiffs in those cases submitted evidence of the defendant’s failure to deny the claim within thirty (30) days of receipt, so that the defendant’s employee’s claim that he checked the defendant’s records and that the denials had been timely mailed was insufficient. In this case, while plaintiff has shown that defendant’s denials, generated by its verification of treatment forms, were not timely mailed, plaintiff fails to submit an affidavit from a person with knowledge, that plaintiff never received the blanket disclaimers prior to plaintiff’s treating its assignors. Under these circumstances, defendant’s proof of mailing of the blanket disclaimer forms, in the absence of a sworn denial of receipt by plaintiff, is sufficient.

As noted above, the only distinction between this case and A & S Medical is that in A & S Medical the blanket disclaimer was served on the assignor while in this case the blanket disclaimers were served on plaintiff medical supplier. This distinction need not lead to a different result, since the Appellate Term in A & S Medical took a strong position that the no-fault statutory scheme requires the insurer to deny each claim it receives in a timely fashion, and cannot rely on a blanket disclaimer served prior to receipt of the verification of treatment form. As the Appellate Term noted, permitting such a blanket disclaimer would vitiate the thirty-day rule within which a claim must be denied. [*4]

In addition, even if a previously served blanket disclaimer could serve as a timely denial for subsequent medical treatment, the blanket disclaimers herein cannot be used by defendant as a defense. The blanket disclaimers herein are incomplete. They do not list the name of the medical provider in item 23, and unlike the denials served after receipt of the verification of treatment forms, which list the plaintiff medical provider as the applicant for benefits, the blanket disclaimers list the assignors as the applicants for benefits. An incomplete blanket disclaimer, which makes no mention of the medical provider, cannot be considered a timely denial of a claim for treatment which was subsequently provided, even if the blanket disclaimers were served on the medical provider. At the very least, if defendant wishes to rely on a blanket disclaimer, it must be properly completed. Thus, defendant’s belated denials of plaintiff’s no-fault claims cannot be deemed timely denied based on the previously served, but improperly filled out, blanket disclaimers.

Defendant cites Hospital for Joint Diseases v. Allstate Insurance Co., 5 AD3d 441 (2nd Dept. 2004), as standing for the proposition that a blanket disclaimer can act as a timely denial of subsequent treatment. In that case, the plaintiff claimed that it was entitled to summary judgment on two no-fault claims it sent on March 6, 2002, since the defendant had failed to either pay or deny the claims within thirty (30) days of receipt. The defendant submitted evidence that it had previously notified the plaintiff’s assignor that it had terminated her no-fault benefits based on an independent medical examination. In addition, defendant showed that it had previously issued timely denials for identical claims previously submitted by the plaintiff, and that the plaintiff had repeatedly resubmitted the identical claims, until, one time, the defendant failed to issue a timely denial. The court found that the defendant’s denial was timely, since it had previously timely denied the identical claim. This case is quite different from Hospital for Joint Diseases, since defendant herein never issued a timely denial.

A no-fault claim is overdue if it is not paid or denied within thirty (30) days of receipt. Insurance Law § 5106(a); 11 NYCRR § 65.15(g)(1)(i). Since the blanket disclaimers are not valid, and since defendant either failed to pay or deny the claims with thirty (30) days of receipt, or never issued a denial, plaintiff’s no-fault claim is overdue.

Where an insurance company fails to deny a no-fault claim within thirty (30) days of receipt, it is precluded from raising the defense of lack of medical necessity (Amaze Medical Supply, Inc. v. Allstate Insurance Co., 2 Misc 3d 134[A], 2004 WL 758248 [AT 2nd & 11th Jud. Dists.]).

Defendant further argues that the fees sought by plaintiff exceed the Workers’ Compensation fee schedule. Since defendant failed to deny the claims within thirty (30) days of receipt, it is precluded from raising this defense (Mingmen Acupuncture Services, P.C. v. Liberty Mutual Insurance Co., 2002 WL 1362202 [AT 9th & 10th Jud Dists.]; Park Health Center v. Prudential Property & Casualty Insurance Co., 2001 WL 1803364 (AT 2nd 11th Jud Dists.]).

Accordingly, plaintiff’s motion for summary judgment is granted.

Interest on overdue claims accrues at 2% interest per month. Insurance Law

§5106(a); 11 NYCRR § 65.15(h)(1).

