Index No. CV-1526-20/SM
James F. Matthews, J.

Upon the following papers numbered 1 to 65 read on this motion by defendant for an order seeking Summary Judgment of dismissal ; by Notice of Motion/Order to Show Cause and supporting papers 1-4,61 ; Notice of Cross Motion and supporting papers ; Answering Affidavits and supporting papers 62,63 ; Replying Affidavits and supporting papers 64,65 ; Filed papers; Other exhibits: 5-60, (and after hearing counsel in support of and opposed to the motion), it is

ORDERED that the motion by defendant for summary judgment dismissing plaintiff’s complaint pursuant to CPLR 3212(b), is granted.

Plaintiff medical provider seeks reimbursement from defendant insurer for assigned first party no-fault benefits for medical dates of service (“DOS”) rendered to plaintiff’s assignor from 02/06/2019 through 03/19/2020, for injuries sustained from a car accident of 01/28/2019, in the outstanding sum of $7,399.77, under New York’s No-Fault Law.

Defendant now moves for summary judgment dismissing the complaint pursuant to CPLR 3212(b), supported by the affidavit of its Claims Supervisor, Danuta Fudali, which asserts, inter alia, that defendant timely mailed its NF-10 Denial Of Claim forms (“denials”) and Explanation of Benefits (“EOB’s”) to plaintiff, pursuant to the practices and procedures it established to ensure timely deliver of its mailings to the intended recipient, thereby creating a presumption of receipt. The denials were based upon defendant’s payment in full for plaintiff’s submissions of excessive billing not compiled in accordance with the Workers’ Compensation [*2]Fee Schedule (“Fee Schedule”), pursuant to the findings in the affidavit of Carolyn Mallory, C.P.C. (“Certified Professional Coder”)^[FN1] , and the lack of medical necessity for certain chiropractic and acupuncture billing, as supported by the Independent Medical Examination (“IME”) and report of Dr. John Iozzio, D.C., L.Ac., dated 03/26/2019, the IME report of Dr. John Iozzio dated 05/02/2019, and the peer review report of Dr. Daniel Sposta, D.C., L.Ac., dated 05/15/2019, which cut off any further chiropractic and acupuncture treatments as of 04/22/2019 and 05/23/2019, respectively.

In opposition to the motion for summary judgment, plaintiff asserts it attached to its papers as an exhibit, the affidavit of Dr. Vadim Dolsky, L.Ac., to rebut the claims of Dr. Iozzio and Dr. Sposta, by demonstrating plaintiff’s assignor was symptomatic and required the treatments provided by the treating providers; that Dr. Iozzio’s IME reports concede that the evaluations and treatments prior to the IME dates were medically necessary; that defendant’s IME reports failed to demonstrate the disputed services were inconsistent with generally accepted medical or professional practices; and Dr. Dolsky’s professional opinion differs from that stated by defendant’s experts, thereby raising a question of fact requiring a trial.

In addition, plaintiff asserts it attached to its papers as an exhibit, the affidavit of Priti Kumar, C.P.C., to rebut the facts and opinions on the proper use of the fee schedule, in opposition to the opinion expressed by Carolyn Mallory, C.P.C. on behalf of defendant. Plaintiff contends the difference of opinion of each party’s expert raises a question of fact, which requires a trial.

In reply to plaintiff’s opposition papers, defendant urges the Court to ignore the purported findings of both Dr. Vadim Dolsky, L.Ac., and that of Priti Kumar, C.P.C., as there are no affidavits or exhibits attached to plaintiff’s papers as an exhibit. Indeed, a search by the Court for the existence of any exhibits or affidavits from plaintiff proved useless, as there is none to be found.

A proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law with proof in admissible form sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557,562 [1980]; see also Manhattan Medical v State Farm Mut. Ins. Co., 20 Misc 3d 1144[A][Civ. Ct. Richmond Cty. 2008]).

Once a showing of entitlement to summary judgment has been made, the burden shifts to the party opposing the motion for summary judgment, to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action (see CPLR 3212 [b]; Alvarez v Prospect Hospital, supra; Zuckerman v City of New York, supra).

An attorney’s affirmation which demonstrates no personal knowledge of the facts, is insufficient to defeat a motion for summary judgment, but may serve as a vehicle for the submission of acceptable attachments, which do provide evidentiary proof in admissible form (see Zuckerman v City of New York, supra).

Here, the Court determines defendant has satisfied its burden of demonstrating the existence and following of its standard office practices and procedures for the timely and proper mailing of its NF-10 denial of claim forms and EOR’s to plaintiff (see Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2nd Dept, 2007]). Defendant’s mailing methods were sufficient to create a rebuttable presumption of proper mailing (see St. Vincent’s Hosp. of Richmond v GEICO, 50 AD3d 1123, 1124 [2nd Dept 2008]; New York Presbyt. Hosp. v Allstate Ins. Co.,29 AD3d 547 [2nd Dept 2006]; Gentlecare Ambulatory Anesthesia Servs. v GEICO Ins. Co., 57 Misc 3d 150[A][App Term, 2d, 11th & 13th Jud Dists 2017]). “…Proof of proper mailing gives rise to a presumption that the item was received by the addressee” (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2nd Dept 2001]), which presumptions of receipt, were not refuted or denied by plaintiff in the instant matter. Plaintiff’s arguments in opposition are unavailing.

The Court further determines that defendant has made a prima facie showing of entitlement to summary judgment as a matter of law with proof in admissible form sufficient to establish the lack of any material issues of fact, which has not been refuted by plaintiff (see Alvarez v Prospect Hospital,supra]; Winegrad v New York Univ. Med. Center, supra; Zuckerman v City of New York, supra).

The failure to submit a rebuttal affidavit from plaintiff’s C.P.C. expert on the contested fee schedule issues, leaves only the opposition analysis of plaintiff’s attorney, with no personal knowledge of the facts, unsupported by expert witness testimony as to the use and interpretation of the fee schedules in the context of defendant’s components and calculations of the alleged maximum permissible fee (see Murali v Upton, 175 Misc 2d 186, 187-188 [Civ Ct, NY Cty, 1997]).

In addition, the failure to submit a rebuttal affidavit from plaintiff’s expert physician showing the medical necessity of its billing in a non-conclusory manner and meaningful way, rebutting the issues raised in the insurer’s IME and peer review reports, fails to demonstrate the existence of a triable issue of fact as to whether there was a lack of medical necessity for the medical services at issue (see Throgs Neck Multicare, P.C. v Mercury Ins. Co., 52 Misc 3d 138[a}[App Term, 2nd Dept, 9th & 10th Jud Dists 2016]), and leaves the conclusions of defendant’s medical experts un-refuted (see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A][App Term, 2nd, 11th & 13th Jud Dists 2009]).

“The law is well settled that a party, in opposition to a motion for summary judgment, must assemble and lay bare affirmative proof to demonstrate that the matters alleged are real and capable of being established upon trial” (see Nelson v Lundy, 298 AD2d 689, 690 [3rd Dept 2002]; see also Wasson v Bond, 80 AD3d 1114 [3rd Dept 2011]). The plaintiff’s papers fail to meet this standard and accordingly, judgment is granted in favor of defendant and the complaint is dismissed (see Jamil M. Abraham, M.D., P.C. v Country Wide Ins. Co.,3 Misc 3d 130[A][App Term, 2nd & 11th Jud Dists 2004]; Murali v Upton, supra).

Accordingly, the motion for summary judgment by defendant pursuant to CPLR 3212(b), is granted. The foregoing constitutes the decision and order of this Court.

Dated: January 5, 2022
J.D.C.

Footnotes

Footnote 1:Defendant’s expert Coder states under oath that in the event medical necessity is found at a trial, the amounts to be allowed under the fee schedule would be $447.32 for Bills 1 through 6, and $3,798.60 for Bills 7 through 46 (see page 46 of Carolyn Mallory’s affidavit).

Index No. CV-3161-20/SM
James F. Matthews, J.

Upon the following papers numbered 1 to 16 read on this motion by defendant for summary judgment of dismissal by Notice of Motion/ Order to Show Cause and supporting papers 1,2,9 ; Notice of Cross Motion and supporting papers 10,11 ; Answering Affidavits and supporting papers 10,11 ; Replying Affidavits and supporting papers 15,16 ; Filed papers; Other exhibits: 3-8,12-14 ;(and after hearing counsel in support of and opposed to the motion), it is

ORDERED that the motion by defendant for summary judgment dismissing plaintiff’s complaint, is denied, and plaintiff’s cross-motion for summary judgment in the total sum of $6,947.81, is denied.

In this action by a medical provider to recover assigned first-party no-fault benefits for medical services rendered, consisting of ten (10) bills totaling $6,947.81, defendant insurer moves for summary judgment dismissing the complaint based upon assignor’s failure to appear for orthopedic independent medical examinations (“IME’s”) on 08/14/2019, and then on 09/14/2019, not satisfying a condition precedent of its insurance policy (see 11 NYCRR 65-1.1), which defendant raised as a ninth affirmative defense in its amended verified Answer, thereby vitiating insurer’s liability (see Stephan Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2nd Dept 2006]). Defendant asserts it denied each of the 10 claims premised on a breach of condition to coverage, which voided the policy ab-initio, resulting in no coverage to the no-fault claims retroactively dated to the date of the automobile accident of 04/25/2019 (see Unitron Advantage Ins. Co. v Bay Shore Physical Therapy, PLLC., 82 AD3d 559 [1st Dept 2011], lv denied 17 NY3d 705 [2011]).

In opposition to the motion, plaintiff argues defendant failed to properly and timely schedule the orthopedic IME’s pursuant to 11 NYCRR 65-3.5(d), which requires that a scheduled IME as additional verification of a claim, be scheduled to be held within 30 calendar days from the date of receipt of prescribed verification forms or claims (see W.H.O. Acupuncture , P.C. v Travelers Home & Marine Ins. Co., 36 Misc 3d 152[A][2nd Dept, 2d, 11th & 13th Jud Dists 2012]).

Plaintiff contends that defendant concedes (and admits) it received the first claim on 05/31/2019 as noted on defendant’s NF-10 Denial of Claim form, and should have scheduled its orthopedic IME within the next 30 days from 05/31/2019, or within 06/30/2019. However, defendant’s scheduling letter for its orthopedic IME was dated 07/30/2019, with its first IME date set for 08/14/2019, which was untimely and improper.

Plaintiff also contends that defendant concedes (and admits) it received the second claim on 06/17/2019 as noted on defendant’s NF-10 Denial of Claim form, and should have scheduled its orthopedic IME within the next 30 days from 06/17/2019, or within 07/17/2019. However, defendant’s scheduling letter for its orthopedic IME was dated 07/30/2019, with its first IME date set for 08/14/2019, which was untimely and improper.

Plaintiff further contends that defendant concedes (and admits) it received the third claim on 07/03/2019 as noted on defendant’s NF-10 Denial of Claim form, and should have scheduled its orthopedic IME within the next 30 days from 07/03/2019, or within 08/02/2019. However, defendant’s scheduling letter for its orthopedic IME was dated 07/30/2019, with its first IME date set for 08/14/2019, which was untimely and improper.

Plaintiff also cross-moves for summary judgment in the sum of $6,947.81, asserting it timely submitted the 10 NF-3 Notice of Claim forms to defendant for this total, and payment is overdue. Plaintiff contends that defendant’s NF-10 Denial of Claim forms for each of the 10 submitted claims, is prima facie proof of plaintiff’s timely submission and defendant’s receipt of each claim and that payment is overdue.

In opposition to plaintiff’s cross-motion, defendant denies plaintiff’s arguments in support, and raises the doctrine of res judicata as a defense to plaintiff’s contentions, citing 2 civil decisions from the City of New York, a copy of each of which was provided by defendant to the Court:

1) LONGEVITY MEDICAL SUPPLY, INC., a/a/o MARISOL TORRES v NY CENTRAL MUT. FIRE INS., Index No. 713404/20 (Civ Court, City of New York, Queens Cty, dated 6/9/2021 (Greenburg, J.), and

2) NORTH QUEENS SURGICAL CENTER, a/a/o MARISOL TORRES v NY CENTRAL MUT. FIRE INS., Index No. 715694/20 (Civ Court, City of New York, Queens Cty, dated 6/6/2021 (Lanzetta, J.).

Defendant argues that both decisions demonstrate that assignor Marisol Torres’ failure to appear at duly scheduled IME’s were the grounds for dismissal, with prejudice, and since plaintiff’s assignor herein is the same Marisol Torres as in the two cited cases, the instant cross-motion by plaintiff should be denied under the doctrine of res judicata, accordingly.

In addition, defendant replies in further support of its motion for summary judgment, that it is entitled to dismissal on the grounds it timely denied reimbursements for plaintiff’s bills, based upon the failure of plaintiff’s assignor to appear at duly scheduled IME’s, thereby failing to satisfy a condition precedent to the insurer’s liability under the no-fault policy, which voided the policy ab-initio, resulting in no coverage for the no-fault claims, retroactively dated to the automobile accident date of 04/25/2019.

