[*1] Decided on April 5, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Schoenfeld, J.P., Hunter, Jr., J.
570684/10

Plaintiff appeals from an order of the Civil Court of the City of New York, New York County (Debra Rose Samuels, J.), dated June 10, 2010, which granted defendant’s motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Debra Rose Samuels, J.), dated June 10, 2010, reversed, without costs, motion denied and complaint reinstated.

Plaintiff, a chiropractic practice, commenced this action to recover assigned first-party no-fault benefits for services rendered to its assignor, who sustained injuries in a January 2009 automobile accident. The assignor was referred to plaintiff by a non-party practitioner. Defendant-insurer moved for summary judgment dismissing the complaint pursuant to Public Health Law § 238-a, claiming that plaintiff may not recover for the services rendered to the assignor because the referring practitioner had a “financial relationship” with plaintiff (see Public Health Law § 238-a[1][a], [b]). Civil Court granted the motion, and we now reverse.

Public Health Law § 238-a prohibits a practitioner from making a referral to a health care provider where the referring practitioner (or immediate family member of such practitioner) has a “financial relationship” with the health care provider (Public Health Law § 238-a[1][a]). A “financial relationship” is defined in section 238(3) of the Public Health Law as “an ownership interest, investment interest or compensation arrangement.” Critically, a “compensation arrangement” means “any arrangement involving any remuneration between a practitioner, or immediate family member, and a health care provider” (Public Health Law § 238-a[5][a]), but does not include “payments for the rental or lease of office space” if there is a lease that meets specific enumerated requirements, i.e., is in writing, for a term of at least one year, with a rent consistent with fair market value and not based upon the volume or value of any referrals, and would be commercially reasonable even if no referrals were made (Public Health Law § 238-a[5][b][i]).

The evidence submitted by defendant in support of its motion failed to establish, prima facie, that there was any “financial relationship” between plaintiff and the referring practitioner. No allegation is made that there was any “ownership interest” or “investment interest” between [*2]plaintiff and the referring practitioner. Although defendant submitted some unparticularized evidence indicating that plaintiff leased unspecified office space from various unnamed physicians in 2007 — two years prior to the underlying referral — defendant’s limited submission failed to establish that there was any “compensation arrangement” in general or any “payments for the rental or lease of office space” in particular, between plaintiff and the referring practitioner. Since defendant failed to meet its initial burden of establishing as a matter of law its defense pursuant to Public Health Law § 238-a, the motion for summary judgment should have been denied regardless of the sufficiency of plaintiff’s opposing papers (see Winegrad v New York Univ. Med. Center, 64 NY2d 851, 853 [1985]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: April 05, 2011

[*1] Decided on April 5, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Schoenfeld, J.P., Shulman, Hunter, Jr., JJ
570946/10.

Plaintiffs appeal from an order of the Civil Court of the City of New York, New York County (Arlene P. Bluth, J.), dated June 5, 2008, which denied their motion for summary judgment in the principal sum of $9,902.18.

Per Curiam.

Order (Arlene P. Bluth, J.), dated June 5, 2008, reversed, without costs, and summary judgment is granted in favor of plaintiff Carnegie Hill Orthopedic Services, P.C. in the principal sum of $6,902.18, and plaintiff Devonshire Surgical Facility in the principal sum of $3,000. The Clerk is directed to enter judgment accordingly.

In this action to recover assigned first-party no-fault benefits, plaintiff Devonshire Surgical Facility established its prima facie entitlement to summary judgment on its claim for $3,000, and plaintiff Carnegie Hill Orthopedic Services, P.C., established its entitlement to summary judgment on its claim for $6,902.18 (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8, 9 [2007]; Devonshire Surgical Facility v American Tr. Ins. Co., 27 Misc 3d 137[A], 2010 NY Slip Op 50867[U] [2010]).

In opposition, defendant failed to raise a triable issue of fact. Even assuming that defendant issued timely denials of plaintiffs’ claims (see Country-Wide Ins. Co. v Zablozki, 257 AD2d 506 [1999], lv denied 93 NY2d 809 [1999]), the peer review report relied upon by defendant to deny plaintiffs’ claims is conclusory and fails to set forth sufficient facts to raise triable issues with respect to its defense of lack of medical necessity (see East Coast Acupuncture Servs., P.C. v American Tr. Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50213[U][2007]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. [*2]
Decision Date: April 05, 2011

[*1] Decided on April 5, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Schoenfeld, J.P., Shulman, Hunter, Jr., JJ
570945/10.