In accordance with 11 NYCRR § 65.17(b)(6)(v), once a court action is commenced, a party may recover attorneys’ fees in the sum of 20% of the amount of no-fault benefits awarded, including the interest awarded thereon, to a maximum of $850.00 per claim (Smithtown General Hospital v. State Farm Mutual Auto Insurance Co., 207 AD2d 338 [2nd Dept. 1994]).

The clerk is directed to enter judgment against defendant on the first cause of action [*5]in the sum of $1360.00, with 2% interest per month, from January 23, 2003. The clerk is directed to enter judgment against defendant on the second cause of action for attorneys’ fees in the sum of 20% of the above amount, including the interest awarded thereon, to a maximum of $850.00.

The clerk is directed to enter judgment against defendant on the third cause of action in the sum of $727.15, with 2% interest per month, from January 23, 2003. The clerk is directed to enter judgment against the defendant on the fourth cause of action for attorneys’ fees in the sum of 20% of the above amount, including the interest awarded thereon, to a maximum of $850.00.

The clerk is directed to enter judgment against the defendant on the fifth cause of action in the sum of $812.15, with 2% interest per month, from January 23, 2003. The clerk is directed to enter judgment against the defendant on the sixth cause of action for attorneys’ fees in the sum of 20% of the above amount, including the interest awarded thereon, to a maximum of $850.00.

The clerk is directed to enter judgment against defendant on the seventh cause of action in the sum of $850.00, with 2% interest per month, from February 10, 2003. The clerk is directed to enter judgment against defendant on the eight cause of action for attorneys’ fees in the sum of 20% of the above amount, including the interest awarded thereon, to a maximum of $850.00.

The clerk is directed to enter judgment against the defendant on the ninth cause of action in the sum of $85.00, with 2% interest per month, from February 10, 2003. The clerk is directed to enter judgment against the defendant on the tenth cause of action for attorneys’ fees in the sum of 20% of the above amount, including the interest awarded thereon, to a maximum of $850.00.

This constitutes the decision and order of the court.

Dated:Brooklyn, New York ________________________________

January 4, 2005 DELORES J. THOMAS

Judge, Civil Court

Footnotes

Footnote 1: Zoya Abayeva, Geraldine Aybar and Altagarcia Abayea.

Footnote 2: Alekandra Borukhova and Jeanne Rivkin.

[*1]

Civil Court of the City of New York, Kings County, December 21, 2004

APPEARANCES OF COUNSEL

Baker, Barshay & Neuwirth, Hauppauge (Robert J. Baker of counsel), for plaintiff. Carmen Callahan & Ingham, Farmingdale (Kerry-Ann Davidson of counsel), for defendant.

{**6 Misc 3d at 888} OPINION OF THE COURT

Ellen Gesmer, J.

This case presents squarely the question of whether an assignment {**6 Misc 3d at 889}is an essential element of a claim for first-party no-fault benefits, and whether the failure to include it is a waivable defect. For the reasons set forth below, the court holds that an assignment is an essential element of a claim for no-fault benefits, which cannot be waived.

In this action, the verified complaint alleges that Melvin Reyes was injured in a car accident on May 12, 2003 and received treatment from plaintiff to whom he assigned his rights to benefits under No-Fault Insurance Law § 5101 et seq. Plaintiff brings this action, as the assignee of Mr. Reyes, to recover $3,080 in first-party no-fault benefits. Plaintiff moves for summary judgment, and defendant opposes it, because of plaintiff’s failure to establish that it submitted an assignment of benefits to defendant with its notice of claim. Plaintiff contends that submission of an assignment of benefits is not part of its prima facie case and that any objections to the assignment are waived if not asserted in the defendant’s denial. Here, defendant [*2]concededly did not object in its denial to plaintiff’s failure to include an assignment in its proof of claim.

In making its argument, plaintiff relies on New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co. (8 AD3d 640 [2d Dept 2004]). That case would appear to support plaintiff’s position. There, the Appellate Division held that the insurance company’s failure to prove that it had mailed timely requests for verification of the assignments upon which the respondents’ claims were based prevented it from objecting to the claims “on the basis of lack of proof of the assignments.” (At 641; see also New York Hosp. Med. Ctr. of Queens v AIU Ins. Co., 8 AD3d 456 [2d Dept 2004].) Recently, citing New York Hosp. Med. Ctr., the Appellate Term for the 2d and 11th Judicial Districts reversed a trial court which had dismissed a no-fault case because the plaintiff had submitted an assignment which did not designate an assignee (Diagnostic Rehab. Med. Serv. PC v Travelers Indem. Co., 6 Misc 3d 68 [App Term, 2d & 11th Jud Dists 2004]). Specifically, the Appellate Term held (at 69) that the defendant insurer, “having failed to seek additional verification or allege any deficiency in the assignment in its denial of claim form, had waived any defenses with respect thereto.”