Here, the Court finds that although defendant established that the notices of the scheduled orthopedic IME’s were properly mailed in accordance with defendant’s standard office practice and procedures (see St. Vincent’s Hosp. of Richmond v GEICO, 50 AD3d 1123 [2nd Dept 2008]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d,11th & 13th Jud Dists 2007), and that plaintiff’s assignor failed to appear at each of the IME’s (see [*2]Stephen Fogel Psychological , P.C. v Progressive Cas. Ins. Co., 35 AD3d 720,721 [2nd Dept 2006]; Utopia Equipment, Inc. v ELRAC, Inc.,56 Misc 3d 134[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2017]), defendant failed to demonstrate that the scheduling of the orthopedic IME’s complied with Regulation 11 NYCRR §65-3.5[d], which prescribes a statutory 30-calendar-day time frame for the timely holding of IME’s, from the date of receipt of the verification forms or claims (see American Tr. Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015]), or that the 30-day period was tolled by a proper verification request (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2nd Dept 2005]; 11 NYCRR 65-3.5).

Therefore, the Court finds that defendant has failed to demonstrate a prima facie entitlement for summary judgment (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557,562 [1980]), in that defendant failed to timely schedule its first orthopedic IME for each of the first submitted three claims, pursuant to 11 NYCRR 65-3.5(d), which requires that a scheduled IME as additional verification of a claim, be scheduled to be held within 30 calendar days from the date of receipt of the claims ^[FN1] (see Irina Acupuncture, P.C. v Nationwide Affinity Ins. Co., 57 Misc 3d 146[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2017]; W.H.O. Acupuncture, P.C. v Travelers Home & Marine Ins. Co., supra at *2; see also O & M Medical, P.C. v Travelers Indem. Co., 47 Misc 3d 134[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2015]).

Defendant’s own NF-10 Denial of Claim form dated 10/21/2019, admits the first claim was received from plaintiff on 05/31/2019, requiring a scheduled IME by 06/30/2019. However, defendant’s scheduling letter for its first orthopedic IME for this claim was dated 07/30/2019, with its first orthopedic IME date set for 08/14/2019, which was untimely and improper (see 11 NYCRR 65-3.5[d]; American Tr. Ins. Co. v Longevity Med. Supply, Inc., supra; W.H.O. Acupuncture, P.C. v Travelers Home & Marine Ins. Co., supra).

In addition, Defendant’s own NF-10 Denial of Claim form dated 10/22/2019, admits the second claim was received from plaintiff on 06/17/2019, requiring a scheduled IME by 07/17/2019. However, defendant’s scheduling letter for its orthopedic IME for this claim was dated 07/30/2019, with its orthopedic IME date set for 08/14/2019, which was also untimely and improper (see 11 NYCRR 65-3.5[d]; American Tr. Ins. Co. v Longevity Med. Supply, Inc. supra; W.H.O. Acupuncture, P.C. v Travelers Home & Marine Ins. Co., supra).

Furthermore, Defendant’s own NF-10 Denial of Claim form dated 10/21/2019, admits the third claim was received from plaintiff on 07/03/2019, requiring a scheduled IME by 08/02/2019. [*3]However, defendant’s scheduling letter for its orthopedic IME was dated 07/30/2019, with its orthopedic IME date set for 08/14/2019, which was also untimely and improper (see 11 NYCRR 65-3.5[d]; American Tr. Ins. Co. v Longevity Med. Supply, Inc., supra; W.H.O. Acupuncture, P.C. v Travelers Home & Marine Ins. Co., supra).

The remaining 7 NF-3 Notices of Claim were denied by defendant on the same basis of plaintiff assignor’s failure to appear at the scheduled orthopedic IME of 08/14/2019, and the rescheduled IME of 9/04/2019.^[FN2] However, these NF-10 Denials of Claim relied upon the same untimely and improperly scheduled IME date of 08/14/2019. Since the first IME date of 08/14/2019 was untimely and improper, the rescheduled IME date of 09/04/2019 was also untimely and improper, and it did not toll defendant’s time to pay or deny those bills (see St. Vincent’s Hosp. of Richmond v GEICO, 50 AD3d 1123 [2nd Dept 2008]); see also Concourse Chiropractic, PLLC. v Fiduciary Ins. Co. Of America, 35 Misc 3d 146[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2012).

In effect, there was no duly scheduled IME at which plaintiff failed to appear, as the scheduling letters for the IME’s were each scheduled to be held beyond the 30 days of defendant’s receipt of the claims, as required by 11 NYCRR 65-3.5(d), rendering each scheduling letter a nullity (see American Tr. Ins. Co. v Longevity Med. Supply, Inc., supra; O & M Medical, P.C. v Travelers Indem. Co., supra).

Therefore, defendant failed to demonstrate that it had properly denied the claim, based upon plaintiff’s breach of a condition precedent to coverage, which voided the policy ab-initio, resulting in no coverage for the 10 no-fault claims, retroactively dated to the automobile accident date of 04/25/2019 (see Unitron Advantage Ins. Co. v Bay Shore Physical Therapy, PLLC., 82 AD3d 559 [1st Dept 2011]; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., supra at 721]; 11 NYCRR 65-1.1).

Accordingly, the motion by defendant for summary judgment dismissing plaintiff’s complaint on this basis, is denied.

The Court now turns to plaintiff’s cross-motion for summary judgment for the amount in the complaint. Here, the Court determines that plaintiff has failed to demonstrate a prima facie entitlement for summary judgment, by proof in admissible form sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr., supra; Zuckerman v City of New York, supra).

Plaintiff attempts to use defendant’s NF-10 Denial of Claim forms as proof that it submitted its 10 claims totaling the sum of $6,947.81, which have not been timely paid or denied. “The Second Department has repeatedly held that a plaintiff no-fault provider establishes its prima facie entitlement to judgment by submitting proper evidentiary proof that it generated and mailed the prescribed statutory billing forms to the defendant insurer, that the defendant received [*4]it, and that the no-fault benefits were overdue” (see AR Medical Rehabilitation v State-Wide Ins. Co., 49 Misc 3d 918 [Civil Ct, New York City 2015], citing Westchester Med. Ctr. v Progressive Cas. Ins. Co., 89 AD3d 1081-82 [2nd Dept 2011]).

This was later affirmed by the Court of Appeals wherein it held that a medical provider is required to submit proof of mailing through evidence in admissible form, which may include “the verification of treatment form and/or an affidavit from a person or entity (1) with knowledge of the claim and how it was sent to the insurer or (2) who has relied upon the forms in the performance of their business” (see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498 [2015]). “The burden of proving submission is generally met by an affidavit of a billing agent or an employee averring that he or she personally mailed the claim forms to the insurer or averring that a standard office practice or procedure designed to ensure that items were properly addressed and mailed was followed” (see AR Medical Rehabilitation v State-Wide Ins. Co., supra at 919, citing Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., supra at 506-07).

Neither Court addressed the issue of whether a medical provider could forgo evidentiary proof of its mailing procedure by relying upon its receipt of a denial form from the insurer (see AR Medical Rehabilitation v State-Wide Ins. Co., supra at 920). However, the Appellate Term had previously ruled that a medical provider’s receipt of an NF-10 denial form from the insurer was sufficient to demonstrate that the claim form was sent by the medical provider and received by the insurer (see Eagle Surgical Supply, Inc. v Allstate Ins. Co., 42 Misc 3d 145[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2014). In this instance, “plaintiff is not trying to use the denial as the plaintiff’s own business record pursuant to CPLR 4518[a]; instead, in this context, the denial is being used as an admission by the defendant that the claim form had been received” (Id.).^[FN3] “Defendant’s denials admitted the receipt of the bills at issue…and plaintiff was not required to establish a CPLR 4518 foundation for the bills” (see EMC Health Prods., Inc. v Geico Ins. Co., 43 Misc 3d 139[A][App Term 2nd Dept, 2d, 11th & 13th Jud Dists 2014]). Therefore, a “plaintiff may establish its prima facie case by submitting a copy of its proof of claim form accompanied by an affidavit or testimony of its billing manager as to his personal knowledge of the issuance of the claim and a copy of defendant’s denial form indicating when defendant received the claim and when it denied it” (see AR Medical Rehabilitation v State-Wide Ins. Co., supra at 921, citing Oleg Barshay, D.C., P.C. v State Farm Ins. Co., 14 Misc 3d 74 [App Term 2nd Dept 2006]).

In the instant matter, plaintiff has failed to demonstrate it prima facie entitlement to summary judgment, by submission of a copy of its NF-3 proof of claim forms accompanied by an affidavit of its billing manager as to his personal knowledge of the issuance of the claim, in addition to defendant’s NF-10 denial of claim form. Accordingly, plaintiff’s cross-motion for summary judgment in the sum of $6,947.81 on this basis is denied.

Nevertheless, defendant has opposed plaintiff’s cross-motion for summary judgment, by raising the doctrine of res judicata (claim preclusion), as a defense to plaintiff’s contentions, citing two civil decisions from the City of New York, wherein plaintiff’s assignor, Marisol Torres, was also named as a plaintiff’s assignor, with the named defendant, NY Central Mut. Fire Ins. Company. Both decisions noted the failure of plaintiff’s assignor to appear at duly scheduled [*5]IME’s, and resulted in the Court’s dismissal of each case.

The Court finds that defendant has failed in its burden to produce evidentiary proof in admissible form sufficient to establish material issues of fact which would require a trial of the action (see CPLR 3212[b]; Alvarez v Prospect Hospital, supra at 324). Though defendant has interposed the doctrine of res judicata as a defense, under res judicata, “a disposition on the merits bars litigation between the same parties, or those in privity with them, of a cause of action arising out of the same transaction” (see Cortazar v Tomasino, 150 AD3d668 [2nd Dept 2017]). Or more simply, “a valid final judgment bars future actions between the same parties on the same cause of action” (see Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347 [1999]). “One linchpin of res judicata is an identity of parties actually litigating successive actions against each other: the doctrine applies only when a claim between the parties has been previously ‘brought to a final conclusion'” (see Blue Sky, LLC. v Jerry’s Self Storage, LLC., 145 AD3d 945 [2nd Dept 2016]).

The Court further finds that the cited cases by defendant fail to demonstrate they are a disposition on the merits for the same litigation between the same parties, or those in privity with them, for a cause of action arising from the same transaction (see Cortazar v Tomasino, supra). Indeed, the cited cases refer to litigants, Longevity Medical Supply, Inc. and North Queens Surgical Center, as assignees of Marisol Torres, but there is no link to Jiang Acupuncture, P.C., other than there being the same assignor in the instant matter. Also, there is no factual showing that the cited matters refer to the same transaction.

Accordingly, the Court finds that defendant has failed in its burden to produce evidentiary proof in admissible form sufficient to establish material issues of fact which would require a trial of the action.

Any remaining contentions of the parties are either unavailing or have been rendered academic.

The foregoing constitutes the decision and order of this Court.

Dated: September 23, 2021

HON. JAMES F. MATTHEWS

J.D.C.

Footnotes

Footnote 1:The Court notes that “the record does not reflect when [defendant] received the ‘prescribed verification forms'” (see American Tr. Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841 [1st Dept 2015][citing to dissent of Friedman, J.P. at 844]), though “the 30 day period within which the IME was supposed to be scheduled, is measured from the date on which [defendant insurer] received the prescribed verification form from [plaintiff] itself (citing to Ops Gen Counsel NY Ins Dept No. 03-02-12, Feb 2003, remaining cite omitted ), noting that the prescribed verification form to which §65-3.5[d] refers is, in the case of a non-hospital healthcare provider, as in the instant matter, ‘NYS Form NF-3, Verification of Treatment by Attending Physician or Other Provider of Health Service [emphasis added]'” (see American Tr. Ins. Co. v Longevity Med. Supply, Inc., supra at dissent of Friedman, J.P. at page 845).

Footnote 2:The remaining NF-10 Denial of Claim forms also refer to the Reason For Denial (#33) as being based upon the failure of plaintiff assignor to appear at a scheduled Chiropractor and Acupuncture IME held on 08/21/2019. However, no factual evidence, such as a dated scheduling letter, or failure to appear affidavit, to support this statement was submitted, and the Court makes no ruling in this regard. Additional reasons for denial (#33) were for plaintiff’s submission of excessive workers’ compensation fee schedule rates, and submission of inaccurate insurance information based upon the insurer’s investigation, but no supporting evidence was submitted and the Court also makes no ruling in this regard.

Footnote 3:The Court notes that the Eagle case ultimately turned on the fact that defendant insurer consented to the admission into evidence of plaintiff’s claim form.

CV-1909-18/SM
James F. Matthews, J.