Plaintiffs appeal from an order of the Civil Court of the City of New York, New York County (Arlene P. Bluth, J.), dated June 4, 2008, which denied their motion for summary judgment on the complaint.

Per Curiam.

Order (Arlene P. Bluth, J.), dated June 4, 2008, reversed, without costs, and summary judgment is granted in favor of plaintiff Devonshire Surgical Facility in the principal sum of $3,000, and plaintiff Carnegie Hill Orthopedic Services, P.C. in the principal sum of $11,929.08. The Clerk is directed to enter judgment accordingly.

In this action to recover assigned first-party no-fault benefits, plaintiffs Carnegie Hill Orthopedic Services, P.C. and Devonshire Surgical Facility established their prima facie entitlement to summary judgment on their respective claims for $11,929.08, and $3,000 (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). Specifically, defendant’s documentary submissions established its receipt of plaintiffs’ claims and that the claims were overdue (see Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8, 9 [2007]; Devonshire Surgical Facility v American Tr. Ins. Co., 27 Misc 3d 137[A], 2010 NY Slip Op 50867[U] [2010]).

In opposition to the plaintiffs’ motion for summary judgment, defendant, which was precluded under a so-ordered stipulation from offering certain evidence pertaining to its defense of lack of medical necessity (see Wilson v Galicia Contr. & Restoration Corp., 10 NY3d 827, 830 [2008]), failed to raise a triable issue of fact (see Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d at 743; Devonshire Surgical Facility, supra). Accordingly, plaintiffs were entitled to judgment in their favor.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: April 05, 2011

[*1] Decided on March 29, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Lowe, III, P.J., Shulman, Hunter, Jr., JJ
571027/10.

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Raul Cruz, J.), entered on or about December 10, 2009, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Raul Cruz, J.), entered on or about December 10, 2009, reversed, without costs, motion granted and complaint dismissed. The Clerk is directed to enter judgment accordingly.

In this action to recover assigned first-party no-fault benefits, defendant’s documentary submissions established prima facie, that it duly mailed the notices of the independent medical examinations (IMEs) to the assignor and that the assignor failed to appear for the IMEs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2006]). In opposition, plaintiff failed to raise a triable issue regarding the reasonableness of the requests or the assignors’ failure to attend the IMEs (see Inwood Hill Med. P.C. v General Assur. Co., 10 Misc 3d 18, 20 [2005]; Marina v Praetorian Ins. Co., 28 Misc 3d 132[A], 2010 NY Slip Op 51292[U] [2010]). Plaintiff’s contention that defendant failed to prove the mailing of the IME notices to the assignor’s attorney is unavailing absent competent proof in the record establishing that the assignor was represented by counsel with regard to the subject no-fault claim.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: March 29, 2011

[*1] Decided on March 24, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Shulman, J.P., Hunter, Jr., J.
570324/10

Shulman, J.P., Hunter, Jr., J.

Allstate Insurance Company,NY County Clerk’s No. Petitioner-Appellant,570324/10 -against- Alexandre DeMoura a/a/oCalendar No. 10-162 Miriam Cruceta, Respondent-Respondent. Petitioner appeals from an order of the Civil Court of the City of New York, New York County (Tanya R. Kennedy, J.), dated March 16, 2009, which denied its petition to vacate an arbitration award in favor of respondent awarding him unpaid no-fault benefits in the principal sum of $11,170.42, and granted respondent’s cross petition to confirm the arbitration award. Per Curiam. Order (Tanya R. Kennedy, J.), dated March 16, 2009, reversed, without costs, and matter remanded to Civil Court for a framed issue hearing regarding whether the $50,000 limit of the subject insurance policy was exhausted before petitioner-insurer was obligated to pay respondent’s claim. When an insurer “has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]). A defense that the coverage limits of the policy have been exhausted may be asserted by an insurer despite its failure to issue a denial of the claim within the 30-day period (New York & Presby. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]), and an arbitrator’s award directing payment in excess of the $50,000 limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d at 245; 11 NYCRR 65-1.1). Moreover, as petitioner-insurer correctly argues, such error “will not be waived if the party relying on it asserts it . . . in opposition to an application for confirmation” (Matter of Brijmohan v State Farm Ins. Co., 92 NY2d at 822). Here, petitioner’s submissions on its motion to vacate the arbitration award and in opposition to respondent’s cross motion to confirm the award raised a triable issue of fact regarding whether the $50,000 policy limit had been exhausted before payment could be made to respondent on its claim (see 11 NYCRR 65-3.15). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue. We note that petitioner’s remaining arguments are without merit. THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. I concurI concur Decision Date: March 24, 2011

