Civil Court of the City of New York, Kings County

317285/03

Eileen N. Nadelson, J.

This action was brought under the Regulations of the New York State Insurance Department, 11 NYCRR sec. 65-1.1 et seq., to recover first party benefits under New York’s No-Fault Insurance Law.

The two assignments that form the basis of this action involve two persons who were allegedly injured in the same motor vehicle accident. Plaintiff medical provider submitted a bill for the first assignor, Jimmy Cadet (Cadet) on March 7, 2003. This claim was denied on May 15, 2003, based on the assignor’s failure to establish proof of the claim pursuant to his Examination Under Oath (EUO). Plaintiff submitted a bill for the second assignor, Naika Gousse (Gousse) on March 4, 2003; this claim was denied on May 15, 2003, because the assignor failed to appear for her EUO.

Plaintiff has moved for summary judgment, asserting that the denials of benefits were not received within the statutorily mandated 30 days after receipt of the claims, 11 NYCRR sec. 65-3.5, 65-3.8(a).

The EUO upon which the denial of claim for Cadet was based was unsigned by the [*2]assignor and not notarized. While objections based on allegedly fraudulent accident claims survive an insurer’s failure to timely deny such claim, Cf. Central General Hospital v. Chubb Group of Ins. Cos., 90 NY2d 195, 659 N.Y.S. 2d 246 (1997), and thereby toll the 30-day statutory period, when opposing a motion for summary judgment, the defendant insurer must be able to raise triable issues of fact in admissible form. Bonetti v. Integron Nat. Ins. Co., 269 AD2d 413, 703 N.Y.S. 2d 217 (2d Dept. 2000). The EUO submitted by Defendant insurer in the instant action is not in a legally admissible form, being unsigned and unverified. Consequently, the court holds that unsigned and unverified Examinations Under Oath are insufficient to raise triable issues of fact so as to defeat a motion for summary judgment.

Section 65-3.5 of 11 NYCCR, the regulations promulgated pursuant to New York’s No Fault Law, states:

(A) Within 10 business days after receipt of the completed application for motor

vehicle no-fault benefits, the insurer shall forward to the parties required to

complete them, those prescribed verification forms it will require prior to pay-

ment of the initial claim.

(B) Subsequent to the receipt of one or more of the completed verification forms,

any additional verification shall be requested within 15 business days of receipt

of the prescribed verification forms.

In the instant case, an EUO was requested of Gousse within the ten business days after the claim was submitted, and it is uncontroverted that she did not appear on the scheduled date. However, the Regulations impose a burden on the insurer to follow-up with an additional request if the initial request for verification was incomplete or not complied with at all. In this instance, the insurer did not follow the procedures of 11 NYCRR sec. 65-3.5(B) in seeking a second date for the EUO when Gousse failed to attend the first scheduled examination. Therefore, the 30-day statutory period was not tolled because Defendant insurer failed to adhere to the provisions of the No-Fault Regulations by not attempting to schedule a second EUO.

Based on the foregoing, the court grants Plaintiff’s motion for summary judgment. Judgment for Plaintiff in the amount of $4460 plus statutory 2% per month interest and statutory 20 % attorney’s fees.

Dated: October 27, 2004

__________________________

EILEEN N. NADELSON, J.C.C.

[*1]

Civil Court of the City of New York, Kings County, October 19, 2004

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for plaintiff. Jaffe & Nohaicki, New York City, for defendant.

{**5 Misc 3d at 768} OPINION OF THE COURT

Ann Elizabeth O’Shea, J.

This is an action to recover first-party no-fault benefits, attorney’s fees and costs pursuant to New York’s Insurance Law and no-fault regulations. The cause of action allegedly arose out of an automobile accident on June 24, 2002, in which Robert Nieves, plaintiff’s assignor, was injured. Plaintiff, a medical equipment supplier, allegedly provided Mr. Nieves with medical supplies for which it submitted a claim for $705 to defendant insurer. Defendant denied plaintiff’s claim on the ground that the supplies were not medically necessary. Plaintiff now moves for summary judgment, arguing that defendant’s denial was untimely and without any evidentiary support. Defendant, in opposition, asserts that plaintiff has not established its prima facie entitlement to summary judgment with admissible evidence, including evidence as to the documented cost of the supplies provided. For the following reasons, plaintiff’s motion is granted in all respects.

Under the No-Fault Insurance Law and regulations, a medical equipment supplier must submit a properly completed proof of claim^[FN1] to the insurer within 180 days after the supplies have [*2]been provided under the “old regulations” in effect prior to April 4, 2002 (11 NYCRR 65.12) or 45 days after the supplies have been provided under the “new regulations” in effect on April 4, 2002 and thereafter (11 NYCRR 65-1.1 [h]). The insurer then has 30 days from the date the claim is received to pay or deny the claim under both the old and new regulations (11 NYCRR 65.15 [g] [1] [i]; 65-3.8 [a] [1]). If the insurer has any objections to or questions about the claim, including, among other things, the necessity for the supplies provided, the amount of the claim, or the adequacy of the claim form,^[FN2] it may request that the claimant provide further information to verify the claim (11 NYCRR 65.15 [d] [1] [old regulations]; 11 NYCRR 65-3.5 [b] [new regulations]; see Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], *2 [App Term, 2d Dept 2003] [“a properly completed claim form, which suffices on its face to establish the particulars of the nature and extent of the injuries and (health benefits) received and contemplated . . {**5 Misc 3d at 769}. and the proof of the fact and amount of the loss sustained . . . is all that is necessary at the claim stage . . .” (internal quotation marks and citations omitted)]; see also Dermatossian v New York City Tr. Auth., 67 NY2d 219, 224 [1986] [“to receive payment, (a claimant) need only file a ‘proof of claim’ (which) the insurers are obliged to honor . . . promptly or suffer the statutory penalties” (citations omitted)]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 2d Dept 2003]). A request for verification must be made by the insurer within 10 business days after the claim has been received under the old regulations (11 NYCRR 65.15 [d] [1]) and within 15 business days under the new regulations (11 NYCRR 65-3.5 [b]). The 30-day clock in which to pay or deny the claim is then stopped until the requested information is provided by the claimant (see Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]; Liberty Queens Med., P.C. v Liberty Mut. Ins. Co., 2002 NY Slip Op 40420[U] [App Term, 2d & 11th Jud Dists 2002]). An insurer who fails to pay or deny the claim—or seek verification of the particulars of the claim—within the applicable time periods is thereafter precluded from raising any defenses to the claim, other than lack of coverage or fraud (Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274 [1997]; Presbyterian Hosp. v Aetna Cas. & Sur. Co., 233 AD2d 433 [2d Dept 1996]; Central Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11 [2d Dept 1999]). The Court of Appeals has explained the principles and policies that prompted the adoption of this comprehensive regulatory scheme for the resolution of no-fault claims:

“[T]he primary purpose underlying the No-Fault Law [is] to assure claimants of expeditious compensation for their injuries through prompt payment of first-party benefits without regard to fault and without expense to them . . . To implement this legislative aim of curtailing delay and reducing expense in the adjustment of motor vehicle accident claims, the regulations . . . are written to encourage prompt payment of claims, to discourage investigation by insurers, and to penalize delays.”

(Dermatossian v New York City Tr. Auth., 67 NY2d 219, 225 [1986] [citations omitted].)

Those principles and policies have also informed court decisions limiting the proof required by medical providers and the defenses available to insurers on motions for summary judgment{**5 Misc 3d at 770} and at trial. To establish a prima facie case, a plaintiff medical supplier must submit proof that it timely transmitted its claim for no-fault benefits, that the defendant insurer received the claim but failed to pay or validly deny the claim within the permissible 30 days or to request verification within the applicable 10 or 15 business days after it received the claim (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], *2 [App Term, 2d Dept 2003] [“courts have declined to distinguish a proper proof of claim under the insurance regulations from the quantum of proof necessary to prevail on a motion for summary judgment in an ensuing action on the claim”]; see also Ocean Diagnostic Imaging PC v State Farm Mut. Auto. Ins. Co., 5 Misc 3d 53 [App Term, 2d Dept 2004]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d Dept 2003]). Once the plaintiff has established its prima facie case, the burden shifts to the defendant to come forward with admissible evidence refuting plaintiff’s evidence and demonstrating the existence of a material issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985]).

In support of its motion for summary judgment, plaintiff submitted a copy of its NF-3 proof of claim form, accompanied by an affidavit of its billing manager attesting on personal knowledge to the issuance of the claim, and a copy of defendant’s denial form (NF-10), indicating defendant received the claim on August 28, 2002, and denied it on November 21, 2002.^[FN3] In this case, the NF-10 denial form, which is admissible as an admission by defendant, is sufficient to establish plaintiff’s prima facie entitlement to summary judgment, i.e., that the claim was transmitted, that defendant received it, and that defendant failed to pay or deny the claim within 30 days of receipt^[FN4] (see A.B. Med. Servs., PLLC v New York Cent. Mut. Fire Ins. Co., 3 Misc {**5 Misc 3d at 771}3d 136[A], 2004 NY Slip Op 50507[U] [2d Dept 2004]). Nothing more is required.^[FN5] [*3]

Defendant offers nothing in response to plaintiff’s motion other than a generic attorney’s affirmation in opposition and a generic memorandum of law with little but a passing connection to the claims in issue here. In any event, construing defendant’s opposition in the most favorable light possible, defendant fails to overcome plaintiff’s prima facie case for several reasons.

First, the denial is untimely, and, therefore, defendant is precluded from asserting any defense other than fraud or lack of coverage (Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274 [1997]; Presbyterian Hosp. v Aetna Cas. & Sur. Co., 233 AD2d 433 [2d Dept 1996]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11 [2d Dept 1999]).

Second, the stated reason for the denial in defendant’s NF-10 is that “an extended delay between the motor vehicle accident and the beginning of treatment suggest not medically necessary and raises issue of casualty [sic].” It is by now firmly established that the burden is on the insurer to prove that the medical services or supplies in question were medically unnecessary (see, e.g., A.B. Med. Servs. v GEICO Ins., 2 Misc 3d 26 [App Term, 2d Dept 2003], and cases cited therein). In addition, a denial premised on lack of medical necessity must be supported by evidence such as an independent medical examination, peer review, or examination under oath “setting forth a sufficiently detailed factual basis and medical rationale for the claim’s rejection” (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701, *1 [App Term, 2d Dept 2003]; see also Rockaway Blvd. Med. P.C. v Travelers Prop. Cas. Corp., 2003 NY Slip Op 50842[U] [App Term, 2d & 11th Dists 2003]; see also 11 NYCRR 65-3.8 [b] [4]; Choicenet Chiropractic P.C. v Travelers Prop. Cas. Corp., 2003 NY Slip Op 50697[U] [App Term, 2d & 11th Jud Dists 2003]; Rockaway Blvd. Med. P.C. v Allstate Ins. Co., 2003 NY Slip Op 50681[U] [App Term, 2d & 11th Jud Dists 2003]). {**5 Misc 3d at 772}Defendant’s conclusory, unsupported statement in its denial form is wholly inadequate to defeat plaintiff’s motion for summary judgment.