Upon the following papers numbered 1 to 19 read on this motion by defendant for summary judgment of dismissal by Notice of Motion/Order to Show Cause and supporting papers 1,2,12 ; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 13,17 ; Replying Affidavits and supporting papers 18,19 ; Filed papers; Other exhibits: 3-11,14-16 ;(and after hearing counsel in support of and opposed to the motion), it is

ORDERED that the part of the motion by defendant seeking summary judgment of dismissal for the NF-3 claim forms with dates of service (“DOS”) of 10/23/17, 10/25/17 through 11/08/17, and 11/14/17 through 11/17/17, for the respective amounts of $34.68, $41.04, $41.04, $41.04, $101.87, $41.04, $101.87, $101.87 and $92.98, in the total sum of $597.43, upon the grounds of outstanding verification requests pursuant to 11 NYCRR 65-3.8(b)(3), is denied, and the Court awards summary judgment to the non-moving plaintiff in the sum of $597.43, pursuant to CPLR 3212(b).

Defendant’s proof submitted in support of its motion to dismiss the aforementioned NF-3 claims based upon outstanding verification requests, also demonstrates it improperly mailed its verification requests to plaintiff provider at the wrong address. The aforementioned NF-3 proof of claim forms (defendant admits their receipt) clearly lists the Provider’s name and address as being: Medalliance Medical Health Services, c/o Law Offices of Baker Sanders, 100 Garden City Plaza, Suite 500, Garden City, New York 11530. A copy of plaintiff’s envelope received and kept by defendant with each of these NF-3 proof of claim forms (submitted as part of defendant’s exhibits), shows a pre-printed return address of Baker Sanders LLC, 100 Garden City Plaza, Suite 500, Garden City, New York 11530.

Moreover, each correspondence to defendant from plaintiff’s health care provider occurred through its attorneys, Baker Sanders, LLC., whose letterhead clearly states the following: “For all Correspondence: 100 Garden City Plaza, Suite 500, Garden City, NY 11530.”

Yet the address on defendant’s verification requests for the aforementioned NF-3 claims, show they were mailed to: Medalliance Medical Health Services, Curtis Blumenthal, D.C., 100 [*2]Garden City Plaza, Suite 500, Garden City, New York 11530; Medalliance Medical Health Services, Ruchi Shah Pt, 100 Garden City Plaza, Suite 500, Garden City, NY 11530; Medalliance Medical Health Services, Lamercie Jean Jacques, 100 Garden City Plaza, Suite 500, Garden City, New York 11530.

The verification requests were improperly addressed as they did not conform to the specific address provided by the plaintiff provider in its NF-3 notice of claim forms. There is no evidentiary proof submitted which indicates the plaintiff provider had offices at the address indicated on the verification letters. As a result, receipt of the verification letters cannot be presumed, and it may be inferred that the provider did not receive the verification request letters, which would therefore excuse any non-compliance thereof (see Celtic Med. P.C. v Progressive Ins. Co., 194 Misc 2d 429 [Dist Ct, Nassau Cty 2002]). Therefore, the Court finds that defendant has failed in its burden to make a prima facie showing of entitlement to summary judgment of dismissal, as a matter of law, with proof in admissible form sufficient to establish the lack of any material issues of fact, concerning the alleged mailing of verification requests to plaintiff provider (see Alvarez v Prospect Hospital, 68 NY2d 320,324 [1986]); Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557,562 [1980]). Defendant has failed to demonstrate that it mailed verification request letters to the proper address provided by the plaintiff provider (see Daily Med. Equip. Distrib. Ctr., Inc. v Auto One Ins. Co., 53 Misc 3d 136[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2016], citing St. Vincent’s Hosp. of Richmond v Government Employees Ins. Co., 50 AD3d 1123 [2nd Dept 2008]).

Defendant thereby failed to show that it properly tolled the 30 calendar days in which each claim must be paid or denied, from the date of receipt of the claim (see Insurance Law §5106[a]; 11 NYCRR §65-3.8[a][1]), by making additional verification requests within 15 days from its receipt of each claim (see 11 NYCRR 65-3.5[b]; NY & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492, 493 [2nd Dept 2006]), thereby making each claim overdue (see 11 NYCRR 65-3.8[a][1]; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2nd Dept 2005]), and necessitating the denial of this part of defendant’s motion for summary judgment of dismissal.

The Court also awards summary judgment to the non-moving plaintiff in the sum of $597.43, pursuant to CPLR 3212(b), as plaintiff has demonstrated its prima facie case for entitlement to benefits, by showing evidentiary proof that the prescribed statutory billing forms were mailed to and received by the insurer and that payment of no-fault benefits are overdue (see Viviane Etienne Med. Care v Country-Wide Ins. Co., 25 NY3d 498 [2015]; St. Luke’s Roosevelt Hospital v American Transit Ins. Co., 1 AD3d 498 [2nd Dept 2003]; Insurance Law §5106[a]); and it is further

ORDERED that the part of defendant’s motion seeking summary judgment of dismissal for 10 NF-3 claim forms with dates of service (“DOS”) of 11/14/17, 01/08/18, 03/26/18, 03/31/18, 04/18/18, 05/07/18, 07/14/18, 07/26/18 through 07/28/18, 08/09/18, and 08/24/18, for the respective sums of $41.04, $34.68, $111.80, $111.80, $111.80, $80.02, $111.80, $223.60, $111.80, and $111.80, for a total of $1,050.14, on the grounds of non-receipt of the NF-3 billing after the medical services were allegedly rendered, as required within 45 days by 11 NYCRR 65-1.1(d), is denied, and the Court awards summary judgment to the non-moving plaintiff in the sum of $1,050.14, pursuant to CPLR 3212(b).

The Court determines that the affidavit of Brian Edejer, the supervisor of the mailing [*3]department of plaintiff’s counsel, demonstrates his personal familiarity with and supervision over the standard office practices and procedures of his department, geared to insure the proper addressing and mailing of NF-3 no-fault claim forms to insurance carriers. He asserts that his review of the files and computer records of the mailing department made and kept in the regular and ordinary course of business for the instant matter, shows that the NF-3 claim forms and the cover letters from plaintiff’s counsel’s office, were delivered by plaintiff to the custody of the U.S. Postal Service, and have not been returned as undeliverable. He submits a stamped proof of mailing from the U.S. Postal Service for each of the 10 NF-3 claim forms, which confirm their receipt by the U.S. Postal Service, for mailing to defendant.

The Court also finds plaintiff has demonstrated it is entitled to the presumption of timely receipt by defendant of the 10 NF-3 claim forms, despite defendant’s allegations of denial of receipt (see A.B. Medical Services, PLLC. v MVAIC, 6 Misc 3d 131 [A][App Term, 2nd & 11th Jud Dists 2005]), especially in light of the stamped proof of mailing for each claim from the U.S. Postal Service which remains unrefuted by defendant (see St. Vincent’s Hosp. of Richmond v Government Employees Ins. Co., supra, at 1124; Phoenix Ins. Co. v Tasch, 306 AD2d 288 [2nd Dept 2003]; Quality Psychological Services, P.C. v Hartford ins. Co., 38 Misc 3d 1210[A][Civ Ct, City of NY, Kings Cty, 2013]; Elmont Open MRI & Diagnostic Radiology, P.C., 30 Misc 3d 126[A][App. Term, 9th & 10th Jud. Dists 2010]).

In the view of the Court, defendant’s denial of receipt of the 10 NF-3 claim forms, and the statements of the general and customary standard office practices and procedures of defendant’s mailing department for receipt of incoming mail, as supported by the affidavit of defendant’s litigation examiner, Matthew Dunleavy, are insufficient (see S & M Supply Inc. v GEICO Ins., 2003 NY Slip Op 51192 [App Term, 2nd & 11th Jud Dists]; Amaze Med. Supply v Colonial Penn Ins. Co., 3 Misc 3d 135[A][App Term, 2nd & 11th Jud Dists 2004]), under the instant circumstances, to raise a triable issue of fact (see Matter of Fodor v Mena America Bank, N.A., 34 AD3d 473 [2nd Dept 2006]; Matter of State Farm Mut. Auto. Ins. Co. v Kankam, 3 AD3d 418 [2nd Dept 2006]).

Therefore, since defendant has failed to demonstrate it paid or denied the 10 NF-3 claims in the total sum of $1,050.14, within 30 calendar days of receipt of each claim (see 11 NYCRR 65-3.8[c]), or properly sought verification requests to toll the date within 15 days of receipt of each claim (see 11 NYCRR 65-3.5[b]; NY & Presbyt. Hosp. v Allstate Ins. Co., supra; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., supra), each of the 10 NF-3 claims is overdue (see 11 NYCRR 65-3.8[a][1]), and the part of defendant’s motion for summary judgment of dismissal of the 10 NF-3 claims totaling $1,050.14, is denied.

The Court also awards summary judgment to the non-moving plaintiff in the sum of $1,050.14, pursuant to CPLR 3212(b), as plaintiff has demonstrated its prima facie case for entitlement to benefits, by showing evidentiary proof that the prescribed statutory billing forms were mailed to and received by the insurer and that payment of no-fault benefits are overdue (see Viviane Etienne Med. Care v Country-Wide Ins. Co., 25 NY3d 498 [2015]; St. Luke’s Roosevelt Hospital v American Transit Ins. Co., 1 AD3d 498 [2nd Dept 2003]; Insurance Law §5106[a]); and it is further

ORDERED that the part of defendant’s motion for summary judgment dismissing plaintiff’s complaint pursuant to CPLR 3212, for the NF-3 claim forms with dates of service (“DOS”) of 01/03/18, 01/10/18, 01/15/18, 01/16/18, 01/24/18, 02/14/18, 02/19/18, 02/20/18, 02/26/18, for the respective amounts of $26.42, $34.68, $34.68, $41.04, $34.68, $34.68, $34.68, [*4]$41.04 and $34.68, for the total of $316.58, on the grounds the medical services rendered by plaintiff were not medically necessary, is denied.

The Court determines that the factual basis and medical rationale of the conflicting medical opinions and conclusions offered by Dr. Daniel Sposta, D.C., L.Ac., by his peer review report and affidavit dated 10/06/17, which cut off any further chiropractic treatments effective 11/09/17 (see 11 NYCRR §65-3.8 [b][4]; Delta Dignostic Radiology, P.C. v American Mfrs. Mut. Ins. Co., 12 Misc 3d 145[A][App Term, 2nd & 11th Jud Dists 2006]), and the rebuttal affidavit of plaintiff’s expert and treating Chiropractor, Dr. Curtis Blumenthal, D.C., sworn to on 11/18/20, which disputes the findings and rebuts the conclusions of Dr. Sposta (see Ortho-Med Surgical Supply, Inc. v Progressive Cas. Ins. Co., 34 Misc 3d 145[A][App Term, 2nd, 11th & 13th Jud Dists 2012]; Pan Chiropractic P.C. v Mercury Ins. Co., 24 Misc 3d 136[A] [App Term, 2d, 11th & 13th Jud Dists 2009]), meaningfully demonstrate the collective existence of triable issues of fact as to whether there was a lack of medical necessity for the billed services at issue, rendered by plaintiff’s assignee (see Throgs Neck Multicare, P.C. v Mercury Ins. Co., 52 Misc 3d 138[A][App Term, 2nd Dept, 9th & 10th Jud Dists 2016]; Western Chiropractic, P.C. v Hertz Claim Mgt., 48 Misc 3d 133[A][App Term, 9th & 10th Jud Dists 2015]; Alur Med. Supply, Inc. v Geico, 31 Misc 3d 126[A][App Term, 2nd, 11th & 13th Jud Dists 2011]), which must be determined at a trial (see also Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr., supra; Zuckerman v City of New York, supra); and it is further

ORDERED that the part of the motion by defendant seeking summary judgment of dismissal of the NF-3 claim form with the date of service (“DOS”) of 11/14/17, received by defendant on 02/12/18, in the sum of $41.04, and denied by defendant on 02/26/18, pursuant to 11 NYCRR 65-1.1(d), which requires submission of a no-fault claim within 45 days of rendered services, is denied.

Plaintiff’s affidavit of its mailing supervisor, Brian Edejer, acknowledges that the NF-3 claim form for DOS of 11/14/17, along with plaintiff’s counsel’s cover letter, were mailed to defendant on 02/06/18. Plaintiff justifies the late claim submission beyond the 45 days of rendered services, based upon the cover letter dated 02/06/18 from plaintiff’s counsel, Baker Sanders, LLC. to defendant, which informed defendant the claim was “previously submitted incorrectly to another insurance company based on the information provided to our law firm at the time and/or based on a difficulty in ascertaining the proper carrier.”

However, plaintiff also contends that defendant waived the right to challenge the late submission for the $41.04 NF-3 claim received by defendant on 02/12/18 for the DOS of 11/14/17, based upon defendant’s repudiation of liability as of 11/09/17 on the grounds of Dr. Daniel Sposta’s negative independent medical examination (“IME”), because a repudiation of liability excuses any obligations to comply with any conditions precedent under the insurance policy (see Ighara Realty Corp. v New York Prop. Ins. Underwriting Assn., 63 NY2d 201, 217-218 [1984]).