MARCH 24, 2011
SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT
								June 2010 Term

Petitioner appeals from an order of the Civil Court of the City of New York, New York County (Tanya R. Kennedy, J.), dated March 16, 2009, which denied its petition to vacate an arbitration award in favor of respondent awarding him unpaid no-fault benefits in the principal sum of $11,170.42, and granted respondent’s cross petition to confirm the arbitration award.

Per Curiam.

Order (Tanya R. Kennedy, J.), dated March 16, 2009, reversed, without costs, and matter remanded to Civil Court for a framed issue hearing regarding whether the $50,000 limit of the subject insurance policy was exhausted before petitioner-insurer was obligated to pay respondent’s claim.

When an insurer “has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]). A defense that the coverage limits of the policy have been exhausted may be asserted by an insurer despite its failure to issue a denial of the claim within the 30-day period (New York & Presby. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]), and an arbitrator’s award directing payment in excess of the $50,000 limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d at 245; 11 NYCRR 65-1.1). Moreover, as petitioner-insurer correctly argues, such error “will not be waived if the party relying on it asserts it . . . in opposition to an application for confirmation” (Matter of Brijmohan v State Farm Ins. Co., 92 NY2d at 822).

Here, petitioner’s submissions on its motion to vacate the arbitration award and in opposition to respondent’s cross motion to confirm the award raised a triable issue of fact regarding whether the $50,000 policy limit had been exhausted before payment could be made to respondent on its claim (see 11 NYCRR 65-3.15). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue.

We note that petitioner’s remaining arguments are without merit.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. [*2]

I concurI concur
Decision Date: March 24, 2011

Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC

2011 NY Slip Op 01948 [82 AD3d 559]

March 17, 2011

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, May 11, 2011

Unitrin Advantage Insurance Company, Respondent, v Bayshore Physical Therapy, PLLC, et al., Defendants, and Martin Bassiur, DDS, Doing Business as NY Craniofacial Pain Management, et al., Appellants.

—[*1] Israel, Israel & Purdy, LLP, Great Neck (William M. Purdy of counsel), for appellants.

Rubin, Fiorella & Friedman LLP, New York (Joseph R. Federici, Jr. of counsel), for respondent.

Order, Supreme Court, New York County (Jane S. Solomon, J.), entered March 1, 2010, which denied defendants-appellants’ motion for summary judgment dismissing the complaint, granted plaintiff’s cross motion for summary judgment on the complaint, and declared that plaintiff does not owe coverage for the no-fault claims allegedly assigned to defendants, unanimously affirmed, without costs.

The motion court properly determined that plaintiff insurer may retroactively deny claims on the basis of defendants’ assignors’ failure to appear for independent medical examinations (IMEs) requested by plaintiff, even though plaintiff initially denied the claims on the ground of lack of medical necessity (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721-722 [2006]). The failure to appear for IMEs requested by the insurer “when, and as often as, [it] may reasonably require” (Insurance Department Regulations [11 NYCRR] § 65-1.1) is a breach of a condition precedent to coverage under the no-fault policy, and therefore fits squarely within the exception to the preclusion doctrine, as set forth in Central Gen. Hosp. v Chubb Group of Ins. Cos. (90 NY2d 195 [1997]). Accordingly, when defendants’ assignors failed to appear for the requested IMEs, plaintiff had the right to deny all claims retroactively to the date of loss, regardless of whether the denials were timely issued (see Insurance Department Regulations [11 NYCRR] § 65-3.8 [c]; Stephen Fogel Psychological, 35 AD3d at 721-722).

It is of no moment that the retroactive denials premised on failure to attend IMEs were embodied in blanket denial forms, or that they were issued based on failure to attend IMEs in a different medical speciality from that which underlies the claims at issue. A denial premised on breach of a condition precedent to coverage voids the policy ab initio and, in such case, the insurer cannot be precluded from asserting a defense premised on no coverage (see Chubb, 90 NY2d at 199).

