Civil Court, New York County

044447 CVN 2008

Attorneys for plaintiff:

Leon Kucherovsky

By: David Forman, Esq.

Attorneys for defendant:

Saretsky, Katz, Dranoff & Glass, LLP

By: Howard J. Newman, Esq.

Manuel J. Mendez, J.

Upon a reading of the foregoing cited papers on this motion and cross motion for summary judgment it is the decision of this court that the motion is granted, plaintiff is awarded judgment in the amount of $2,610.00 with interest at 2% per month from July 19, 2008, plus attorneys fees of 20% of judgment plus interest amount not to exceed $850.00, plus costs. The cross motion is denied.

This motion was returnable on November 13 2008. On the return date the court adjourned the motion to December 17, 2008 at which time defendant filed a cross motion and opposition to the motion. The court then adjourned the motion and cross motion to March 11, [*2]2009 for a reply. On March 11, 2009 there being no reply this court took the motion on submission and ordered plaintiff to submit its reply by March 25, 2009. Plaintiff has submitted its reply and this court now decides the motion.

Plaintiff moves for summary judgment to recover for services rendered its assignor under the No-fault provision of the Insurance Law. Plaintiff alleges that as a result of an automobile accident on July 19, 2002, it provided services to its assignor on August 15 to August 29, 2002 and on September 23, 2002 submitted a bill to the defendant for these services in the amount of $630.00. It provided services on September 3 to September 26, 2002 and on October 8, 2002 submitted a bill to the defendant for these services in the amount of $900.00. It provided services on October 1 to October 28, 2002 and on November 5, 2002 submitted a bill to the defendant for these services in the amount of $720.00. It provided services on November 1 to November 13, 2002 and on December 5, 2002 submitted a bill to the defendant for these services in the amount of $270.00. It provided services on December 20, 2002 and on January 7, 2003 submitted a bill to the defendant for these services in the amount of $90.00. The total for all the bills submitted by plaintiff to the defendant is $2,610.00.

In support of its motion plaintiff annexes the affidavit of Yevgeny Gorbatov, LAC, its owner who has personal knowledge that the claims were mailed because it is his responsibility to insure that the claims were mailed. He bases his affidavit on personal knowledge and a review of the file. He further states that the services were provided and bills mailed as indicated in this court’s factual recitation. Finally, he provides the office practice and procedure in place at the time these services were performed and bills generated to ensure that items are properly addressed and mailed( See Moving papers Exh. A).

Plaintiff also annexes to its moving papers the denial of claims issued by the defendant. In these denials, all dated February 17, 2003, defendant acknowledges receipt of the claims and denies all of the claims submitted based on lack of coverage ( See moving papers Exh. E). There was no verification requested to toll the 30 day period within which defendant had to pay or deny the claim.

Defendant cross moves for summary judgment on the basis that the assignor is perpetrating a fraud and has failed to cooperate. Its denial of claim form gives as a reason for the denial of all claims the following: ” All New York no-fault benefits are denied to the above injured person based on the loss not being accidental; violation of the fraud provisions of the policy; failure to cooperate, we base our conclusion on your failure to cooperate on evidence of your giving false or misleading information throughout the presentation of the claim; the injuries did not arise our of the use or operation of the insured vehicle; and engaging in fraudulent conduct in connection with this loss.”

In support of its motion defendant annexes an attorney’s affirmation, the affidavit of Christopher Maresco, a claims representative, and the denial of claims forms (NF-10). Absent from defendant’s submission is an affidavit from an investigator from its special investigations [*3]unit and a copy of the assignor’s examination under oath.There was no request for verification of claim or additional verification tolling the time within which to pay or deny plaintiff’s claim. All the claims were denied on February 17, 2003 more than 30 days after the last bill for $90.00 had been submitted. Rosemarie Tulino, not Christopher Maresco, was the adjustor assigned to this claim.

Defendant claims the denial is due to a number of factors all of which taken together establish that there was fraud perpetrated by its insured, including the assignor. The affidavit of Chistopher Maresco states that his knowledge is based on a review of the file and on his personal knowledge. He states that “he has been assigned to oversee the handling of this claim which was referred to the special investigations unit to resolve questions of merit since this loss had multiple fraud indicators which support State Farms’s founded belief that the collision was fraudulent and not an accident.” The affidavit goes on to indicate that there are “Fraud Indicators” leading defendant to its conclusion of fraud. Mr. Maresco goes on to state that ” When all the information was carefully investigated and analyzed it formed State Farm’s founded belief that the purported accident was not a covered accident, but instead it was an intentional act which is not covered under State Farm’s policy of insurance.”

In order to prevail on a motion for summary judgment, the proponent must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence, eliminating all material issues of fact.(Klein V. City of New York, 89 NY2d 833; Ayotte V. Gervasio, 81 NY2d 1062, Alvarez v. Prospect Hospital, 68 NY2d 320). Once the moving party has satisfied these standards, the burden shifts to the opponent to rebut that prima facie showing, by producing contrary evidence, in admissible form, sufficient to require a trial of material factual issues(Kaufman V. Silver, 90 NY2d 204; Amatulli V. Delhi Constr. Corp.,77 NY2d 525; Iselin & Co. V. Mann Judd Landau, 71 NY2d 420). In determining the motion, the court must construe the evidence in the light most favorable to the non-moving party(SSBS Realty Corp. V. Public Service Mut. Ins. Co., 253 AD2d 583; Martin V. Briggs, 235 [1992]).

In an Action to recover first-party no-fault benefits for health care services provided to an assignor, a plaintiff establishes a prima facie entitlement to summary judgment by proof that it submitted a claim, setting forth the fact and amount of the loss sustained and that payment of no-fault benefits is overdue ( Insurance Law § 5106[a]; Mary Immaculate Hosp. , v. Allstate Ins. Co., 5 AD3d 742[2004]; Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128 [A], 2003 NY Slip Op 51701[U][App. Term 2nd. & 11th Jud. Dists. 2003]). A no-fault benefits applicant may cure deficiencies in its proof of mailing by annexing to its motion papers an insurer’s denial of claim form wherein the insurer acknowledges the claims’ receipt ( Fair Price Med. Supply Corp., v. ELRAC Inc., 12 Misc 3d 119 [App. Term 2nd. & 11th, Jud. Dists. 2006]). Plaintiff has established a prima facie entitlement to summary judgment through the affidavit of Yevgeny Gorbatov and the exhibits annexed to its moving papers which show that a claim was submitted and payment is overdue. Any deficiencies in Mr. Gorbatov’s affidavit are cured by the defendant’s denial of claim forms which acknowledge receipt of plaintiff’s claims. [*4]

The burden now shifts to defendant to raise a material issue of fact. Defendant had 30 days to pay or deny the claim, counting from the date it receives the bills in question ( See 11 NYCRR§ 65-3.8(a)). Defendant did not pay or deny the claim within 30 days of receipt of the bill, and did not request verification of the bills within 15 days of its receipt ( See 11 NYCRR§ 3.5 (a)). However, this has no effect on its defense of lack of coverage.( See Presbyterian Hospital v. Maryland Casualty Co., 90 NY2d 274[1997]; Central General Hospital v. Chubb Group of Ins. Co.,90 NY2d 195, 659 N.Y.S. 2d 246 [1997]) which may be asserted after the time to pay or deny the claim has expired, premised on a “fact or founded belief” that the alleged injury does not arise out of an insured accident.

While the untimely denial does not preclude defendant from interposing the lack of coverage defense based on fraud, it remains defendant’s burden to demonstrate ” a fact or founded belief” that the injuries did not result from an insured event ( See Central General Hospital v. Chubb Group of Ins. Co., 90 NY2d 195, 199 [1997] Supra). Thus, defendant’s proof has been found lacking when an “investigator’s report alleged only that the uncooperative insured, but not the assignor, had been involved in prior accidents alleged to be “suspicious” ( A.B. Medical Services PLLC v. Eagle Insurance Co., 3 Misc 3d 8, 776 N.Y.S. 2d 434 [App. Term 2nd. Dept. 2003]), the motion is supported by an affirmation of defendant’s counsel without personal knowledge of the facts and an affidavit of a claim representative likewise with no personal knowledge of defendant’s investigation into the incident ( Oleg Barshay, D.C., P.C., v. State Farm Ins. Co., 14 Misc 3d 74, 831 N.Y.S. 2d 821 [App. Term 2nd. Dept. 2006]; Comprehensive Mental v. Allstate Ins. Co., 14 Misc 3d 130(A), 836 N.Y.S. 2d 484[ App. Term 9th & 10th Jud. Dists. 2007]) when the statements in the affidavit of the investigator are conclusory (Great Wall Acupuncture v. Utica Mutual Ins. Co., 14 Misc 3d 144 (A), 836 N.Y.S. 2d 499 [App. Term 2nd. & 11th Jud. Dists. 2007]).

“To interpose a defense of staged-accident fraud sufficient to raise a triable issue of fact, defendant must establish the fact or founded belief that the alleged injuries do not arise out of an insured incident. The discrepancies in the testimony given by two passengers during their examinations under oath are insufficient to establish a founded belief that the alleged injuries did not arise out of a covered accident. The affidavit of defendant’s claims representative and the attached exhibits failed to substantiate the conclusory allegations of the assignor’s participation in a ring that stages traffic incidents to defraud insurers” (Webster Diagnostic Medicine, P.C., v. State Farm Ins. Co., 15 Misc 3d 97, 838 N.Y.S. 2d. 343 [App. Term 9th & 10th Jud. Dists. 2007]).

The defendant must come forth with proof in admissible form which is more than just “unsubstantiated hypotheses and suppositions.” These are insufficient to raise a triable issue of the assignor’s fraud ( A.B. Medical Services, PLLC v. Eagle Ins. Co., 3 Misc 3d 8, 776, N.Y.S. 2d 434 [2003]; Oleg Barshay, D.C., P.C., v. State Farm Ins. Co., 14 Misc 3d 74, 831 N.Y.S. 2d 821 [2006];Comprehensive Mental v. Allstate Ins. Co., 14 Misc 3d 130(A), 836 N.Y.S. 2d 484 [2007];Great Wall Acupuncture v. Utica Mutual Ins. Co., 14 Misc 3d 144 (A), 836 N.Y.S. 2d 499[ 2007] Supra). [*5]

Defendant has failed to come forth with more than mere unsubstantiated hypothese and suppositions in support of its motion. Its attorney’s affirmation is without probative value as he has no personal knowledge of the facts ( See Melbourne Med., P.C., v. Utica Mut. Ins. Co., 4 Misc 3d 92 [App. Term 2nd. & 11th Jud. Dists. 2004]). The affidavit of Christopher Maresco is also without probative value as he has no personal knowledge of the investigation. He is not a member of the investigation Unit and was not the investigator assigned to investigate plaintiff’s assignor’s claims. In fact his affidavit does not state the name of the investigator investigating this claim. His affidavit, which is based on his review of the file is conclusory and provides no more than the hypothese and suppositions which the courts have previously rejected as insufficient to support or oppose a motion for summary judgment. Mr. Maresco alludes to discrepancies in the Examinations Under Oath of the various passengers in the vehicle at the time of the accident. However, the transcripts are not annexed to the cross moving papers for the court to review. The court is left to rely on the analysis of these transcripts by Mr. Maresco who reaches the conclusion that the accident was not a covered accident. His affidavit without more is insufficient to defeat plaintiff’s entitlement to summary judgment.

Accordingly, it is the decision and order of this court that the motion for summary judgment is granted. Plaintiff is awarded a judgment in the amount of $ $2,610.00 with interest at 2% per month from July 19, 2008, plus attorneys fees of 20% of the judgment plus the interest amount not to exceed $850.00, plus costs. The cross motion is denied.

This constitutes the decision and order of this court.

Dated: April 2, 2009__________________________

Manuel J. Mendez

Judge Civil Court

Civil Court, Kings County

49724/04

Genine D. Edwards, J.

This is a trial of an action for first-party benefits, attorney’s fees and statutory interest commenced by PDG Psychological P.C. (“plaintiff”) as assignee of Sergey Potapov (“assignor”) against State Farm Insurance Company (“defendant”), pursuant to New York Insurance Law and the No-Fault Regulations. Plaintiff billed defendant a total of $2,758.76 for psychological treatment rendered to its assignor from October 2002 to February 2003. Defendant denied the claims due to a violation of the fraud provisions in its policy. The jury rendered a verdict in favor of the defendant. This Court reserved its decision regarding the parties’ directed verdict motions.

No-Fault reform was enacted to ensure speedy recovery of payment to providers of healthcare services rendered to those injured in automobile accidents. Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274 (1997). To this end, the No-Fault Regulations allow certain providers to receive direct payment from insurance companies. 11 NYCRR §65-3.11. Providers must submit forms that include the fact and amount of the loss within 45 days of the services rendered. 11 NYCRR §65-1.1; St. Vincent’s Hospital & Medical Center v. County Wide Insurance Company, 24 AD3d 748 (2nd Dept. 2005). Thereafter, insurers must make payment or deny the claim within thirty days. 11 NYCRR §65.15(g). However, where the insurer denies the claim due to a coverage issue the thirty-day period is not applicable. Central General Hospital v. Chubb Group of Insurance Companies, 90 NY2d 195 (1997).

FACTS

Plaintiff did not offer any witnesses to prove its prima facie case of entitlement to benefits. Instead, plaintiff first argued that pursuant to a prior decision on a summary judgment motion its prima facie case was established. However, a perusal of that decision reveals that Judge George Silver simply denied summary judgment. Judge Silver did not indicate that plaintiff’s prima facie case was made.