Finally, to the extent defendant’s defense to the summary judgment motion is that plaintiff did not document the cost of the supplies provided as part of its claim, the defense is without merit. It is true that, under the regulations, no-fault benefits available for medical supplies are limited to 150% of their “documented cost” (see 11 NYCRR Appendix 17-C, part E [b] [1]). However, in this court’s view, “documented cost” is not an element of plaintiff’s prima facie case. As is the case with issues of medical necessity, any questions about the amount claimed for medical supplies can and should be asked through a request for verification and, if possible, resolved at the claim stage, not by a court on a motion for summary judgment or at trial. Defendant had the opportunity to ask plaintiff to document the costs of the supplies when it received the claim. Because defendant failed to do so within the time permitted by the regulations, defendant is precluded from raising it now as a defense to plaintiff’s summary judgment motion.^[FN6] [*4]

For the foregoing reasons, plaintiff’s motion is granted in all respects. Judgment shall be entered in favor of plaintiff for $705 plus statutory interest and attorney’s fees plus costs.

Footnotes

Footnote 1: Or “substantially equivalent written notice” (11 NYCRR 65-3.5 [a]).

Footnote 2: For example, lack of authentication or other defect in the assignment of benefits (see, e.g., Elm Med., P.C. v American Home Assur. Co., 2003 NY Slip Op 51357[U]; but see A.B. Med. Servs. PLLC v Highlands Ins. Co., NYLJ, May 27, 2003, at 21, col 3 [Civ Ct, NY County]).

Footnote 3: Also annexed to the moving papers is a copy of an unsworn “Letter of Medical Necessity” concerning the assignor. This document is not considered by the court as it is not in admissible form.

Footnote 4: The court notes that the mailing log, date stamped by the Postal Service, also submitted in support of plaintiff’s motion, standing alone without any accompanying affidavit made on personal knowledge that the proof of claim was transmitted in accordance with plaintiff’s regular business procedures, would not be sufficient, for summary judgment purposes, to establish that the claim was transmitted to defendant.

Footnote 5: The additional documents submitted by plaintiff—a receipt for medical equipment and an assignment of benefits form signed by the assignor; a prescription for the medical equipment; invoices from Collona Distributors, Inc.; a copy of a cancelled check to Collona Distributors, Inc. for the full amount of the invoices—were not required as part of plaintiff’s prima facie burden of proof on its summary judgment motion, although they may have been instructive as a response to a timely request for verification of the claim by defendant.

Footnote 6: To the extent this decision is at odds with King’s Med. Supply v Travelers Prop. Cas. Corp. (194 Misc 2d 667 [Civ Ct, Kings County 2003]), which was decided before the development of the Appellate Term case law, this court respectfully declines to follow it.

Civil Court of the City of New York, Kings County

41116/2004

Peter P. Sweeney, J.

In this action pursuant to Insurance Law § 5101 et seq to recover first-party no-fault benefits, plaintiff moves to strike defendant’s seventh, eighth and tenth affirmative defenses on the ground that they were not pleaded with the specificity required by CPLR 3016(b). For the reasons stated below, the motion is denied in part and granted in part.

Factual Background

Plaintiff Carepluss Medical Supply Inc. a/a/o Edme Aenor commenced this action by the service of a summons and complaint, alleging that the defendant State Farm Mutual Automobile Insurance Company wrongfully denied a claim for first-party no-fault benefits. The claim was in [*2]the amount of $757.00 for medical supplies provided to its assignor Edme Aenor in connection with injuries arising out of a September 2, 2002 motor vehicle accident. In its denial dated April 9, 2003, the defendant acknowledged receipt of the clain on December 4, 2002 and denied the claim solely on the ground that Mr. Aenor failed to appear for two scheduled examinations under oath.

In its answer, defendant denied all the material allegations alleged in plaintiff’s complaint and asserted twelve affirmative defenses. Defendant’s seventh, eighth and tenth affirmative defenses provide as follows:

SEVENTH: That Plaintiff has engaged in fraudulent conduct in connection with the operation of its business and the submission of the claim to State Farm by intentionally paying substantially more for the items at issue for which reimbursement is sought, than the price that is readily available in the relevant marketplace, with the intent to deceive State Farm, and to inflate the charges that were submitted to State Farm.

EIGHTH: That Plaintiff has fraudulently and materially misrepresented to State Farm that the cost that was incurred and upon which the charges for the items at issue were based, were necessary and/or required costs, when In fact, the Plaintiff intentionally paid more for the items at issue than the price that is readily available in the relevant marketplace, with the intent to deceive State Farm and to inflate the charges that were submitted to State Farm.

TENTH: That the medical supplies fo which reimbursement is sought were not related to the accident in question and/or were never actually provided.

Plaintiff maintains that since these defenses are premised upon allegations of fraud and misrepresentation, they must be dismissed because they were not pleaded with the specificity required by CPLR 3016(b), which in pertinent part, provides: “[w]here a * * * defense is based upon misrepresentation [or] fraud * * * the circumstances constituting the wrong shall be stated in detail.”

Discussion

Plaintiff’s motion is granted, but only to the extent that defendant’s seventh and eighth affirmative defenses and that portion of defendant’s tenth affirmative defense alleging that “the medical supplies fo which reimbursement is sought were * * * were never actually provided” are stricken. These defenses are being stricken, not because of defendant’s non-compliance with CPLR 3016(b), but because defendant’s admitted failure to pay or reject the claims within 30 days of receipt precluded it from raising them (see Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d 274; Central General Hosp. v. Chubb Group of Ins. Companies, 90 NY2d 195).

In the court’s view, the defendant complied with CPLR 3016(b) which “requires only that [*3]the misconduct complained of be set forth in sufficient detail to clearly inform a [plaintiff] with respect to the incidents complained of and is not to be interpreted so strictly as to prevent an otherwise valid cause of action in situations where it may be ‘impossible to state in detail the circumstances constituting a fraud'” (Lanzi v. Brooks, 43 NY2d 778, 780, quoting Jered Contr. Corp. v. New York City Tr. Auth., 22 NY2d 187, 194). Defendant’s seventh, eighth and tenth affirmative defenses pass muster under this analysis, especially since the facts and circumstances underlying these defenses are most likely within the exclusive knowledge of the plaintiff. It would seem to be impossible for the defendant to be any more specific at this stage of the proceedings.

The court is cognizant that in some instances, a defense premised upon fraud may be asserted even when a denial is issued beyond the 30 day period set forth in Insurance law § 5106[a]. Such instances, however, are limited to situations were the fraud, if proven, would establish that there was no coverage at all for the claim (Central General Hosp., 90 NY2d at 199). Thus, where a fraud defense is premised upon allegations that the collision underlying the claim was a staged event in furtherance of an insurance fraud scheme, the defense survives an untimely denial since a fabricated accident does not trigger coverage under the no-fault endorsement (see e.g. Mount Sinai Hospital v. Triboro Coach Inc ., 263 AD2d 11,19, citing Central General Hospital, supra ., Inwood Hill Medical P.C. v. Allstate Insurance Company, 2004 WL 1381082).

On the other hand, where fraud defenses are premised upon allegations of excessive or fraudulent billing, as is the case here, the defenses do not survive an untimely denial since the defenses, even if established, would not result in a finding that there was ” no coverage at all” for the claim (Melbourne Medical, P.C. v. Utica Mut. Ins. Co., 2004 WL 1431320, 2, citing Central Gen. Hosp., 90 NY2d at 199, 659 NYS2d 246, 681 NE2d 413; Presbyterian Hosp. in City of NY, 90 NY2d at 285).

Finally, plaintiff has not established a basis for striking that portion of defendant’s tenth affirmative defense which alleges that “the medical supplies for which reimbursement is sought were not related to the accident.” Even where there is an untimely denial, an insurer may raise a lack of coverage defense “premised on the fact or founded belief that an alleged injury does not arise out of an insured incident.” (Central General Hospital , 90 NY2d at 199). Such a defense does not necessarily have to be premised upon fraud and may be raised in situations where the insurer is claiming that the injuries at issue arose out of an uninsured accident (see e.g. Central General Hosp. , supra [allegation that injuries arose out of a separate work-related accident and not a motor vehicle accident]. In such circumstances, the specificity requirements of CPLR 3016(b) do not apply.

This constitutes the decision and order of the court.

Dated: September 29, 2004

_____________________________

PETER P. SWEENEY [*4]

Civil Court Judge

[*1]

Civil Court of the City of New York, Kings County, September 24, 2004

APPEARANCES OF COUNSEL

Amos Weinberg for plaintiff. Melli, Guerin & Melli (Matthew J. Smith of counsel), for defendant.

OPINION OF THE COURT

Eileen N. Nadelson, J.

Plaintiff, a medical provider that is seeking first-party benefits pursuant to New York’s No-Fault Insurance Law, has moved for summary judgment based on defendant insurer’s failure to pay or deny plaintiff’s claim within the statutory 30-day period following submission of said claim.

Defendant is opposing the motion for summary judgment by asserting that it is not subject to the provisions of 11 NYCRR 65-3.4 because plaintiff’s assignor, the person allegedly injured in the motor vehicle accident, failed to submit to several requests for an examination under oath (EUO), and that the loss is not a covered loss because the accident was staged, thereby rendering plaintiff’s assignor a noneligible party pursuant to New York’s No-Fault Regulation 68 (11 NYCRR part 65).

In reply to defendant’s opposition to this motion, plaintiff avers that the basis for denial [*2]stemming from its assignor’s failure to submit to EUOs is inapplicable because the statute authorizing such basis did not go into effect until after the incident in question. Further, plaintiff maintains that any accusation of fraud with respect to the claim made by defendant has been made against the other individuals involved in the incident but not against its assignor.

The basic facts are not in dispute. The insurance policy in question was issued by defendant on March 3, 2002. The alleged accident occurred on March 20, 2002. Plaintiff’s claim was received by defendant on May 16, 2002. After submission of the claim defendant requested an examination under oath of plaintiff’s assignor. Plaintiff’s assignor failed to appear and a second EUO was scheduled, which she also did not attend. On December 13, 2002, defendant issued its denial of benefits to plaintiff.

The regulation that forms the basis of this motion, Regulation 68-A, 11 NYCRR 65-1.1, was enacted in September of 2001. The regulation applies to all new and first renewal insurance policies effective on or after September 1, 2001. (11 NYCRR 65-1.1 [b] [1], [2].) The effective date of the regulation is April 5, 2002. The import of this regulation to the case at bar is that it is the operative legislative authority for an insurer to deny first-party benefits to medical providers whose assignors fail to attend EUOs.

Plaintiff’s argument rests on the fact that the effective date of the regulation is subsequent to the date of the alleged accident and injury, and therefore is inoperative to the instant action. In support of this contention, plaintiff relies on Bronx Med. Servs., P.C. v Lumbermans Mut. Cas. Co. (2003 NY Slip Op 51022[U], *3 [App Term, 1st Dept 2003]), which states that “[t]he revised regulations cannot be applied retroactively to cover plaintiff’s September 2000 no-fault claim.” However, the facts in this cited decision are clearly distinguishable from the case at bar.