In its decision, the Appellate Term also overruled its own prior {**6 Misc 3d at 890}decision in A.B. Med. Servs. PLLC v Progressive Ins. (2003 NY Slip Op 50790[U], *1 [App Term, 2d & 11th Jud Dists 2003]), in which it had affirmed the denial of a plaintiff medical provider’s motion for summary judgment on the ground that the “purported assignment” did not bear the name of any assignee. Strikingly however, the Appellate Term did not disown its decision in A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co. (4 Misc 3d 141[A], 2004 NY Slip Op 51031[U] [App Term, 9th & 10th Jud Dists 2004]). In that case, decided three months after New York Hosp. Med. Ctr. (8 AD3d 640 [2004]), the Appellate Term reversed the grant of a plaintiff’s motion for summary judgment finding, inter alia, that one of the plaintiffs had failed to prove its prima facie case because the record did not contain an assignment. The Appellate Term reached that result even though the decision does not indicate that the defendant asked for verification of the assignment or issued a timely denial on that basis. This court concludes that A.B. Med. Servs. v State Farm Mut. Auto. Ins. Co. (4 Misc 3d 141[A], 2004 NY Slip Op 51031[U] [App Term, 9th & 10th Jud Dists 2004]) is still good law, both because the Appellate Term did not overrule it and because, for the reasons set forth below, it is consistent with governing precedent. Applying that decision to this case, this court must deny plaintiff’s motion for summary judgment since it failed to prove that it included an assignment in its notice of claim.

The continued validity of A.B. Med. Servs. (4 Misc 3d 141[A], 2004 NY Slip Op 51031[U]), notwithstanding the Appellate Division decision in New York Hosp. Med. Ctr. (8 AD3d 640 [2004]), is entirely consistent with the policies and principles stated in Central Gen. Hosp. v Chubb Group of Ins. Cos. (90 NY2d 195 [1997]). In that case, the Court of Appeals held that a defense of noncoverage cannot be waived in a no-fault case, even if the insurer fails to raise it in its denial. That decision extended [*3]to the no-fault context the Court’s holdings in Zappone v Home Ins. Co. (55 NY2d 131 [1982]) and Schiff Assoc. v Flack (51 NY2d 692 [1980]) that the defense of noncoverage could not be waived in cases concerning liability policies and professional indemnity insurance. The underlying theory of all of these cases is that if the insurer is not liable to the alleged insured under the contract of insurance, then contractual liability cannot be created by waiver (Schiff Assoc. v Flack, 51 NY2d 692, 698 [1980]; Zappone v Home Ins. Co., 55 NY2d 131, 135-136 [1982]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 201 [1997]). The Court of Appeals explained that, if for example, the insurance company had no contract of insurance at all with the alleged insured, or had no contract with its insured concerning the vehicle in the accident, then “there simply is no insurance at all and, therefore, no obligation to disclaim or deny.” (Zappone v Home Ins. Co., 55 NY2d 131, 139 [1982].){**6 Misc 3d at 891}

An assignment essentially extends the rights created by contract from the assignor to the assignee, so the assignee can sue on behalf of its assignor only if it has a valid assignment. Accordingly, the insurance company has no contractual obligation to the assignee in the absence of a valid assignment. Consequently, if the absence of an assignment could be waived by the insurance company’s failure to raise it, then contractual liability between the insurance company and the assured’s assignee would be created by waiver. But that should not be permitted, just as the courts do not permit a contractual obligation between the insurance company and its alleged insured to be created by waiver (Schiff Assoc. v Flack, 51 NY2d 692, 698 [1980]; Zappone v Home Ins. Co., 55 NY2d 131, 135-136 [1982]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 201 [1997]). Therefore, when no assignment is tendered, the insurance company has no contractual obligation to the assignee, and its objections to the absence of the assignment cannot be waived.

In this case, there simply was no assignment. Plaintiff did not attach one to its moving papers or to its reply papers. Therefore, plaintiff has failed to establish that defendant has any contractual obligation to it, and the court cannot grant summary judgment in its favor.

Civil Court of the City of New York, Kings County

115723/04

Bruce Newborough, P.C., Brooklyn, New York for the plaintiff; McDonell & Adels, P.C. (Lisa E. Hechler), Garden City, New York for the defendant

Ellen Gesmer, J.