Secondly, plaintiff argued that this Court should take judicial notice of the exhibits that were attached to the summary judgment motion and are now a part of the Court file. This Court denied that application. Exhibits attached to motions are not automatically admitted into evidence via the judicial notice doctrine. At trial, a foundation for the admissibility of each [*2]exhibit must be laid. McArthur v. Wal-Mart Stores, Inc., 274 AD2d 378 (2nd Dept. 2000) (no proper foundation was laid for the admission of the exhibit); Funk v. Kaiser-Frazer Sales Corporation, 15 AD2d 548 (2nd Dept. 1961); Petchesky v. Brooklyn Terminal Market Ass’n., 266 A.D. 680 (2nd Dept. 1943); Hogan v. National Sellers, Inc., 256 A.D. 951 (2nd Dept. 1939); Kavanagh v. Passeggio, 222 A.D. 679 (2nd Dept. 1927); A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc. v. State Farm Mutual Automobile Insurance Company, 7 Misc 3d 822 (NY Civ. Ct. Kings County 2005); Universal Open MRI of the Bronx, P.C. v. State Farm Mut. Auto Ins., 12 Misc 3d 1151(A) (NY Civ. Ct. Kings County 2006).

Plaintiff’s third attempt at having the exhibits admitted into evidence was deemed successful. Plaintiff argued that pursuant to its Notice to Admit and defendant’s Statement in Reply to Request for Admissions, the exhibits were admitted by the defendant. Defendant’s Statement in Reply to Request for Admissions was not sworn, was made by an attorney and not the plaintiff, was not verified by the plaintiff and no rationale was articulated as to why the defendant could not admit or deny the requests. Defendant’s Reply to Request for Admissions amounted to a failure to respond. Therefore, according to ELRAC, Inc. v. McDonald, 186 Misc 2d 830 (NY Sup. Ct. Nassau County 2001), the exhibits were deemed admitted by the defendant. Thus, the subject bills, denial of claim form, assignment of benefit form and delay letters were admitted into evidence.

The plaintiff rested. The defendant made a motion for a directed verdict due to plaintiff’s failure to prove a prima facie case. This Court reserved its decision. The burden of production of evidence of an intentional collision shifted to the defendant. Mount Sinai Hospital v. Triboro Coach, Incoporated, 263 AD2d 11 (2nd Dept. 1999).

In support of its case, defendant proffered the testimony of Laura Cevallos, a Special Investigation Unit Investigator for State Farm Insurance Company. Ms. Cevallos explained her educational background and investigative training, including her training with the National Insurance Crime Bureau. Ms. Cevallos testified that the assignor’s policy initiated on August 18, 2002 and the accident occurred two months later. This automatically raised a red flag in Ms. Cevallos’ mind. There were multiple passengers in the vehicle and the assignor had many prior accidents. The subject accident was reported by an attorney and not by the assignor. According to Ms. Cevallos, these factors were all suspect. Ms. Cevallos testified that she reviewed the file maintained by the Special Investigation Unit; the transcripts of the examinations under oath of the passengers and the assignor; she took a statement from the driver of the other car; and attempted to obtain additional testimony from the assignor, but he did not cooperate.

Upon a claim committee review of the assignor’s file it was decided that the claims should be denied. Ms. Cevallos was part of the claim committee and prepared the proposal for denial of the claims because the accident was intentional as evidenced by several discrepancies between the transcripts of the examinations under oath of the passengers and the assignor, including where they were going; when they all met; the time of the accident; where the car was at the time of impact; any stops along the way; the names of the passengers. These discrepancies coupled with the other driver’s statement supported a denial of the assignor’s claims. The defendant attempted to have the transcripts of the examinations under oath admitted into evidence, but failed to lay the proper foundation. A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra. [*3]

Ms. Cevallos was not present during the examinations under oath nor did she formulate any of the queries, but she requested that the examinations be conducted in order to compare the testimony with the other driver’s statement. She did not obtain any recorded statements from the passengers that were in the assignor’s car.

On cross-examination, Ms. Cevallos testified that there were also questions regarding damage to the assignor’s car. But she failed to bring any photographs of the assignor’s car and she did not bring her entire file. Ms. Cevallos testified that the other driver who rear-ended the assignor’s car indicated that there was no damage to the cars and “no contact between the cars”. According to Ms. Cevallos, the other driver indicated that the assignor stopped short. Ms. Cevallos admitted that the other driver also indicated that they were traveling at forty miles per hour, the assignor stopped short, but the other driver was able to stop and did not make contact with the assignor’s car. Ms. Cevallos also admitted that no one from State Farm Insurance Company examined the brakes on the assignor’s vehicle.

On re-direct examination, Ms. Cevallos testified that an individual discrepancy in the testimony was not determinative, but all of them taken together, coupled with the other driver’s statement, could not be explained away. In addition, the other driver did not file a claim with State Farm Insurance Company.

At the close of Ms. Cevallos’ testimony the defendant rested. Plaintiff did not provide any rebuttal evidence. Plaintiff made a motion for a directed verdict. This Court reserved its decision on that motion. After deliberation, the jury rendered a verdict in favor of the defendant.

ANALYSIS

Can responses to a Notice to Admit establish Plaintiff’s prima facie case at trial?

A Notice to Admit is a discovery tool used to expedite trial by eliminating proof of undisputed matters. Rosenfeld v. Vorsanger, 5 AD3d 462 (2nd Dept. 2004); Risucci v. Homayoon, 122 AD2d 260 ( 2nd Dept. 1986); ELRAC, Inc., supra. It is not intended to eradicate ultimate facts or fundamental or material issues that can only be resolved by a full trial. Sagiv v. Gamache, 26 AD3d 368 (2nd Dept. 2006); The Hawthorne Group, LLC v. RRE Ventures, 7 AD3d 320 (1st Dept. 2004); Vasquez v. Vengroff, 295 AD2d 421 (2nd Dept. 2002); Singh v. G & A Mounting & Die Cutting, Inc., 292 AD2d 516 (2nd Dept. 2002); Glasser v. City of New York, 265 AD2d 526 (2nd Dept. 1999); DeSilva v. Rosenberg, 236 AD2d 508 (2nd Dept. 1997); Rubino v. City of New York, 209 AD2d 681 (2nd Dept. 1994); Orellana v. City of New York, 203 AD2d 542 (2nd Dept. 1994).

In the case at bar, the plaintiff served a Notice to Admit with attachments that included, inter alia, its subject medical bills, a denial of claim form and an assignment of benefits form. At trial, due to the defendant’s failure to respond to the Notice to Admit, this Court deemed the documents admitted, and they were marked into evidence. However, upon further reflection and review of the relevant caselaw, it is clear that the plaintiff’s Notice to Admit and the documents attached thereto go to the heart of this matter, that is, plaintiff’s prima facie entitlement to no-fault benefits. Hence, according to the relevant caselaw, a Notice to Admit cannot be used to prove plaintiff’s case, which is material in this no-fault action. Indeed, while it may be argued that the defendant should have been able to verify the contents of its own denial of claim form, it is pellucidly clear that the defendant cannot verify the contents of the assignment of benefits form nor the subject bills. The contents of these documents are material to the instant case and [*4]cannot be admitted via a Notice to Admit. Sagiv, supra.

Considering the foregoing, plaintiff failed to prove its prima facie case. Plaintiff did not provide any evidence of the fact and amount of the loss; that the claim was untimely denied or that payment was not made; that its assignor assigned his right to payment of no-fault benefits to plaintiff and that the bills were submitted to the defendant. Amaze Medical Supply Inc. v. Eagle Insurance Company, 2 Misc 3d 128(A) (App. Term 2nd & 11th Jud. Dists. 2003); Mary Immaculate Hospital v. Allstate Insurance Comapany, 5 AD3d 742 (2nd Dept. 2004); New York Craniofacial Care, P.C. v. Allstate Insurance Company, 11 Misc 3d 1071(A) (NY Civ. Ct. Kings County 2006); Inwood Hill Medical P.C. v. Allstate Insurance Company, 3 Misc 3d 1110(A) (NY Civ. Ct. New York County 2004); Ultimate Medical Supplies v. Lancer Insurance Company, 7 Misc 3d 1002(A) (NY Civ. Ct. Kings County 2004).

Although this Court need not consider the remaining issues it is compelled to briefly discuss the issues that plague trials involving staged accidents.

At a trial involving a claim for no fault benefits, who has the burden of proving that insurance coverage exists?

It is clear that there is a dearth of reported trial cases that discuss this hotly contested issue, and there are no appellate decisions. The plaintiff herein argued that since the defendant alleged “staged accident” as an affirmative defense then the defendant must prove that the staged accident precludes coverage. This Court is not persuaded by that argument.

The plaintiff, as the proponent of a claim for no-fault benefits, always maintains the burden of persuasion. A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra; Universal Open MRI of the Bronx, P.C., supra; V.S. Medical Services, P.C. v. Allstate Insurance Company, 11 Misc 3d 334 (NY Civ. Ct. Kings County 2006). See also, Vasile v. Hartford Accident & Indemnity Company, 213 AD2d 541 (2nd Dept. 1995); Gongolewski v. Travelers Insurance Company, 252 AD2d 569 (2nd Dept. 1998). The plaintiff meets that burden by proving that it submitted the fact and amount of the loss to the defendant as well as nonpayment by the defendant or untimely denial by the defendant. SZ Medical, P.C., JH Chiropractic P.C., New Wave Oriental Acupuncture P.C. v. Country-Wide Insurance Company, 12 Misc 3d 52 (App. Term 2nd & 11th Jud. Dists. 2006); Contemp. Med. Diag. & Treatment, P.C. v. Government Employees Insurance Company, 6 Misc 3d 137(A) (App. Term 2nd & 11th Jud. Dists. 2005); Careplus Medical Supply Inc. v. Allstate Insurance Company, 9 Misc 3d 128(A) (App. Term 2nd & 11th Jud. Dists.2005); A.B. Medical Services PLLC, D.A.V. Chiropractic P.C., LVOV Acupuncture P.C. v. Commercial Mutual Insurance Co., 12 Misc 3d 8 (App. Term 2nd & 11th Jud. Dists. 2006). With this proof comes a presumption of coverage. V.S. Medical Services, P.C., supra; Universal Open MRI of the Bronx, P.C., supra; A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra; Amaze Medical Supply Inc. supra.

Thereafter, the burden of production, that is, providing an explanation for why there is no coverage, shifts to the defendant. Central General Hospital, supra; Mount Sinai Hospital, supra; A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra; V.S. Medical Services, P.C., supra; Universal Open MRI of the Bronx, P.C., supra. This burden, in effect, allows the [*5]defendant to disprove the presumption of coverage, thus demonstrating its denial of plaintiff’s complaints. Palmier v. United States Fidelity and Guaranty Company, 135 AD2d 1057 (3rd Dept. 1987). Of course, there is no set standard by which the defendant will achieve its burden; the evidence must be judged on a case by case basis. The assertion “no insurance coverage” in defendant’s verified answer amounts to a denial of plaintiff’s allegations. Beece v. Guardian Life Insurance Company of America, 110 AD2d 865 (2nd Dept. 1985). The defendant is not proving an affirmative defense, wherein it has the burden of proof. Prime Medical P.C. v. Travelers Indemnity Co., 2 Misc 3d 1009(A) (NY Civ. Ct. Kings County 2004) (insurer has the burden of proving lack of medical necessity); Stand-Up MRI of the Bronx v. General Assurance Insurance, 10 Misc 3d 551 (NY Dist. Ct. Suffolk County 2005).

Here, plaintiff maintains the burden of persuasion, even if the defendant designated its denial as an affirmative defense. Sinacore v. State of New York, 176 Misc 2d 1 (NY Ct. Cl. 1998). If the defendant sustains its burden of production of a fact or founded belief that the accident was staged, then the plaintiff should submit rebuttal evidence proving that coverage existed or risk losing its claim. A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc., supra; Universal Open MRI of the Bronx, P.C, supra.

At trial, what is the standard of proof for proving insurance coverage?

This Court concurs with the recent decisions by Judges Jack Battaglia (A.B. Medical Services, PLLC, D.A. Chiropractic, P.C., Daniel Kim’s Acupuncture, P.C., Somun Acupuncture, P.C., Square Synagogue Transportation Inc. v. State Farm Mutual Automobile Insurance Company ), Arlene Bluth (V.S. Medical Services, P.C. v. Allstate Insurance Company), and Richard Velasquez (Universal Open MRI of the Bronx, P.C. v. State Farm Automobile Insurance Company). These cases have clearly and succinctly indicated that the ultimate question in the staged accident arena is: whether the incident was intentional or not? Thus, the standard of proof as to that issue is preponderance of the evidence. Id. It is plaintiff’s burden to prove by a preponderance of the evidence that coverage existed for the accident. The defendant has the opportunity to explain why there is no coverage. When all of the evidence has been submitted the finder of fact must determine whether the evidence preponderates in favor of the plaintiff or the defendant. V.S. Medical Services, P.C., supra.

Based upon the foregoing, the evidence offered by the defendant did not meet its burden of producing evidence of a fact or founded belief that the collision was intentional. The defendant failed to proffer admissible evidence to rebut the presumption of coverage. The fact that the accident occurred soon after the purchase of the policy and the testimony by Ms. Cevallos indicating that the assignor had a record of prior accidents, taken together or alone does not sustain defendant’s burden. More importantly, the defendant did not provide any admissible evidence regarding the specific discrepancies in the testimonies of the passengers and the assignor or the other driver’s statement. Indeed, the defendant never offered the other driver’s testimony at this trial.

Based upon the evidence provided at trial, the defendant’s motion for a directed verdict is granted based upon plaintiff’s failure to prove its prima facie case.