In Bronx Med. Servs., the insurer was basing its denial on a provision of the issued insurance policy in question. The court stated that “[t]he no-fault protection created by statute and implementing regulations cannot be qualified by the inapplicable conditions and exclusions of the liability portion of the policy.” (At *3 [internal quotation marks omitted], quoting Utica Mut. Ins. Co. v Timms, 293 AD2d 669 [2002].) In other words, the statute would prevail over a contrary provision in a private contract of insurance. Because the regulation in question was not enacted until after the subject accident, the court found the plaintiff’s reasoning specious that the change in the regulation should give effect to its insurance policy provision. It was in the context of refuting this argument that the court correctly stated that the regulation could not be given retroactive effect.

This court notes that the accident and claim for benefits in the Bronx Med. Servs. case both occurred in the year 2000.

In the instant case, the regulation applies to the insurance policy issued by defendant in March of 2002. The only question to be decided by this court is whether the regulation applies to [*3]claims filed after its effective date relating to accidents occurring before its effective date.

Few decisions have been rendered on this issue, and none on this specific point. In Ocean Diagnostic Imaging P.C. v GEICO Ins. (3 Misc 3d 137[A], 2004 NY Slip Op 50511[U] [2d Dept 2004]), the court found that Regulation 68-A did not apply because it was not in effect on the date of the accident or of the claim, which was received on August 15, 2001. In King’s Med. Supply Inc. v Progressive Ins. (3 Misc 3d 126[A], 2004 NY Slip Op 50311[U], *2 [2d Dept 2004]), the court also found for the provider because “at the time plaintiff’s claims were filed, EUOs were not available as a form of verification.” (Emphasis added.) Finally, in A.B. Med. Servs. PLLC v Eagle Ins. Co. (3 Misc 3d 8, 10 [2d Dept 2003]), the court held that the subject regulation was inapplicable with respect to denying claims based on the provider’s assignor failing to attend EUOs because “at the time plaintiffs filed the instant claims there was no provision in the insurance regulations for such a procedure.” (Emphasis added.)

All of the above-cited decisions are clear on one point: Regulation 68-A does not apply retroactively to claims filed before its effective date. By contrast, the claim for benefits in the instant case was filed more than a month after the regulation came into effect, and the insurance policy upon which the claim is based is subject to the regulation because it was issued and effective after September 1, 2001. Therefore, the court holds that Regulation 68-A applies to claims filed after its effective date and, consequently, the court denies plaintiff’s motion for summary judgment.

Although now moot, the court also finds that defendant’s argument that plaintiff’s assignor is not a covered person because of alleged fraud to be without merit. Defendant asserts correctly that the preclusion rule (denying an insurer the ability to raise any defense to a claim not paid or denied within 30 days of receipt or 30 days after verification) does not apply to a defense based on a claim that the incident was not an accident but a deliberate event staged in furtherance of a scheme to defraud the insurer (A.B. Med. Servs. PLLC v Eagle Ins. Co., supra). However, defendant has failed to provide any evidence of fraud with respect to plaintiff’s assignor. All assertions of fraud are made against the other parties to the incident, and therefore are not relevant to the assignor in question.

Plaintiff’s motion for summary judgment is denied for the reasons stated above.

Civil Court of the City of New York, Kings County

80154/03

David M. Steiner, Esq. of Isreal, Isreal & Purdy of Great Neck, NY appeared for plaintiff; Jeanne M. Valentine, Esq. of Cluasen, Miller P.C. of New York, New York appeared for Defendant.

Ann Elizabeth O’Shea, J.

Upon the foregoing cited papers, the decision and order on defendant’s motion to vacate a default judgment and to dismiss the complaint, is as follows:

Plaintiffs Aurora Chiropractic PC, Dragon Acupuncture PLLC, Latortue Medical Services, PC and S & B Neurocare, PC, instituted this action to recover first-party, no-fault benefits for medical services rendered to their assignor, Kathleen Marsh, who was injured in an automobile accident on February 16, 2001. Plaintiffs provided medical services to Ms. Marsh between March 14, 2001, and February 8, 2002. Each of the plaintiffs made several claims for payment. Upon the purported failure of defendant to pay or deny the claims within thirty days, plaintiffs instituted this action.

The summons and complaint were served on defendant on June 25, 2003. An extension of time to file an answer was requested and granted, giving counsel until August 15, 2003, to answer the complaint. On defendant’s failure to answer, a clerk’s judgment was entered, without any judicial intervention, in the amount of $31,287.65.

Defendant now seeks an order opening the default and setting aside the judgment entered [*2]against it. Defendant also seeks an order dismissing the complaint on the grounds that after August 31, 2001, it had no further obligation to pay No Fault benefits. Plaintiff submitted papers in opposition. Oral argument was heard on May 19, 2004, subsequent to which the matter was submitted for decision.

As a general rule, a default judgment will be vacated and a late answer will be permitted when a defendant can show that there was some reasonable excuse for its delay in answering and there is some merit to its defense (see Spencer v. Sanko Holding USA, 247 AD2d 532 [2d Dept 1998]). A defendant is not required to establish its defense as a matter of law; it need only set forth sufficient facts to make out a prima facie showing of a meritorious defense (see Quis v. Bolden, 298 A.D.2d 375 (2d Dept 2002).

In support of its claim to have a reasonable excuse for its delay in answering, defendant states that it intended to file an answer to the complaint, but ultimately could not do so without an index number, which plaintiff failed to provide. Although defendant allegedly attempted independently to ascertain the index number, by sending its law clerk on September 25, 2003, directly to the Court, its law clerk allegedly was told that there was no index number assigned to the matter. When defendant’s law clerk subsequently sought the information directly from plaintiff’s counsel by telephone, he purportedly was informed that plaintiff’s counsel was “not aware of” the index number, a telephone conversation which plaintiff’s counsel denies ever occurred. No claim is made that any further attempts to serve or file its answer were made. Because it was plaintiffs’ duty to provide defendant with an index number, defendant asks the court to excuse defendant from having taken no further action between the date on which it made inquiry of the Civil Court, and the date on which the default judgment was entered.

Despite defendant’s failure to follow up on the case during the five months which passed between the date it first sought an index number incident to filing an answer, and the date the default judgment was entered, it seems evident that there was no intention on the part of defendant to default in answering. Viewed in light of the strong public policy of this State which favors the resolution of cases on the merits (see Scagnelli v. Pavone, 178 AD2d 590 [2d Dept 1991]), and considering the fact that defendant moved promptly to open the default (see A.B. Med. Servs. Pllc v. Americar & Truck Rental Inc.., 2003 NY Slip Op 51394U [App. Term. 2003]), defendant’s excuse is deemed adequate.

Defendant advances as its “meritorious defense” a claim that the treatment rendered by plaintiffs was not medically necessary. Lack of medical necessity is a defense to an action to recover no-fault benefits, which an insurer may assert pursuant to a timely denial, based on a medical examination or a sufficiently detailed peer review report (see Amaze Med. Supply, Inc. v. Eagle Ins. Co., 2004 NY Slip Op 50279U, 1 [App. Term 2d Dept 2004]). In this case, defendant’s claim of a lack of medical necessity is supported by the results of five independent medical examinations conducted by Dr. Weiss, an orthopedist, Dr. Weksler a clinical psychologist and certified pain specialist, Dr. Zlatnick, a neurologist, Dr. Orenstein, a chiropractor, and Dr. Iozzio, an acupuncturist. In their reports, the last dated August 21, 2001, each concludes that Ms. Marsh is fully recovered, and has no further need for medical treatment, establishing its defense.

Defendant contends that the timeliness of its denial is not in issue as it issued a blanket denial of all “future benefits” directly to Ms. Marsh, in advance of the submission of any of plaintiffs’ [*3]claims, bringing it outside of the preclusion rules set forth in Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 [1997]. In support of this contention, defendant appends as an exhibit to its motion papers, five undated denial of claim [NF-10] forms. Each references a particular independent medical examination report and states that “future benefits are being denied” based on the specified report. Although no proof of mailing was adduced, defendant contends that the NF-10 forms, and the medical reports, were mailed to Ms. Marsh on August 31, 2001.

No-fault regulations provide that “if the insurer has information which clearly demonstrates that the applicant is no longer disabled, the insurer may discontinue the payment of benefits by forwarding to the applicant a prescribed denial of claim form” (11 NYCRR 65.15[g][2][ii]). However, that section does not absolve defendant of its responsibilities under the No-Fault law and regulations to individually consider and timely pay or deny each subsequent claim made for benefits under the No-Fault law. As was observed by the court in Atlantis Medical, P.C. v. Liberty Mutual Insurance Co., 2002 NY Slip Op 40043U, 2002 NY Misc LEXIS 202 [Dist. Ct. Nassau Co.], when the 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.” To the contrary, both the statute and the regulations contemplate the insurer responding directly to the claim within the statutorily prescribed time frame, failing which it will be precluded, pursuant to Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 [1997], from interposing such defenses as a lack of medical necessity.

Nor will a belated denial of plaintiffs’ No Fault claims be “deemed” timely on the basis of its earlier blanket disclaimer of responsibility which predated plaintiffs’ provision of services (see A&S Medical, P.C. v. Allstate Insurance Co., 196 Misc2d 322, 323 [App. Term. 1st Dept 2003], app. granted, NY App Div 2004 LEXIS 9836 [1st Dept July 5, 2004]). Thus, the additional NF- 10 forms included in defendant’s motion papers, dated January 16, 2002, responding to two claims made by plaintiff Aurora Chiropractic for $48.90 and $439.27, one claim made by plaintiff Latortue Medical Services for $812.89, and two claims made by plaintiff Dragon Acupuncture, for $1,275 and $1105, are not rendered “timely” by the mere addition of “benefits terminated on 8/31/01” as a part of the reason given for denial of the claims.

Nor do any of the January 10, 2003, NF-10 forms, standing on their own, evidence a timely denial of these five claims. For one thing, none of the NF-10 forms was sent to plaintiffs, as required by 11 NYCRR § 65.15(g)(3)(i)(“the applicant or the authorized representative”). They were all sent to plaintiffs’ assignor. Further, the forms are incomplete, lacking among other things the date on which the specified claims were received, absent which the timeliness of the response cannot be determined. Finally, defendant does not list a lack of medical necessity as the reason for its denial of plaintiffs’ claims. Having failed to do so, defendant is precluded pursuant to Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 [1997], from advancing lack of medical necessity as a defense to any part of this action.

As defendant is precluded, in the absence of a timely denial, from advancing lack of medical necessity as a defense, defendant’s motion to vacate the default and set aside the judgment is denied.

This constitutes the decision and order of this Court. [*4]

Date:September 23, 2004_____________________________

Ann Elizabeth O’Shea, J.C.C.

[*1]

Civil Court of the City of New York, Kings County, September 23, 2004

APPEARANCES OF COUNSEL

Baker, Barshay & Neuwirth, P.C. (Robert J. Baker of counsel), for plaintiff. Meiselman, Denlea, Packman, Carton & Eberz, P.C. (Stephen L. Bauley of counsel), for defendant.