The Court determines that defendant has repudiated liability by denying all no-fault benefits based upon the opinion of its medical expert, Dr. Daniel Sposta, D.C., L.Ac., dated 10/06/17, which cut off any further chiropractic treatments effective 11/09/17, based upon the IME of the same date, which found there was no medical necessity for further chiropractic treatment. “This disclaimer of coverage excused the [claimant] from further compliance with conditions precedent regarding time limitations for submitting medical proofs of loss for the treatments she nevertheless continued to undergo” (see State Farm Ins. Co. v Domotor, 266 [*5]AD2d 219 [2nd Dept 1999]; see also State Farm Mut. Auto Ins. Co. V Urban, 78 AD3d 1064 [2nd Dept 2010], citing State Farm v Domotor, supra; Matter of NY Med. Health, P.C. v New York City Tr. Auth., 24 Misc 3d 1219[A][Civ Ct, Kings Cty 2009]; Greater Forest Hills Physical Therapy, P.C. v State Farm Auto Ins. Co., 45 Misc 3d 1215[A][D Ct, Nassau Cty 2014]).

Here, plaintiff’s DOS occurred on 11/14/17, five days after the cut-off date of 11/09/17. “An insurance carrier may not, after repudiating liability, create grounds for its refusal to pay by demanding compliance with proof of loss provisions of the policy” (see State Farm Ins. Co. v Domotor, supra at 220, 221). The insurance carrier “must ‘stand or fall upon the defense upon which it based its refusal to pay’…i.e., because ‘no treatment [was] necessary'” (Id., at 221).

Therefore, the Court finds that if the medical opinion of Dr. Daniel Sposta, D.C., L.Ac., should prevail at trial, on the grounds the medical services rendered by plaintiff were not medically necessary, then the part of defendant’s motion to dismiss the NF-3 claim form with the DOS of 11/14/17, in the sum of $41.04, received by defendant on 02/12/18, shall be deemed denied, on the basis defendant repudiated liability, which excused plaintiff from compliance with the time limitations for submitting medical proofs contained in the policy (see State Farm Ins. Co. v Domotor, supra).

However, in the event the medical opinion of Dr. Daniel Sposta, D.C., L.Ac, does not prevail at trial, on the grounds the medical services rendered by plaintiff were medically necessary, the Court finds under this set of circumstances, plaintiff has raised a triable issue of fact (see CPLR 3212[b]), concerning whether plaintiff was reasonably justified in submitting its NF-3 claim form beyond the 45 days of rendered service (see 11 NYCRR 65-1.1[d]), based upon the standards set forth in 11 NYCRR 65-3.5[l][insurer must give due consideration to plaintiff’s late justification explanation]; see also Bronx Expert Radiology v Clarendon Natl. Ins. Co., 23 Misc 3d 133[A][App Term, Sup Ct, 1st Dept 2009][insurer must give “appropriate consideration for situations where the claimant has difficulty ascertaining the insurer’s identity or inadvertently submits a claim to the incorrect insurer”]), which also must be determined at trial (see Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr., supra; Zuckerman v City of New York, supra); and it is further

ORDERED that the part of defendant’s motion seeking summary judgment of dismissal pursuant to CPLR 3212, for NF-3 claim forms with dates of service (“DOS”) of 02/05/18, 02/05/18, 02/14/18 through 02/19/18, 02/16/18, 02/24/18, 02/26/18, 05/10/18, 05/17/18 through 05/26/18, 05/19/18 through 06/13/18, 05/21/18 through 06/09/18,^[FN1] 05/23/18 through 06/16/18, 04/02/18 through 06/23/18,^[FN2] 06/27/18 through 07/07/18, 06/30/18 through 07/24/18, 07/05/18, [*6]07/10/18 through 07/19/18, 07/31/18, 08/02/18, 08/04/18, 08/18/18, 08/25/18 through 09/01/18 and 08/29/18 through 09/05/18, for the respective sums of $64.07, $101.87, $203.74, 101.87, $101.87, $101.87, $111.80, $223.60, $223.60, $335.40,^[FN1] $234.67, $536.52, $335.40, $447.20, $111.80, $223.60, $111.80, $111.80, $111.80, $111.80, $223.60 and $223.60, for a total submission of 22 NF-3 claims in the sum of $4,353.28, on the grounds that plaintiff’s claim amounts exceeded the permissible fee schedules of the official NY Workers’ Compensation Fee Schedule (“Fee Schedule”), as well as the Travelers Corechoice Preferred Provider Organization (“PPO”),^[FN3] is denied.

However, defendant is granted partial summary judgment of dismissal, for the sums of $53.73, $56.68, $103.30, $51.65, $51.65, $51.65, $56.69, $113.38, $113.38, $154.95, $103.30, $206.60, $154.95, $206.60, $51.65, $103.30, $51.65, $51.65, $51.65, $51.65, $113.38 and $103.30, for a total of $2,056.74, for its prior partial payments made to plaintiff provider, as demonstrated by the proofs submitted in Exhibit G attached to the affirmation of defendant’s counsel, showing defendant’s individual checks made payable to plaintiff provider, which were then deposited by plaintiff provider in its own account, but not credited by plaintiff provider in its complaint, which proof was not refuted by plaintiff.

Furthermore, the Court finds that defendant has failed to demonstrate a prima facie entitlement to summary judgment for dismissal, with proof in admissible form sufficient to establish there are no material issues of fact, for the sufficiency of the remaining sum of $2,296.54 ($4,353.28 less $2,056.74) (see Xiang Fu He v Troon Mgt. Inc., 34 NY3d 167, 175 [2019]).

Defendant has failed to present a sworn statement from a Professional Coder, or from an experienced Claim Representative, along with references to the applicable fee schedule, as sufficient proof demonstrating defendant’s denial at proper no-fault rates (see Gentle Acupuncture, P.C. v Tri-State Consumer Ins. Co., 55 Misc 3d 147[A][App Term, 2nd Dept, 9th & 10th Jud Dists 2017]; GBI Acupuncture, P.C. v 21st Century Ins. Co., 48 Misc 3d 140[A][App Term, 2d, 11th & 13th Jud Dists, 2015]).

Moreover, an affidavit of a no-fault/litigation examiner or professional medical coder/biller must show that defendant properly applied the appropriate relative value units and conversion factor assigned to the CPT codes for the services rendered in calculating the amount plaintiff is entitled to be reimbursed, which is lacking herein (see Renelique v American Tr. Ins. Co., 57 Misc 3d 145[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2017]; see also Adelaida Physical Therapy, P.C. v 21st Century Ins. Co., 58 Misc 3d 135[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2017]; Liberty Chiropractic P.C. v 21st Century Ins. Co., 53 Misc 3d 133[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2016]).

Finally, there is insufficient proof to establish whether the fees submitted by plaintiff [*7]provider were correctly subject to reduction under the fee schedule and the PPO contract, as a part of the PPO contract pertinent to this matter was redacted and not provided by defendant, and there is no copy of a signed PPO contract establishing a nexus between the medical provider and the PPO network, for the time frames the medical services were rendered. Nor is there sufficient proof demonstrating that PPO rates were applicable to the instant matter. Furthermore, plaintiff’s contention that the name of Curtis Blumenthal, D.C. (affiliated with plaintiff medical provider), does not appear on any of the physical therapy bills paid under PPO rates, also raises questions of fact.

Any remaining contentions of the parties, are unavailing or have been rendered academic.

Submit judgment.

The foregoing constitutes the decision and order of this Court.

Dated: June 30, 2021
HON. JAMES F. MATTHEWS
J.D.C.

Footnotes

Footnote 1:The affirmation of Shana Kleinman overlooked providing an explanation for this particular NF-3 claim form, for dates of services (“DOS”) of 05/21/18 through 06/09/18, received by defendant on 06/21/18, in the claim sum of $335.40, with a partial payment by defendant tendered to plaintiff in the sum of $154.95 (by check #: 25693181, dated 07/05/18), leaving a disputed amount in defendant’s NF-10 denial form of $180.45. However, the proof submitted with the affirmation of Shana Kleinman in Exhibit G factually substantiates this set of facts, which includes a copy of both sides of the tendered check for $154.95 deposited by plaintiff in its account, which factual proof the Court accepts.

Footnote 2:In paragraph 176 of Shana Kleinman’s affirmation, it states that the dates of services (“DOS”) are from 5/31/18 through 6/23/18. However, the actual proof of the NF-10 denial of claim in Exhibit G, states the DOS is 04/02/18 through 06/23/18, which dates the Court accepts.

Footnote 3:Defendant asserts that the provider is a voluntary participant in Traveler’s Corechoice Preferred Provider Private Organization (“PPO”), and as a result for each pertinent claim, defendant applied the fee schedule amount, and then the PPO contract amount, with the remainder of the claim being denied. Corechoice Network (“Corechoice”) processes the PPO claims.

CV-6239-18/HU
C. Stephen Hackeling, J.

Upon the following papers numbered 1 to 20 read on this motion to dismiss plaintiff’s complaint by Notice of Motion/Order to Show Cause and supporting papers 1,2,6; Notice of Cross Motion and supporting papers 7,8,13; Answering Affidavits and supporting papers 7,8,13; Replying Affidavits and supporting papers 14-18,20; Filed papers; Other exhibits: 3-5,9-12,19; (and after hearing counsel in support of and opposed to the motion), it is,

ORDERED that the motion by defendant to dismiss plaintiff’s complaint pursuant to CPLR 3211(a)(3), on the ground that plaintiff lacks legal capacity to sue in the State of New York, pursuant to BCL §1312(a), is denied, with prejudice; and it is further

ORDERED that the alternative motion by defendant to compel discovery and a deposition of plaintiff, is denied; and it is further

ORDERED that the cross-motion by plaintiff for summary judgment pursuant to CPLR 3212, and plaintiff’s request for an order pursuant to CPLR 3212(g), are both denied.

Plaintiff health service provider, a limited liability corporation,^[FN1] seeks reimbursement of No-Fault benefits in the sum of $7,943.11, as assignee of a New York No-Fault claimant, for medical and surgical services rendered to its Brooklyn assignor, at its New Jersey surgical center on 05/04/2018, stemming from an automobile accident of 1/08/2018.

Plaintiff lists its address as 6 Chestnut Ridge Road, Montvale, New Jersey 07645 on the summons, and the submitted, uncertified medical records (see CPLR 4518) not objected to by defendant, show the same address as the location of the surgery rendered on 5/04/2018.

Defendant now moves for dismissal pursuant to CPLR 3211(a) (3), arguing that plaintiff lacks standing to bring this action in the State of New York, because plaintiff has failed to register with the Secretary of State in New York to operate as a foreign corporation authorized to do business in New York, pursuant to BCL §1312(a). Defendant asserts plaintiff is a New Jersey corporation whose business activities within New York State are so systematic and regular as to manifest continuity of activity,^[FN2] and contends that online data activity demonstrates that plaintiff has over 627 pending cases against insurance companies in the New York State court system.

Alternatively, defendant moves pursuant to CPLR 3101 for an order compelling plaintiff to appear for deposition, to address the issue of plaintiff’s legal capacity to sue in the State of New York.^[FN3]

In opposition to the motion to dismiss, plaintiff denies it qualifies as a foreign corporation required to register with the New York Secretary of State to operate as a foreign corporation doing business in New York, stating its contact with the State of New York is “incidental” and not “systematic” as claimed by defendant. Plaintiff asserts a denial of its right to sue in a New York State Court, based upon an assignment of a New York No-Fault claim, is a violation of the interstate commerce clause of the U.S. Constitution.

Plaintiff further contends that plaintiff’s assignor is a New York resident (living in Brooklyn), who assigned his New York No-Fault contract to plaintiff, who brought the instant suit to collect for unpaid medical services rendered to plaintiff’s assignor at its New Jersey medical facility.

In addition, plaintiff cross-moves for summary judgment for the sums delineated in the complaint, contending it timely provided its claim to defendant, thirty days have since transpired, and defendant has not paid or denied the claim.

In the alternative, plaintiff seeks an order pursuant to CPLR 3212(g), stating that plaintiff [*2]has met its prima facie case in the event of trial.

In opposition to plaintiff’s motion for summary judgment, defendant contends that contrary to plaintiff’s statement, defendant has denied the claim within 30 days of its receipt, and attaches documents of proof in support of this contention.

Here, the Court determines that defendant has failed to satisfy its burden of demonstrating that plaintiff was a foreign corporation “doing business” in the State of New York, and was thereby subject to the registering conditions placed by BCL §1312 on foreign corporate capacity to sue in New York (see Pergament Home Ctrs. v Net Realty Holding Trust, 171 AD2d 736 [2nd Dept 1991]). Though there is no admissible proof that plaintiff is a New Jersey Corporation, plaintiff asserts in its complaint that it is a LLC. and has a New Jersey address. Plaintiff also asserts its business contact with the State of New York is “incidental” and not “systematic.” In addition, defendant contends that plaintiff is a New Jersey business, which plaintiff does not deny.