There is likewise no merit to defendants’ contention that the IME request notices were [*2]invalid. Plaintiff satisfied its prima facie burden on summary judgment of establishing that it requested IMEs in accordance with the procedures and time frames set forth in the no-fault implementing regulations, and that defendants’ assignors did not appear. In opposition, defendants failed to raise an issue of fact that the requests were unreasonable (see generally Celtic Med. P.C. v New York Cent. Mut. Fire Ins. Co., 15 Misc 3d 13, 14-15 [2007]; A.B. Med. Servs. PLLC v USAA Gen. Indem. Co., 9 Misc 3d 19, 21 [2005]).

Defendants’ argument that plaintiff was required to demonstrate that the assignors’ failure to appear for the IMEs was willful is unpreserved and, in any event, without merit. The doctrine of willfulness, as addressed in Thrasher v United States Liab. Ins. Co. (19 NY2d 159 [1967]), applies in the context of liability policies, and has no application in the no-fault context, where the eligible injured party has full control over the requirements and conditions necessary to obtain coverage (cf. id. at 168).

Defendants’ argument that all IMEs must be conducted by physicians is unavailing. Although Insurance Department Regulations (11 NYCRR) § 65-1.1 (d) states that “[t]he eligible injured person shall submit to medical examination by physicians selected by, or acceptable to, the [insurer], when, and as often as, the [insurer] may reasonably require,” the regulations permit reimbursement for medically necessary treatment services that are rendered by nonphysicians, such as chiropractors and acupuncturists, as well (see Five Boro Psychological Servs., P.C. v AutoOne Ins. Co., 22 Misc 3d 978, 979-980 [2008]). We have considered defendants’ remaining contentions and find them unavailing. Concur—Andrias, J.P., Saxe, Friedman, Moskowitz and Richter, JJ. [Prior Case History: 2010 NY Slip Op 31936(U).]

M.N. Dental Diagnostics, P.C. v Government Empls. Ins. Co.

2011 NY Slip Op 01333 [81 AD3d 541]

February 22, 2011

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, March 30, 2011

M.N. Dental Diagnostics, P.C., as Assignee of Daniel Burgos, Respondent, v Government Employees Insurance Company, Appellant.

—[*1] Law Offices of Teresa M. Spina, Woodbury (Peter J. Molesso of counsel), for appellant. Steven J. Neuwirth, Garden City, for respondent.

Order of the Appellate Term of the Supreme Court in the First Judicial Department, entered June 24, 2009, which affirmed an order of the Civil Court of the City of New York, Bronx County (Julia I. Rodriguez, J.), entered on or about February 15, 2007, finding the issue of which insurer is the primary insurer must be submitted to arbitration, unanimously affirmed, with costs.

Insurance Law § 5105 (b) requires that mandatory arbitration be used to resolve all disputes between insurers as to their responsibility for the payment of first-party benefits. 11 NYCRR 65-3.12 (b) provides that “[i]f a dispute regarding priority of payment arises among insurers who otherwise are liable for the payment of first-party benefits, then the first insurer to whom notice of claim is given . . . shall be responsible for payment to such person. Any such dispute shall be resolved in accordance with the arbitration procedures established pursuant to section 5105 of the Insurance Law and section 65-4.11 of this Part.”

Defendant argues that its denial of benefits raised an issue of coverage, rather than of payment, because it was not “otherwise . . . liable” for the payment of first-party benefits. However, 11 NYCRR 65-4.11 (a) (6) provides that “any controversy between insurers involving the responsibility or the obligation to pay first-party benefits (i.e., priority [of] payment or sources of payment as provided in section 65-3.12 of this Part) is not considered a coverage question and must be submitted to mandatory arbitration under this section.” Thus, as “the first insurer to whom notice of claim [was] given” (11 NYCRR 65-3.12 [b]), defendant was responsible or obligated to pay the no-fault benefits for the health services provided by plaintiff, irrespective of any issues of priority or source of payment. By denying plaintiff’s claim on the stated ground that no-fault benefits were payable by another insurer (Fidelity and Guaranty Insurance Co.), defendant raised an issue as to which insurer was obligated to pay first-party [*2]benefits, which “[c]learly . . . is an inter-company dispute subject to mandatory arbitration” (see Paramount Ins. Co. v Miccio, 169 AD2d 761, 763 [1991], lv denied 78 NY2d 851 [1991]; Matter of Pacific Ins. Co. v State Farm Mut. Auto. Ins. Co., 150 AD2d 455, 456 [1989]). Concur—Saxe, J.P., Friedman, DeGrasse, Freedman and Abdus-Salaam, JJ. [Prior Case History: 24 Misc 3d 43.]