The verified complaint alleges that Arthur Scott was injured in a car accident on March 20, 2003 and received treatment from plaintiff to whom he assigned his rights to benefits under the No-Fault Insurance Law §5101 et seq. Plaintiff brings this action, as the assignee of Mr. Scott, to recover $1,340.30 in first party no-fault benefits. Defendant moves for summary judgment on the grounds that plaintiff engaged in a pattern of fraudulent billing practices and has failed to verify its billing for the instant claim. Plaintiff failed to oppose defendant’s motion. Therefore the Court will decide this matter solely on defendant’s moving papers and annexed documentation.

Defendant maintains that it is issued a timely denial because it received the bill at issue on June 16, 2003, issued a request for additional verification on June 27, 2003 and, after [*2]receiving no response from plaintiff, ultimately denied plaintiff’s claim on December 1, 2003. However, defendant’s moving papers do not include any proof of mailing of its request for verification (S & M Supply, Inc. v Geico Ins. Co., 2003 NY Slip Op 51192[U] [2d & 11th Jud Dists 2003]). The affidavit of Ms. Dawn Madalone an Investigator employed by defendant’s Special Investigations Unit does not establish mailing because Ms. Madalone does not state in her affidavit that she has personal knowledge that the requests were sent to plaintiff (Presbyterian Hosp. v Maryland Casualty Ins. Co., 226 AD2d 613 [2d Dept 1996]). Nor does the Madalone affidavit create a presumption of mailing because it does not describe the standard operating procedures plaintiff uses to ensure that its verification requests are mailed (S & M Supply, Inc. v Geico Ins. Co., 2003 NY Slip Op 51192[U] [2d & 11th Jud Dists 2003]). Consequently, having failed to establish that it mailed the requests for verification, defendant has failed to show that its denial of plaintiff’s claim was timely. The fraud which defendant is claiming as a defense to payment of this claim is fraud by the plaintiff medical provider. Although an untimely denial permits a defendant to assert a defense of fraud by the assignor, a claim of fraud by the assignee must be asserted in a timely denial (Melbourne Medical, P.C. v Utica Mutual Ins. Co., 4 Misc 3d 92 [2d Dept 2004]). Consequently, defendant’s motion for summary judgment must be denied.

Even if this claim were not barred by the late denial, defendant would not be entitled to summary judgment in its favor. In order to satisfy its burden on a motion for summary judgment, defendant “must show that the accident was a deliberate event or a part of an insurance fraud scheme.” (A.M. Med., P.C. v NY Cent. Mut. Ins. Co., 2004 NY Slip Op 50298U, *2 [Civil Ct, Queens County 2004]). This is higher than the standard when the defendant is merely opposing a plaintiff’s motion for summary judgment based on a fraud defense; in that event, defendant must submit “facts, in admissible form and with the requisite particularity, to create triable issues of fraud” (A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 3 Misc 3d 130A (App Term, 2d and 11th Jud Dists 2004), such as an affidavit by a person with personal knowledge of the facts at issue (Melbourne Medical, P.C. v. Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004].

In support of its contention, defendant submits the transcript of the Examination Under Oath (EUO) of Dr. Patricia Garel, in which Dr. Garel states that she never provided psychological services to any of plaintiff’s patients although plaintiff submitted claims to defendant seeking reimbursement for psychological services allegedly rendered by her. However, the transcript of Dr. Garel’s EUO is not executed in accordance with CPLR 3116. CPLR 3116[a] provides that the transcript must be submitted to the witness so that the witness can read it and make any changes to it that are desired. If the witness then signs the transcript under oath, the transcript may be utilized. “Unsigned depositions do not suffice as proof requisite to defeat a motion for summary judgment.” (Pathmark Graphics Inc. v J.M. Fields, Inc., 53 AD2d 531 [1st Dept 1976]; see also Lo Cicero v Frisian, 150 AD2d 761 [2d Dept 1989]). This principle applies equally to an examination under oath taken by an insurance company. (Krupp v Aetna Life & Casualty Co., 103 AD2d 252, 263 [2d Dept 1984]).