This constitutes the decision and order of this Court.

Dated: July 14, 2006______________________

Genine D. Edwards, J.C.C.

Civil Court, Kings County

047034/2004

Genine D. Edwards, J.

This is a bench trial of an action for first-party benefits, attorney’s fees and statutory interest commenced by Elite Medical Care, P.C. (“plaintiff”) as assignee of Dan Teper (“assignor”) against Travelers Property and Casualty Insurance Company (“defendant”) pursuant to the New York Insurance Law and the No-Fault regulations. Plaintiff billed defendant a total of $5,155.47 for medical treatment rendered to its assignor. The treatment was provided from January 2002 through July 2002.

At the outset, defendant made a motion to dismiss plaintiff’s complaint because the NF-3 forms (proof of claim) were defective. Defendant contended that there was an issue regarding the relationship of a health service provider and the plaintiff. Defense counsel stated that according to New York State information, Ahmed Salem (a named health care provider on several of the NF-3 forms) is the owner of plaintiff, but Mr. Salem allegedly admitted under oath that he is not the owner. Defendant also argued that the NF-3 forms were not pleadings and could not be amended as of right. Plaintiff responded by indicating that the subject treatment was performed in 2002 predating the 2004 NF-3 form. This Court reserved its decision on defendant’s motion.

The applicable insurance regulations regarding direct payment of no-fault benefits establishes that “an insurer shall pay benefits upon assignment directly to providers of health care services ” 11 NYCRR 65-3.11(a). Pursuant to this regulation defendant asserted that the plaintiff is not a “provider”. In support of this contention defendant alleged that the NF-3 forms submitted by plaintiff did not identify the relationship between the plaintiff and the treating physicians.

Defendant also argued that there is contradictory evidence regarding Mr. Salem’s relationship with the plaintiff.

Defendant is correct. No-fault benefits must be paid directly to providers of services. A.B. Medical Services PLLC v. Liberty Mutual Insurance Company, 9 Misc 3d 36 (2nd Dept. 2005); Rockaway Boulevard Medical P.C. v. Progressive Insurance, 9 Misc 3d 52 (2nd Dept. 2005); A.B. Medical Services PLLC, DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C., G.A. Physical Therapy P.C. v. Countrywide Insurance Company, 10 Misc 3d 249 (NY Civ. Ct Kings County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1061(A) (NY Civ. Ct Queens County 2005); Multiquest, PLLC v. Allstate Insurance Company, 10 Misc 3d 1069(A) (NY Civ Ct Queens County 2005). [*2]

If it is demonstrated that the billing entity or its employees are not the actual health care providers then they are not entitled to payment of no-fault benefits directly from the insurance company. A.B. Medical Services PLLC, DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C., G.A. Physical Therapy P.C., supra; Rockaway Boulevard Medical P.C., supra; Health and Endurance Medical P.C. v. State Farm Mutual Automobile Ins., 2006 NY Slip Op. 51191(U) (App. Term 2nd & 11th Jud. Dists. 2006); Boai Zhong Yi Acupuncture Services v. Allstate Insurance Co., 2006 NY Slip Op. 51288(U) (App. Term 2nd & 11th Jud. Dists. 2006). Moreover, this defense cannot be waived and is not subject to preclusion for failure to timely deny. Rockaway Boulevard Medical P.C., supra; M.G.M. Psychiatry Care P.C. v. Utica Mutual Insurance Company, 2006 NY Slip Op. 51286(U) (App. Term 2nd & 11th Jud. Dists. 2006).

However, as in Multiquest PLLC, 10 Misc 3d 1061(A), supra, the defendant herein failed to provide any competent evidence that Mr. Salem was an independent contractor and not plaintiff’s employee. In addition, the defendant predicated its motion to dismiss upon the insufficiency of the NF-3 forms, without proving that it requested verification of the information provided therein. Rockaway Boulevard Medical P.C., supra. Hence, defendant’s motion must fail.

Turning to the trial, the plaintiff proffered the testimony of Viktoria Beylana, an employee of Maugust, Inc. Plaintiff hired Maugust Inc. to handle its billing and collection matters. Ms. Beylana testified that she received all of the medical paperwork from the plaintiff then prepared and mailed the bills. She also handled plaintiff’s incoming mail, denials and verification requests. Ms. Beylana responded to denials by submitting further information to the insurance company. Ms. Beylana identified nine bills and two letters to the defendant, which were marked into evidence. She had no knowledge as to the employment relationship of the health care providers and the plaintiff. Plaintiff’s counsel never questioned Ms. Beylana about an assignment of benefits form nor did Ms. Beylana identify same. Absolutely no evidence was presented regarding assignment of benefits. Upon the plaintiff resting, the defendant made a motion for a directed verdict due to plaintiff’s failure to prove a prima facie case.

The insurance regulations prescribe when a health care provider may receive direct payment from an insurer. 11 NYCRR 65-3.11(b). Specifically, the provider must have a properly executed assignment. 11 NYCRR 65-3.11(b)(2)(i). It is axiomatic that such assignment must be proved before the provider is entitled to receive “assigned” no-fault benefits. A.B. Medical Services PLLC Daniel Kim’s Acupuncture P.C. D.A.V. Chiropractic P.C. v. State Farm Mutual Automobile Insurance Company, 4 Misc 3d 141(A) (App. Term 9th&10th Jud. Dists. 2004); Siegel, M.D. v. Progressive Casualty Ins. Co., 6 Misc 3d 888 (NY Civ. Ct Kings County 2004); Vista Surgical Supplies, Inc. v. Utica Mutual Insurance Co., 7 Misc 3d 833 (NY Civ. Ct Kings County 2005); Inwood Hill Medical P.C. v. Allstate Insurance Company, 3 Misc 3d 1110(A) (NY Civ. Ct Kings County 2004); Multiquest, PLLC, 10 Misc 3d 1069(A), supra. In the instant case, the plaintiff did not introduce evidence of a “properly executed assignment”. Thus, plaintiff failed to prove a prima facie case of entitlement to no-fault benefits.

This Court is aware of the many summary judgment decisions that have found that the defendant waives its right to raise the deficiencies in the assignment of benefits forms when the denial was untimely and/or did not allege such defects. Nyack Hospital v. Metropolitan Property & Casualty Insurance Company, 16 AD3d 564 (2nd Dept. 2005); Nyack Hospital v. Encompass Insurance Company, 23 AD3d 535 (2nd Dept. 2005); Chiropractic Neurodiagnostics, P.C. v. Travelers Indemnity Co., 11 Misc 3d 644 (NY Civ. Ct New York County 2006); SZ Medical P.C. v. Country -Wide Insurance Company, 2006 NY Slip Op. 26194 (App. Term 2nd & 11th Jud. Dists. 2006); Delta [*3]Diagnostic Radiology, P.C. v. Progressive Casualty Insurance Co., 11 Misc 3d 136(A) (App. Term 2nd & 11th Jud. Dists. 2006); Hospital for Joint Diseases v. Allstate Insurance Company, 21 AD3d 348 (2nd Dept. 2005); Multiquest PLLC, 10 Misc 3d 1061(A), supra. However, those decisions discuss deficiencies in the forms. This Court is faced with rendering a decision in a bench trial of a no-fault action where there is lack of proof of an assignment. To be certain, a broad interpretation of a “technical defect” in the claim forms as discussed in Chiropractic Neurodiagnostics, P.C., supra, does not include the scenario where, at trial, there is no proof of an assignment at all.

Certainly, this Court is not being called upon to assume or speculate that an assignment existed in this matter. Accordingly it is,

ORDERED that, judgment should be entered in favor of defendant and the complaint is dismissed.

This constitutes the decision and order of the Court.

Dated: July 13, 2006 __________________________________

Genine D. Edwards, J.C.C.

Civil Court, Richmond County

005741/05

Peter P. Sweeney, J.

The plaintiff commenced this action pursuant to Insurance Law § 5101 et seq to recover assigned first-party no-fault benefits for medical service provided to its Assignors, Guillermo Rios and Criselda Rodriquez.

The trial of the action took place on April 12, 2006. Neither party called a witness. To establish a prima facie case, plaintiff relied solely upon defendant’s failure to respond to a notice to admit it was served on November 30, 2005 pursuant to CPLR 3123(a).

The notice to admit requested admissions of the following facts:

1.The defendant received the claim(s) for No-Fault benefits that are the subject of this action.

2.The defendant received the N-F-3 Verification of Treatment Form(s) that are the subject of this action.

3.The defendant received the bill(s) that are the subject of this action.

4. The defendant has not paid the bill(s), claim(s), and/or N-F-3 referenced in 1 through 3 above.

5.The defendant received an Assignment of Benefits Forms(s) for the claims that are the subject of this action.

7.The defendant did not mail requests for verification to the plaintiff for the claims that are the subject of this action.

8.The defendant issued a policy of insurance covering the vehicle plaintiff’s assignor was in at the time of the motor vehicle accident.

Plaintiff did not annex to the notice to admit copies of the bills, claims, and/or N-F-3s and requested and admissions as to their genuineness as CPLR 3123(a) permits. Further, the bills, [*2]claims, and/or N-F-3s were not received in evidence during the trial.

Plaintiff maintained that by failing to respond to the notice to admit, defendant admitted to the truth of all the facts alleged therein and that these facts were sufficient to make out a prima facie case.

Defendant maintained that it was not obligated to respond to the notice to admit since it was vague and ambiguous and sought admissions of ultimate issues of fact. Defendant further maintained that plaintiff was required to introduce the bills, claims, and/or N-F-3s into evidence to make out a prima facie case.

Discussion:

Defendant’s contention that it did not have to respond to the notice to admit is without merit. Plaintiff properly used the notice to admit to dispose of what it believed to be uncontroverted questions of facts which would have been easily provable at trial (The Hawthorne Group, LLC v. RRE Ventures, 7 AD3d 320, 324 [1st Dep’t 2004]; see also Meadowbrook-Richman, Inc. v. Cicchiello, 273 AD2d 6 [1st Dep’t 2000]; Samsung America, Inc. v. Yugoslav Korean Consulting & Trading Co.,199 AD2d 48 [1st Dep’t 1993] ). The notice to admit removed “from the case those uncontested matters which would [have] merely present[ed] a time-consuming burden at trial” (Villa v. New York City Housing Authority, 107 AD2d 619-620 [1st Dep’t 1985] ).

While a party is not obligated to furnish admissions in response to a notice to admit that improperly demands admissions of ultimate and fundamental issues that can only be resolved after a full trial or matters that are in actual dispute (see, Meadowbrook-Richman, Inc. v. Cicchiello 273 AD2d 6, 6; [1st Dep’t 2000]; Orellana v. City of New York, 203 AD2d 542, 543 [2nd Dep’t 1994]; Miller v. Hilman Kelly Co.,177 AD2d 1036, 1037 [4th Dep’t 1991] ), “[a]ll of the items in the notice to admit involve[d] clear-cut factual matters about which one would reasonably anticipate no dispute, and the immediate disposition of which would not unfairly prejudice the defendant and would help to expedite the trial” (Risucci v. Homayoon, 122 AD2d 260, 261 [2nd Dep’t 1986], citing , CPLR 3123[a]; Villa v. New York City Housing Auth., 107 AD2d 619, 620 [1st Dep’t 1985] ). That fact that a notice to admit will establish plaintiff’s prima facie case on paper does not bar its use (id.).

Simply because defendant denied many of the facts alleged in the notice to admit in its answer to plaintiff’s complaint did not establish that those facts were in actual dispute. To hold otherwise would preclude a plaintiff from requesting admissions of any fact initially denied by a defendant in its answer. If defendant actually disputed any of the facts alleged in the notice to admit, it should have submitted a timely response denying them.

The court rejects defendant’s contention that the notice to admit was vague and/or ambiguous.

Inasmuch as defendant did not respond to the notice to admit within 20 days, defendant is deemed to have admitted all of the facts alleged therein (CPLR 3123[a] ).

Notwithstanding the above, the court agrees with defendant that plaintiff did not make out a prima facie case. In A.B. Med. Servs. PLLC v. State Farm Mut. Auto. Ins. Co., 2005 NY Slip Op 50432[U] [App Term, 2d & 11th Jud Dists], the court held that “[b]y failing to append the necessary claim forms to their motion papers, plaintiffs did not establish their prima facie case” (see, also, Patil v. Countrywide Ins. Co., 2006 NY Slip Op. 50306(U) [App Term, 9th & 10th [*3]Jud Dists]; Maldonado v. Steiner, 2005 NY Slip Op. 51905(U) [App Term, 9th & 10th Jud Dists] ). It necessarily follows that to make out a prima facie case at trial, copies of the NF-3 claim forms or their functional equivalent must be received in evidence for the purpose of demonstrating exactly what was sent to and received by the defendant. In the instant case, neither the N-F-3s nor their functional equivalent were received in evidence nor did plaintiff annex them to the notice to admit and request an admissions as to their genuineness.

Accordingly, it is hereby

ORDERED that judgment be entered in favor of the defendant dismissing the action.

Dated: July 3, 2006_____________________________

PETER P. SWEENEY

Civil Court Judge

[*1]

Civil Court of the City of New York, Kings County, June 21, 2006

APPEARANCES OF COUNSEL

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff. Melli, Guerin & Wall, P.C., New York City, for defendant.

OPINION OF THE COURT

Arlene P. Bluth, J.

The above-captioned three cases were consolidated for trial before this court on June 5, [*2]2006. On that date, counsel for both parties stipulated to the facts set forth below, taking the joint position that what remained were issues of law. On June 12, 2006, counsel for both parties submitted briefs on the following issues: (1) May a physical therapist use a billing code found in the medicine fee schedule where such services do not appear in the physical medicine fee schedule? and (2) May a physical therapist bill for range of motion and muscle testing when an evaluation and management are billed for on the same day? After considering the parties’ stipulations and briefs, the court makes the following findings.