OPINION OF THE COURT

Eileen N. Nadelson, J.

This motion and cross motion for summary judgment raises a question of first impression under the regulations enacted pursuant to New York’s No-Fault Insurance Law.

Plaintiff sued defendant insurer to recover for first-party benefits under New York’s No-Fault Law. In support of its claim, plaintiff submitted proof of claim to defendant, including its proof of mailing. Plaintiff alleges that defendant failed to pay or deny its claim within 30 days as required by the No-Fault Law, nor has defendant requested additional verification. Under such circumstances, plaintiff asserts that defendant is precluded from raising a defense to its claim. (Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274 [1997].) Therefore, plaintiff moved this court for summary judgment pursuant to CPLR 3211.

In opposition to plaintiff’s motion, defendant raised several issues, all of which have been dealt with during oral argument, leaving only one issue to be decided by the court. [*2]Defendant maintains that it does not have to pay the claim because plaintiff is not currently registered with the New York State Department of Education. This argument forms the basis of defendant’s cross motion for summary judgment. Plaintiff’s counsel has represented that plaintiff, although not currently registered, was registered at the time the services that form the basis of this claim were provided.

Therefore, the issue to be determined by the court is: Whether a health care provider who is registered with the New York State Department of Education at the time services are provided may recover the value of those services under New York’s No-Fault Insurance Law if the provider is no longer registered at the time payment for those services is sought?

11 NYCRR 65-3.16 (a) (12) states:

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

To date, this section of the regulation has not been subject to judicial scrutiny.

The words of the statute would appear to be clear on its face: licensed to “perform such service.” However, without any other direct interpretation of this regulation, the court must look to other circumstances in which the judiciary has determined similar issues.

Section 691.10 (b) of title 22 of the Official Compilation of Codes, Rules and Regulations of the State of New York, dealing with the conduct of attorneys, states that “[a] disbarred, suspended or resigned attorney may be compensated . . . for legal services rendered and disbursements incurred by him prior to the effective date of the disbarment or suspension order or of his resignation.”

The rationale behind this regulation is that the services were provided by the attorney when he or she was licensed, and therefore the attorney is entitled to appropriate compensation for the work the attorney legally performed. (See generally, Casey v Ruffino, 306 AD2d 304 [2d Dept 2003]; Lee v Hayt, Percy & Mermelstein, 4 Misc 3d 1012[A], 2004 NY Slip Op 50853[U] [2004].)

Further, under general principles of contract law, it is well settled that contracts made by private parties must necessarily be construed in the light of the applicable law at the time of their execution. (10 NY Jur 2d, Contracts § 204, at 112; see City of Troy Unit of Rensselaer County Ch. of Civ. Serv. Empls. Assn. v City of Troy, 36 AD2d 145 [3d Dept 1971].) Generally, therefore, the validity of a contract will depend upon the law as it existed at [*3]the time it was made. (Goldfarb v Goldfarb, 86 AD2d 459 [2d Dept 1982].) The only exception to this rule occurs if there is a variation in the law that is made due to changes in public policy. Otherwise, the contract will be interpreted according to the law in effect at the time of its execution. (Bloomfield v Bloomfield, 97 NY2d 188 [2001].)

The court does not find any legislative intent that indicates it is against public policy to reimburse a medical provider for services rendered that were lawfully performed, regardless of the subsequent status of the medical provider.

Based on the foregoing, the court holds that a medical provider may be reimbursed for services rendered while he or she was registered and licensed to perform such services under section 65-3.16 (a) (12) of 11 NYCRR, even if the provider subsequently becomes unregistered.

Plaintiff’s motion for summary judgment is granted. Defendant’s cross motion for summary judgment is denied.

[*1]

Civil Court of the City of New York, Queens County, September 20, 2004

APPEARANCES OF COUNSEL

Serpe, Andree & Kaufman, Huntington (Jonathan H. Kaufman of counsel), for petitioner. Samuel K. Rubin, Bethpage (Barbara Ann Anzelmo of counsel), for Eagle Insurance Company, respondent. Wade, Clarke, Mulcahy, New York City (Nicole Y. Brown of counsel), for Arbitration Forums, Inc., respondent.

OPINION OF THE COURT

Bernice D. Siegal, J.

Motion by petitioner to vacate an arbitration award on the grounds that Arbitration Forums, Inc. has not only misapplied the statute of limitations three times but has flouted an order of this court, and for the imposition of sanctions against respondent Arbitration Forums, Inc. for such contumacious and frivolous behavior is granted to the extent of vacating said arbitration award, remanding the matter for a new hearing before yet another arbitrator and setting the matter of sanctions against Arbitration Forums, Inc. and Eagle Insurance Company down for a hearing on September 27, 2004 at 9:30 a.m. in Part 39 of this court with memoranda of law to be served upon opposing counsel and filed with the court on or before September 20, 2004. The court, sua sponte, extends the matter of the imposition of sanctions to also apply against Eagle Insurance Company as, in light of the law of the case and clear decisional law to the contrary, Eagle opposed the petition to vacate and cross-moved to confirm the erroneous award. The court recognizes that in opposition to the petition, Arbitration Forums, Inc. has indicated that it will vacate the award and reopen the arbitration. Relief for petitioner, however, remains contingent. Should such vacatur indeed occur prior to the entry of this judgment, it is understood that the portion of the within motion respecting the vacating of the award would be moot. However, the issues of whether this court has the authority to impose sanctions upon Arbitration Forums, Inc. and, if so, does Arbitration Forums’ action warrant such punishment, would be nonetheless ripe for review and require a reasoned response. Additionally, respondent’s cross motion to confirm on the grounds that the misapplication of the statute of limitations is not sufficient grounds to vacate an arbitrator’s decision is unavailing and is denied in all respects.

Petitioner, the assignee of an individual allegedly injured in a motor vehicle accident by the respondent’s insured, initially sought reimbursement pursuant to 11 NYCRR 65.10 through compulsory arbitration required for PIP loss transfer. In its initial decision dated October 13, 1998, Arbitration Forums held that the petitioner failed to prove liability [*2]in that it commenced the arbitration more than three years from the date of loss. Petitioner argued that the correct statute of limitations should have been three years from the date of first payment. The award was eventually vacated by the Appellate Term, by order dated October 20, 2000, holding that the imposition by the arbitrator of the wrong statute of limitations was arbitrary and capricious and remanded the matter for a new hearing before another arbitrator. The matter was set down for a new hearing, whereupon it was dismissed by the arbitrator on May 15, 2001 upon the same grounds. The court again vacated the arbitration award as the award was “based on an erroneous application of the statue [sic] of limitations” on or about September 10, 2001. The matter was once again submitted for arbitration and once again, on July 15, 2003, the arbitration award was granted in favor of respondent on the grounds that “no fault statue [sic] based on 3 yrs from date of loss not date of 1st payment.”

Scope of Review

The scope of review of compulsory arbitration decisions has long been held to be clearly beyond the restrictions engrafted in CPLR 7511. In 1980, the Second Department held that “[t]he test thus applicable for review of no-fault arbitrations where error of law is in issue is . . . whether any reasonable hypothesis can be found to support the questioned interpretation.” (Matter of Shand [Aetna Ins. Co.], 74 AD2d 442, 454 [2d Dept 1980].) The Court of Appeals further refined the test and held that where arbitration is mandatory, an award “must have evidentiary support and cannot be arbitrary and capricious” (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]). Thus, the stricter standard imposed upon review of compulsory arbitration applies to the case at bar as the petitioner herein sought reimbursement of no-fault payments pursuant to Insurance Law § 5105 and New York State Insurance Regulations (11 NYCRR) § 65.10, entitled “Mandatory arbitration procedures for insurers, self-insurers and compensation providers under section 5105 of the Insurance Law.” Therefore, there is no question that the underlying arbitration was compulsory, derived from statute and not voluntary. Thus, the question of law is whether the imposition of a three-year statute of limitations from the date of the accident was arbitrary and capricious.

Statute of Limitations

CPLR 214 imposes a three-year statute of limitations and, specifically, CPLR 214 (2) imposes a three-year statute on liabilities imposed by statute.

The Court of Appeals noted almost one decade ago that in determining the applicability of CPLR 214 (2):

“[T]he pertinent inquiry is whether the statute creates a liability ‘for wrongs not recognized in the common or decisional law,’ and which would not exist but for the statute (State of New York v Cortelle Corp., 38 NY2d 83, 86; see, Aetna Life & Cas. Co. v Nelson, 67 NY2d 169, 175; State of New York v Stewart’s Ice Cream Co., 64 NY2d 83, 88; Murphy v American Home Prods. Corp., 58 NY2d 293, 307; Siegel, NY Prac § 35, at 41 [2d ed]).” (Hartnett v New York City Tr. Auth., 86 NY2d 438, 444 [1995].)

Recently, the Fourth Department specifically held that in a loss transfer claim, which is [*3]statutorily created, the statute of limitations is governed by CPLR 214 (2) and “accrues on the date of payment of no-fault benefits to the claimant, because by then ‘all of the facts necessary to the cause of action have occurred so that the party would be entitled to obtain the relief in court.’ ” (Matter of Liberty Mut. Ins. Co. [Hanover Ins. Co.], 307 AD2d 40, 42 [4th Dept 2003] [citations omitted].) This is true in spite of the recent pronouncement of the Court of Appeals wherein it found that plaintiff insurer seeking reimbursement from the tortfeasor was foiled by a three-year statute of limitations from the date of the accident as “it involves a traditional equitable subrogation, not a liability created by statute” (Allstate Ins. Co. v Stein, 1 NY3d 416, 422 [2004]).

Respondent Eagle’s reliance on Allstate v Stein is therefore misplaced. The case at bar is not one that involves “traditional equitable subrogation,” rather it involves loss transfer plucked from New York State’s No-Fault Law, between two insurers. As the rights and relationships between the parties were created by statute and did not exist in the common law, the statute of limitations found in CPLR 214 (2) must be applied.

Further, the issue of which statute of limitations to impose for mandatory no-fault arbitrations is not new to the appellate courts in this department or to these respondents. The Appellate Term has consistently held in both published and unpublished decisions during 2003 that the statute of limitations of three years from the date of payment is applicable in mandatory loss transfer arbitrations between carriers and failure to apply the correct statute of limitations is arbitrary and capricious. (State Farm Mut. Auto. Ins. Co. v Eagle Ins. Co., 6 Misc 3d 27 [App Term, 2d & 11th Jud Dists 2003]; Allcity Ins. Co. v Eagle Ins. Co., 1 Misc 3d 41 [App Term, 2d & 11th Jud Dists 2003]; Allcity Ins. Co. v GEICO, 2003 NY Slip Op 50898[U] [App Term, 2d & 11th Jud Dists 2003].)

Moreover, as Allstate v Stein (supra) is not dispositive, the Appellate Term has spoken on this very dispute between these very parties, no appeal has been taken and, thus, its decision entered on October 20, 2000, wherein it held that the misapplication of the statute of limitations was arbitrary and capricious, remains the law of the case (see People v Evans, 94 NY2d 499 [2000]; Rubenfeld v Gambino, 289 AD2d 319 [2d Dept 2001]; Kowalski Enters. v Sem Intl., 278 AD2d 371 [2d Dept 2000]; Shroid Constr. v Dattoma, 250 AD2d 590 [2d Dept 1998]).