[*1] Decided on January 14, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Schoenfeld, J.P., Hunter, Jr., Torres, JJ
.

Defendant appeals from those portions of an order of the Civil Court of the City of New York, Bronx County (Elizabeth A. Taylor, J.), dated April 6, 2010, which denied its motion for summary judgment dismissing the claims of plaintiffs Spring Medical, P.C. and Right Aid Diagnostic Medicine, P.C. Per Curiam.

Order (Elizabeth A. Taylor, J.), dated April 6, 2010, insofar as appealed from, modified to grant defendant summary judgment dismissing the claims of plaintiff Spring Medical, P.C.; as modified, order affirmed, without costs.

Defendant made a prima facie showing of entitlement to judgment as a matter of law dismissing plaintiff Spring Medical, P.C.’s claims for assigned first-party no-fault benefits. Defendant established through the affidavit of its claims examiner and excerpts from the Workers’ Compensation Medical Fee Schedule, which may be judicially noticed by this Court (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13, 21 [2009]), that the fees Spring charged for the medical services it rendered to the assignor exceeded the relevant rates set forth in the fee schedule. In opposition, Spring failed to raise a triable issue regarding [*2]defendant’s interpretation of the fee schedule or calculation of the applicable fees. Therefore, defendant’s motion for summary judgment dismissing Spring’s claims — which sought the difference between the amount Spring charged for the services and payments defendant made to Spring pursuant to the fee schedule — should have been granted (see Cornell Med., P.C. v Mercury Cas. Co., 24 Misc 3d 58 [2009]).

Defendant’s motion for summary judgment dismissing the claim of plaintiff Right Aid Diagnostic Medicine, P.C. based on lack of medical necessity was properly denied, since defendant did not demonstrate as a matter of law that it timely denied the claim within the statutory 30-day period (see Country-Wide Ins. Co. v Zablozki, 257 AD2d 506 [1999], lv denied 93 NY2d 809 [1999]) or that the 30-day period was tolled by a proper verification request (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2005]). We note in this connection that the reply affirmation submitted by Right Aid could not be considered for the purpose of showing a prima facie entitlement to summary judgment (see Batista v Santiago, 25 AD3d 326 [2006]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concur
Decision Date: January 14, 2011

[*1] Decided on December 30, 2010

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: McKeon, P.J., Schoenfeld, Shulman, JJ
570736/09.

Defendant, as limited by its brief, appeals from that portion of an order of the Civil Court of the City of New York, Bronx County (Raul Cruz, J.), entered March 18, 2009, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Raul Cruz, J.), entered March 18, 2009, insofar as appealed from, reversed, without costs, defendant’s motion for summary judgment granted, and the complaint dismissed. The Clerk is directed to enter judgment accordingly.

Defendant-insurer made a prima facie showing of entitlement to judgment as a matter of law dismissing the complaint, which asserted claims to recover assigned first-party no-fault benefits. Defendant demonstrated, through the affirmed peer review report of a physician, that the medical supplies plaintiff-provider afforded to its assignor were not medically necessary (see generally CPT Medical Services, P.C. v New York Cent. Mut. Fire Ins. Co., 18 Misc 3d 87 [2007]). In this connection, we note that the physician opined that the medical supplies were not medically necessary because the assignor was already receiving both physical and chiropractic therapy for his injuries, treatment that the physician concluded was sufficient under the circumstances. In opposition, plaintiff, which did not submit any evidence regarding the medical necessity of the supplies, failed to raise a triable issue.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.

McKeon, P.J., Schoenfeld, Shulman, JJ.