In order to use a transcript that is not signed by the witness, if the witness is a nonparty, or, if a party and the transcript is not signed by the witness or certified, it is the burden of the [*3]party proffering the deposition transcript to show that the transcript was sent to the witness to be reviewed for any corrections, and that sufficient time to do so has passed (see Siegel, 1993 Supp Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3116:1, 1997-1998 Pocket Part, at 94). A party seeking to use an unsigned deposition transcript must show that the witness was given the opportunity that CPLR 3116 (a) provides to the witness to make sure that the transcript is correct in form and substance. This procedure is necessary to insure that the proponent of the transcript is not relying on an inaccurate transcript (Palumbo v Innovative Communications Concepts, 175 Misc 2d 156, 157-158 [Sup Ct, NY 1997]). In this case, defendant annexes a copy of a letter dated October 21, 2003 addressed to Dr. Garel’s attorneys requesting that she sign the transcript and have it notarized, but defendant does not proffer an affidavit of a person with personal knowledge that this letter was in fact mailed. Consequently, defendant has not shown either that the transcript was properly executed or that the opportunity that CPLR 3116[a] affords the depondent for execution has passed. Therefore, the Court cannot consider the EUO transcript of Dr. Garel because it does not constitute evidence in admissible form under CPLR 3212 (See Reilly v Newireen Assocs., 303 AD2d 214, 220 n.2 [1st Dept 2003]).

In further support of its fraud claim, defendant again relies on the affidavit of Ms. Madalone who states in her affidavit that defendant properly denied plaintiff’s claim based on overwhelming indica of fraud. Ms. Madalone states that her knowledge of the case comes from:

1. Her “review of the file which she maintained, ” 2. Her investigation into plaintiff’s billing practices; 3. A New York State Insurance Department press release concerning the indictment of Dr. Michael Ferrato, Ph.D of Ferrato Psychological Services, P.C. (FPS) 4. Claim forms submitted to defendant by PSG and FPS for various unidentified patients other than plaintiff’s assignor; 5. The transcripts of EUOs of Darcy Greenidge and Allan Gaskin; and 6. The Examination Before Trial (EBT) transcripts of Henry Johnson and Aida Ellis The Court cannot rely on any conclusions reached by Ms. Madalone which are based on unidentified documents in defendant’s investigative file since those documents are not before the court in admissible form (see CPLR 3212[b]; Friends of Animals, Inc. v Assoc. Fur Mfrs., Inc., 46 NY2d 1065, 1067 [1979]). The Court also cannot rely on the press release concerning the indictment of Dr. Ferrato since it is not in admissible form. Even if it were in admissible form, Ms. Madalone has failed to establish the relevancy of the indictment to this case since Dr. Ferrato did not treat the assignor in this case. Defendant also annexes to its moving papers reams of redacted documents which the Madalone affidavit contends proves that FPS submitted bills to defendant for the exact same services as those claimed by PSG for the same patient just days apart from the date when PSG claimed to have rendered services. However, since the name of the policy holder, the patient’s name, gender and address are redacted from the documents, there is no way for the Court to make an independent determination as to whether the documents in fact support defendant’s contention. More importantly, the documents are not in admissible form since they are not adequately identified (A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 3 Misc 3d 130A (App Term, 2d and 11th Jud Dists 2004). Therefore, the Court cannot rely [*4]on Ms. Madalone’s conclusion that these documents prove fraud.

Finally, like the transcript of the EUO of Dr. Garel, the transcripts of the EUOs and EBTs of Ms. Greenidge, Mr. Gaskin, Mr. Johnson and Ms. Ellis cannot be considered on a motion for summary judgment, since they are not executed and the defendant has failed to show that the deponents were given an opportunity to execute the transcripts.

Consequently, all of the documents relied on by Ms. Madalone cannot be considered by this Court in support of defendant’s motion for summary judgment because the documents are not in admissible form. Therefore, defendant failed to satisfy its burden to submit facts in admissible form and with the requisite particularity to establish fraud. Accordingly, defendant’s motion for summary judgment is denied.

This constitutes the Decision and Order of the Court.

Dated: December 8, 2004

ELLEN GESMER

Judge, Civil Court

Civil Court of the City of New York, Kings County

323338/03

Sylvia Hinds-Radix, J.

Plaintiffs commenced this action to recover first-party no-fault benefits for medical services rendered to their assignor, pursuant to Insurance Law § 5101 et. seq., as well as statutory interest and attorney’s fees. Thereafter, plaintiffs moved for summary judgment on their claims in the amount of $14,628.06, on the ground that defendant failed to pay or to deny their claims within the statutory 30-day period as required by Insurance Law section 5106 [a] ( Amaze Med. Supply Inc.v. Eagle Ins. Co., NYLJ, Dec. 29, 2003, at 21 Col 1 [App Term, 2d &11th Jud Dists]).