Findings of Fact

The three cases before this court on stipulated facts all involve claims for first-party no-fault benefits for physical therapy services rendered to plaintiff’s assignors. Defendant paid some claims and denied others, and plaintiff sued to recover the unpaid amounts. Except as noted, in all three cases the parties stipulated to plaintiff’s prima facie case and to defendant’s timely denial of the bills in question.

For the claims brought under index number 46885/05, the parties stipulated that as to the bills for assignor David Cardoza, plaintiff is entitled to judgment in the amount of $317.84 plus statutory interest, costs, and attorney’s fees. The balance of those bills, totaling $651.04, remains in dispute and were denied based on denial code 129: “This procedure is not listed in the NY state [sic] fee schedule for this provider specialty. If reported with an evaluation and management service, this procedure is inclusive.” As to the bills for assignor Ayodele Sunmola, the parties stipulated that plaintiff is entitled to judgment in the amount of $476.76 plus statutory interest, costs, and attorney’s fees. The balance of those bills, totaling $976.56, remains in dispute and were denied based on the same denial code, 129.

For the claims brought under index number 47943/05, the parties stipulated that as to the bills for assignor Avis Brown, plaintiff is entitled to judgment in the amount of $158.92, plus statutory interest, costs, and attorney’s fees. The balance of the charges, totaling $325.52 ($166.60 $158.92), were denied under denial code 129 and remain in dispute. As to the bills for assignor Tamara Reynolds, the parties stipulated that a partial payment of $45 was made, leaving a balance of $577.84. The latter charges were denied on the basis that range of motion and muscle testing cannot be billed separately from evaluation and management, and that portion of the bill remains in dispute. As to the bills for assignor Issa Vincent, the parties stipulated that plaintiff is entitled to judgment in the amount of $643.36 (portion of the bill for March 30, 2004 in the amount of $158.92 and the entire bill for April 21, 2004 for $484.44) plus statutory interest, costs and attorney’s fees. The balance of $325.52 was denied based upon denial code 129 and remains in dispute.

Finally, for the claims brought under index number 47945/05, the parties stipulated that as to the bills for assignor Orlando Simpson, plaintiff is entitled to judgment in the amount of $158.92, plus statutory interest, costs, and attorney’s fees. The balance of $325.52 was denied based upon denial code 129 and remains in dispute. As to the bill for assignor Pierre Durisile, defendant agreed to furnish plaintiff’s counsel with proof that the claimed amount of $495 was paid, and that plaintiff is entitled to judgment in full but will not collect on that bill if defendant produces a cancelled check within 45 days of the date of the stipulation. As to the bills for assignor Rhonda Moore, the parties stipulated that a partial payment of $83.32 was made, leaving [*3]a balance of $539.52. Defendant denied those charges on the basis that range of motion and muscle testing cannot be billed separately from evaluation and management, and that portion of the bill remains in dispute.

Conclusions of Law

The workers’ compensation fee schedules were adopted by the Superintendent of Insurance for use by those making and processing claims for no-fault benefits. These are contained in a volume entitled Official New York Workers’ Compensation Medical Fee Schedule. The medical fee schedule consists of seven sections: evaluation and management, anesthesia, surgery, radiology, pathology and laboratory, medicine, and physical medicine. In addition to the medical fee schedule, the book contains separate schedules appended for psychology, chiropractic, and podiatry. Each service or procedure has a CPT (current procedural terminology) code, and the codes in each section fall in consecutive numerical ranges. At the center of this dispute are the physical medicine and medicine sections of the medical fee schedule.

The workers’ compensation regulations state that the “medical fee schedule is applicable to medical, physical therapy and occupational therapy services . . . Sections containing rates for medicine, physical medicine, anesthesia, surgery, radiology, pathology and laboratory, and evaluation and management services are included.” (12 NYCRR 329.1.) In other words, the entire volume is open to use by various medical professionals (including, for example, physician assistants and nurse practitioners), as well as physical and occupational therapists. Physical therapists are not limited to any one section. The introduction to the medical fee schedule volume explains that “[t]he schedule is divided into sections for structural purposes only. Physicians are to use the sections that contain the procedures they perform, or the services they render.” (See Official New York Workers’ Compensation Medical Fee Schedule, Introduction and General Guidelines, at 1.) Clearly, the division of medical services into different sections is not to establish who can bill for a particular service but to organize those services in a logical format so that providers can easily locate the information they need.

With this in mind, the court turns to the merits of defendant’s denials. Since the parties stipulated to plaintiff’s prima facie case, it was defendant’s burden to come forward with “competent evidentiary proof” supporting its fee schedule defenses. (See Continental Med., P.C. v Travelers Indem. Co., 11 Misc 3d 145[A], 2006 NY Slip Op 50841[U] [App Term, 1st Dept 2006]; see also Jamil M. Abraham M.D. P.C. v Country-Wide Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50388[U], *2 [App Term, 2d & 11th Jud Dists 2004]; Power Acupuncture P.C. v State Farm Mut. Auto. Ins. Co., 11 Misc 3d 1065[A], 2006 NY Slip Op 50393[U], *4-5 [Civ Ct, Kings County 2006].) This defendant has not done.

The court first addresses the denials that were based on the first sentence of denial code 129, to wit, “This procedure is not listed in the NY state fee schedule for this provider specialty.” On its face, this denial makes no sense: Unlike for chiropractors, podiatrists, and psychologists, there is no fee schedule specifically designated for physical therapists. Just because most of the services physical therapists provide are included in the physical medicine section does not make that section a physical therapy fee schedule.

Even if this court were to make the leap defendant does and assume that the physical medicine section is the equivalent of a physical therapist’s fee schedule, defendant has still failed [*4]to establish that its defense has any merit. Defendant argues that it was improper for plaintiff to use CPT codes contained in the medicine section of the fee schedule. This argument is based on the assumption that the medicine section is for use by physicians only. As explained above, however, the medical fee schedule—with all seven of its component sections—applies to a host of practitioners, including physical therapists. There is simply no bar to a physical therapist using a code from the medicine section where the services performed are found there instead of in the physical medicine section. That is precisely what happened here.

There are no CPT codes in the physical medicine section directly corresponding to the range of motion and muscle testing plaintiff performed. In contrast, there are CPT codes for those services in the medicine section. Specifically, code 95831 is for “[m]uscle testing, manual (separate procedure); extremity (excluding hand) or trunk, with report” (Official New York Workers’ Compensation Medical Fee Schedule at 299) while code 95851 is for “[r]ange of motion measurements and report (separate procedure); each extremity (excluding hand) or each trunk section (spine)” (at 299). Plaintiff opted to use those codes;^[FN1] defendant argues that plaintiff should have stayed within the physical medicine section and used one of two codes contained therein: code 97750 (“Physical performance test or measurement [e.g., musculoskeletal, functional capacity], with written report, each 15 minutes” [at 311]), or code 97799 (“Unlisted physical medicine/rehabilitation service or procedure,” with a relative value to be established “By Report” submitted by the provider [at 311]). Certainly, plaintiff could have used one of these codes. But since the exact services rendered by plaintiff appear in the medicine section, plaintiff chose to use those codes instead.

Defendant’s counsel has identified no law—and this court has found none—holding that a physical therapist cannot bill under the medicine section of the medical fee schedule. This court’s plain reading of the Official New York Workers’ Compensation Medical Fee Schedule and the relevant regulations lead it to conclude that a physical therapist is permitted to use CPT codes found in any section, including the medicine section. In Introna v Allstate Ins. Co. (890 F Supp 161, 165-166 [ED NY 1995], affd 99 F3d 402 [1995]), discussed by both parties herein, the court permitted the plaintiff, a chiropractor, to use codes outside of the chiropractic fee schedule—even though there exists a separate fee schedule designated exclusively for providers of chiropractic. The court need not go that far here, as physical therapists are included within the purview of the medical fee schedule which includes both the medicine and physical medicine sections. Therefore, physical therapists may use a code from the medicine [*5]section to bill for a service not specifically listed in the physical medicine section.

The court further notes that defendant’s defense that plaintiff’s use of codes was improper is belied by the fact that defendant paid for an office visit (Oct. 2, 2002) for assignor Tamara Reynolds which was billed under CPT code 99211—a code which does not appear in the physical medicine section but rather in the evaluation and management section.^[FN2] Defendant offered no explanation as to why it is willing sometimes to accept and pay a physical therapist using a code outside the physical medicine section and at other times objects to the code and rejects the bills.

The court now addresses the other charges in dispute, namely, the range of motion and muscle testing for which payment was denied on the basis that such testing cannot be billed separately from evaluation and management.^[FN3] Having carefully considered the parties’ briefs, the court determines that this defense raises an issue of fact rather than an issue of law, and defendant has not set forth any facts in admissible form to support its argument. Defendant’s counsel is not competent to opine on whether range of motion and muscle testing is generally included in an office evaluation by a physical therapist. Defendant opted not to commission a peer review and move thereupon for summary judgment, or to proceed to a live trial at which it could present witnesses and evidence. Instead, counsel proceeded only on briefs. In the absence of any testimony by a competent medical professional, this court cannot determine whether plaintiff’s charges were medically appropriate. Since it was defendant’s burden to make out its defense, the court finds that defendant has failed to carry its burden.

The court notes that even if defendant were correct that the defense turns on a question of law, defendant has not shown any basis in law to support its defense. While defendant points out that certain fees for chiropractic treatment are included in evaluation and management sessions under the chiropractic fee schedule, it identifies no such rule in the medical fee schedule which is at issue here.

For the foregoing reasons, the court finds that plaintiff is entitled to judgment for the disputed amounts. Accordingly, the court awards judgment as follows:

Under Index Number 46885/05:

a)

For assignor David Cardoza, $968.88 ($317.84 stipulated amount plus $651.04 awarded herein) plus statutory interest, costs, and attorney’s fees.

b)

For assignor Ayodele Sunmola, $1,453.32 ($476.76 stipulated amount plus $976.56 awarded herein) plus statutory interest, costs, and attorney’s fees.

Under Index Number 47943/05:

a)

For assignor Avis Brown, $484.44 ($158.92 stipulated amount plus $325.52 awarded herein) plus statutory interest, costs, and attorney’s fees.

b)

For assignor Tamara Reynolds, $577.84 plus statutory interest, costs, and attorney’s fees.

c)

For assignor Issa Vincent, $968.88 ($158.92 and $484.44 stipulated amounts plus $325.52 awarded herein) plus statutory interest, costs, and attorney’s fees.

Under Index Number 47945/05:

a)

For assignor Orlando Simpson, $484.44 ($158.92 stipulated amount plus $325.52 awarded herein) plus statutory interest, costs, and attorney’s fees.

b)

For assignor Pierre Durisile, $495 plus statutory interest, costs, and attorney’s fees.

c)

For assignor Rhonda Moore, $539.52 plus statutory interest, costs, and attorney’s fees.

Accordingly, plaintiff is awarded judgment against defendant in the amounts set forth above.

Footnotes

Footnote 1: Plaintiff did not, however, bill at the physician’s rates for its services. Rather, plaintiff asserts that it multiplied the “relative value” for the services as listed on the medicine fee schedule by the conversion factor for physical therapists. (See Introna v Allstate Ins. Co., 890 F Supp 161, 164 [ED NY 1995], affd 99 F3d 402 [1995] [“Conversion factors are provider- and procedure-specific; that is, they apply only to the category of health care provider and type of treatment for which they were established”].) Thus, the charges assessed by plaintiff were lower than what a physician would have charged for the same services. Clearly, plaintiff was not trying to obtain a windfall by billing under the medicine section; it was not billing as a doctor; it was just using the code. In any event, defendant does not object to the amounts charged, only to the codes used.

Footnote 2: In its brief, plaintiff contends that defendant also paid for an office visit under code 99211 for assignor Rhonda Moore. However, neither defendant’s denials nor the parties’ stipulated facts supports this contention.

Footnote 3: It appears that these denials are based upon the second sentence of code 129: “If reported with an evaluation and management service, this procedure is inclusive.”

Civil Court, Queens County

650959/03

Timothy J. Dufficy, J.

A non-jury trial was held on November 4, 2005. The issue before the court is whether plaintiff’s claim for no-fault benefits should be denied as untimely, since it was filed beyond the 90-day period.

Plaintiff contends it was impossible to submit the claim to the correct insurance company because the driver (the insured) supplied the wrong carrier to the police and by the time plaintiff realized this error the 90-day period to properly file had run.

Defendant contends that although plaintiff timely filed a claim for no-fault benefits within the 90-day period, plaintiff filed with the wrong carrier, therefore it did not receive notice until after the 90-day period had run. Defendant contends the plaintiff must be barred from enforcing the claim due to late notice. Defendant further contends that plaintiff did not prove it was impossible to timely file the claim with the defendant’s insurance carrier Country-Wide Ins. Co.

STIPULATION OF FACTS

Defendant stipulated to plaintiff’s prima facie case and plaintiff stipulated to defendant’s timely mailing of the denial of the claim. At the time of the trial, the court directed that briefs be submitted to the court and it was stipulated that any exhibits attached to the briefs would be admitted into evidence so long as it was exchanged in the course of discovery. In addition an un-redacted copy of the Country-Wide Ins. Co. file was submitted to the court for in-camera review (hereinafter referred to as Bates file).

The following facts are undisputed:

1) an accident took place on October 27, 1998. Osiris Torres, a bicyclist was involved in an auto accident with Stephen Kempisty the insured and owner operator under a valid Country-Wide insurance policy.