Accordingly, the motion by petitioner to vacate the arbitration award is granted with costs, but the demand for sanctions is set down for a hearing on September 27, 2004, including but not limited to evidence of attorney’s fees expended on petitioner’s behalf for the various arbitrations and petitions to vacate after the Appellate Term decision, with memoranda of law respecting the imposition of sanctions on both Arbitration Forums, Inc. and respondent Eagle Insurance and its attorneys, including whether this court has the authority to impose sanctions in this matter and the basis therefor to be served and filed with [*4]the court prior to September 20, 2004. Respondent’s cross motion is denied in all respects.

[*1]

Civil Court of the City of New York, Kings County, September 14, 2004

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for plaintiffs. Bruno, Gerbino & Soriano, LLP, Melville, for defendant.

OPINION OF THE COURT

Ann Elizabeth O’Shea, J.

Plaintiffs A.B. Medical Services PLLC and LVOV Acupuncture P.C. instituted this action to recover first-party, no-fault benefits for medical services rendered to their assignor, Danny Arenas, who was injured in an automobile accident on March 7, 2003. Plaintiffs provided medical services to Mr. Arenas between March 24, 2003 and June 5, 2003. Each of the plaintiffs made several claims for payment. Only four of those claims are in issue here, each originating from plaintiff A.B. Medical.

Under the no-fault insurance regulations, an insurer must pay or deny a claim within 30 days after it receives a properly completed proof of claim (11 NYCRR 65-3.8 [c]). While an insurer may request additional information to verify a claim, it must do so within 15 days after receiving the proof of claim (11 NYCRR 65-3.5 [b]), and it must then pay or deny the claim within 30 days after receipt of the requested information (11 NYCRR 65-3.8 [a] [1]; [c]).

In order to establish a prima facie case of entitlement to summary judgment on its claims for first-party, no-fault benefits, a plaintiff medical provider need only provide proof that it submitted and defendant received a properly completed claim form, including a “properly executed” assignment of benefits (11 NYCRR 65-3.11 [b] [2]), and that defendant did not pay or deny the claim within 30 days after its receipt of the proof of claim or of additional information in response to a [*2]timely request for verification (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]; New York Hosp. Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2d Dept 2004]).

All four claims were denied on the asserted ground that the services provided were not medically necessary. The forms denying three of the four claims in issue were dated more than 30 days after defendant had received complete proofs of claim. One—for $604.24—was received by defendant on April 29, 2003, and the denial form is dated June 3, 2003, 35 days after the claim was received. A claim for $240 and another for $1,972.08 were received by defendant on June 11, 2003; the denial form for each of those is dated July 22, 2003, 41 days after receipt of the claim. The fourth claim, for $360, was received by defendant on April 14, 2003. Although the denial form is dated May 14, 2003, exactly 30 days after receipt of the claim, the envelope in which the denial was mailed is postmarked May 19, 2003, 35 days after receipt of the claim. In that situation, the operative date for determining the timeliness of the denial must be the date on which the denial was mailed, not the date stated on the denial form (accord Damadian MRI in Canarsie v Countrywide Ins. Co., 194 Misc 2d 708 [2003]). To conclude otherwise would undermine the primary goal of the no-fault system, which is the prompt consideration and processing of claims for losses resulting from automobile accidents (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003]), permit unwarranted delays in the notification of the denial, or encourage the backdating of denials.

Despite the untimeliness of its denials, defendant contends that the assignment of benefits submitted by plaintiff in conjunction with its proofs of claim is deficient because it is undated and the signature of the purported assignor is unauthenticated. While the no-fault regulations require that a proof of claim include a “properly executed” assignment of benefits (11 NYCRR 65-3.11 [b] [2]), the Appellate Term has rejected the argument that the signature on an assignment of benefits must be authenticated for a plaintiff to meet its prima facie burden on a motion for summary judgment (see Ocean Diagnostic Imaging P.C. v Lumbermens Mut. Cas. Co., 3 Misc 3d 137[A], 2004 NY Slip Op 50510[U] [2004], revg Ocean Diagnostic Imaging P.C. v Lumbermens Mut. Cas. Co., Civ Ct, Kings County, July 7, 2003, Sweeney, J., Index No. 75326/02). There is no principled reason why the absence of a date on an assignment should be treated differently from the absence of an authentication of the signature (but see A.B. Med. Servs. v American Tr. Ins. Co., Civ Ct, Kings County, Apr. 13, 2004, Gesmer, J., Index No. 69587/03). Defendant had the opportunity to object to the form or sufficiency of the assignment and to request the original assignment pursuant to its right to seek verification of the claim at the claims stage of the proceeding (see 11 NYCRR 65-3.5 [a]-[c]; 65-3.11 [c]). Its failure to do so results in a waiver of any defense based upon an asserted infirmity in the assignment (New York Hosp. Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640, 641 [2d Dept 2004]; Ocean Diagnostic Imaging P.C. v Lumbermens Mut. Cas. Co., 3 Misc 3d 137[A], 2004 NY Slip Op 50510[U]), or on any other asserted deficiency in the claim (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; Montefiore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 9 AD3d 354 [2d Dept 2004]; Presbyterian Hosp. v Aetna Cas. & Sur. Co., 233 AD2d 433 [2d Dept 1996]), as well as any defense based upon lack of medical necessity (see e.g. Liberty Queens Med., P.C. v Liberty Mut. Ins. Co., 2002 NY Slip Op 40420[U] [App Term, 2d & 11th Jud Dists, June 27, 2002]).

Having submitted proof that it mailed and defendant received its claim forms demonstrating the amount of the loss sustained and that defendant failed to request verification of the assignments or claims or to pay or deny those claims within the applicable time limits, plaintiff established its prima facie entitlement to summary judgment on each of its claims (see New York Hosp. Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640, 641 [2d Dept 2004]). Since defendant is precluded from raising any defense with respect to the sufficiency of the claim forms or the medical necessity of the services provided, there are no issues of fact or law that remain in dispute.

Accordingly, plaintiffs’ motion for partial summary judgment is granted.

Civil Court of the City of New York, Queens County

119001/02

Baker, Barshy & Neuwirth, LLP By: David M. Barshay Esq., Attorneys for plaintiff,1393 Veterans Memorial highway, Ste 21N New York,11788, (631) 979-2906; Short & Billy P.C., By: Ellen Burach-Zion Attorneys for defendant, 217 Broadway Ste 300 New York, N.Y., 10007.

Timothy J. Dufficy, J.

Plaintiff East Way Chiropractic P.C. brought this action against Allstate Insurance Company to recover four separate no-fault payments under a uniform contract of insurance. A non-jury trial was held before this court on May 25, 2004.

FINDINGS OF FACTS

Tammy Figueroa, testified she worked in the billing department for the plaintiff East Way Chiropractic for approximetly five years. She stated that she was responsible for entering data in a computer program for medical bills and was responsible for keeping patient files and billing files in the ordinary course of business.

Ms. Figueroa was familiar with the files of Johnny Concepcion, Charles Taylor, Connie Charles and Jose Martin. Before any assignments were accepted, the office practice was to verify the identity of the patient. Ms. Figureoa stated that no payments were made to the plaintiff East Way except for partial payments made on behalf of Connie Charles. The claim form, to wit “the NF3” and assignments were accepted into evidence except for Jose Martin’s assignment which could not be located.

ISSUES

After plaintiff established a prima facia case, the issue of a timely denial was raised by the plaintiff. The only proof submitted by the defendant was the “NF10” denials which were timely on their face. Defendant’s witness Hector Herrera testified that he was a claim adjuster for defendant Allstate Insurance Company for the past three years and was familiar with the Taylor, Martin and Charles no-fault files. Mr. Herrera received training as to the procedure used by Allstate when a claim is denied. Mr. Herrera testified that the information is entered into the network or main frame computer with a claim number and the injured party’s name. Mr. Herrera stated he was assigned to the instant claims a few days before trial. He testified through the in house training he learned how data is entered into the computer. Denial forms are mailed from a central office in Texas. Mr. Herrera testified through his training, he learned that the forms are mailed out the same day they are entered into the computer or at latest the next day, unless it was a Friday or a holiday weekend. On cross examination, Mr. Herrera admitted that he testified at a prior proceeding that he thought the mailing were done by a third party. However, Mr. Herrera was later permitted to correct his testimony at that proceeding. The court finds that Mr. Herrera [*2]lacks personal knowledge of the of the mailing procedure used in the Texas facility and in fact never visited or worked in the Texas office. No other evidence of a timely mailing was offered by defendant.

As pointed out by the plaintiff in their trial memorandum of law, the law is well settled in that for an insurer’s denial of claim form to be deemed timely pursuant to 11 NYCRR 65.15(g) (3) and Insurance Law§5106(a), the insurer must not only prove that it generated the denial document within thirty (30) days of receipt of the applicants claim, but that it also mailed the denial to the applicant within the same time period. See, Hospital for Joint Diseases v. Nationwide Mutual Ins. Co., 284 A.D.2d 374 (2nd Dept. 2001); A. B. Medical Services, PLC v. GEICO Ins., 2 Misc. 3rd 26 (APP. Term 2nd and 11th J.D. Dist. 2003). The court holds that personal knowledge of the actual mailing or at least personal knowledge of the actual procedure is required. See, S& M Supply Inc. V. GEICO Ins., 2003 N. Y. Slip Op. 51192 (U) (App. Term. 2nd and 11th J.D. Dist. 2003). In the case at bar, the witness did not have personal knowledge of the Texas mailing procedure and in fact never visited or worked at the Texas office. Therefore, the defendant failed to establish that the denials were timely mailed to the applicant within thirty (30) days.

Accordingly, judgment is awarded to the plaintiff for the amount sought in the complaint for services provided to Johnny Concepcion ($122.14), Charles Taylor ($1615.58), Jose Martin ($1916.46). As for the claim for services provided to Connie Charles partial judgment in the amount of $470.96. The plaintiff is directed to submit a judgment to the court together with statutory interest and attorney fees.

Dated: June 23, 2004 _________________________

TIMOTHY J. DUFFICY, J.C.C.

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

43154/03

Plaintiffs: Inwood Hill Medical P.C. and Bronx Neurodiagnostics P.C., as assignees of Jose Rincon

Plaintiffs represented by: Amos Weinberg, Esq., 49 Somerset Dr. S., Great Neck, NY 11020

Telephone: 516-829-3900

Defendant: Allstate Insurance Company

Defendant represented by: Stern & Montana LLP, 115 Broadway, New York, NY 10006

Telephone: 212-532-8100 (Fax 7271)

Shlomo S. Hagler, J.

In this action to recover first-party no-fault benefits, plaintiffs Inwood Hill Medical P.C. (“IHM” or “assignee”) and Bronx Neurodiagnostics P.C. (“BN” or “assignee”) as assignees of Jose Rincon (“Rincon” or “assignor”) move for an order pursuant to CPLR §3212 granting plaintiffs summary judgment against defendant Allstate Insurance Company (“Allstate” or “defendant”) in the sum of $8,418.49. Defendant opposes the motion.