1. SUMMARY JUDGMENT STANDARD

The rule governing summary judgment requires the proponent of a summary judgment motion to make a prima facie showing of entitlement to judgment as a matter of law, tending admissible evidence to eliminate any material issues of fact from the case ( Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]; Torterello v. Carlin, 260 AD2d 201 [1st Dept. 1999]). The burden of production as well as the burden of persuasion always rests on the proponent of the motion (Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]).

If the moving party satisfies those standards, the burden shifts to the opponent to rebut [*2]that prima facie showing by presenting evidence in admissible form establishing the existence of triable issues of fact ( see, CPLR 3212, subd [b]; Zuckerman v. City of New York, 49, NY2d 557 [1980]; Davenport v. County of Nassau, 279, AD2d 497 [2001]; Pragano v. Kingsburg, 182 AD2d 270 [2nd Dept.1992]; Kaufman v. Silver, 90 NY2d 204, 208 [1997]). It is well settled that Summary judgment should be denied if there is any doubt as to the existence of a triable issue of fact ( Freese v. Schwartz, 203 AD2d 513 [2nd Dept. 1984]).

When deciding a motion for summary judgment, the court must review the evidence in the light most favorable to the non-moving party, and must give that party all of the reasonable inferences that can be drawn from the evidence ( Louniakov v. M.R.O.R. Realty Corp., 282 AD2d 657 [2nd Dept. 2001]; SSBSS Realty Corp. v. Public Service Mut. Ins. Co., 253 AD2d 583, 584-585 [1st Dept. 1998]).

11. COVERAGE OF MEDICAL EXPENSES PURSUANT TO INSURANCE LAW 5106 (a)

Pursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, within (30) thirty days after a claimant submits proof of the facts and the amount of loss sustained, an insurer is required to either pay or deny a claim for insurance coverage of medical expenses arising from a motor vehicle accident (see, 11 NYCRR § 65.15 (g) (3); Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195, 200 [1997]; Mount Sinai Hosp., v. Triboro Coach, 263 AD2d 11, 16 [2nd Dept. 1999]; New York Med. Center of Queens v. Country-Wide Ins. Co., 295 AD2d 583 [2nd Dept. 2002]).

The 30 day period may be extended by a request for verification pursuant to 11NYCRR

65.15 (d) (1) (2). (See, New York Hosp. Med. Ctr. of Queens v. Country Wide Ins. Co., 295 AD2d 584 [2nd Dept. 2002]; Presbyterian Hosp. In the City New York v. Maryland Cas. Co., 90 NY2d 279 [1997]).

If the requested verification has not been supplied to the insurer within 30 calendar days, after the original request, the insurer shall issue a follow-up request within 10 calendar days of the insured failure to respond. See, 11 NYCRR 65.15 (e) (2), now 15 days 11NYCRR 65-3.5 (b). S&M Supply v. Allstate Insurance Co., 2003 NY SLIP Op 51191 [U] [App Term, 2d & 11thJud Dists]. “An insurer shall not issue a denial of claim form . . . prior to its receipt of verification of all of the relevant information requested . . . “(New York Hosp. Med. Ctr. Of Queens v. Country-Wide Ins. Co., 295 AD2d 583, 585 [2002]; Glassman D.C., PC v. State Farm Mut. Auto. Ins. Co., 192 Misc2d 264, 265 [App Term, 2nd & 11 Jud Dists. 2002]).

If the additional verification required by the insurer is a medical examination, the insurer shall schedule the examination to be held within 30 calendar days from the date of receipt of the prescribed verification forms (see, 11 NYCRR 65.15 [d] [3]).

The only exception to the 30 day rule is where a carrier’s untimely denial is based upon the defense of lack of coverage, or a medical condition for which the patient was treated was not “related to the accident” (Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195 [1997]). To withstand a motion based on this defense, the insurer has the burden to come forward with proof in admissible form to establish “the fact” or the evidentiary foundation for its belief that the patient’s treatment was unrelated to the accident (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]). [*3]

Failure to pay or deny a claim within the 30- day period requirement, absent a request for additional verification, renders benefits “overdue,” and precludes the insurer from disclaiming liability based on a breach of a policy condition or a statutory exclusion defense (St. Clare’s Hosp. v. Allicity Ins. Co., 201 AD2d 720 [2nd Dept. 1994]). All overdue payments bear interest at a rate of 2% per month, and the claimant is entitled to recover attorney’s fees where a “valid claim or portion” was denied or overdue (see, Insurance Law 5106 (a); Presbyterian Hosp. in the City of New York v. Maryland Cas. Co., 90 NY2d 274 [1997]).