2) the New York City Police accident report in evidence shows that the insurance company code was 385 (All-City Insurance Company).

3) Plaintiff filed a timely claim dated December 12, 1998 with All-City Insurance Company.

4) the claim was denied on April 20, l999 by All-City Insurance Company. The denial [*2]states the policy was not in force on the date of the accident and the policy was cancelled on January 7, 1997.

5) Plaintiff then filed a claim with MVAIC shortly after the All-City Insurance denied the claim. On May 20, 1999 MVAIC denied the claim. The basis of the denial by MVAIC was that there was available insurance and that Merchant and Businessmen/Country was then the current insurance company for Stephen Kempisty. When the matter was reported to MVAIC it generated notice to Countrywide on notice dated February 19, 1999 (Bates file Page number 305). The court finds pursuant to the documents submitted to the court in-camera, that All-City was named on the accident report and at that time and all relevant times remained on New York State Department of Motor Vehicles computer as the carrier of record as far as the three digit code is concerned (computer printouts pages, Bates file pages 313,314) submitted in-camera to the court which indicates valid insurance from All City from November 18,1997 to July 6,1999.

6) a claim was filed with Country-Wide on July 30, 1999 explaining why the late claim was submitted indicating such circumstances outside claimants control.

7) the court notes that the MVAIC claim was denied on May 20, 1999, upon learning the correct carrier, plaintiff filed a claim on July 30, 1999, well within 90-days of the MVAIC denial.

On August 12, 1999, County-Wide Insurance Company issued a denial of claim. The reason set forth for this denial was as follows:

“As per regulation 68 of the New York State No-Fault Insurance Law:

In the event of an accident, written notice setting forth details sufficient to identify the eligible insured person along with reasonable obtainable information

regarding the time, place & circumstances of the accident shall be

given to the company or the company’s authorized agents as soon as

practicable, but in no event more than 90 days after the date of accident

pursuant to the above all No-fault benefits are denied.”

ISSUES

The two issues before the Court are: (1) Whether the plaintiffs can maintain an action for No-Fault insurance benefits against the insurer, absent notice to the insurer within 90-days after the date of accident and (2) Whether the subsequent denials issued by the defendant insurance company were proper?

APPLICABLE LAW

The No-Fault regulation in effect at the time of accident which gave rise to the claim was 11 NYCRR65.11(m)(2). This regulation provided in pertinent part that a notice of claim to the insurer must be filed within 90-days of the accident. Late filings were permitted upon “written proof that it was impossible to comply with such limitation due to the specific circumstances beyond the claimant’s control.”

CONCLUSIONS OF LAW

It is well settled that delay on the part of an injured party to give notice may be excused, upon a showing of diligence, where he had difficulty ascertaining the identity of the insured or insurer (see Subia v. Cosmopolitan Mutual Ins. Co., 80 Misc 2d 1090[1975]). Here the court [*3]has substantial evidence before it that the injured party exercised utmost diligence in pursuing the claim by first presenting its claim to All-City Insurance, then to MVIAC, and upon learning that insurance was available, further researching the claim until ultimately establishing Country Wide Ins. Co. as the responsible insurer. Timely notice requirement will not be applied as strictly against the injured party as it would be against the insured. See, Hartford Accident & Indemnity Co. V. CNA Insurance Companies, Sued Herein as CNA Insurance, et al, 99 AD2d 310 [1984]. Therefore, the claim is deemed timely.

The court also notes that it has limited equity jurisdiction pursuant to NY City Civ Ct Act sec. 213 and sec. 905 (e.g. Kuchen v. Daimler Chrysler, 9 Misc 3d 45 [Sup. Ct. App. Term 2nd &11th J.D. Dists.2005]). Thus, the doctrine of equitable estoppel would apply to the fact pattern at hand. Equitable estoppel is the principle by which a party is absolutely precluded both at law and equity from denying or asserting the contrary of any material fact, which by his words or conduct affirmative or negative, intentionally or through culpable negligence, he has induced others or another, who was excusably ignorant of the true facts and who had the right to rely upon such words or conduct, to believe and act upon them thereby, as a consequence reasonably to be anticipated, changing his position in such a way that he would suffer injury if such denial or contrary assertion were allowed. The doctrine prohibits a person upon principles of honesty and fair and open dealing, from asserting rights the enforcement of which would, through his omissions or commission, cause fraud or injustice to be committed (75 NY Jur 2d, Limitations and Laches § 40). It is the holding of the court that the doctrine of equitable estoppel is appropriate in the case at bar. Plaintiff demonstrated he relied on the information provided on the police report by Country Wide’s insured. A claim for no fault benefits was sent to the carrier plaintiff’s had notice of, All-City, diligently within the 90-day period. Plaintiff then acted appropriately and diligently by reporting the claim to MVIAC. By the time the plaintiff received the correct information, the strict 90-day rule has passed. To hold the plaintiff in violation of the 90-day rule would be injustice especially since defendant Country-Wide was aware of a possible claim as early as February 19,1999 (Bates file page 305).

Defendant has not shown how it was prejudiced by the allowance of the filing of such late claim when it was aware of such claim prior to the filing of plaintiffs’ claim. The facts of this specific case clearly document that compliance with the deadline to file a claim within 90 days was impossible due to specific circumstances beyond the claimant’s control ( In the Matter of Medical Society of the State of New York et al v. Gregory Sergio as Superintendent of Insurance of the State of New York et al 100 NY2d 854[2003]; Mantor v General Accident Insurance et.al, 129AD2d 998 [4th dept 1987]; Persaud v Rahman et. al. ,262 AD2d 542 [ 2nd Dept 1999] and Hackensack University Medical Center, et. al v New York City Transit Authority 10 AD2d 675 [2nd Dept 2004])

Accordingly, the court having found that the plaintiff timely notified the defendant of its claim, grants judgment in favor of plaintiff on the first cause of action in the amount of $3,669.03 plus statutory interest, costs and attorney fees.

Judgment is also granted in favor of plaintiff on the second cause of action in the amount of $2,919.24 plus statutory interest, costs, and attorney fees.

_____________________________

TIMOTHY J. DUFFICY, J.C.C. [*4]

Dated: May 23, 2006

[*1]

Civil Court of the City of New York, New York County, April 18, 2006

APPEARANCES OF COUNSEL

Werner, Zaroff, Slotnick, Stern & Ashkenazy, LLP, Lynbrook (Suzette Hyde of counsel), for plaintiffs. Carman, Callahan & Ingham, LLP, New York City (Jason Tenenbaum of counsel), for defendants.

OPINION OF THE COURT

Diane A. Lebedeff, J.

These two cases were consolidated for trial and center upon a no-fault health services provider’s claim for compensation for charges for an electrical diagnostic test identified as current perception threshold testing, also known as sensory nerve conduction threshold testing. Contending that compensation must be denied for these no-fault claims, defendant advances two novel arguments: (1) the medical tests are not compensable under Medicare, and (2) the medical tests are so questionable that such testing constitutes “provider fraud.”

CPT and sNCT Testing

To briefly address the nature of current perception threshold testing (CPT) and sensory nerve conduction threshold testing (sNCT), CPT and sNCT procedures assess the function of a tested sensory nerve. The test device is a noninvasive electrodiagnostic test. The tester affixes three pads to designated spots on skin over a nerve pathway and delivers electrical charges on an upward scale until the patient reports feeling a sensation. Such pads may be placed along various nerve pathways on upper or lower limbs or both. The results are recorded on a table format and the device, comparing the readings obtained to an internal database of readings, [*2]delivers a printout of an analysis and a statement reporting whether the patient’s sensory perception is normal or the degree to which perception is elevated or depressed.

The federal Centers for Medicare and Medicaid Services, a division of the federal Department of Health and Human Services, issued a number of statements regarding CPT and sNCT, which have been addressed by counsel and of which the court takes judicial notice. As of October 1, 2002, CPT and sNCT were classified as procedures not compensable under Medicare (68 Fed Reg 44088-03, 44089 [2003] [“The available scientific evidence is not adequate to demonstrate the accuracy of sNCT . . . as compared to nerve conduction studies . . . We conclude that the scientific and medical literature does not demonstrate that the use of sNCT to diagnose sensory neuropathies in Medicare beneficiaries is reasonable and necessary”]). The Centers for Medicare and Medicaid Services also issued an extended analysis, including a literature review, explaining the basis for this policy and found it most significant that CPT and sNCT results have, to date, led to no changes in patient management, albeit such testing might offer a type of testing sensitivity appropriate to patients with sensory neuropathy resulting from diabetes or a genetic disorder known as Fabry’s disease (Decision Mem of Centers for Medicare and Medicaid Services, Electrodiagnostic Sensory Nerve Conduction Threshold, CAG-00106N, Feb. 14, 2002 [reporting experts in neuropathy “were uniformly unaware of a use for sNCT that would alter patient management” and accordingly it could not be found “clinically effective”]).^[FN1] However, the review closed with the observation that “sNCT merits further study and we encourage investigators to conduct well-designed clinical trials to demonstrate the clinical effectiveness of the test” (id.).

Alternative tests which provide substantially similar information to that produced by CPT or sNCT regarding the status of nerves include the much simpler pin prick test and, providing information also on the physical structures which might impinge upon nerves, nerve conduction velocity tests (NCV), electromyography tests (EMG) and magnetic resonance imaging tests (MRI). All of these alternative tests are universally recognized as informative by experts, as stated by defendant’s expert who testified at the trial. It is noted that one no-fault insurer has contended that ordering CPT or sNCT after performing an NCV, EMG or MRI is a fraud on such insurer (see, based on such facts, State Farm Mut. Auto. Ins. Co. v CPT Med. Servs., P.C., 375 F Supp 2d 141 [ED NY 2005, Glasser, J.] [$2.5 million damage claim in complaint asserting CPT or sNCT procedures were done with sole purpose of generating fees, claims raised under Racketeer Influenced and Corrupt Organizations Act (18 USC § 1961 et seq.), as well as fraud and unjust enrichment theories]).

Because of the limited nature of the two defenses advanced, the court is not called upon to rule upon any other potential issues, such as (1) whether a CPT or sNCT may be ordered and/or administered by a chiropractor,^[FN2] (2) whether the person performing the test was not an [*3]employee of the health services provider filing the claim, but was an independent contractor,^[FN3] or (3) that such test is too experimental or novel to be compensable.^[FN4]

No-Fault Insurer’s “Medicare Defense”

The defendant no-fault insurer timely denied the subject claims for CPT or sNCT procedures for identical reasons. Each denial recited the insurer’s position that such testing lacks “scientific and clinical evidence that would deem this service medically necess[ary]” and referred to the determination of the federal Centers for Medicare and Medicaid Services, that such testing was not compensable under Medicare.

The court must reject the insurer’s contention that the programmatic noncompensability under Medicare bars submission of a claim under the no-fault program. To adopt that argument would require judicial rewriting of New York’s no-fault statute to insert a reference to Medicare standards. The no-fault statute references only a single bright line standard for compensable health care services, which encompasses workers’ compensation fee schedules (Insurance Law § 5108 [a] [no-fault charges “shall not exceed the charges permissible under the schedules prepared [*4]and established by the chairman of the workers’ compensation board for industrial accidents, except (to the extent) unusual procedures or unique circumstances justify the excess charge”], [c] [“No provider of health services . . . may demand or request any payment in addition to the (authorized) charges”]).

Given the clarity of the no-fault statute, the statutory language bars a “Medicare defense” (Roth v Michelson, 55 NY2d 278, 283 [1982] [absent ambiguity, statute to be interpreted literally]; McKinney’s Cons Laws of NY, Book 1, Statutes § 92, Comment [the “intention of the Legislature is first to be sought from a literal reading of the act itself”]; 97 NY Jur 2d, Statutes § 102 [2006] [“Determining legislative intent; unambiguous provisions”; “where statutory language is clear and unambiguous, the court must give effect to the plain meaning of the words and apply it in accordance with its express terms”]). If this argument is to be further advanced, it must be presented to the Legislature, the Insurance Department or the Workers’ Compensation Board. A health services provider’s eligibility for compensation under Medicare is not, standing on its own, a cognizable reason to deny payment of a no-fault claim and this argument is rejected.

No-Fault Insurer’s “Fraud Defense” as Applicable to

a Health Services Procedure

The defendant then urges that the use of CPT or sNCT should be barred as constituting “provider fraud.” Defendant contends that “provider fraud” should be treated in the same manner as a defense of noncoverage, which is not waived by a failure to assert it in a timely denial (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 202 [1997]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 283 [1997]). On this basis, defendant argues that a defense of “fraud” by a health services procedure may be advanced at trial even if not set forth in a timely denial.

At the outset, because of the loose use of the term “fraud” in the no-fault area, care must be taken to distinguish what “fraud” is claimed to be at issue. For example, the “staged accident fraud” defense actually poses an issue of noncoverage because—under both no-fault concepts and typical automobile policy provisions—insurance coverage is limited to an “accident,” and does not necessarily pose an issue of fraud (V.S. Med. Servs., P.C. v Allstate Ins. Co., 11 Misc 3d 334 [Civ Ct, Kings County 2006, Bluth, J.] [with extensive review of case law and rejecting fraud clear; and convincing burden of proof]), and the “provider fraud” of not being a properly licensed health services facility truly poses an issue of not being eligible to receive reimbursement, rather than fraud (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 320 [2005]; 11 NYCRR 65-3.16 [a] [12] [“A provider of health care services is not eligible for reimbursement under section 5102 (a) (1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement”]). As these examples illustrate, a “fraud” defense in the no-fault area often actually refers to a challenge to coverage or eligibility for reimbursement.