Background

Rincon was allegedly in a motor vehicle accident on April 11, 2002. He allegedly suffered personal injuries and was treated by health care providers IHM and BN. The next day, Rincon assigned to IHM and BN his right to recover benefits from Allstate for health care services rendered to him. (See, Exhibit “C” to the Motion). Plaintiffs then mailed the executed assignment of benefits forms and an application for motor vehicle no-fault benefits (“NF-2”) to Allstate. Between June 20, 2002 and October 16, 2002, IHM and BN mailed several claim forms denominated as “Verification of Treatment By Attending Physicians or Other Provider of Health Service” (“NF-3” or “claim form”) to Allstate. (See, Exhibits “D” & “E” to the Motion).

By letter dated July 18, 2002, Allstate via its counsel sent Rincon a notice to appear for an Examination Under Oath (“EUO”) on August 23, 2002 to verify his claim for no-fault benefits. Thereafter, by letter dated August 22, 2002, Allstate and Rincon agreed to adjourn the EUO from August 23 to September 16, 2002. (See, Exhibit “G” to the Opposition papers). Allstate conducted Rincon’s EUO on September 16, 2002. Allstate also conducted EUO’s of Rincon’s co-claimants, David Villones (Allstate’s policy holder) and Floyd Spencer on August 22, 2002 and September 16, 2002, respectively. (See, Exhibits “C,” “D,” and “E” to the Opposition papers).

Allstate conceded that it received IHM’s and BN’s claim forms and it issued its denials as follows:

[*2]

(See, Exhibits “D” & “E” to the Motion and Exhibit “F” to the Opposition papers).

Specifically, Allstate denied the bulk of plaintiffs’ claim forms by Denial of Claim Forms (“NF-10” or “denials”) dated October 8, 2002, stating that “No-Fault benefits are denied based on EUO (Examination Under Oath) of the Claimant and Failure to Establish proof of claim.” With respect to a $2,619.20 claim form dated July 8, 2002, Allstate denied it on September 18, 2002 for an additional reason “based on [an unproduced] peer review by Dr. Joseph Cole.”

As a result of nonpayment of first-party no-fault benefits, this action ensued by service of a summons and complaint. (See, Exhibit “A” to the Motion). Allstate interposed

an answer with several affirmative defenses asserting, inter alia, a lack of coverage under the applicable insurance policy. (See, Exhibit “B” to Opposition papers, Answer at ¶ 11).

Summary Judgment

The movant has the initial burden of proving entitlement to summary judgment. Winegrad v New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985). Once such proof has been offered, in order to defend the summary judgment motion, the opposing party must “show facts sufficient to require a trial of any issue of fact.” CPLR § 3212(b); Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986); Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595 (1980); Friends of Animals, Inc. v Associated Fur Mfrs., 46 NY2d 1065, 416 NYS2d 790 (1979); Freedman v Chemical Construction Corp., 43 NY2d 260, 401 NYS2d 176 (1977); Spearmon v Times Square Stores Corp., 96 AD2d 552, 465 NYS2d 230 (2d Dept 1983). “It is incumbent upon a [litigant] who opposes a motion for summary judgment to assemble, lay bare and reveal [his, her, or its] proof, in order to show that the matters set up in [the pleadings] are real and are capable of being established upon a trial.” Spearmon, 96 AD2d at 553 (quoting Di Sabato v Soffes, 9 AD2d 297, 301, 193 NYS2d 184, 189 [1st Dept 1959]). If the opposing party fails to submit evidentiary facts to controvert the facts set forth in the movant’s papers, the movant’s facts may be deemed admitted and summary judgment granted since no triable issue of fact exists. Kuehne & Nagel, Inc. v F. W. Baiden, 36 NY2d 539, 369 NYS2d 667 (1975). In addition, an affidavit or affirmation by an attorney or individual who [*3]does not have personal knowledge of the facts is insufficient in support or opposition to the motion as it lacks probative value. Wehringer v. Helmsley Spear, 91 AD2d 585 (1st Dept 1982), affd 59 NY2d 688, 463 NYS2d 417 (1983).

No-Fault Law

History

Approximately thirty years ago, the Legislature enacted sweeping changes to our inadequate tort system of reparations for personal injuries suffered in automobile accidents. This program under Title 18 of the Insurance Law was titled “Comprehensive Automobile Insurance Reparations Act.” (L. 1973, ch. 13, effective February 1, 1974, former Insurance Law ｧ 670, et seq). This legislation is commonly referred to as the No-Fault Law because it provides a plan for compensation of victims of motor vehicle accidents for economic losses without regard to fault or negligence. Montgomery v Daniels, 38 NY2d 41, 378 NYS2d 1 (1975); Overly v Bangs Ambulance, Inc., 96 NY2d 295, 727 NYS2d 378 (2001).

The noble and stated intent of the No-Fault Law was to create a new and improved insurance reparations system:

[W]hich assures that every auto accident victim will be compensated for substantially all of his economic loss, promptly and without regard to fault; [and] will eliminate the vast majority of auto accident negligence suits, thereby freeing our courts for more important tasks. (Governor’s Memorandum of Approval, 1973 N.Y. Legis. Ann. 298). (Emphasis added, quotation marks omitted)

Granger v Urda, 44 NY2d 91, 98, 404 NYS2d 319, 322 (1978). A lynch-pin of the No-Fault Law was the prompt payment of victim’s claims under the so-called “30-day rule” as first-party benefits were “overdue if not paid within thirty-days after the claimant supplies proof of the fact and the amount of loss sustained.” Former Insurance Law § 675(1); Montgomery v Daniels, 38 NY2d 41, 378 NYS2d 1 (1975).

Effective September 1, 1984, the No-Fault Law was re-codified without substantial change from the “Comprehensive Automobile Insurance Reparations Act” to the “Comprehensive Motor Vehicle Insurance Reparations Act” under Article 51 of the Insurance Law. (L. 1984, ch. 367 & ch. 805).

For more than thirty years, the Superintendent of Insurance promulgated regulations implementing the No-Fault Law, which were adopted as Regulation 68 and codified at 11 NYCRR part 65. Matter of Medical Society of the State of N.Y. v Serio, 100 NY2d 854, 768 NYS2d 423 (2003) (“Medical Society II“). In 1999, in an effort to combat abuse of the no-fault laws, the Superintendent proposed an amended Regulation 68. The amended regulation was successfully challenged in the courts. Matter of Medical Society of the State of N.Y., Inc. v Levin, 185 Misc 2d 536 (Sup Ct, N.Y. County 2000), affd 280 AD2d 309 (1st Dept 2001) (“Medical Society I“). However, while the appeal in that case was pending, the Superintendent reinitiated the rule-making process and promulgated another revised Regulation 68, which was also challenged. In Medical Society II, the Court of Appeals upheld the Superintendent’s authority to promulgate the challenged regulations as being fully consistent with Article 51 of the [*4]Insurance Law.

Among the most significant changes adopted in the revised regulations was a reduction in the time frames applicable to the filing of notices and proofs of claim. This was based on the Superintendent’s determination that much of the abuse was associated with the lengthy time frames within which claims could be presented to insurers. Medical Society II, 100 NY2d at 862, 768 NYS2d at 427. The Superintendent also concluded that the shorter time frames would better effectuate the legislative purpose of providing prompt compensation “as the loss is incurred” pursuant to Insurance Law § 5106(a). Id.

The revised regulations reduced the time limit for filing a notice of claim from ninety (90) to thirty (30) days. 11 NYCRR ｧｧ 65-1.1; 65-2.4(b). The revised regulations also reduced the time in which to submit proof of loss due to medical treatment from one hundred eighty (180) to forty-five (45) days, and proof of work loss from “as soon as reasonably practicable” to ninety (90) days. 11 NYCRR ｧｧ 65-1.1; 65-2.4(c). In addition, the revised regulations also increased the time limit for the insurer to seek additional verification requests from ten (10) business days to fifteen (15) business days. 11 NYCRR ｧ 65-3.5(b) and former 11 NYCRR ｧ 65.15(d)(2).

These new regulations have been in effect since April 4, 2002. Medical Society II, 100 NY2d at 862, 768 NYS2d at 427, n 2. This is an important date as the old regulations would apply to a motor vehicle accident occurring prior to April 4, 2002.

Insurance Law § 5106(a)

The general framework for payment of first-party benefits derives from Insurance law § 5106(a). It states as follows:

(a) Payments of first-party benefits and additional first-party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied. All overdue payments shall bear interest at the rate of two percent per month. If a valid claim or portion was overdue, the claimant shall also be entitled to recover his attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim subject to limitations promulgated by the superintendent in regulations.

[*5]Regulation 68, 11 NYCRR ｧ 65

The Insurance Department is the governmental agency responsible for the administration of Article 51 of the Insurance Law. In this capacity, the Superintendent of Insurance, interpreting Insurance Law § 5106, promulgated Regulation 68 and codified it under 11 NYCRR ｧ 65. These regulations contain the specific details for payment of first-party benefits such as notice requirements, claim procedures, follow-up requirements and payment or denial of claims. The courts defer to the special expertise of the Insurance Department in interpreting the Insurance Law except where “the regulation runs counter to the clear wording of a statutory provision [and the regulation then] should not be accorded any weight (citations omitted).” Kurcsics v Merchants Mutual Ins. Co., 49 NY2d 451, 459, 426 NYS2d 454, 458 (1980).

Four sections of these regulations ｧｧ 65-2.4, 65-3.5, 65-3.6 and 65-3.8 form the blueprint or outline for processing of first-party no-fault claims.

The process begins when an injured party provides notice to the insurer within thirty days after the date of the accident. 11 NYCRR § 65-2.4(b). This notice requirement may be deemed satisfied when the injured party submits an “Application for Motor Vehicle No-Fault Benefits (NYS Form NF-2).” The injured party or that party’s assignee (i.e., health care provider) must submit a “written proof of claim” to the insurer for health service expenses within forty-five days after the date services are rendered, and submit proof of work loss within ninety days. 11 NYCRR § 65-2.4(c). For proof of claim for health service expenses, the health care provider usually submits a “Verification of Treatment by Attending Physician or Other Provider of Health Service (NYS Form NF-3),” or less commonly, “Verification of Hospital Treatment (NYS Form NF-4),” or “Hospital Facility Form (NYS Form NF-5).”

Within ten business days after receipt of the completed no-fault application (NF-2), the insurer must forward verification forms for health care or hospital treatment (NF-3, NF-4 or NF-5) to the injured party or that party’s assignee. After receipt of the completed verification of health care or hospital treatment forms (NF-3, NF-4 or NF-5), the insurer may seek “additional verification” or further proof of claim from the injured party or that party’s assignee within fifteen business days thereof. 11 NYCRR § 65-3.5(b). For instance, the insurer may seek an independent medical examination (“IME”) of the injured party which must be held within thirty calendar days from receipt of the initial verification forms (11 NYCRR § 65-3.5[d]), or an examination under oath (“EUO”) which “must be based upon the application of objective standards so that there is specific objective justification supporting the use of such examination.” 11 NYCRR § 65-3.5(e). The injured party must be reimbursed for “any loss of earnings and reasonable transportation expenses.” Id. Of course, the insurer may seek various medical documentation as proof of claim within the prescribed fifteen business days. Id.