Therefore, the Court determines that defendant has failed to overcome the presumption that plaintiff is doing business in its state of incorporation, and not in the State of New York (see Highfill, Inc. v Bruce and Iris, Inc., 50 AD3d 742 [2nd Dept 2008]).

The Court further finds that there is no proof that plaintiff maintains an office or phone listing, or owns real property or has employees or sales reps, in the State of New York (see Uribe v Merchants Bank of New York, 266 AD2d 21, 22 [1st Dept 1999]; see also S & T Bank v Spectrum Cabinet Sales, Inc., 247 AD2d 373 [2nd Dept 1998]).

Indeed, though defendant broadly links over 627 pending cases in the State of New York court system brought by plaintiff against insurance companies, as evidence of plaintiff’s New York systemic activities, the linkage is disingenuous and unavailing. First, defendant’s proof is by inadmissible hearsay. Next, plaintiff’s activities in the State of New York, appear to be limited to collection lawsuits from assignments under New York’s No-Fault law, brought in New York courts for unpaid medical services rendered in its business as a health service provider and surgical center in the State of New Jersey.

Moreover, the instant action does not equate to an assignment of a collection of account receivables for consumer debt purchased by a plaintiff, for enforcement through the New York State court system (see Centurion Capital Corp. v Guarino, 35 Misc 3d 1219[A][Civ Ct, City of New York, 2012]), nor an assignment to recover money for goods sold in New York by an out-of-state (Pennsylvania) corporation (see S & T Bank v Spectrum Cabinet Sales, Inc., supra]).

The Court finds that the undisputed facts remain that plaintiff is a health service provider and surgical center, rendering services at its health care facility located in New Jersey, which requires incidental litigation for collection of its unpaid charging fees in the courts of the State of New York, where entrance as a plaintiff is contemplated through assignments under New York’s No-Fault law. It is not as a corporate entity whose actual business is as a systematic purchaser of assignments for collection enforcement in the courts of the State of New York.

The Court notes that even if plaintiff was required to register as a foreign corporation doing business in the State of New York, it is not a jurisdictional defect, and does not defeat the action, as a plaintiff may cure the failure to obtain a certificate pursuant to BCL §1312 at any time prior to resolution of the action by judgment (see Uribe v Merchants Bank of New York, supra; Hot Roll Mfg. Co. v Cerone Equipment Co., 38 AD2d 339 [3rd Dept, 1972]; see also Virgilio Flores, S.A. v Jerome Radelman, Inc., 567 F. Supp 577 [1982]). As a result, the instant circumstances do not create a true legal incapacity to sue within the meaning of CPLR 3211[a][3] [*3](see Paper Manufacturers Co. v Ris Paper Co., 86 Misc 2d 95 [City of New York, Civ Ct, 1976]).

Accordingly, the motion by defendant to dismiss plaintiff’s complaint pursuant to CPLR 3211(a)(3), on the ground that plaintiff lacks legal capacity to sue in the State of New York pursuant to BCL §1312(a), is denied, with prejudice.

Defendant’s alternative motion to compel discovery and a deposition of plaintiff “if defendant (sic) disputes that it lacks capacity to sue” is denied. The issue of plaintiff’s legal capacity to sue under BCL §1312(a) is now moot, given the Court’s instant ruling, thereby eliminating the need for defendant’s request for discovery and deposition for this purpose. Supervision of discovery and the setting of reasonable terms and conditions rests within the sound discretion of the Court (see Hernandez v City of Yonkers,74 AD3d 1025, 1026 [2nd Dept 2010]). Accordingly, defendant’s alternative motion to compel discovery and a deposition of plaintiff, is denied.

Plaintiff’s cross-motion for summary judgment pursuant to CPLR 3212, upon the grounds that defendant has failed to pay or deny the bills within 30 days of receipt of plaintiff’s claim or properly toll the time, for dates of service on 05/04/18, is denied (see 11 NYCRR 65-3.8[a][1]). Defendant has refuted plaintiff’s contentions with documents demonstrating that it timely provided a denial of claim to plaintiff,^[FN4] thereby creating a question of fact on this issue requiring a trial (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557,562 [1980]).

Furthermore, the Court finds that plaintiff has failed to demonstrate a prima facie case in support of summary judgment, as the necessary element provided by the Assignment of Benefits form submitted by plaintiff’s assignor, states it is for an accident which occurred on 3/19/18, not the subject accident of 1/08/18 (see Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr.,supra; Zuckerman v City of New York, supra).

Any remaining contentions lack merit.

The foregoing constitutes the decision and order of this Court.

Dated: January 20, 2020

J.D.C.

Footnotes

Footnote 1:Though defendant claims plaintiff is a New Jersey corporation, there is no admissible evidence substantiating this claim.

Footnote 2:Defendant’s papers are contradictory, in that paragraph 10 of the affirmation in support of the motion states plaintiff did not do any business in New York, while paragraph 13 states plaintiff has been doing large amounts of New York business. Furthermore, defendant states in paragraph 18 that plaintiff lists a New York business address, which is clearly false, as demonstrated by the New Jersey address listed in the summons and the lack of any other address listed in any other papers.

Footnote 3:Defendant’s Notice of Motion seeks an order compelling plaintiff to appear for deposition, only, but its affirmation supports discovery of plaintiff (¶ 3) and documentary discovery (¶ 20), on the issue of plaintiff’s legal capacity to sue in the State of New York.

Footnote 4:In paragraph 12 of the Affirmation in Support, Defendant cites Amer-A-Med Health Products, Inc. v GEICO Ins. Co., 2010 NY Slip Op 32258(U)(Sup Ct Nass Cty). However, the correct cite is 2010 NY Slip Op 31032, and the case does not stand for the proposition “that foreign No-Fault providers must comply with BCL §1312(a).”

[*1]

District Court of Suffolk County, Third District, December 6, 2019

APPEARANCES OF COUNSEL

Nicolini, Paradise, Ferretti & Sabella, PLLC, Mineola, for defendant.

Law Offices of Gabriel & Shapiro, LLC, Wantagh, for plaintiff.

Plaintiff’s cross motion seeking summary judgment is granted. Defendant’s motion, seeking an order dismissing the within complaint, upon the grounds that the plaintiff billed amounts exceeding the New York State Workers’ Compensation Board medical fee schedule, is denied.

The facts are not in dispute. This sole issue presented for consideration by the court is whether 11 NYCRR 65-3.8 (g) (1) (ii) is inconsistent with the express dictates of the Insurance Law and is therefore constitutionally void, as violative of article III, § 1 of the New York State Constitution.

The court notes that the New York State Attorney General was served with a copy of the plaintiff’s cross motion, pursuant to CPLR 1012 (b), but chose not to intervene to defend the constitutionality of 11 NYCRR 65-3.8 (g) (1) (ii), regarding the fee schedule defense, which provides:

“(g) (1) Proof of the fact and amount of loss sustained pursuant to Insurance Law section 5106(a) shall not be deemed supplied by an applicant to an insurer and no payment shall be due for such claimed medical services under any circumstances:

“(i) when the claimed medical services were not provided to an injured party; or

“(ii) for those claimed medical service fees that exceed the charges permissible pursuant to Insurance Law sections 5108(a) and (b) and the regulations promulgated thereunder for services rendered by medical providers.”

Article III, § 1 of the New York State Constitution provides: “The legislative power of this state shall be vested in the senate and assembly.”

Section 5106 (a) of the Insurance Law provides:

“(a) Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid{**66 Misc 3d at 466} within thirty days after such proof is supplied.”

This legislative statute establishes the legal doctrine that defenses to claims not raised within 30 days after receipt of a no-fault claim are precluded. The preclusion rule has been consistently recognized and enforced by the Court of Appeals. (See Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498 [2015]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997].)

In 2013 the New York State Insurance Commissioner, under his rule-making power, promulgated regulation 65-3.8 which purports to remove fee schedule defenses from the statutory “preclusion doctrine.” An administrative agency’s rule-making power is limited and may not circumvent or be contrary to the legislature’s determination. (See NY Const, art III, § 1; Matter of Nicholas v Kahn, 47 NY2d 24 [1979].) Such inconsistent regulations are “preempted” by statutory dictate. (See e.g. Boreali v Axelrod, 71 NY2d 1 [1987].) Removing the fee schedule defense from the statutory preclusion rule via regulation is an unconstitutional overreach, and shall be disregarded by this court as being invalid and in contravention of the historical statutory 30-day time period given to defendants to pay or deny claims (or be subject to preclusion).

Accordingly, the defendant’s fee schedule defense became nonviable 30 days after the claim was received without denial or demand for further verification. The defendant’s motion to dismiss is denied as moot and the plaintiff’s cross motion seeking summary judgment is granted.

CV-4230-15/HU
Janine A. Barbera-Dalli, J.

Upon the following papers numbered 1 to 37 read on this motion by defendant to strike Notice of Trial, compel discovery, and for dismissal (Seq 001); by defendant for summary judgment dismissing complaint (Seq 002); by 1st Notice of Motion/Order to Show Cause and supporting papers (Seq 001) 1,2,6 ; Notice of Cross Motion and supporting papers (Seq 003) by plaintiff for partial summary judgment for relief demanded in complaint 7-9 ; Answering Affidavits and supporting papers 7-9 ; by 2nd Notice of Motion/Order to Show Cause and supporting papers (Seq 002) 10-16,32 ; Answering Affidavits and supporting papers 33,35 ; Replying Affidavits and supporting papers 36,37; Filed papers ; Other exhibits: 3-5,17-31,34 ; and after hearing counsel in support of and opposed to the motion) it is,

ORDERED that the motions submitted and categorized as Seq #001, Seq #002 and Seq #003, are hereby consolidated and the Court’s decision is rendered herein; and it is further

ORDERED that the motion by defendant for summary judgment dismissing plaintiff’s complaint pursuant to CPLR 3212 (Seq #002) is granted. The complaint is dismissed; and it is further

ORDERED that the motion by defendant striking plaintiff’s Notice of Trial, and dismissing the complaint on the ground that discovery is not complete (Seq #001), is denied, as being academic; and it is further

ORDERED that the motion by plaintiff for partial summary judgment pursuant to CPLR 3212(e),(g), is also denied.

Defendant moves by summary judgment for dismissal of plaintiff’s complaint, which seeks reimbursement of first-party no-fault benefits for medical services rendered to plaintiff’s assignor as the result of an automobile accident of 01/16/12 in the total sum of $6,523.31.

The grounds for dismissal are the failure of plaintiff’s assignee to attend two (2) duly scheduled Examinations Under Oath (“EUO’s”) set by defendant for 05/07/12, and the follow-up for 05/30/12. Defendant asserts the failure to attend the EUO’s breached a condition precedent for payment under defendant’s no-fault insurance policy, thereby voiding the policy. As a result, defendant issued NF-10 denial of claim forms dated 06/01/12.

In opposition to defendant’s motion, plaintiff asserts that defendant’s proof in support of the motion for summary judgment is insufficient to satisfy defendant’s prima facie burden of showing the timely and proper mailing of the notices for the EUO’s, the lack of appearance at the noticed EUO’s, and for showing the NF-10 denial of claims were mailed within 30 days of the last EUO date. In addition, plaintiff asserts that defendant also failed to provide “good reasons” to justify the EUO of plaintiff’s assignee.

A proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law with proof in admissible form sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]); see also Manhattan Medical v State Farm Mut. Ins. Co., 20 Misc 3d 1144[A][Civ. Ct. Richmond Cty. 2008]).

A summary judgment motion must be supported by an affidavit of a person having knowledge of the facts and the affidavit shall recite all the material facts and show there is no defense to the cause of action or that the cause of action or defense has no merit (see CPLR 3212[b]). A conclusory affidavit or an affidavit by an individual who lacks personal knowledge of the facts does not satisfy the proponent’s prima facie burden (see JMD Holding Corp. v Congress Financial Corp., 4 NY3d 373 [2005]).

A failure to comply with an insurer’s demand to submit to an EUO, is a material breach of the policy, precluding recovery of the policy proceeds (see Interboro Ins. Co. v Clennon, 113 AD3d 596 [2nd Dept 2014]; Unitrin Advantage Ins. Co. v Bay Shore Physical Therapy, PLLC., 82 AD3d 559 [2nd Dept 2011]).

Here, the Court finds that defendant insurer has demonstrated by proof in admissible form that it twice demanded an EUO of plaintiff’s assignee (see Palafox PT, P.C. v State Farm Mut. Auto. Ins. Co., 49 Misc 3d 143[A][App Term, 2nd, 11th & 13th Jud Dists 2015]), for 05/07/12, and the follow-up EUO for 05/30/12, by scheduling letters which were properly mailed in accordance with defendant’s standard office practices and procedures, and in accordance with no-fault regulations (see St. Vincent’s Hosp. of Richmond v GEICO, 50 AD3d 1123, 1124 [2nd Dept 2008]; Gutierrez v Elrac, Inc., 48 Misc 3d 138[A][App Term, 2nd, 11th & 13th Jud Dists 2015]; Urban Radiology, P.C. v Tri-State Consumer Ins. Co., 27 Mis3d 140[A][App Term, 2nd, 11th & 13th Jud Dists 2010]).