III. PLAINTIFFS MOTION FOR SUMMARY JUDGMENT

In support of its motion for summary judgment in this action, plaintiffs submitted the affidavit of David Safir, who states in his affidavit that he is the billing manager for the plaintiffs. Mr. Safir avers that he personally mailed all of the claim forms for no-fault medical services to the defendant, and defendant failed to pay or deny the claims within thirty days of receipt of the claims.

A review of plaintiffs’ motion papers indicates that plaintiffs established their prima facie entitlement to judgment by submitting proof that the statutory claim forms were mailed and received, and that defendant did not pay or deny the claims within the prescribed statutory 30-day period (Amaze Med. Supply Inc., v. Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 [2004]). The burden then shifted to the defendant to demonstrate the existence of a triable issue of fact requiring a trial on the action ( Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986]; St. Luke’s Roosevelt Hosp., v. American Tr. Ins. Co., 274 AD2d 511 [2nd Dept. 2000]).

IV. DEFENDANT’S OPPOSITION

Defendant, in its opposition to plaintiffs’ motion, admits to receipt of plaintiffs’ claims but contends that it denied the claims based on multiple grounds of (1) failure of plaintiffs’ assignor to appear for Scheduled Independent Medical Examinations (2) fees for medical supplies purchased were excessive as per the Workers’ Compensation Schedule (3) injury causation and (4) medical necessity.

(a) Failure to Appear for Scheduled Independent Medical Examinations

Defendant alleges that plaintiffs’ assignor violated a policy condition of the insurance policy by failing to appear for scheduled independent medical examinations (IMEs), thus precluding any recovery of benefits thereunder. In support of its allegation, defendant relies on the affidavit of Dan Ross, an employee of Alliance Health Medical, P.C., which is an outside entity that provides services for the defendant.

Mr. Ross states in his affidavit that his review of the file, and records pertinent to plaintiffs’ assignor, revealed that, defendant forwarded IME scheduling letters dated June 10, 2003 to plaintiffs’ assignor, requesting her to attend IMEs scheduled for June 26, 2003, and June 30, 2003. Mr. Ross further states that on July 2, 2003, Alliance Health Medical notified the defendant, that plaintiffs’ assignor failed to appear for the scheduled IMEs. In its opposition papers, defendant attached two copies of IME letters addressed to plaintiffs’ assignor, requesting the assignor to attend IME’s scheduled for June 26, 2003 and June 30, 2003. The letters were each dated June 10, 2003.

This court finds that defendant fail to comply with the follow-up procedures and timetable for verification set out in the governing regulations of 11NYCRR 65-3.5 (b), by [*4]following up with an additional request for verification, or by notifying plaintiffs’ assignor of her right to follow up procedures and timetable for verifications ( S&M Supply v. Allstate Insurance Co., 2003 NY SLIP Op 51191 [U] [App Term, 2d & 11thJud Dists]; Presbyterian Hosp. in the City of New York v. Aetna Cas,. & Sur. Co., 233 AD2d 432; Metro Med. Diagnostics v. Lumbermens Ins. Co., 189 Misc2d 597 (2001) [App Term 2d and 11th Jud Dists]).

Furthermore, no probative evidence was submitted by the defendant to establish that the IME letters were ever sent to plaintiff’s assignor. Mr. Ross states that a review of the file and records reveal that defendant forwarded IME request letters to plaintiff’s assignor, without averring that he mailed the request himself. He did not state in his affidavit that he had personal knowledge that the letters were mailed to plaintiffs’ assignor ( Rue v Stokes, 191 AD2d 245 [1993]; LI First Aid Medical Supply Inc., v. Progressive Cas Inc. Co., 196 Misc2d 258, nor has he created a presumption of mailing by relying on defendant’s business records or by describing the standard office practice or procedure used by the defendant to ensure that its requests are properly mailed ( see, CPLR section 4518 (a); Residential Holding Corp., v. Scottsdale Ins. Co., 286 AD2d 679 [2nd Dept. 2001]).

By submitting copies of letters addressed to plaintiffs’ assignor without an affidavit from someone with first hand knowledge attesting how, when, or by whom the letters were mailed, does not in itself support a presumption that the letters were mailed, and received by plaintiffs’ assignor ( American Home Assur. Co., v. Choudary, 255 AD2d 346 [2nd Dept. 1998]; Residential Holding Co., v. Scottsdale Ins Co., 286 AD2d 679, 680 [2nd Dept. 2001]; Presbyterian Hosp. in the City of New York , v. Maryland Casualty Ins. Co., 226 AD2d 613 [2nd Dept. 1996]). Consequently, the affidavit of Mr. Ross was insufficient to raise a triable issue of fact as to whether the requests for independent medical examinations were timely sent to plaintiffs’ assignor.