If any requested additional verification (e.g., IME, EUO or other medical documentation) has not been supplied to the insurer thirty calendar days after the original request, the insurer shall, within ten calendar days, follow-up with the recalcitrant party “either by telephone call, properly documented in the file, or by mail.” 11 NYCRR § 65-3.6(b). “At the same time, the insurer shall inform the applicant and such party’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” Id. [*6]

After receipt of the notice and proof of claim, the onus then shifts to the insurer to pay or deny the claim within thirty calendar days. 11 NYCRR § 65-3.8(a)(1) & (c). No-fault benefits are overdue if not paid within thirty calendar days. Id. Hence, this is called the “30-day rule.” If the insurer denies the claim, it often uses a prescribed “Denial of Claim Form (NF-10)” providing a detailed explanation for the denial.

Much confusion has arisen relating to the method of counting the thirty calendar days described in 11 NYCRR § 65-3.8(j). It states as follows:

(j) For the purposes of counting the 30 calendar days after proof of claim, wherein the claim becomes overdue pursuant to section 5106 of the Insurance Law, with the exception of section 65-3.6 of this Subpart, any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.

Example: Where an insurer sends an application for motor vehicle no-fault benefits 15 days after notice is received at the address of the insurer’s proper claim processing office instead of five business days, the 30 calendar days permitted by subdivision (a) of this section are reduced to 20 calendar days.

The best case discussing the method of counting vis-a-vis the 30-day rule is Keith v Liberty Mutual Fire Ins. Co., 118 AD2d 151, 503 NYS2d 441 (2d Dept 1986). “Although the clock does not begin to run on the thirty-day calendar day requirement until the insurer receives all of the necessary verification . . . the insurer’s lack of diligence in obtaining the verification may reduce the thirty-day period even before verification is obtained.” Keith, 118 AD2d at 154, 503 NYS2d at 443. In that case, the insurer was four business days late in requesting verification of hospital records. The Appellate Division, Second Department held that the insurer’s thirty calendar days to pay or deny the claim must be reduced by four days, leaving twenty-six days. Id. However, the Appellate Division also applied the insurer’s follow-up requirements for verification requests set forth in our current regulations, 11 NYCRR § 65-3.6(b), which may be excluded by the plain wording of the regulation. The inconsistency may be resolved by stating that the insurer’s time is not reduced where it sought the additional verification requests late but within the prescribed thirty calendar days (i.e., more than fifteen business days and up to twenty-nine calendar days which would not effectively reduce the thirty days to zero). Where the insurer either seeks additional verification requests or even provides a time to respond outside the thirty calendar days, the proverbial clock has run and there is no need to resort to the 11 NYCRR § 65-3.8(j) counting requirement. A contrary interpretation of the regulation would run counter to the clear wording of Insurance Law § 5106(a) providing for the strict 30-day rule. See, Kurciscs v Merchants Mutual Ins. Co., 49 NY2d 451, 426 NYS2d 454 (1980). [*7]

Prima Facie Case

There is a growing debate as to what constitutes the prima facie case in first-party no-fault benefits actions. See, Metroscan Imaging v American Transit Ins. Co., NYLJ, December 10, 1999, at 27, col 5 (Civ Ct NY County, Smith, J.); Neuro Care Center II v Allstate Ins. Co., NYLJ, January 28, 2003, at 17, col 5 (Civ Ct NY County, Billings, J.).

To establish a prima facie case, plaintiffs have the burden of proof of demonstrating (1) standing to bring the action; and (2) the submission of completed proofs of claims to defendant which defendant did not pay or deny within thirty days.

Standing

Standing is defined as “a party’s right to make a legal claim or seek judicial enforcement of a duty or right.” Black’s Law Dictionary, Seventh Edition, 1999. The United States Supreme Court nicely articulated the meaning of standing as follows:

Have the appellants alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions? This is the gist of the question of standing.

Baker v. Carr, 369 US 186, 204, 82 S Ct 691, 703 (1962) (Brennan, J.).

First-party no-fault benefits actions are no different and require standing to be addressed. Where the injured party assigned his/her claim to a health care provider or hospital, such assignment of benefits forms must be provided as part of the prima facie case. At the very least, the assignment of benefits forms must include the assignor and assignee’s name, the date of the accident, and be signed and dated by the assignor. The plaintiffs’ burden in proving standing is satisfied once they submit properly completed assignment of benefits forms. Defendant must then come forward with evidence of a deficiency or a claimed defect in the assignment or such defense will be waived unless it was alleged in the insurer’s denial of claim. See, Presbyterian Hospital v Aetna Casualty & Surety Co., 233 AD2d 433, 650 NYS2d 602 (2d Dept 1996), lv dismissed 89 NY2d 1030, 658 NYS2d 245 (1997); Quality Medical Healthcare, P.C. v Lumberman’s Mutual Casualty Co., 2002 N.Y. Slip Op 50098(U), 2002 WL 496433 (App Term 1st Dept, March 19, 2002). An example of a waivable defect is the inclusion of a “reservation of rights” provision in the assignment of benefits form. See, Park Health Center a/a/o Sharpe v Eveready Ins. Co., 2001 N.Y. Slip Op 40665(U), 2001 WL 1807733 (App Term 2d & 11th Jud Dists, December 17, 2001).

This analysis may be best analogized to the defendant’s waiver of personal jurisdiction defenses. Plaintiffs must present a completed affidavit of service to satisfy their service requirements. The affidavit of service raises a presumption of delivery which may be either rebutted or waived. See, Slater v Congress of Racial Equality, Inc., 48 AD2d 623, 367 NYS2d 789 (1st Dept 1975).

[*8]Proof of Claims

Plaintiffs must submit completed proofs of claims in similar form to the NYS NF-3, 4, or 5 Forms. Significantly, the forms provide the defendant with the name of the policyholder, name and address of the provider, policy number, date of accident, date of health care service, place of service, description of treatment/service rendered and charges billed. The NF-3 and NF-4 forms also contain an assignment of no-fault benefits option that may be executed by the injured party.

Next, plaintiffs must show that these claims were mailed to the insurer. This can be accomplished in one of at least three ways. First, plaintiffs may provide an affidavit of service and/or proof of mailing. Second, plaintiffs may provide proof of a standard office practice or procedure designed to ensure that claims are properly addressed and mailed. See Amaze Medical Supply Inc. a/a/o Tsigelman v Allstate Ins. Co., 3 Misc 3d 133(A), NYLJ, June 2, 2004, at 27, col 6, 2004 NY Slip Op 50447(U), 2004 WL 1197345 (App Term 2d & 11th Jud Dists, May 20, 2004). Lastly, the date the claim was received as specified on the Denial of Claim (NF-10) form serves as an admission by the insurer and is sufficient proof of mailing. A.B. Medical Services PLLC v New York Central Mutual Fire Ins. Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 50507(U), 2004 WL 1302031 (App Term 2d & 11th Jud Dists, May 26, 2004); Ocean Diagnostic Imaging, P.C. a/a/o Grishchenko v Lumbermens Mutual Casualty Co., NYLJ, June 2, 2004, at 27, col 3, 2004 NY Slip Op 50510(U), 2004 WL 1301952 (App Term 2d & 11th Jud Dists, May 26, 2004).

Once plaintiffs show that properly completed claim forms were submitted to the insurer, they must then demonstrate that the claims were not paid or denied by the insurer within thirty calendar days of receipt thereof, as discussed below.

30-Day Rule

The Court of Appeals in the landmark case of Presbyterian Hospital in the City of N.Y. a/a/o DiGuisto v Maryland Casualty Co., 90 NY2d 274, 282, 660 NYS2d 536, 542 (1997), declared that “an insurer may be precluded from interposing a statutory exclusion defense for failure to deny a claim within 30 days as required by Insurance Law § 5106(a).” The Court of Appeals explained that the strict construction of the “30-day rule” was intended as a “trade-off of the no-fault reform [which] still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leased contestable period and process designed to avoid prejudice and red-tape dilatory practices.” Presbyterian, 90 NY2d at 285, 660 NYS2d at 542.

Lately, the courts have liberally interpreted the plaintiffs’ burden as to require only submission of “complete proofs of claims to defendant which defendant did not pay or deny within 30 days.” Amaze Medical Supply Inc. a/a/o Darlington v Allstate Ins. Co., 2 Misc 3d 134(A), 2004 NY Slip Op 50211(U), 2004 WL 758248 (App Term 2d & 11th Jud Dists, March 26, 2004). See also, Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists); Amaze Medical Supply, Inc. v Colonial Penn Ins. Co., NYLJ, March 3, 2004, at 26, col 1, 2004 NY Slip Op 50471(U), 2004 WL 1243410 (App Term 2d & 11th Jud Dists, March 3, 2004); A.B. Medical Services PLLC a/a/o Suzolyanski v CNA Ins. Company, 1 Misc 3d 137(A), 2004 NY Slip Op 50061(U), 2004 WL 314819 (App Term 1st Dept, February 11, 2004); Damadian MRI in Elmhurst, P.C. a/a/o [*9]Jones v Liberty Mutual Ins. Co., 2 Misc 3d 128(A), 2003 NY Slip Op 51700(U), 2003 WL 23310887 (App Term 9th & 10th Jud Dists, Dec. 24, 2003); A.B. Medical Services PLLC a/a/o Boliere v Lumbermens Mutual Casualty Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 24194, 2004 WL 1301910 (App Term 2d & 11th Jud Dists, May 26, 2004); A.B. Medical Services PLLC v New York Central Mutual Fire Ins. Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 50507(U), 2004 WL 1302031 (App Term 2d & 11th Jud Dists, May 26, 2004); Amaze Medical Supply Inc. a/a/o Bermudez v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003); Amaze Medical Supply Inc. a/a/o Tsigelman v Allstate Ins. Co., 3 Misc 3d 133(A), NYLJ, June 2, 2004, at 27, col 6, 2004 NY Slip Op 50447(U), 2004 WL 1197345 (App Term 2d & 11th Jud Dists, May 20, 2004); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002) (“plaintiff health care provider established a prima facie case by the submission of statutory forms of proof of claim and the amount of the loss . . .” [citations omitted]).

Moreover, the Appellate Term, First Department has recently held that due to an untimely denial, the insurer “waived any defenses relating to the adequacy of plaintiffs’ claim forms, including the alleged absence of necessary signatures.” A.B. Medical Services PLLC a/a/o Suzolyanski v CNA Ins. Co., 1 Misc 3d 137(A), 2004 NY Slip Op 50061(U), 2004 WL 314819 (App Term 1st Dept, February 11, 2004).