Enko Enterprises International, Inc., NY County Clerk’s No.
a/a/o Pena Felix, 570736/09
Plaintiff-Respondent, –
against-
Calendar No. 10-125
Clarendon National Insurance
Company,
Defendant-Appellant.
Defendant, as limited by its brief, appeals from that portion of an order of the Civil Court of the City of New York, Bronx County (Raul Cruz, J.), entered March 18, 2009, which denied its motion for summary judgment dismissing the complaint.
Per Curiam.
Order (Raul Cruz, J.), entered March 18, 2009, insofar as appealed from, reversed, without costs, defendant’s motion for summary judgment granted, and the complaint dismissed. The Clerk is directed to enter judgment accordingly.
Defendant-insurer made a prima facie showing of entitlement to judgment as a matter of law dismissing the complaint, which asserted claims to recover assigned first-party no-fault benefits. Defendant demonstrated, through the affirmed peer review report of a physician, that the medical supplies plaintiff-provider afforded to its assignor were not medically necessary (see generally CPT Medical Services, P.C. v New York Cent. Mut. Fire Ins. Co., 18 Misc 3d 87 [2007]). In this connection, we note that the physician opined that the medical supplies were not medically necessary because the assignor was already receiving both physical and chiropractic therapy for his injuries, treatment that the physician concluded was sufficient under the circumstances. In opposition, plaintiff, which did not submit any evidence regarding the medical necessity of the supplies, failed to raise a triable issue.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: December 30, 2010

DECEMBER 30, 2010
SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT
								May 2010 Term

Decision Date: December 30, 2010

Lenox Hill Radiology, P.C. v Tri-State Consumer Ins. Co.

2010 NY Slip Op 20530 [31 Misc 3d 13]

Accepted for Miscellaneous Reports Publication

AT1

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, April 27, 2011

[*1]

Lenox Hill Radiology, P.C., as Assignee of Edward Bredy, Respondent, v Tri-State Consumer Insurance Company, Appellant.

Supreme Court, Appellate Term, First Department, December 30, 2010

APPEARANCES OF COUNSEL

Corigliano, Geiger & Verrill, Jericho, for appellant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, LLC, Mineola, for respondent.

{**31 Misc 3d at 14} OPINION OF THE COURT

Per Curiam.

Judgment, entered on or about September 9, 2008, reversed, with $30 costs, and complaint dismissed.

Upon the trial of this action to recover payment of first-party no-fault benefits arising from plaintiff’s performance of four separate MRIs of plaintiff’s assignors, Civil Court awarded judgment in plaintiff’s favor in the principal amount of $4,390.16. The principal defense advanced by defendant insurer at trial was that plaintiff’s claims were premature because plaintiff had failed to respond to defendant’s verification requests (see 11 NYCRR 65-3.5 [b]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2004]). Upon review of the record, we conclude that defendant presented evidence of its office mailing practice sufficient to establish that the verification requests had been mailed and presumably received by plaintiff. In this posture, and in the absence of any claim or showing that plaintiff ever responded to defendant’s timely requests for verification, we reverse the judgment appealed from and dismiss the action as premature.

At trial, defendant presented the testimony of an experienced claims examiner, Jennifer Piccolo, who both personally prepared the initial and follow-up verification requests here at issue and possessed firsthand knowledge of defendant’s standard office mailing practice. The witness’s credible and consistent account of the mailing procedures generally followed by defendant, including how the mail was systematically picked up during the workday, when it would “go out,” and what steps would be taken if a verification letter was returned as undeliverable (an event which, the witness noted, did not occur here), “obviated the necessity of producing a witness with personal knowledge of the actual mailing” of defendant’s verification letters (see Badio{**31 Misc 3d at 15} v Liberty Mut. Fire Ins. Co., 12 AD3d 229, 230 [2004]). Nor was it incumbent upon defendant to produce a witness, such as a mail clerk or other clerical employee, whose duty [*2]it was to ensure compliance with its mailing procedures or who possessed personal knowledge of such compliance (see Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [2007]).

Having established its routine and reasonable office practice, defendant met its burden to establish that the verification letters were mailed to (and presumably received by) plaintiff. Plaintiff not only failed to produce any countervailing evidence to rebut the presumption of receipt, but has not at any time affirmatively denied receipt of the verification letters.

Before concluding, we would be remiss in failing to note that the facts and circumstances of this action do much to illustrate the disturbing reality that first-party no-fault benefits litigation has become the antithesis of what was supposed to be an expeditious and simplified process for the payment of medical costs for injuries sustained in motor vehicle accidents (see Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 214 [1996]). Too often, lawsuits with a value akin to a small claims action become bogged down by an insistence by one party or another that mailing of routine forms be established with scientific precision, asking judges, already burdened to the breaking point with the veritable legion of no-fault cases overflowing from our court dockets (while very able arbitrators remain underutilized), to require multiple witnesses to be summoned to the courthouse, merely to establish a presumption of mailing, even in the absence of an express denial of receipt of the disputed correspondence. Unfortunately, this class of cases has spawned a body of “gotcha” jurisprudence, marked by a near manic preoccupation with form over substance.