The submitted proof also demonstrated defendant’s mailing methods were sufficient to create a rebuttable presumption of proper mailing (see New York Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2nd Dept 2006]). “. . . Proof of proper mailing gives rise to a presumption that the item was received by the addressee” (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2nd Dept 2001]).

Here, plaintiff does not deny receipt of the timely mailings, thereby failing to rebut the [*2]presumption of receipt raised by defendant’s proof of mailings (Id.; see also S & M Supply Inc. v GEICO, 2003 NY Slip Op. 51192[U][App Term, 2nd & 11th Jud Dists 2003]; Harbor Medical & Diagnostics P.C. v Allstate Ins. Co., 11 Misc 3d 1063[A][Civ Ct, New York City 2006]). Nor has plaintiff sufficiently demonstrated that it timely and legally satisfied its duty to communicate with defendant with a statement of why it could not provide what the EUO verifications sought (see Dilon Med. Supply Corp. v Travelers Ins. Co.,7 Misc 3d 927, 931-932 [NY City Civ. Ct. 2005]).

The Court further finds that plaintiff’s assignee failed to appear at both duly scheduled EUO’s, without excuse, or timely notice, as demonstrated by the affirmation of defendant’s attorney, Edward Ryan, Esq., who was present and assigned to conduct the EUO on each scheduled date (see Delta Dignostic Radiology, P.C. v Esurance, 48 Misc 3d 138[A][App Term, 2nd, 11th & 13th Jud Dists 2015]; Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 42 Misc 3d 137[A][App Term, 2nd, 11th & 13th Jud Dists 2014]).

The Court also determines that the NF-10 denial of claim forms were timely mailed to plaintiff in accordance with defendant’s standard office practices and procedures to ensure that items were properly addressed and mailed, especially for the generating and mailing of NF-10 denial of claim notices (see 11 NYCRR 65-3.8[a][1]; St. Vincent’s Hosp. of Richmond v GEICO, supra; Ortho-Med Surgical Supply, Inc. v MVAIC, 28 Misc 3d 139[A] [App Term, 2nd, 11th & 13th Jud Dists 2010]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16, 18 [App Term, 2nd, 11th & 13th Jud Dists 2007]). The NF-10 denial of claim forms were dated 06/01/12 and timely mailed within the 30 day period within which defendant was required to pay or deny the claim (see 11 NYCRR §65-3.8[a][1]). Defendant has shown that its standard office practices and procedures ensured plaintiff’s receipt of the denial of claim forms, and created an additional, rebuttable presumption for such mailings (see New York Presbyt. Hosp. v Allstate Ins. Co., supra).

Furthermore, the Court finds that defendant provided sufficient reasons in the first notice of 04/04/12 and 04/11/12, and in the second notice of 05/10/12 and 05/25/12, to justify the EUO of plaintiff’s assignee.

Moreover, in as much as defendant demonstrated the failure of plaintiff’s assignee to timely respond to or appear at the EUO verification dates, without excuse, plaintiff waived its defenses and is therefore estopped from contesting the reasonableness of the EUO requests (see Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto.Ins. Co., 42 Misc 3d 137[A][App Term, 2nd Dept 2014]; see also Morris Med., P.C. v Amex Assur. Co., 37 Misc 3d 140[A][App Term, 2d, 11th & 13th Jud Dists 2012]). The defendant should not be put in the position of second guessing why plaintiff failed to respond to the EUO verification requests (see Canarsie Chiropractic, P.C. v State Farm Mut. Ins. Co., 27 Misc 3d 1228[A][NY City Civ Ct 2008]). Plaintiff’s inaction to defendant’s timely notifications is fatal to its causes of action for alleged medical services rendered (see Crescent Radiology PLLC. v American Transit Ins. Co., 31 Misc 3d 134[A][App Term, 9th & 10th Jud Dist 2011]; Interboro Ins. Co. v Clennon, supra).

Therefore, the Court finds that defendant has made a prima facie showing of entitlement to summary judgment dismissing the complaint, as a matter of law, sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr., supra; Zuckerman v City of New York, supra).

Once a showing of entitlement to summary judgment has been made, the burden shifts to the party opposing the motion for summary judgment, to produce evidentiary proof in admissible [*3]form sufficient to establish the existence of material issues of fact which require a trial of the action (see CPLR 3212 [b]; Alvarez v Prospect Hospital, supra).

Here, the Court finds that plaintiff has failed in its burden to produce evidentiary proof in admissible form sufficient to establish material issues of fact which require a trial of the action.

It is not necessary for the Court to rule upon any remaining contentions of the parties, as they have been rendered academic.

The foregoing constitutes the decision and order of this Court.

Dated: May 4, 2018
HON. JANINE A. BARBERA-DALLI
J.D.C.

[*1]

District Court of Suffolk County, Third District, December 19, 2017

APPEARANCES OF COUNSEL

Law Office of Aloy O. Ibuzor, Melville, for defendant.

Gabriel & Shapiro, P.C., Wantagh (Steven F. Palumbo of counsel), for plaintiff.

It is ordered that the motion by defendant seeking an order granting summary judgment for dismissal of the complaint, pursuant to CPLR 3212, is denied; and it is further[*2] ordered that defendant’s uncontested request for partial summary judgment concerning the timely and proper mailing of its verification requests is granted; and it is further ordered that the cross motion by plaintiff seeking an order granting summary judgment for the relief demanded in the complaint is granted.

Defendant moves by summary judgment motion for dismissal of plaintiff’s complaint which seeks reimbursement of assigned first-party no-fault benefits for medical services provided to plaintiff’s assignor from June 4, 2015, through June 16, 2015, in the aggregate sum of $6,396.08, as the result of an automobile accident on March 11, 2015. The grounds for dismissal are the failure of plaintiff’s assignor to fully comply with defendant’s written verification requests, thereby rendering the action premature.

Defendant alternatively seeks partial summary judgment in the event its motion for summary judgment is denied, asserting it has demonstrated a prima facie showing that timely and proper mailing procedures were used to send its verification requests to plaintiff.

In opposition, plaintiff asserts that defendant has failed to demonstrate any “good reasons” to support its verification requests as required by insurance regulation 11 NYCRR 65-3.2 (c). Plaintiff alleges that defendant has made onerous and burdensome “Mallela” type verification requests which plaintiff brought to defendant’s attention in its three responding “objection” letters dated July 28, 2015, September 4, 2015, and October 23, 2015. These letters were timely provided to defendant in response to its verification requests, and plaintiff contends defendant ignored the “objection” letters with its responsive letter dated August 5, 2015, where it refused to narrow the verification requests to the issues of plaintiff’s reimbursement claims and stated it was entitled to all the requested information pursuant to law.{**58 Misc 3d at 859}

Plaintiff also cross-moves for summary judgment for the relief demanded in the complaint. Plaintiff asserts that defendant has failed to properly respond to plaintiff’s “objection” letters and the 30 calendar days to pay or deny the claim has expired, thereby requiring payment by defendant.

A proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law with proof in admissible form sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; see also Manhattan Med. Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 1144[A], 2008 NY Slip Op 51844[U] [Civ Ct, Richmond County 2008]).

A summary judgment motion must be supported by an affidavit of a person having knowledge of the facts and the affidavit shall recite all the material facts and show there is no defense to the cause of action or that the cause of action or defense has no merit (see CPLR 3212 [b]). A conclusory affidavit or an affidavit by an individual who lacks personal knowledge of the facts does not satisfy the proponent’s prima facie burden (see JMD Holding Corp. v Congress Fin. Corp., 4 NY3d 373 [2005]).

No-fault regulations mandate that a written proof of claim for health service expenses rendered on or after April 1, 2013 (see 11 NYCRR 65-3.5 [o]; 65-3.8 [b] [3]), is overdue if not paid or denied by the defendant (or insurer) within 30 calendar days of receipt (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1]). An insurer may toll the 30 day period by requesting additional verification of the claim within 15 days from its receipt of the claim (see 11 NYCRR 65-3.5 [b]; New York & Presbyt. Hosp. v Allstate Ins. [*3]Co., 30 AD3d 492, 493 [2d Dept 2006]). If the insurer has not received requested verification from the plaintiff (or applicant) within 30 calendar days of the initial request, the insurer may send a follow-up verification request by phone or mail within 10 calendar days (see 11 NYCRR 65-3.6 [b]). At the same time, the insurer shall inform the applicant and its attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested (see 11 NYCRR 65-3.6 [b]).

An insurer may not issue a denial of claim form (NF-10) prior to its receipt of verification of all relevant information requested by the insurer (see Insurance Law § 5106 [a]; 11{**58 Misc 3d at 860} NYCRR 65-3.8 [b] [3]; 65-3.5 [c]). A verification demand by an insurer will extend the 30 day period until such time as the requested verification is received (see 11 NYCRR 65-3.8 [a] [1]; Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432 [2d Dept 2004]). Where a requested verification is not provided an insurer is not required to pay or deny the claim (see 11 NYCRR 65-3.8 [b] [3]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2d Dept 2004]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338 [2d Dept 2002]).

However, an insurer may issue a denial of claim for health service expenses rendered on or after April 1, 2013, if more than 120 calendar days have transpired after the initial request for verification, and the applicant has not submitted the verification requested under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply, provided the verification request so advised the applicant as required in section 65-3.5 (o) (see 11 NYCRR 65-3.8 [b] [3]).

A plaintiff applicant has a duty to respond to a proper and timely verification request from a defendant insurer, even where a plaintiff anticipates it will be unable to fully satisfy the insurer’s request or the request is unintelligible (see Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [2d Dept 1999]). Also, any additional verification sought from plaintiff’s assignor can be sought from plaintiff’s assignee, as an assignee stands in the shoes of the assignor (see Arena Constr. Co. v Sackaris & Sons, 282 AD2d 489 [2d Dept 2001]).

A defendant also has a duty to act, by payment or denial of the claim or request for further verification, upon receipt of plaintiff’s response to defendant’s verification request, so long as plaintiff’s documentation is arguably responsive to defendant’s verification request (see All Health Med. Care v Government Empls. Ins. Co., 2 Misc 3d 907 [Civ Ct, Queens County 2004]; 11 NYCRR 65-3.8 [a]). Where a defendant remains silent in the face of plaintiff’s verification response, this inaction constitutes a waiver of all defenses (id.).

Though an insurer is entitled to request and receive information necessary to the processing and verifying of the applicant’s claim (see 11 NYCRR 65-3.5 [c]), the scope of the requested materials is not unlimited (see generally 11 NYCRR 65-3.6 [b]). Insurance regulations require the existence of “good {**58 Misc 3d at 861}reasons” to demand verification (see 11 NYCRR 65-3.2 [c]; Doshi Diagnostic Imaging Servs. v State Farm Ins. Co., 16 Misc 3d 42 [App Term, 2d Dept, 9th & 10th Jud Dists 2007]). Also, insurance regulations require an insurer to clearly inform an applicant of the insurer’s position concerning any disputed matter (see 11 NYCRR 65-3.2 [e]). In addition, the insurance regulations require insurers to follow the basic principle of providing prompt and fair payment (see 11 NYCRR 65-3.2 [a]). In this regard, the insurance regulations provide that an insurer is to assist an applicant in the processing of a claim (see 11 NYCRR 65-3.2 [b]) and insurers are directed to not treat the applicant as an adversary (see 11 NYCRR 65-3.2 [b]).

Insurance carriers are entitled to withhold reimbursement of no-fault claims “provided by fraudulently incorporated enterprises to which patients have assigned their claims” (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 319 [2005]). Consequently, a medical provider which is not wholly owned and controlled by physicians (see Business Corporation Law §§ 1507 [a]; 1508 [a]) is ineligible to collect no-fault reimbursements and insurers can examine how a medical practice is owned and controlled to determine whether unlicensed individuals were violating state and local laws (Mallela at 321). However, insurers cannot delay payments of no-fault claims to pursue investigations unless they have “good cause” (id. at 322; see also 11 NYCRR 65-3.2 [c] [for “good reasons”]).

Here, the court determines that defendant has failed to demonstrate a prima facie entitlement to summary judgment for dismissal, with proof in admissible form sufficient to establish there are no material issues of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Hempstead Gen. Hosp. v New York Cent. Mut. Fire Ins. Co., 232 AD2d 454 [2d Dept 1996]).