The rationale for this standard was best expressed by the Appellate Term, Second Department in both Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003) and Damadian MRI in Elmhurst, P.C. a/a/o Jones v Liberty Mutual Ins. Co., 2 Misc 3d 128(A), 2003 NY Slip Op 51700(U), 2003 WL 23310887 (App Term 9th & 10th Jud Dists, Dec. 24, 2003), as follows:

The situation may be analogized to an account stated where, upon the insurer’s failure to timely and properly deny the bill as embodied in the claim form, the insurer is presumed to have acquiesced to its correctness, thereby rendering the insurer liable thereon.

However, the Court of Appeals has also held that an untimely disclaimer or denial does not prevent the insurer from raising a lack of coverage defense “premised on the fact or founded belief that an alleged injury does not arise out of an insured incident.” Central General Hospital a/a/o Mandrels v Chubb Group of Ins. Cos., 90 NY2d 195, 199, 659 NYS2d 246, 248 (1997). Thus, even if the insurer fails to pay or deny a claim within thirty days of its submission, it may still raise a lack of coverage defense.

Medical Necessity

Courts have held that plaintiffs need not demonstrate medical necessity as part of their prima facie case. Dermatossian v New York City Transit Authority, 67 NY2d 219, 224, 501 NYS2d 784, 787 (1986) (“A claimant to receive payment need only file a ‘proof of claim’ . . [*10]. and the insurers are obligated to honor it promptly or suffer the statutory penalties”); A.B. Medical Services PLLC v Geico Ins., 2 Misc 3d 26, 773 NYS2d 773 (App Term 2d Dept 2003) (“We have rejected arguments that a no-fault benefits claimant is obligated to prove the treatment’s medical necessity, at the claim stage or in support of its motion for summary judgment in a subsequent action on the claim [citations omitted]”); Choicenet Chiropractic, P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672(U), 2003 WL 1904296 (App Term 2d & 11th Jud Dists, January 23, 2003); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002).

The insurer may raise the defense that a claimed procedure was not medically necessary with a timely denial pursuant to the 30-day rule. Presbyterian, 90 NY2d 274, 282, 660 NYS2d 536, 542 (1997); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002). If there is an untimely disclaimer or denial in derogation of the 30-day rule, the insurer’s lack of medical necessity defense is precluded. Amaze Medical Supply Inc. a/a/o Darlington v Allstate Ins. Co., 2 Misc 3d 134(A), 2004 NY Slip Op 50211(U), 2004 WL 758248 (App Term 2d & 11th Jud Dists, March 26, 2004).

Furthermore, in support of or opposition to a summary judgment motion or at trial, the defense that the claim was not medically necessary must be supported by sufficient factual evidence or proof and cannot simply be conclusory. Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003); Choicenet Chiropractic, P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672(U), 2003 WL 1904296 (App Term 2d & 11th Jud Dists, January 23, 2003).

Fraud

No-fault insurance fraud is a rising and significant problem. The Court of Appeals listed alarming statistics as follows:

Between 1992 and 2001, reports of suspected automobile insurance fraud increased by 275%, the bulk of the increase occurring in no-fault insurance fraud. Reports of no-fault fraud rose from 489 cases in 1992 to 9,191 in 2000, a rise of more than 1700%. No-fault fraud accounted for three quarters of the 16,902 reports of automobile-related fraud received by the Insurance Department’s Frauds Bureau in 2000, and more than 55% of the 22,247 reports involving all types of insurance fraud. In 1999, the Superintendent established a No-Fault Unit within the Frauds Bureau to focus specifically on no-fault fraud and abuse. By one estimate, the combined effect of no-fault insurance fraud has been an increase of over $100 per year in annual insurance premium costs for the average New York motorist.

Medical Society II, 100 NY2d at 861, 768 NYS2d at 426. [*11]

Notwithstanding the above, where a defense is based on fraud, the defendant insurer must allege in detail the particular facts constituting the wrong as mandated by CPLR § 3016(b). The general standard the insurer must assert for a lack of coverage or fraud defense is one “premised on the fact or founded belief that the alleged injury does not arise out of an insured incident” but was a deliberate event staged in furtherance of a scheme to defraud the insurer. Central General Hospital v Chubb Group of Ins. Cos., 90 NY2d at 199, 659 NYS2d at 248. See also, Metro Medical Diagnostic, P.C. v Eagle Ins. Co., 293 AD2d 751, 741 NYS2d 284 (2d Dept 2002). Thus, the insurer has the burden to come forward with proof in admissible form to establish “the fact” or “foundation for its belief” that the alleged incident was a staged event to defraud the insurer. Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d 11, 699 NYS2d 77 (2d Dept 1999). Indeed, unsupported conclusions and “suspicions” as well as “unsubstantiated hypotheses and suppositions” are insufficient to raise a triable issue of the assignor’s alleged fraud. See, A.B. Medical Services PLLC v Eagle Ins. Co., 3 Misc 3d 8, 776 NYS2d 434 (2d Dept 2002); A.B. Medical Services PLLC v Lumbermen’s Mutual Casualty Co., NYLJ, September 30, 2003, at 17, col 1 (Civ Ct Kings County, Schack, J.); Bonetti v Integan National Ins. Co., 269 AD2d 413, 703 NYS2d 217 (2d Dept 2000); Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists); A.M. Medical P.C. v New York Central Mutual Ins. Co., 2 Misc 3d 1012(A), NYLJ, April 29, 2004, at 19, col 1, 2004 N.Y. Slip Op 50298(U), 2004 WL 869595 (Civ Ct Queens County, Butler, J.) (“low impact report” failed to show that incident was a staged event to defraud the insurer).

There is a dearth of case law to provide guidance as to what is required for the insurer to establish a fraud defense. The Appellate Division, Second Department stated that “an expert’s affidavit will usually [but not always] be necessary to effectively establish the basis of an insurer’s founded belief.” Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d at 20, 699 NYS2d at 84 (emphasis added). Also, where it is proven that the vehicles were involved in several collisions within a short period of time after the insurer issued insurance policies for vehicles registered to the insured, that may satisfy the definition of “founded belief.” State Farm Mutual Automobile Ins. Co. v Laguerre, 305 AD2d 490, 759 NYS2d 531 (2d Dept 2003). The proof adduced may be an affidavit of the investigator who has personal knowledge of the alleged fraud investigation and affidavits from individuals involved in the collisions and/or the police accident report for each of the collisions, if any. Id.; Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists).

Specificity of Denial of Claim

It is well settled law that to deny or disclaim coverage for bodily injuries, an insurer must give written notice “as soon as is reasonably possible” to the injured party and the insured with a high degree of specificity of the grounds on which the denial or disclaimer is predicated. See, Insurance Law § 3420(d); General Accident Ins. Group v Cirucci, 46 NY2d 862, 414 NYS2d 512 (1979); State Farm Mutual Automobile Ins. Co. v Cooper, 303 AD2d 414, 756 NYS2d 87 (2d Dept 2003). The Court of Appeals concisely explained the need for specificity as follows:

Absent such specific notice, a claimant might have [*12]difficulty assessing whether the insurer will be able to disclaim successfully. This uncertainty could prejudice the claimant’s ability to ultimately obtain recovery. In addition, the insured’s responsibility to furnish notice of the specific ground on which the disclaimer is based is not unduly burdensome, the insurer being highly experienced and sophisticated in such matters.

General Accident Ins. Group v Cirucci, 46 NY2d at 864, 414 NYS2d at 514. Therefore, the insurer is limited to the specific grounds alleged in its written Denial of Claim.

Discussion

Plaintiffs have demonstrated their prima facie case by submitting executed assignment of benefits forms and completed copies of proofs of claims which were mailed and received by the defendant, but not paid or denied within thirty days of receipt. (See Exhibits “C,” “D,” & “E” to the Motion). The burden then shifts to the defendant to demonstrate the existence of a material issue of fact. See, Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986).

Inasmuch as the lack of coverage defense may essentially be asserted at any time, defendant really does not argue that plaintiffs’ claims were timely denied, but rather that “Mr. Rincon’s [assignor’s] injuries did not arise from the accident, or that the accident may have been staged.” (See Affidavit of Maureen Carbone, Claim Representative, in Opposition to Motion, sworn to on April 21, 2004, at ¶ 7). Defendant’s claim representative bases this conclusion on EUO testimony of Rincon as well as his two co-claimants, Villones and Spencer, as follows:

i)The claimants declined medical treatment at the scene of the accident, did not seek treatment at any hospital, and waited approximately 2-5 days to seek treatment at the same clinic where they received similar to identical treatment. (Rincon Tr: 59, 62; Villones Tr: 40, 48; Spencer Tr: 50, 53)

ii)Claimants missed minimal, if any, time from work as a result of the accident. (Rincon Tr: 10; Spencer Tr: 11)

iii)Claimants did not consult with their regular physicians or medical centers in regard to the accident. (Rincon Tr: 37; Villones Tr: 16; Spencer Tr: 26)

iv)Claimants set forth sharply discrepant accounts as to the arrangements for and purpose of their meeting on the day of the accident, how much time elapsed before the accident occurred after having entered the vehicle, whether [*13]or not the adverse vehicle fled the scene of the accident, how the police were alerted to the scene, and how they learned of the clinic. (Rincon Tr: 43-45, 51-52, 58, 63; Villones Tr: 21-22, 37-38; Spencer Tr: 33-36, 41, 50, 52).

(See Affidavit of Maureen Carbone, Claim Representative, in Opposition to Motion, sworn to on April 21, 2004, at ¶ 6).

In this case, the minor discrepancies in the testimony as well as the claimants’ minimal work loss and use of the same clinic, are insufficient as a matter of law to demonstrate a triable issue as to a fraud defense “premised on the fact or founded belief that the alleged injury does not arise out of an insured incident.” Central General Hospital v Chubb Group of Ins. Cos., 90 NY2d at 199, 659 NYS2d at 248. Defendant failed to present either competent evidence such as expert testimony (e.g., peer review report) that the alleged injuries were not causally related to the accident or even an investigator’s report. Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d at 20, 699 NYS2d at 84. The sum and substance of the defendant’s defense is based on “unsubstantiated hypotheses and suppositions.” A.B. Medical Services PLLC v Eagle Ins. Co., 3 Misc 3d 8, 10, 776 NYS2d 434, 436 (2d Dept 2002).

Moreover, the defendant’s explanation in the denial of claim forms justifying the denial “based on EUO testimony,” is vague and lacks the “high degree of specificity” on which the denials must be predicated. See, Insurance Law § 3420(d); CPLR § 3016(b); General Accident Ins. Group v Cirucci, 46 NY2d 862, 414 NYS2d 512 (1979).

Conclusion

Based on the foregoing, this Court grants plaintiffs summary judgment against defendant in the sum of $8,418.49 with statutory interest at a rate of two percent per month and attorneys’ fees of 20% thereof. 11 NYCRR ｧ§ 65-3.9(a) & 65-3.10; St. Clare’s Hospital v Allstate Ins. Co., 215 AD2d 641, 628 NYS2d 128 (2d Dept 1995). Submit judgment on notice to all parties.

The foregoing constitutes the decision and order of this Court. Courtesy copies of this decision and order have been mailed to counsel for the parties.

Dated: New York, New York________________________________

June 18, 2004J. C. C.