How we have reached this sorry state is of little moment. Perhaps all branches of government need to call a “time out” and, working together, endeavor to construct a workable process to achieve what the framers of the no-fault statute had in mind when they sought to establish a simplified and expeditious process to reimburse those of our citizenry injured in automobile accidents. For sure, the system now in place is not achieving that laudable aim.

Schoenfeld, J. (dissenting). I fully agree with the majority’s sentiment that it is time for a change in no-fault litigation, which has become overly protracted and wasteful. Clearly, a{**31 Misc 3d at 16} streamlined process that yields timely, substantive results to ensure reimbursement, when appropriate, is needed. In the present case, all that was required at trial was the testimony of an individual with knowledge of defendant’s standard mailing practice. As this was not done, however, I respectfully dissent and would affirm the trial judge’s finding in favor of plaintiff.

At trial, defendant did not dispute that it received plaintiff’s bills, but averred that plaintiff failed to respond to its request for verification. In support thereof, defendant offered the testimony of Jennifer Piccolo, an experienced claims examiner.

Ms. Piccolo testified to having reviewed plaintiff’s claims, and stated why further verification was needed. As a result, she prepared verification letters and placed them in “a bin slot . . . within the department,” to be “picked up by the clerical department.” She further testified that if mail was not delivered and came back to her office, the address would be checked, and if it was wrong, it would be corrected and re-mailed. However, Ms. Piccolo candidly admitted to not knowing the mailroom procedure:

“Q: Do you have personal knowledge of the actual policies of the people who handle that mail that’s returned?

[*3]

“A: Personal knowledge, yes.

“Q: Personal knowledge as in you observe them do their day to day job with respect to . . . receipt of mail returned?

“A: No.

“Q: Nor with any of their other responsibilities with respect to mailing, correct?

“A: Correct.”

It is well established that the decision of the fact-finding court should not be disturbed unless it is obvious that the court’s conclusion could not be reached under any fair interpretation of the evidence. (Frame v Maynard, 78 AD3d 508 [1st Dept 2010].) Further, the burden is on the insurer to establish proper and timely mailing of verification requests. (Westchester Med. Ctr. v Progressive Cas. Ins. Co., 6 Misc 3d 1039[A], 2005 NY Slip Op 50348[U] [Nassau Dist Ct 2005]; see Lehrer McGovern Bovis, Inc. v Public Serv. Mut. Ins. Co., 268 AD2d 388 [1st Dept 2000].)

As noted in Badio v Liberty Mut. Fire Ins. Co. (12 AD3d 229, 230 [1st Dept 2004]): “An insurer is entitled to a presumption that a [request] was received when the proof exhibits an office practice and procedure . . . which shows that the [request has]{**31 Misc 3d at 17} been duly addressed and mailed.” (Emphasis added and internal quotation marks omitted.) In that case, “Liberty Mutual did present the testimony of an employee who possessed personal knowledge of the office mailing practice, including how the mail was picked up and counted, and how the names and addresses on each item were confirmed.” (Id.)

Clearly Ms. Piccolo, who placed her letters in a bin slot within her own particular department, did not know whether such letters were put in a postal box that day. Nor did she have personal knowledge regarding even the basic mailing practice and procedure of her company. In Westchester Med. Ctr. v Countrywide Ins. Co. (45 AD3d 676 [2d Dept 2007]), defendant contended that a claim for payment was premature because plaintiff failed to respond to its verification requests. However, the Court, in holding that the statements by a supervisor employed in defendant’s claims department were insufficient, noted that she “had no personal knowledge that the verification requests were actually mailed on the dates they were issued.” (Id. at 676.) The Court further stated that “her conclusory allegations regarding the defendant’s office practice and procedure failed to establish that [it] was designed to ensure that the verification requests were . . . properly mailed.” (Id. at 676-677; accord Modern Psychiatric Servs. P.C. v Progressive Ins. Co., 10 Misc 3d 145[A], 2006 NY Slip Op 50143[U] [App Term, 2d Dept 2006]; Careplus Med. Supply Inc. v Travelers Home & Mar. Ins. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50648[U] [App Term, 2d Dept 2005].)

Accordingly, the judgment in favor of plaintiff should not be disturbed.

McKeon, P.J., and Shulman, J., concur; Schoenfeld, J., dissents in a separate opinion.