It is uncontested that defendant has demonstrated it timely requested verification of facts on July 22, 2015 (first request), and on August 26, 2015 (second request), from plaintiff, with mailings in accordance with defendant’s standard office practices and procedures, as shown by the supporting affidavits of Joyce Mooney and Patricia S. Pierce, which is uncontradicted by plaintiff (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2d Dept 2008]; Elmont Open MRI & Diagnostic Radiology, P.C. v Travelers Indem. Co., 30 Misc 3d 126[A], 2010 NY Slip Op 52223[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2010]). Therefore, defendant’s request for partial summary judgment concerning the timely and proper{**58 Misc 3d at 862} mailing of the verification requests is granted. Defendant has demonstrated a prima facie showing that timely and proper mailing procedures were used to send its verification requests to plaintiff.

However, the court finds that defendant has failed to establish an objective, reasonable basis for the contents of the verification demands mailed to plaintiff, for the four contested bills totaling $6,396.08, for medical services rendered from June 4, 2015, through June 16, 2015 (see 11 NYCRR 65-3.2 [c]; Doshi Diagnostic Imaging Servs. v State Farm Ins. Co., 16 Misc 3d 42 [App Term, 2d Dept, 9th & 10th Jud Dists 2007]).

The evidence shows that the verification requests from defendant for each bill were identical, and contained 34 unnumbered or unlettered bullet point demands, for the short time span of the medical reimbursement requests of June 4, 2015, through June 16, 2015. The court notes that if plaintiff wished to respond to specific verification requests, it had no method by which to refer to a specific request, since the voluminous requests were not numbered or lettered or presented in any cogent way with specificity. It is difficult to imagine this was not by deliberate design, adding further difficulty to an already voluminous verification list.

Plaintiff asserts it tried to have defendant narrow the voluminous items of information demanded, by mailing “objection” letters which challenged the requested verifications as being “unduly burdensome and abusive” and seeking further clarification, but was rebuffed by defendant who stated it was entitled to each item as a matter of law.

The court finds that plaintiff provided reasonable justification for the failure to comply with defendant’s verification requests (see 11 NYCRR 65-3.5 [o]), by providing its “objection” letters dated July 28, 2015, September 4, 2015, and October 23, 2015.

This occurred despite defendant’s failure, under the insurance regulations, to advise the applicant in the same verification requests that “the insurer may deny the claim if the applicant does not provide within 120 calendar days from the date of the initial request either all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply” (see 11 NYCRR 65-3.5 [o]; 65-3.8 [b] [3]).

Plaintiff contends in its opposition papers that the delay verification demands from defendant were sensitive “Mallela” {**58 Misc 3d at 863}type corporate information, which were imposed without any explanation or reason. Plaintiff points to defendant’s verification demands, where it requests

“a copy of the lease, sublease and/or financial agreement between Joseph Quashie MD and Devonshire Surgical Facility LLC . . . verification of employment of Dipti Patel DC (W-2 or 1099 and/or current paystub) by Pro-Align Chiropractic . . . copy of lease, sublease and or financial agreement between Pro-Align Chiropractic and Devonshire Surgical Facility . . . copy of the lease, sublease and/or financial agreement between Total Chiropractic PC and NYS Diagnostic Medicine PC . . . copy of the lease, sublease and/or financial agreement between Total Chiropractic PC and Life Circles Healthcare Medical PC . . . copy of the lease, sublease and/or financial agreement between Pro-Align Chiropractic PC and NYS Diagnostic Medicine PC . . . verification of employment (W-2 or 1099 and/or current paystub) for Sarl Ramzan DC with Total Chiropractic PC.”

Plaintiff asserts these verification requests failed to show a link with plaintiff, are abusive discovery demands absent any explanation or reasons, and are part of an improper “fishing expedition” by defendant.

Plaintiff also points to the lack of any SIU^[FN*] affidavit from defendant in support of its verification demands, or in answer to plaintiff’s “objection” letters, which it implies would link an ongoing insurance investigation with a plaintiff medical provider which is a fraudulently incorporated enterprise (see State Farm Mut. Auto. Ins. Co. v Mallela at 319).

The court notes that defendant does not address plaintiff’s claims of “Mallela” type verification requests in any responsive letters to plaintiff, or in any opposition papers. Therefore, the court accepts these circumstances as an admission by defendant.

The court further finds that plaintiff properly fulfilled its duty to respond to defendant’s timely verification requests, by mailing its “objection” letters dated July 28, 2015, September 4, 2015, and October 23, 2015, even though plaintiff anticipated{**58 Misc 3d at 864} in the letters it would be unable to fully satisfy the insurer’s request (see Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co.).

However, the court also finds that though defendant properly fulfilled its duty to act upon plaintiff’s responsive “objection” letters with its responsive letter dated August 5, 2015 (see All Health Med. Care v Government Empls. Ins. Co.), it remained silent in the face of plaintiff’s “Mallela” type verification responses, which inaction constituted a waiver of all defenses (id.).

Plaintiff’s correspondence also invited further discussion if defendant disagreed with the position taken by plaintiff. Plaintiff’s three “objection” letters of July 28, 2015, September 4, 2015, and October 23, 2015, ended with the last letter stating defendant had ignored its prior letters and did not address plaintiff’s concerns, and that payment or denial was overdue.

The court’s review of the evidence finds the closest statement by defendant which provides an explanation for its verification demands is through the affidavit of Joyce Mooney, [*5]the claim litigation representative for defendant, who simply states: “the claim was directed to a claims representative for processing. The claims representative determined additional information was needed to process the claim and therefore, sent a request for additional information to PRO-ALIGN CHIROPRACTIC, PC dated 7/22/2015″ (see para 10 [emphasis added]).

The court’s review of the affidavit of Patricia S. Pierce, unit manager of the mail service center for defendant, shows it does not address any explanation for the basis of the verification requests.

The court’s review of the affirmation of defendant’s counsel reveals defendant received bills from plaintiff on July 2, 2015, in the amount of $78.20 for medical services on June 4, 2015; on July 13, 2015, in the amount of $2,105.96 for medical services on June 9, 2015; on July 8, 2015, in the amount of $2,105.96 for medical services on June 11, 2015; and on July 14, 2015, in the amount of $2,105.96 for medical services on June 16, 2015. Counsel then states: “Upon receipt, a determination was made to request further verification in order to process the bills in dispute as additional information was needed” (see para 11 [emphasis added]).

Counsel for defendant further states: “Travelers mailed timely verification requests respective to the bill as stated{**58 Misc 3d at 865} above. Such an event effectively tolled the time within which Defendant had to either pay or deny the claims” (see para 14).

Defendant’s responding letter dated August 5, 2015, to plaintiff’s “objection” letters which protested the verification requests stated the following:

“We are in receipt of your 7 letters dated 7/28/2015 that contained none of the requested verification. Please note the following:

“Please be advised that we are in receipt of your 7 letters dated 7/28/15. In your letter, you state that our letter is improper and asks for a ‘large amount of information of all kinds’ which you find ‘unduly burdensome and abusive.’ In addition, you request that we resubmit a request that is narrowly tailored to the specific provider and dates of service at issue.

“To the contrary, we disagree that our letter is ‘improper or unduly burdensome and abusive.’ The letter is specific to a particular claim and provider, as is referenced in the letter. The information is necessary in order to verify this claim. Furthermore, we only seek information that is necessary to verify the claim. As such, the letter is already as ‘narrowly tailored’ as possible.

“Are you aware, pursuant to 11 NYCRR 65-3.5[c] an insurer is entitled to receive all items necessary to verify the claim. Thus, please forward such information so that the claim can be reviewed” (emphasis added).

Defendant asserts that no responsive verification was provided by plaintiff. In support, the affidavit of Joyce Mooney states that “no notations were found in the computer indicating that any response or the remaining requested documents had been received from Pro-Align Chiropractic P.C.” (see para 32). In addition, “a search of the physical file was also conducted. No documents and/or correspondence of any kind were found in response to Travelers requests for additional verification” (see para 32).

However, the court notes that her sworn statement is contradicted by the affirmation of defendant’s counsel, who admits receipt from plaintiff of:

a partial response on July 31, 2015, to defendant’s verification requested on July 22, 2015 (see para 17);{**58 Misc 3d at 866}

a partial response on August 5, 2015, to defendant’s verification requested on July 28, 2015 (see para 19);

a partial response on September 9, 2015, to defendant’s verification, responded to by defendant on September 18, 2015 (see paras 22, 24), and responded to by defendant on November 18, 2015 (see para 29);

a partial response on September 18, 2015, to defendant’s verification requested on September 9, 2015 (see para 24); and

a partial response on October 27, 2015, to defendant’s verification (see para 27).

The court finds that there is no sworn statement from anyone with knowledge, which provides a reasonable basis for the verification demands. The affirmation of Joyce Mooney, the claim litigation representative for defendant, states in pertinent part, “The claims representative determined additional information was needed to process the claim.” This statement is hearsay and conclusory, and does not satisfy the proponent’s prima facie burden for summary judgment (see JMD Holding Corp. v Congress Fin. Corp.). There is also no statement from the claims representative.

The court notes that the affirmation of defendant’s counsel also states in pertinent part, “a determination was made to request further verification in order to process the bills in dispute.” This statement is also hearsay and conclusory and does not satisfy the proponent’s prima facie burden for summary judgment (id.).

In addition, the statement of defendant’s counsel is not based upon personal knowledge, and is therefore without probative value or evidentiary significance (see Warrington v Ryder Truck Rental, Inc., 35 AD3d 455, 456 [2d Dept 2006]; see also Wesh v Laidlaw, 59 AD3d 534 [2d Dept 2009]).

Finally, the court notes that defendant’s responsive letter dated August 5, 2015, to plaintiff’s “objection” letters, which states “the information is necessary in order to verify this claim” and “we only seek information that is necessary to verify the claim,” is a replay of the same statements provided by Joyce Mooney and defendant’s counsel. The statements are conclusory, provide no information used as the basis for the verification requests and do not satisfy the proponent’s prima facie burden for summary judgment (see JMD Holding Corp. v Congress Fin. Corp.).

Moreover, the court determines that all the pertinent statements do not satisfy the insurance regulation which requires{**58 Misc 3d at 867} an insurer to provide “good reasons” to demand verification (see 11 NYCRR 65-3.2 [c]; Doshi Diagnostic Imaging Servs. v State Farm Ins. Co.). Consequently, without the required “good reasons” to demand verification, an insurer cannot delay payments of no-fault claims to pursue investigations (see State Farm Mut. Auto. Ins. Co. v Mallela at 322).

Furthermore, though defendant correctly states in its letter of August 5, 2015, to plaintiff that “an insurer is entitled to receive all items necessary to verify the claim” pursuant to 11 NYCRR 65-3.5 (c), there are other duties which defendant failed to follow.

The court finds that defendant failed to satisfy its obligation to clearly inform applicant of the insurer’s position concerning any disputed matter (see 11 NYCRR 65-3.2 [e]); failed to satisfy the regulation to follow the basic principle of providing prompt and fair payment (see 11 NYCRR 65-3.2 [a]); failed to assist applicant in the processing of the claim (see 11 NYCRR 65-3.2 [b]); and failed to not treat the applicant as an adversary (see 11 NYCRR 65-3.2 [b]).

Moreover, defendant’s verification demands seek certain documents from plaintiff, but reject in advance certain documents which do not meet its criteria. On point, defendant’s demand states that “initials, electronic signatures, and/or stamped signatures are not acceptable.” This raises issues of fact for the reasonableness of the verification demands, since the requested documents speak for themselves and cannot be changed by plaintiff to meet the criteria of defendant’s demands.

Therefore, the court determines defendant has failed to establish a prima facie showing of entitlement to summary judgment dismissing the complaint as a matter of law.

Accordingly, the motion for summary judgment by defendant dismissing plaintiff’s complaint pursuant to CPLR 3212 is denied.

Defendant’s motion for partial summary judgment concerning that timely and proper mailing procedures were used to send its verification requests to plaintiff is granted.

Plaintiff’s cross motion for summary judgment seeking an order granting summary judgment for the relief demanded in the complaint is granted.

Footnotes

Footnote *:Plaintiff does not provide a definition of its use of the term SIU; however, the court assumes it to be a reference to an investigative unit since this relates to the subject matter plaintiff speaks about.

[*1]

District Court of Suffolk County, Third District, November 27, 2017

APPEARANCES OF COUNSEL

Law Offices of Buratti, Rothenberg & Burns, East Meadow, for defendant.

Baker Sanders, LLC, Garden City, for plaintiff.

After due deliberation, it is hereby ordered that defendant’s motion for summary judgment is granted solely to the extent that the amount in dispute is reduced to $9,160.08 based upon the uncontested merits of its fee schedule defense. In all other respects, defendant’s motion is denied. Based upon the submissions of the parties, the court finds that plaintiff has established its prima facie case and defendant has established its timely denial of the assigned no-fault benefits at issue. There exist material facts in dispute as to the medical necessity of the treatment provided to plaintiff’s assignor, which must be decided at a trial.