(b) Fees for Medical Supplies Excessive as per the Workers’ Compensation Law Fee Schedule

The defendant alleges that the fees sought by plaintiffs for medical supplies purchased for their assignor, exceeded those permitted by Workers’ Compensation Law Fee Schedule. It is well settled that, based on a timely denial, an insurer is entitled to interpose the defense that certain charges were not in conformity with the charges permissible under the workers’ compensation fee schedule (Park Health Ctr., v. Prudential Prop & Cas Ins. Co., NYLJ, Dec. 14, 2001 [App Term, 2d & 11th Jud Dists]). Insurance regulation 11 NYCRR 68, Appendix 17-C, Part E (b) (1), provides:

“For medical equipment and supplies (e.g., TENS units, soft cervical collars) provided by a physician or medical equipment supplier, the maximum permissible charge is 150 percent of the documented cost of the equipment to the provider.

This section provides essentially a fee schedule for equipment provided by a medical provider or a medical equipment supplier. In the Instant action, defendant failed to submit evidentiary proof

to establish that the benefits sought for medical supplies were not in conformity with the charges permissible under the workers compensation fee schedule law (Kings Medical Supply v. Travelers Property Casualty Corp., 756 NYS2d 385 [2003]; Abraham v. County Wide Ins. Co., [*5]NYLJ, Feb. 2, 2004 [App Term, 2d &11th Jud Dists]).

Furthermore, since defendant failed to timely deny plaintiffs claim or to seek additional verification of the claims within thirty days of it receipt of the claims, defendant is precluded from raising the defense of excessive fees in its opposition to plaintiffs’ motion for summary judgment (Mt. Sinai v. Triboro Coach, 263 AD2d 11 [2nd Dept. 1999]).

( c) Injury Causation

Defendant argues that there is no casual relationship between the accident and the injury alleged by plaintiffs’ assignor. To support its argument, defendant submitted an unsworn low impact “Automotive Engineering Report”. Defendant argues that the low impact analysis “Automotive Engineering report” concluded that plaintiffs assignor’s treatment was not related to the accident.

Although, defendant is not precluded from asserting the defense that the alleged injuries were not casually related to the accident despite an untimely denial of the claims (Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195 [1997]; Mount Sinai Hosp., v. Triboro Coach, 263 AD2d 11, 16 [2nd Dept. 1999]), this court finds that the unsworn “Automotive Engineering Report” lacks evidentiary value and does not constitute competent proof in admissible form, and cannot be considered in opposition to plaintiffs’ motion for summary judgment (Dotez v. Allstate Ins. Co., [App Term, 9th & 10th Jud Dists.]). Additionally, defendant failed to present a sworn statement from someone with knowledge of the facts or with appropriate expertise to render an opinion (Mt. Sinai Hospital v. Triboro Coach Inc., 263 AD2d 11 [2nd Dept. 1999]).

(d) Medical Necessity

Defendant remaining argument is that the medical treatments rendered to plaintiffs’ assignor were not medically necessary. Lack of medical necessity is a valid defense to an action to recover no fault benefits if stated in a timely denial (Presbyterian Hosp. in the City of New York v. Maryland Casualty Ins. Co., 226 AD2d 613 [2nd Dept. 1996]; Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195 [1997]). Since defendant failed to raise the defense of medical necessity within 30 days of receipt of the plaintiffs’ claims, defendant is precluded from interposing this defense to the motion for summary judgment (New York Presbyterian Hosp., v. Empire Ins., 286, AD2d 322 [2nd Dept. 2001]). Despite the use of a multiple defenses, the defendant cannot prevail if the defenses are not raised within the statutory prescribed period.

V. CONCLUSION

Accordingly, plaintiffs’ motion for summary judgment is hereby granted in its entirety. Judgment shall be entered in favor of plaintiffs in the amount of $14,628.06, together with appropriate statutory interest and attorneys’ fees.

The court did not consider defendant’s amended affirmation in opposition in rendering its decision and order, since the amended papers were not timely served upon the plaintiffs.

This constitutes the decision and order of this court.

Dated: November 10, 2004.

Brooklyn, New York

______________________________ [*6]

SYLVIA HINDS-RADIX

J.C.C.