Here, rather than any independent fraud, present is a defense of “excessive treatment” by a medical provider, which involves questioning the health services provider’s bill. A question of medically inappropriate treatment cannot be readily equated to a coverage issue (Central Gen. Hosp. v Chubb Group, supra, 90 NY2d at 199 [“treatment being deemed excessive by the insurer . . . would not ordinarily implicate a coverage matter”]).

On questions regarding medical necessity in the no-fault area, the issue of appropriateness of treatment is one which must be raised in the course of claims processing. The claim form itself gives rise to a presumption of medical necessity (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 22 [App Term, 2d Dept 2004] [“presumption of medical necessity . . . attaches to the claim form”]). Any objection to a lack of medical necessity must be stated in a claim denial form, and must be “supported by competent evidence such as an independent medical examination, a peer review or other proof which sets forth a factual basis [*5]and a medical rationale for denying the claim” (Healing Hands Chiropractic, P.C. v Nationwide Assur. Co., 5 Misc 3d 975, 976 [Civ Ct, NY County 2004, Kern, J.] [also involving a claim for CPT compensation]; see also, decisions following trial, Nir v Allstate Ins. Co., 7 Misc 3d 544 [Civ Ct, Kings County 2005, Matos, J.], and CityWide Social Work & Psychological Servs. v Travelers Indem. Co., 3 Misc 3d 608 [Civ Ct, Kings County 2004, Battaglia, J.]). At all stages, the insurer bears the burden of proof on a medical necessity defense (see Healing Hands Chiropractic, P.C. v Nationwide Assur. Co., supra; see also Lumbermens Mut. Cas. Co. v Inwood Hill Med., P.C., 8 Misc 3d 1014[A], 2005 NY Slip Op 51101[U], *6 [Sup Ct, NY County 2005, Ramos, J.] [“failure to appear (for a scheduled examination under oath or independent medical examination) rebuts the presumption of the medical necessity . . . (but) does not require dismissal of the action” on medical necessity grounds]).

It is the conclusion of this court that this challenge to a health services procedure cannot be cloaked as one of fraud. Moreover, even if looking at the record as a whole for those “[b]adges of fraud permitting an inference of fraudulent intent” (Nonas v Romantini, 271 AD2d 292, 292 [1st Dept 2000] [a fraudulent conveyance case]), the fact that CPT or sNCT is not compensable by Medicare is but a single factor and is insufficient without more to establish fraudulent intent (Spires v Mihou, 13 AD3d 1056, 1057 [4th Dept 2004] [“fraudulent intent is rarely established by direct proof, but we nevertheless conclude that there are insufficient ‘badges of fraud’ in this case from which such intent may be inferred”]; compare Brody v Pecoraro, 250 NY 56, 61 [1928 Cardozo, Ch. J.] [“The traditional badges of fraud are spread over the transaction in prodigal profusion”]; see Inwood Hill Med. v Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 NY Slip Op 50565[U] [Civ Ct, NY County 2004, Hagler, J.] [an extended analysis of fraud allegations in the context of a no-fault summary judgment motion]). Most significantly, given that the tendered defense fits suitably within the structure of analysis for the treatment of a medical necessity issue, attempting to cast this attack on a health services bill as exempt from the need for a timely articulated denial appears to be a step which would fly in the face of a clear caution issued by the Court of Appeals (Presbyterian Hosp. v Maryland Cas. Co., supra, 90 NY2d at 285-286 [“The tradeoff of the no-fault reform still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leashed contestable period and process designed to avoid prejudice and red-tape dilatory practices. To string out belated and extra bites at the apple is . . . unfounded under the statutes, regulations and policies” and “we discern no justification for penalizing injured parties or their provider assignees by recognizing disincentives against prompt attention and action (to timely claims processing)”]).

Turning to the evidence presented appropriate to medical necessity, the defense expert’s testimony failed to address the medical status of the patients at issue and failed to present any proof of inappropriateness of the testing utilized based upon an individual review of each claim. New York courts insist that no-fault insurers focus on the facts regarding the individual claimant in these cases, whether involving first-party or third-party claims for compensation for medical procedures, because the governing legislation requires a grant of “full compensation for economic loss” (Oberly v Bangs Ambulance, 96 NY2d 295, 298 [2001]; Insurance Law § 5101). No evidence was presented that the bills were inappropriate in amount for the procedures at issue.

Accordingly, in relation to this claim for compensation, this “provider fraud” argument is rejected as a disguised attempt to avoid the strictures regarding claims processing contained in the Comprehensive Motor Vehicle Insurance Reparations Act and is held not to be equivalent to a viable challenge to coverage or eligibility for reimbursement. Rather, it is found proper to consider the subject claims under the standards applicable to a medical necessity issue and—applying a fair preponderance of the credible evidence standard of proof—no cognizable reason to deny or diminish payment has been established by the insurer.

Conclusion

Given the foregoing and the parties having agreed that there were assignments of benefits to plaintiff and that completed copies of proofs of claim were mailed and received by the defendant, but not paid or denied within 30 days of receipt, the plaintiff has established his case (11 NYCRR former 65.15 [g] [3]).

Accordingly, judgment in each case shall issue for the plaintiff. Based upon the court’s experience and observation, the reasonable value of the services of plaintiff’s attorney fees exceeds the amount permitted under Insurance Law § 5106 and it is determined that plaintiff is entitled to attorney fees and statutory interest pursuant to such provision.

Footnotes

Footnote 1: This conclusion was also reached by others. In 1999, an article in the American Association of Electrodiagnostic Medicine’s journal Muscle & Nerve reviewed available literature and concluded that “the information in [health services] publications is insufficient to make conclusions about the usefulness of this form of sensory testing at the present time” (Neurotron, Inc. v American Assn. of Electrodiagnostic Medicine, 189 F Supp 2d 271, 273 [D Md 2001], affd 48 Fed Appx 42 [4th Cir 2002] [dismissing the manufacturer’s product disparagement and Lanham Act claims]). In 1997, the Pennsylvania Blue Shield program issued a statement that CPT had “no proven clinical utility” and was not compensable (Neurotron Inc. v Medical Serv. Assn. of Pennsylvania, Inc., 254 F3d 444, 447 [3d Cir 2001] [dismissing the manufacturer’s product disparagement claim]).

Footnote 2: As to plaintiff’s assignor Ostroviak, the record contained a prescription form for the test issued by a chiropractor; as to both plaintiff’s assignors, the test was administered by a chiropractor. The defendant has advanced no argument that CPT or sNCT is a procedure which the State Board of Regents and the State Board for Chiropractors do not permit a chiropractor to “prescribe” nor an electrical device which a chiropractor may not “utilize” (Education Law § 6551 [3]). As cogently pointed out by Judge Markey in ABC Med. Mgt. v GEICO Gen. Ins. Co. (3 Misc 3d 181, 185 [Civ Ct, Queens County 2003]), a ready answer to such an inquiry may be found in consulting the list of what is permitted, as well as a review of the Workers’ Compensation Law fee schedules incorporated into the no-fault program which lists procedures for which a chiropractor may seek compensation (12 NYCRR 348.2 [a]).

It is noted that a health care services provider performing a procedure at the request of a chiropractor may file a direct claim for no-fault compensation with an insurance company provided the service is one which a chiropractor may prescribe and the service is medically necessary (Omega Diagnostic Imaging, P.C. v State Farm Mut. Auto Ins. Co., 8 Misc 3d 715 [Civ Ct, Kings County 2005, Nadelson, J.]). The insurer here has failed to preserve a “fee schedule” defense for trial purposes, because that defense was not asserted in the subject claim denials (Jamil M. Abraham M.D. P.C. v Country-Wide Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50388[U], *2 [App Term, 2d & 11th Jud Dists 2004] [“we have held that by virtue of a timely claims denial an insurer is entitled to interpose the (fee schedule) defense” and “establish that . . . charges exceeded that permitted by law by evidentiary proof”]).

Footnote 3: A defense that a health service was not provided by the health services provider or its employees, but by an independent contractor, would bar a suit because the plaintiff then would not be “a ‘provider’ within the meaning of the insurance regulations” and such defense is “nonwaivable and not subject to the preclusion rule” (Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc 3d 52, 54 [App Term, 2d Dept 2005]). The chiropractor who administered the tests at issue was called in by plaintiff’s office to conduct the tests and brought his own testing machine, facts generally indicative of independent contractor status, but his statement that he was plaintiff’s employee was not challenged.

Footnote 4: Absent any argument which might spring from policy language or have another basis, objecting to health services as experimental or of dubious value gives no rise to an independently cognizable objection, distinct from a medical necessity argument (12 Couch on Insurance 3d § 171:66 [“Requirement of Reasonable Relation to Treatment Prescribed”; compensable no-fault medical expenses may include “expenses for innovative medical procedures warranted by circumstances” and such “charges should be reviewed on a case-by-case basis because of the unique nature and speculative value of the service rendered. The critical issue here is the value of the service performed in light of the claimant’s condition”]).

Civil Court, Kings County

33911/02

Karen Rothenberg, J.

Defendant State Farm Mutual Auto Ins. Co. (hereinafter “State Farm”) moves pursuant to CPLR 3211(a)(5) to dismiss the plaintiffs’ actions on the grounds that plaintiffs are collaterally estopped from maintaining the actions in light of a declaratory judgment entered in Supreme Court. After review of the papers submitted herein, this court hold that collateral estoppel is not applicable and the plaintiffs are not bound by the declaratory judgment.

In 2002, plaintiffs, as assignees of Marie Paul and Estella Amilcar, commenced these actions to recover first-party no-fault benefits for medical services provided to the assignors for an accident that occurred on February 21, 2001. On March 12, 2003, State Farm commenced a declaratory judgment action in Supreme Court, Kings County for a determination that it was not obligated to provide coverage for the accident. These assignors, but not the assignees, were among the persons served in the declaratory judgment action. State Farm moved for a default judgment against the parties based upon their failure to appear, and said motion was granted by order of the Hon. Laura Jacobson entered in the Clerk’s Office of the Supreme Court on April 12, 2004. The default order provided that “State Farm Mutual Auto Ins. Co. has no obligation to provide UM, SUM or PIP benefits to the …. passengers, Estella Amilcar [and] Marie Paul…”, and [*2]stated that the “loss of 2-21-01 was intentional and therefore an uncovered event.”

Defendant argues that the declaratory judgment should be entitled to collateral estoppel effect, thereby precluding plaintiffs from maintaining these actions for no-fault benefits. Collateral estoppel, or issue preclusion, may be applied in a subsequent action to prevent a party or those in privity, from relitigating an issue decided in a prior adjudication. (see Ryan v New York Tel. Co., 62 NY2d 494, 478 N.Y.S.2d 823). In order to invoke collateral estoppel it must be shown that (1) there was a full and fair opportunity to contest the decision that is alleged to be dispositive in the present action and (2) the issue in the present proceeding is identical to that decided in the prior proceeding. (see Langdon v. WEN Management Co., 147 AD2d 450, 537 N.Y.S.2d 603).

For collateral estoppel to be applied, it must be established that plaintiffs, who were not parties to the previous action, are privy to the prior judgment. (see Green v. Santa Fe Industries, Inc., 70 NY2d 244, 519 N.Y.S.2d 793). The determining factor is the point in time when the relationship between the party to the prior litigation and the person(s) claimed to be a privy is formed. In the assignor-assignee context, “privity must have arisen after the event out of which the estoppel arises.” Gramatan Home Investors Corp., v. Lopez, 46 NY2d 481 at 486, 414 N.Y.S.2d 308 at 312. As the Court of Appeals in Gramatan, cited supra, explained:

“an assignee is deemed to be in privity with the assignor where the action

against the assignor is commenced before there has been as assignment. In

that situation, at the time the assignee succeeded to the rights of the assignor, the subject matter of the assignment was then embroiled in litigation and was

subject to the claims of the third parties and the assignee is charged with notice

that his rights to the assignment are subject to competing claims. Conversely

an assignee is not privy to a judgment where the succession to the rights affected

thereby has taken place prior to the institution of the suit against the assignor.”

(Gramatan Home Investors Corp., v. Lopez, supra, at 486; 312.)

In the instant situation, since assignments were made prior to the commencement of the declaratory judgment action against the plaintiffs’ assignors, plaintiffs are not bound by the terms of the judgment. Moreover, in light of the fact that the declaratory judgment was obtained by default, there was no actual litigation on the merits, and therefore there is no identity of issues between this action and the prior determination in the declaratory judgment action. (see Zimmerman v. Tower Ins. Co., 13 AD3d 137, 788 N.Y.S.2d 309; Chambers v. The City of New York, 309 AD2d 81, 76 N.Y.S.2d 708).

In light of the foregoing, the defendant’s motion is denied in its entirety.

This constitutes the decision/order of the court.

March 3, 2006 ———————————————————-

DateJudge, Civil Court

Civil Court, Kings County

98035/04

Delores J. Thomas, J.

Plaintiff, a medical services provider, seeks to recover $2,143.90 in fees for services it provided to assignor Nato Seselia for EMG/NCV test.

Defendant denied payment on the basis that the tests were medically unnecessary.

The only issue at trial as the parties had stipulated to all other pertinent issues, was whether the EMG/NCV test were necessary. Therefore, defendant bore the burden of proof on this issue (see, Citywide Social Work & Psy. Serv. v. Travelers, Indem. Co., 3 Misc 3d 608 [Civ. Ct., Kings Co., 2004]; Elm Medical P. C. v. American Home Assurance Co., 2003 NY Slip Op. 51357 [U], 2003 WL 22471156 [Civ. Ct., Kings Co., 2003]; Fifth Ave. Pain Control Center v. Allstate Ins. Co., 196 Misc 2d 801 [Civ. Ct., Queens Co., 2003]).