This is an action to recover assigned no-fault benefits for treatment rendered to plaintiff’s assignor for injuries claimed to have been sustained in a motor vehicle accident which occurred on December 30, 2012. Defendant’s motion for summary judgment seeks dismissal of the [*2]complaint on three separate grounds: (1) lack of medical necessity for the treatment; (2) billing in excess of the applicable fee schedule; and (3) lack of authority to do business in the State of New Jersey where the treatment was rendered, by reason of the failure of plaintiff corporation to obtain a certificate of authority to transact business, prior to the time the treatment was rendered.

As to the issue of medical necessity, both sides submitted detailed affidavits of qualified professionals regarding the reasons why the treatment rendered was or was not medically necessary. Based upon a careful review of these affidavits, the court is constrained to rule that relevant and material factual issues exist regarding the medical necessity of the subject services.

Regarding the fee schedule defense, defendant submits proof in the form of an affidavit by Timothy Schultz, a certified coder, to establish that the amount allowable by the applicable New Jersey fee schedule for the services rendered is $9,160.08.{**58 Misc 3d at 405} Plaintiff did not submit any evidence to rebut this proof. Accordingly, the court grants this branch of defendant’s motion and reduces the amount in issue to $9,160.08.

Defendant also seeks dismissal of all of the claims because plaintiff, a New York professional corporation, was not authorized to transact business in the State of New Jersey as of the dates of the treatment for which payment is sought herein. That fact is not disputed. Plaintiff became authorized to transact business in the State of New Jersey on January 5, 2015. This action was commenced on December 1, 2016 when service was duly effectuated on defendant. Plaintiff claims that the failure to obtain the requisite certificate of authority was a technical violation that does not warrant granting the drastic relief of claim preclusion urged by defendant. The parties submitted conflicting arbitration awards on this issue. It appears that this is a case of first impression as the court is not aware of any other judicial determinations of this issue.

The reasoning urged by defendant and set forth in the arbitration awards relied upon is that plaintiff violated the New York no-fault regulations by not having been qualified to do business in New Jersey by reason of having failed to obtain a certificate of authority as required by New Jersey law at New Jersey Statutes Annotated § 14A:13-3. The New York regulation relied upon by defendant is found at 11 NYCRR 65-3.16 (a) (12), which provides as follows:

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

Defendant urges the court to interpret the pertinent part of the regulation to be that the failure of the plaintiff health care corporation to timely obtain the requisite certificate of authority for a foreign corporation to transact business means the insurer is not obligated to pay for otherwise valid billing for medical treatment. The court disagrees. There is no dispute that the health care professionals who rendered treatment for which payment is demanded met all of the licensing requirements of the State of New Jersey to perform the health care{**58 Misc 3d at 406} services rendered to plaintiff’s assignor. The court therefore concludes that no violation of the New York no-fault regulations has been established under the facts presented in this case. The court determines that the cited regulation does not apply to the corporate certificate requirement at issue in this case.

However, even if the court were to find that the aforesaid no-fault regulation applied in this case, the court would still conclude that the failure to obtain the certificate of authority to [*3]transact business in New Jersey would not in and of itself preclude recovery of payment for the no-fault health care benefits provided. New Jersey law explicitly proscribes the impact of transacting business without the certificate of authority. New Jersey Statutes Annotated § 14A:13-11 provides as follows:

“14A:13-11. Transacting business without certificate of authority

“(1) No foreign corporation transacting business in this State without a certificate of authority shall maintain any action or proceeding in any court of this State, until such corporation shall have obtained a certificate of authority. This prohibition shall apply to

“(a) any successor in interest of such foreign corporation, except any receiver, trustee in bankruptcy or other representative of creditors of such corporation; and

“(b) any assignee of the foreign corporation, except an assignee for value who accepts an assignment without knowledge that the foreign corporation should have but has not obtained a certificate of authority in this State.

“(2) The failure of a foreign corporation to obtain a certificate of authority to transact business in this State shall not impair the validity of any contract or act of such corporation, and shall not prevent such corporation from defending any action or proceeding in any court of this State.

“(3) In addition to any other liabilities imposed by law, a foreign corporation which transacts business in this State without a certificate of authority shall forfeit to the State a penalty of not less than $200.00, nor more than $1,000.00 for each calendar year, not more than 5 years prior thereto, in which{**58 Misc 3d at 407} it shall have transacted business in this State without a certificate of authority. Such penalty shall be recovered with costs in an action prosecuted by the Attorney General. The court may proceed in such action in a summary manner or otherwise.”

This statute provides that the non-authorized foreign corporation may not maintain an action in New Jersey until such corporation has obtained a certificate of authority to transact business. Even if this were to apply to a New York action, the plaintiff was in fact authorized to transact business in New Jersey at the time the action was commenced. The statute also expressly provides that the failure to obtain the certificate “shall not impair the validity of any contract or act of such corporation” (NJ Stat Ann § 14A:13-11 [2]). This clearly includes the validity of the assignment of an insured’s contractual right to no-fault benefits, as well as the “acts” of the duly licensed health care professional rendering the treatment for which payment is sought. Finally, the statute imposes monetary penalties for failure to obtain the requisite certificate of authority to transact business.

Thus, the State of New Jersey has in place the means by which foreign corporations who fail to obtain a certificate of authority are penalized. None of the statutory penalties includes the relief requested by defendant in its motion. The harsh penalty of claim preclusion requested by defendant is not required by New Jersey law and would thwart the purpose and intent of the New York No-Fault Law and regulations. It would amount to a windfall for insurers who would otherwise be obligated to pay for medically necessary services rendered to victims of motor vehicle accidents.

The court also notes that failure to obtain the certificate of authority in this case does not [*4]amount to fraud that would be “good cause” for denial of payment as set forth in State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313, 322 [2005]). Without proof of fraudulent intent, the court finds the failure to obtain a certificate of authority to transact business in this case was a technical violation for which alternate penalties are provided by New Jersey law. Therefore, such conduct cannot be solely relied upon by insurers to delay or withhold payment of otherwise valid no-fault billing.

HUCV 2206-16
James F. Matthews, J.

Upon the following papers numbered 1 to 21 read on this petition for an order vacating the decision in part of a master arbitrator; by Notice of Petition /Order to Show Cause and supporting papers 1-3, ; Notice of Cross Motion and supporting papers ; Answering Affidavits and supporting papers 10,11 ; Replying Affidavits and supporting papers18,21 ; Filed papers ; Other exhibits: 4-9,12-17,19,20 ; (and after hearing counsel in support of and opposed to the motion), it is

ORDERED that the petition to vacate the part of the award and remand rendered by a Master Arbitrator’s decision dated June 27, 2016, which vacated the lower Arbitrator’s award dated March 8, 2016 for $4,329.19 to petitioner, and then remanded the matter to lower arbitration for consideration of respondent’s Mallela defense of fraudulent incorporation, is granted. That part of the award of the Master Arbitrator dated June 27, 2016, which vacated the lower Arbitrator’s award of $4,329.19 to petitioner, and then remanded the matter to arbitration for consideration of respondent’s Mallela defense, is vacated; and it is further

ORDERED that the remaining part of the award rendered by the Master Arbitrator’s decision dated June 27, 2016, which confirmed the decision of the lower Arbitrator dated March 8, 2016, is confirmed.

Petitioner asks the Court to vacate that part of the award of a Master Arbitrator dated June 27, 2016, which vacated the lower Arbitrator’s award of $4,329.19 to petitioner, and then remanded the matter to lower arbitration for consideration of whether respondent’s Mallela defense of fraudulent incorporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) was appropriate.

The respondent opposes the relief sought by petitioner, and requests that the Master Arbitrator’s award dated June 27, 2016, be confirmed.

The lower arbitration decision dated March 8, 2016, awarded the sum of $4,329.19 to petitioner, based upon a finding that mailing requests for two Examinations Under Oath [*2](“EUO’s”) set for June 24, 2015 and July 16, 2015, respectively, were ignored and unattended by petitioner, but the mailing requests were nonetheless facially untimely, in that the first EUO scheduling request was mailed four and one-half (4 1/2) years after the claim was submitted, thereby rendering the EUO requests a nullity, as related to the billing at issue, and rendering all other issues moot. The lower arbitration also found respondent failed to persuasively support their fee schedule defense and awarded the disputed sum of $4,329.19 to petitioner.

The Master Arbitrator’s decision dated June 27, 2016 leaves only a single issue for determination by the Court: respondent contends the lower arbitrator’s decision did not render a determination concerning respondent’s Mallela defense of fraudulent incorporation, which issue it asserts was raised before the arbitrator and was not precluded due to time constraints.

The Master Arbitrator found that the decision of the lower arbitrator was imperfectly rendered pursuant to CPLR 7511(b) (1)(iii) and 11 NYCRR 65-4.5(s), based upon the lack of a specific determination addressing respondent’s Mallela defense of fraudulent incorporation. It therefore vacated the award of $4,329.19 to petitioner, and remanded the matter back to arbitration for consideration of the Mallela contentions concerning fraudulent incorporation.

Petitioner contends that both the lower arbitration and the Master Arbitration found the EUO scheduling notices to be untimely, thereby precluding respondent’s fee schedule defense due to failure of a timely denial of the claim.

In addition, petitioner asserts that the lower arbitration decision included the statement that “all other issues are moot,” thereby including sufficient language to satisfy respondent’s Mallela contentions. Petitioner argues that respondent failed to provide its Mallela contentions with any type of factual allegations, which is why the lower arbitration decision was written in the manner provided. Respondent’s mere cite to Mallela contentions without factual support is legally insufficient (see generally Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 2016 NY Slip Op 37157 [NY Supp 2016] [wherein the Court focused on petitioner’ belief that respondent may have been ineligible for benefits as an unlawfully incorporated professional corporation, but “petitioner nowhere specifies how respondent failed to meet that burden at the arbitration”]).

The Master Arbitrator’s decision implies that the lower arbitrator was obligated to disclose the basis for its decision, which is why the matter was remanded to lower arbitration for further consideration on the Mallela contentions. However, in actuality, an arbitrator is not obligated to reveal the basis for its award (see Hausknecht v Comprehensive Med. Care of New York, P.C., 24 AD3d 778 [2nd Dept 2005]; Matter of Nationwide Mut. Ins. Co. v Steiner, 227 AD2d 563 [2nd Dept 1996]).

The standard of review for an arbitration award is limited to a determination of whether the award was arbitrary, capricious or incorrect as a matter of law. A master arbitrator’s powers in reviewing an initial arbitrator’s decision are limited to the grounds stated in CPLR 7511, and additionally, under insurance regulations, is limited to whether the initial arbitrator ruled on factual and procedural issues in a manner that was arbitrary, capricious, irrational or without a plausible basis (see Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207, 211 [1981]; In the Matter of Allstate Ins. Co. v Keegan, 201 AD2d 724 [2nd Dept 1994]).

If a challenge is based upon a factual error in the arbitration, “the master arbitrator must uphold the determination if it has a rational basis” (see In the Matter of Richardson v Prudential Prop. & Cas. Ins. Co., 230 Ad2d 861 [2nd Dept 1996]). Moreover, an arbitrator’s award must be upheld “when the arbitrator ‘offer[s] even a barely colorable justification for the outcome [*3]reached'” (see In the Matter of Susan D. Settenbrino. P.C. v Barroga-Hayes, 89 AD3d 1094, 1095 [2nd Dept 2011]). Indeed, for an award to be irrational, there must be “no proof whatsoever to justify the award” (see In the Matter of Gaymon v MTA Bus Co., 117 AD3d 735, 736 [2nd Dept 2014]; In the Matter of Susan D. Settenbrino. P.C. v Barroga-Hayes, supra ). Moreover, “an arbitrator is not bound by principles of substantive law or rules of evidence, and may do justice and apply his or her own sense of law and equity to the facts as he or she finds them to be” (Id. at 1095).

Here, the Court finds that the petition before the Court is timely (see CPLR 7511[a]). Furthermore, the Court finds that the record demonstrates there was a rational basis for the initial arbitrator’s decision and the award dated March 8, 2016 was justified. It was supported by sufficient evidence in the record, and was not arbitrary, capricious, irrational or incorrect as a matter of law.

The Court further finds that the Master Arbitration award dated June 27, 2016, prejudiced petitioner by exceeding its powers (see CPLR 7511[b][1][iii]), and is irrational (see Matter of Falzone [New York Cent. Mut. Fire Ins. Co.], 15 NY3d 530 [2010]). Therefore, the petition is granted, to the extent that the part of the award of the Master Arbitrator dated June 27, 2016, which vacated the lower Arbitrator’s award of $4,329.19 to petitioner, and then remanded the matter to arbitration for consideration of respondent’s Mallela defense, is vacated.

The remaining part of the award rendered by the Master Arbitrator’s decision dated June 27, 2016, which confirmed the decision of the lower Arbitrator dated March 8, 2016, is hereby confirmed (see CPLR 7511[e]).

The foregoing constitutes the decision and order of this Court.

Dated: October 16, 2017
J.D.C.