Testifying on behalf of defendant was Joseph Cole, board certified in physical and rehabilitation medicine. Dr. Cole testified that he reviewed plaintiff medical reports dated April 30, 2003 and May 20, 2003, police accident report and a report dated May 6, 2003 for range of motion testing. Dr. Cole testified that the EMG/NCV test performed by plaintiff were unnecessary because there was already a diagnosis. Dr. Cole testified that the test are only ordered if it would alter the diagnosis or if it was needed to determine location of nerve injury (i.e. neck or wrist). He further testified that the medical documentation reflected that the assignor was improving and there was no indication of a “diagnostic dilemma” necessitating the test.

No one testified on behalf of plaintiff in response to Dr. Cole’s testimony; instead the parties stipulated into evidence as Plaintiff’s Exhibit No.3 a Letter of Medical Necessity for NCV/EMG Test from Alexander Rozenberg, MD, FAAPMR, board certified in physical medicine and rehabilitation.

The letter indicates that the assignor presented to plaintiff’s office with complaints of neck pain with radiation from the neck to the right shoulder and arm with numbness, weakness and tingling sensation in the right shoulder and with restriction of neck movement. The assignor had been diagnosed with cervical paraspinal muscle and ligaments strain/sprain secondary to acceleration/deceleration injury.

The letter further indicates that Dr. Rozenberg ordered electromyography studies in order to determine the exact diagnosis, possible localization and extent of injury; better predict prognosis for recovery and possible residual neurologic deficits, plan possible deep electrical [*2]stimulation nerve block or medicamentous nerve block or neurosurgical evaluation if all other treatment modalities failed.

The Letter of Medical Necessity goes on to indicate that the test were done to rule out cervical radiculopathy and evaluate the extent of nerve damage. Dr. Rozenberg states in the letter that sensory nerve conduction studies are important to exclude plexopathy and mononeuropathy. He further states that the Needle EMG is an essential component of the evaluation to specifically define involved myotomes.

Plaintiff’s exhibit indicates that the Nerve Conduction studies were reported as normal. The document further indicates that the Needle EMG studies of both upper extremities and muscles showed evidence of denervation in the distribution of the right C5-6 paraspinal nerve roots. Dr. Rozenberg concluded that the findings were consistent with right cervical radiculopathy. Based upon his findings he advised the assignor to continue physical therapy and added cervical traction.

A no-fault insurer defending a denial of first-party benefits on the ground that the billed for services were not “medically necessary” must at least show that the services were inconsistent with generally accepted medical/professional practices. The opinion of the insurer’s expert, standing, alone is insufficient to carry the insurer’s burden of proving that the services were not “medically necessary” (Citywide Social Work & Psy, Serv. v. Travelers Indem. Co., 3 Misc 3d 608, 609 supra.). “Generally accepted practice” is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and value that define its calling” (A.B. Med. Ser. v. New York Central Mut. Fire Ins. Co., 7 Misc 3d 1018 [A][Civ. Ct. Kings Co. 2005]; Citywide Social Work & Psy Serv. v. Travelers Indemnity Co., supra).

In A.B. Med. Serv. v. New York Central Mut. Fire Ins. Co. a similar issue regarding neurological testing was involved. Therein the plaintiff had conducted EMG/NCV tests and Somatosensory Evoked Potential (SSEP) tests to determine whether the patient suffered nerve injury from the accident. At trial, defendant’s witness testified that the test were not medically necessary because they did not serve to substantiate the doctor’s findings from the initial physical examination of the patient. The witness testified that it was generally accepted medical practice to utilize electrodiagnostic testing only to determine whether an injury to a nerve exists and nerve damage had already been diagnosed for this patient.

Thereafter the plaintiff’s medical witness, the treating doctor, testified that EMG/NCV and SEEP testing could be utilized even if there was no “diagnostic dilemma”. The doctor further testified that according to generally accepted medical practice, this testing not only confirms a doctor’s suspicions of possible nerve damage, but may also assist in localizing the nerve injury.

In the instant case, neither defendant doctor or the letter of medical necessity uses the language “generally accepted medical practice” prefacing their statements. Dr. Cole deemed the test to be unnecessary because there was no “diagnostic dilemma”, the patient was improving and from the physical examination and history it could be determined that the assignor/patient had a right-sided cervical radiculopathy and a right sided lumbar radiculopathy. He opined that if the test does not effect the treatment, there is no reason to do the test. Therefore, since the test results were normal, and did not effect the course of treatment, they were unnecessary.

The Letter of Medical Necessity from Dr. Rozenberg clearly set forth the reason he had [*3]requested the test be performed. On cross-examination after having been shown the letter (done after Dr. Cole’s peer review), Dr. Cole agreed that the test could be used to determine the conditions set forth in the letter such as plexopathy and mononeuropathy, and the localization of any nerve injury; nonetheless the maintained that the tests were unnecessary for the reasons he previously stated.

The evidence shows contradictory positions between Dr. Cole and Dr. Rozenberg. The evidence shows that Dr. Rozenberg used the electrodiagnostic testing in light of the patient’s complaints to make an exact diagnosis, to locate a possible lesion and to determine the extent of the injury and to exclude possible conditions. The fact that the results were normal to this Court’s mind is not determinative of the usefulness of the studies. In the face of a course of treatment that has not been shown to have no medical purpose or performed towards no medical objective, this Court is not prepared to second guess a treating doctor who decides that a medical test is necessary for his/her diagnosis and treatment (see also A.B. Med. Serv. v. New York Central Mut. Fire Ins. Co., supra; Alliance Med. Office, P.C. v. Allstate Ins. Co., 196 Misc 2d 268 [Civ Ct. Kings Co. 2003]; see also Citywide Social Work & Psy. Serv. P.L.L.C v. Travelers Indemnity Co., supra]). Defendant has failed to show that the test herein were inconsistent with generally accepted/professional practices and therefore medically unnecessary.

Accordingly, judgment is rendered in favor of plaintiff and against defendant in the sum of $2,143.90. This constitutes the decision and judgment of the Court.

DATED: February 27, 2006

Brooklyn, New York

DELORES J. THOMAS

Judge Civil Court

[*1]

Civil Court of the City of New York, Kings County, January 3, 2006

APPEARANCES OF COUNSEL

Alden Banniettis, Brooklyn, for plaintiff. Tell, Cheser & Breitbart, L.L.P., for defendant.

OPINION OF THE COURT

Arlene P. Bluth, J.

When defending a claim for first-party no-fault benefits, an insurer may raise at any time the defense that the alleged injuries do not arise out of an insured incident. What must the insurer present at trial when asserting that the injuries are the result of an accident staged in furtherance of an insurance fraud scheme? As explained more fully below, this court holds that the term “fraud” as used in that context is a red herring. This is because it does not matter whether the accident was staged in furtherance of an insurance fraud scheme or was deliberately caused under some other circumstances. The relevant inquiry is whether the collision was a true accident—that is, was it unintentional? Quite simply, if it was not an accident, then it falls outside the scope of the no-fault policy.

In these actions, plaintiff V.S. Medical Services, P.C. seeks to recover first-party no-fault benefits for medical services rendered to its assignors. At issue is $2,242.87 for treatment rendered to Carlos Gaviria and $12,997.06 for treatment rendered to Ysidro Liriano. Both assignors were involved in the same alleged accident, and plaintiff’s claims for the treatment rendered to them were all denied based on defendant’s claim that the alleged accident was staged. Therefore, since there were common questions of law and fact, the trials were held jointly before this court on November 16, 2005. Defendant Allstate Insurance Company [*2]presented three witnesses: the insured, Victor Herasme; an outside investigator, Robert J. Sasso; and a claims examiner, Sandra Pryce. Plaintiff did not present any witnesses.

In the action pertaining to assignor Ysidro Liriano (Index No. 55821/04), a prior decision/order issued by Honorable Ellen M. Spodek on March 21, 2005 denied cross motions for summary judgment and found that although plaintiff had made out its prima facie case, defendant had raised an issue of fact as to whether the accident was staged. Therefore, the trial on the claims for Mr. Liriano was limited to the issue of whether the collision was an insured incident. As to the other assignor, Mr. Gaviria, plaintiff was still required to make out its prima facie case.

Based upon the testimony and evidence introduced at trial and having had the opportunity to observe the demeanor and credibility of the witnesses’ testimony, the court finds as follows:

Findings of Fact

The assignors herein were involved in an alleged accident on May 8, 2001. One of the assignors, Mr. Gaviria, was driving, and the other, Mr. Liriano, was one of his passengers. The car, a 1985 Nissan, was owned and insured by Victor Herasme, who was defendant’s first witness. Mr. Herasme credibly testified that he frequently loaned out his car to people in the neighborhood. He testified that he had gotten into an accident with the car in or about January 2001, while he was driving; and that just prior to the accident in May 2001 which gave rise to this suit, he had lent the car to Mr. Gaviria (known to him only as “Carlos”), whom he knew casually from around the neighborhood. Mr. Herasme testified that Mr. Gaviria returned the car to him with a “small scratch”; when Mr. Herasme questioned him about it, Mr. Gaviria admitted that he had “scraped by a car” but refused to give details. Mr. Herasme also testified that he is known as Victor, that Mr. Gaviria only called him Victor, and that he was not called Jose by anyone, including Mr. Gaviria. However, when Mr. Gaviria was questioned by defendant in an examination under oath (EUO), the signed transcript of which was introduced into evidence as exhibit A, Mr. Gaviria flatly denied knowing Victor Herasme or anyone named Victor, and claimed to have borrowed the car from a man named Jose.

Defendant’s second witness was Robert J. Sasso, chief executive officer (CEO) of Above Average Investigations, Inc. He was hired by defendant to locate the following witnesses and serve them with subpoenas to testify at the trial: Mr. Gaviria (the driver and an assignor), Mr. Herasme (the owner and insured), Mr. Liriano (a passenger and an assignor), and the treating physician, Dr. Leonid Livchits. Mr. Sasso was unable to serve Mr. Gaviria, but successfully served the other three individuals. Of those, only Mr. Herasme appeared.

Finally, defendant presented Sandra Pryce, a claims representative who works in defendant’s special investigations unit. Ms. Pryce testified that she has been employed for 38 years by defendant, and for 11 years in her current position. Her job includes the review of files referred by the claims department for suspicion of fraud (meaning a noncovered incident), and making the ultimate determination of whether to pay or deny those claims after investigation. Ms. Pryce testified she was referred the file because another Allstate employee had spoken to the driver, Mr. Gaviria, who denied any involvement in an accident. (As described above, he later changed his story when questioned by defendant under oath.) Ms. Pryce testified that the investigation revealed the following facts, and based thereon she determined that the accident [*3]was staged and that the claims should be denied:

(1) In his EUO, Mr. Gaviria denied knowing Mr. Herasme, the insured and owner of the vehicle he was driving.

(2) The alleged accident occurred on May 8, 2001, just under one month after the policy was taken out on April 9, 2001, and the policy was terminated for nonpayment on June 9, 2001, just over a month later.

(3) In a similar pattern, Mr. Herasme had taken out a policy on the car on December 28, 2000, the car was involved in an alleged accident less than a month later on January 19, 2001, and that policy was terminated for nonpayment on February 27, 2001.^[FN1]

(4) In both accidents, there was minimal damage to the car, there were several passengers in the car, and no one was taken to the emergency room, although medical treatments were started later. In addition, both accidents occurred on Seventh Avenue in Manhattan—the first at 19th Street, and the second at 32nd Street.

(5) There were several inconsistencies in the EUO testimony of Mr. Gaviria, the driver, and Mr. Torres, one of the passengers (and the only one of the four passengers who appeared for an EUO). Ms. Pryce noted that they conflicted in very basic ways, including the number and gender of the passengers, whether the police witnessed the accident or were called to the scene, the purpose of the trip and destination of the car. In his EUO, Mr. Gaviria stated that besides him, there were three other people in the car, all male, and one whom he could not even identify; Mr. Torres said there were four other people, and that one was female. Mr. Gaviria said the police were on the scene to witness the accident; Mr. Torres said they were called and arrived later. Mr. Gaviria’s testimony on this point was contradicted by the police report, which Ms. Pryce reviewed as part of defendant’s file. Mr. Gaviria also said that they had been on their way to pick up the mother of one of the passengers, while Mr. Torres said they were just cruising aimlessly. Ms. Pryce credibly testified that, in her experience, these types of inconsistencies—especially as to the number and identity of people in the vehicle—are indicative of a staged accident.

Based on all of these factors, and after consultation with Hazel Johnson, the original claims representative who had forwarded the file to her, Ms. Pryce determined that the accident was staged and therefore not a covered incident, and had the subject claims denied on that basis. She also duly notified the National Insurance Crime Bureau and the New York State Insurance Fraud Bureau.

Conclusions of Law

A. “Fraud” Is Not the Issue

No-fault insurance policies only cover vehicular accidents. An accident is, by definition, unintentional; a deliberate collision is not an accident. Therefore, damages resulting from a deliberate collision are not covered by no-fault insurance. (See Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2d Dept 2005] [no coverage where claimant was injured in an intentional collision]; Matter of Government Empls. Ins. Co. v Robbins, 15 AD3d 484 [2d Dept 2005] [no [*4]coverage for claimant where collision was deliberately caused by the driver of the other vehicle]; Westchester Med. Ctr. v Travelers Prop. Cas. Ins. Co., 309 AD2d 927 [2d Dept 2003] [no coverage where wife was injured when her husband tried to kill her by deliberately driving their car over an embankment while he exited the vehicle]; Matter of Progressive Northwestern Ins. Co. v Van Dina, 282 AD2d 680 [2d Dept 2001] [no coverage where claimant was injured when she was mugged by driver of another car while loading packages into her trunk and was pulled under offender’s car].) This line of cases makes clear that even where the individual claiming benefits had no involvement in causing the collision but was merely an innocent injured party, coverage is properly denied because the collision was not an accident.

Moreover, it does not matter “whether the intentional collision was motivated by fraud or malice.” (Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522, 523 [2d Dept 2003]; see also Progressive N. Ins. Co. v Rafferty, 17 AD3d 888, 889 [3d Dept 2005] [no coverage where claimant deliberately rammed his car into person with whom he had been fighting].) While some intentional collisions are the products of insurance fraud schemes, others are not. In all such cases, it is the deliberate, nonaccidental character of the incident that makes it ineligible for no-fault coverage. Put another way, the no-fault policy only covers accidents; it does not cover deliberate incidents. It does not matter whether the incident was a deliberate mugging, an attempted murder, a product of road rage, or a cold, calculated scheme to defraud the insurance company—if it was deliberate, it is not a covered incident under the no-fault policy.

Nevertheless, our appellate courts commonly invoke the term “fraud” when discussing the defense of lack of coverage; this may be because so many cases involving allegedly noncovered incidents center on accidents purportedly staged for the purpose of generating fraudulent insurance claims. (See State Farm Mut. Auto. Ins. Co. v Laguerre, 305 AD2d 490, 491 [2d Dept 2003] [“A deliberate collision caused in furtherance of an insurance fraud scheme is not a covered accident”]; see also Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2d Dept 2002]; A.B. Med. Servs. PLLC v Encompass Ins., 10 Misc 3d 127[A], 2005 NY Slip Op 51892[U] [App Term, 2d & 11th Jud Dists 2005]; Ocean Diagnostic Imaging, P.C. v Utica Mut. Ins. Co., 9 Misc 3d 138[A], 2005 NY Slip Op 51745[U] [App Term, 9th & 10th Jud Dists 2005]; Careplus Med. Supply Inc. v Allstate Ins. Co., 9 Misc 3d 131[A], 2005 NY Slip Op 51598[U] [App Term, 2d & 11th Jud Dists 2005]; A.B. Med. Servs. PLLC v State-Wide Ins. Co., 7 Misc 3d 136[A], 2005 NY Slip Op 50785[U] [App Term, 2d & 11th Jud Dists 2005]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]; A.B. Med. Servs. v Eagle Ins. Co., 3 Misc 3d 8 [App Term, 2d Dept 2003].) Perhaps the seminal embodiment of this formulation is the Second Department’s pronouncement that “[a] deliberate collision caused in furtherance of an insurance fraud scheme is not a covered accident.” (State Farm v Laguerre, 305 AD2d at 491.) No-fault insurers and practitioners (including the parties and their counsel in this case) have also adopted the nomenclature of fraud when litigating claims involving allegedly staged accidents. This is true even though the no-fault regulations do not mention “fraud” as a defense to payment, but rather refer only to noncovered incidents. (See, e.g., 11 NYCRR 65-3.8 [e] [2].)

Unfortunately, the “fraud” label has created the mistaken impression that the insurance [*5]company must prove that the “accident” was the product of a fraudulent motive or scheme. But the fraud label is merely a distraction, since the focus for a “lack of coverage” defense must always be whether the collision was deliberate or a true accident. That is, the court must determine whether the incident was unintentional (i.e., a true accident) or whether at least one driver intended to make contact (i.e., a deliberate event).

B. Establishing a Staged Accident Defense

In the no-fault context, the plaintiff need not prove coverage as part of its prima facie case. (See, e.g., Amaze Med. Supply Inc. v Lumbermens Mut. Cas. Co., 10 Misc 3d 127[A], 2005 NY Slip Op 51898[U] [App Term, 2d & 11th Jud Dists 2005]; Contemp. Med. Diag. & Treatment, P.C. v Government Empls. Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists 2005]; Triboro Chiropractic & Acupuncture v Electric Ins. Co., 2 Misc 3d 135[A], 2004 NY Slip Op 50215[U] [App Term, 2d & 11th Jud Dists 2004] [setting forth the elements of the plaintiff’s prima facie case, namely, that the statutory claim form, setting forth the fact and the amount of the loss sustained, was submitted to the defendant, and that payment of no-fault benefits is overdue].) Instead, the plaintiff’s prima facie case establishes a presumption of coverage. (See A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 822, 825 [Civ Ct, Kings County 2005].)

Before trial, it is well established that to defeat a plaintiff’s motion for summary judgment for first-party no-fault benefits, a defendant asserting a lack of coverage defense must set forth admissible evidence of “the fact or [a] founded belief that the alleged injury does not arise out of an insured incident.” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; St. Luke’s Roosevelt Hosp. v Allstate Ins. Co., 303 AD2d 743 [2d Dept 2003]; Diagnostic Rehab. Medicine Serv., P.C. v Farm Family Cas. Ins. Co., 7 Misc 3d 137[A], 2005 NY Slip Op 50826[U] [App Term, 1st Dept 2005]; Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists 2005].) In other words, when the defense is based on lack of coverage, to defeat plaintiff’s motion for summary judgment, the defendant must come forward with evidence in admissible form that creates an issue of fact and rebuts that presumption of coverage.

Once the plaintiff’s motion for summary judgment is denied, however, there is a dearth of case law to address what showing the insurer must make at the trial to defeat the claim for first-party no-fault benefits. This court found only two published decisions addressing this issue, and they conflict with each other. In one, the court extrapolated the standard for defeating a summary judgment motion into the trial context. In A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., Judge Jack M. Battaglia of this court held that if the insurer raises a lack of coverage defense, it is its burden at trial to come forward with evidence of ” ‘the fact’ [of lack of coverage or the] ‘found[ation for its] belief’ that there is no coverage.” (A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 822, 824 [Civ Ct, Kings County 2005], quoting Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 19-20 [2d Dept 1999].) A completely different approach was taken by Judge Loren Baily-Schiffman of this court. In JSI Expert Serv. v Liberty Mut. Ins. Co. (7 Misc 3d 1009[A], 2005 NY Slip Op 50513[U] [Civ Ct, Kings County 2005]), Judge Baily-Schiffman rejected the approach of the A.B. Med. court. Instead, she focused on the fraud aspect and applied the “clear and convincing evidence” standard, the unusually high standard required to prove an independent cause of action for fraud. “This Court holds that the insurer’s defense of fraud, whether it be a staged accident or other fraud, requires [*6]proof by clear and convincing evidence.” (JSI Expert Serv. v Liberty Mut. Ins. Co., 7 Misc 3d 1009[A], 2005 NY Slip Op 50513[U], *3 [Civ Ct, Kings County 2005].)

Besides these two posttrial decisions, the issue of whether the incident was a true accident or a deliberate event also arises in another context. In cases where an insurer petitions the Supreme Court to permanently stay arbitration of a claimant’s no-fault claim on the ground that the collision was not a covered incident, the Supreme Court holds a framed issue hearing on that sole issue. In those posthearing decisions, the case law from the Second Department makes clear that whether a collision is a covered incident depends upon whether it was intentionally caused. (See Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2d Dept 2005]; Matter of Government Empls. Ins. Co. v Robbins, 15 AD3d 484 [2d Dept 2005]; Westchester Med. Ctr. v Travelers Prop. Cas. Ins. Co., 309 AD2d 927 [2d Dept 2003]; Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522, 523 [2d Dept 2003]; Matter of Progressive Northwestern Ins. Co. v Van Dina, 282 AD2d 680 [2d Dept 2001].) If the collision was an intentional occurrence, then it is outside the scope of the no-fault policy regardless of why or how it occurred or who was behind it.

That does not mean that an insurer cannot or should not put forth evidence of a fraudulent scheme in order to prove that the collision was not an accident; it does mean, however, that the insurer need not prove fraud. In Matter of Eagle Ins. Co. v Davis (22 AD3d 846 [2d Dept 2005]), the Second Department held that the Supreme Court should have considered evidence proffered on the issue of fraud, insofar as it bore on the question of whether the collision was a covered incident. “When [the insurer] raises an issue of fact as to whether the automobile collision . . . was deliberate or intentional, the issue of fraud is subsumed under the coverage issue. Evidence of such fraud should be considered in determining the broader coverage issue.” (Id. at 847 [citations omitted]; see also Matter of Government Empls. Ins. Co. v Spence, 23 AD3d 466 [2d Dept 2005].) Thus, the insurer may introduce evidence of a fraudulent scheme or motive to the extent that it is probative of the question of whether the collision was a true accident. In other words, evidence of fraud can serve as circumstantial evidence that this was not a covered incident. While “unsubstantiated hypotheses and suppositions” are not enough to make out a lack of coverage defense (see Amstel Chiropractic v Omni Indem. Co., 2 Misc 3d 129[A], 2004 NY Slip Op 50088[U], *1 [App Term, 2d & 11th Jud Dists 2004]), an insurer’s evidence of a purposeful collision will often be circumstantial. This is to be expected; in the absence of a mea culpa from one of the participants, the insurer—and ultimately the court—must examine the facts and circumstances of the incident to determine whether they give rise to an inference of lack of coverage. (See, e.g., A.B. Med. Servs., 7 Misc 3d 822.) Circumstantial evidence is sufficient if a party’s conduct “may be reasonably inferred based upon logical inferences to be drawn from the evidence.” (Benzaken v Verizon Communications, Inc., 21 AD3d 864, 865 [2d Dept 2005].)

C. Burdens of Proof at Trial

As set forth in section B above, the plaintiff need not prove coverage as part of its prima facie case. Instead, the plaintiff’s prima facie case establishes a presumption of coverage. When the defense is based on lack of coverage, therefore, the defendant need only come forward with evidence that rebuts that presumption of coverage. That is, once the plaintiff has made out its prima facie case, the burden of production (also called the burden of going forward) on the issue [*7]of coverage falls upon the defendant, and the defendant must demonstrate that it has a founded basis for believing that the alleged collision was intentionally caused. The burden of persuasion, however, remains on the plaintiff, who must prove its case by a fair preponderance of the credible evidence. (See Kalra v Kalra, 149 AD2d 409, 411 [2d Dept 1989]; Prince, Richardson on Evidence § 3-206 [Farrell 11th ed].) “[I]f the insurer carries its burden of coming forward, plaintiff must rebut it or succumb.” (A.B. Med. Servs., 7 Misc 3d at 825 [internal quotation marks and citation omitted].) How much evidence must defendant produce to satisfy its burden of production? There is no magic formula, but clearly it must be enough to rebut the presumption that the injuries were caused by a covered incident, that is, a true accident. (See Prince, Richardson on Evidence § 3-202.) After all the evidence has been presented, the court must decide whether the evidence of coverage preponderates in favor of the plaintiff, the party who bears the burden of persuasion. If the evidence weighs against the plaintiff, or is so evenly balanced that it is impossible to determine the matter, then judgment must be given for the defendant. (See Roberge v Bonner, 185 NY 265 [1906].)

D. Conclusion

Addressing the issue of plaintiff’s prima facie case, the court finds that plaintiff made out its prima facie case as to assignor Ysidro Liriano on its summary judgment motion; at trial, plaintiff made out its prima facie case as to the other assignor, Carlos Gaviria, via the admissions of defendant, through the testimony of Ms. Pryce, that it received the claims submitted for Mr. Gaviria.

In this trial, defendant came forward with sufficient evidence to rebut the presumption of coverage by showing that it had a founded belief that the injuries did not arise from a covered incident—that is, that the accident was staged because at least one driver intended to make contact.^[FN2] The court finds that the insurer, by Ms. Pryce, testified credibly that its denials of plaintiff’s claims were based, or founded, upon the results of her investigation—including the profile and claim history of the car (older model, accident shortly after insurance taking effect and policy cancelled shortly thereafter for nonpayment on two separate occasions), several passengers in the car, no emergency room treatment for any passenger, several material discrepancies in the car’s occupants’ stories as to the number and gender of people in the car, where they were going, and the driver denying knowing the owner of the car. At trial, defendant also presented Mr. Herasme’s unrebutted testimony that his car suffered only a “small scratch” in the alleged accident—an event which sent no one to the emergency room, but which allegedly resulted in over $15,000 in treatment for these assignors alone.^[FN3] Thus, the evidence produced by defendant rebutted the presumption of coverage which attached to plaintiff’s prima facie case, and shifted the burden of production back to plaintiff. [*8]

Plaintiff wholly failed to carry that burden. Plaintiff produced no evidence to rebut any of defendant’s proof; plaintiff did not even produce its assignors or any other witnesses to the alleged incident. Instead, plaintiff relied on its counsel’s vigorous cross-examination of defendant’s witnesses. The tactic did not succeed, and defendant’s credible proof stands unrefuted. Thus, based upon a fair preponderance of the evidence, this court finds that the subject collision was not a covered incident.

Accordingly, judgment is for defendant, and the complaints are hereby dismissed.

Footnotes

Footnote 1: Ms. Pryce explained that defendant was obligated to reinsure the vehicle because it was in the assigned risk pool, and due to the luck of the draw, Allstate got the vehicle twice.

Footnote 2: In this case, defendant denied the subject claims because, inter alia, the injuries were not caused by an accident. However, even if the denials were not premised upon lack of coverage, the outcome would be the same since at trial defendant established the defense of lack of coverage, and said defense is not subject to preclusion.

Footnote 3: In finding that the alleged injuries were not the result of a covered incident, this court does not suggest that fraud was committed by the medical provider with regard to the billed-for treatment, an issue not before the court in this trial.