SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Peter Paul Sweeney, J.), entered September 26, 2007. The order denied plaintiff’s motion, inter alia, to compel the deposition of defendant.

Order reversed without costs and plaintiff’s motion granted to the extent that defendant is ordered to appear for a deposition within 30 days of the order entered hereon.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved to compel the deposition of defendant and for a conditional order striking defendant’s answer or precluding defendant from testifying in the event defendant fails to comply. Defendant failed to oppose said motion. Accordingly, the court should have granted plaintiff’s motion to the extent of compelling defendant to appear for a deposition (see Crossbay Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 15 Misc 3d 110 [App Term, 2d & 11th Jud Dists 2007]).

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: September 10, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered August 24, 2007. The order granted plaintiff’s motion for summary judgment and implicitly denied defendant’s cross motion for, inter alia, summary judgment dismissing the complaint.

Order modified by providing that plaintiff’s motion for summary judgment is denied; as so modified, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment and defendant cross-moved for summary judgment dismissing the complaint on the ground of lack of medical necessity, or, in the
alternative, for “Partial Summary Judgment on the issue of the Defendant’s timely denial.” The court below granted plaintiff’s motion and implicitly denied defendant’s cross motion. The instant appeal by defendant ensued.

On appeal, defendant argues that the affidavit of plaintiff’s billing manager and corporate officer, submitted in support of plaintiff’s motion, failed to lay a proper foundation for the admission of the documents annexed to plaintiff’s moving papers and that, as a result, plaintiff failed to establish its prima facie case. We agree. The affidavit submitted by plaintiff’s billing manager and corporate officer was insufficient to establish that he possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Bath Med. Supply Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists 2007]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App [*2]Term, 2d & 11th Jud Dists 2006]), and its motion should have been denied.

With respect to defendant’s cross motion, defendant contends that its NF-10 denial of claim forms were timely since its verification requests tolled the statutory 30-day time period in which it had to pay or deny the claims. We note, however, that defendant failed to establish that it timely mailed its verification requests and denial of claim forms inasmuch as the affidavit of its litigation examiner did not sufficiently set forth defendant’s standard office practices and procedures used to ensure that said documents were properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Uptodate Med. Servs., P.C. v Lubermens Mut. Cas. Co., 20 Misc 3d 135[A], 2008 NY Slip Op 51502[U] [App Term, 2d & 11th Jud Dists 2008]). As a result, defendant’s cross motion was properly denied.

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: September 10, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Diane A. Lebedeff, J.), entered August 27, 2007. The order denied defendant’s motion for summary judgment dismissing the complaint and granted plaintiff’s cross motion for summary judgment.

Order reversed without costs, defendant’s motion for summary judgment dismissing the complaint granted and plaintiff’s cross motion for summary judgment denied.

Plaintiff commenced this action to recover $882.39 in assigned first-party no-fault benefits for medical supplies provided to its assignor for injuries he sustained in
a motor vehicle accident on October 12, 2004. Defendant moved for summary judgment dismissing the complaint, arguing that the action was premature since it had yet to receive claims pertaining to such an accident. Plaintiff cross-moved for summary judgment. The court below granted plaintiff’s cross motion and, implicitly, denied defendant’s motion. The instant appeal by defendant ensued.

Upon a review of the record, we find that plaintiff failed to establish its prima facie entitlement to summary judgment by proof that it submitted the statutory claim forms, setting forth the facts and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). The affidavit of plaintiff’s billing manager states that plaintiff’s assignor received medical supplies for injuries he sustained in an accident on October 12, 2004, which date corresponds to the facts alleged in the complaint. The annexed claim forms and denials, however, refer to an accident occurring on September 29, 2004. Consequently, plaintiff’s cross motion for summary judgment should have been denied. Defendant, however, established itsprima facie entitlement to summary judgment dismissing the complaint based upon the fact [*2]that it did not receive claims from plaintiff regarding an accident on October 12, 2004 involving plaintiff’s assignor. Inasmuch as plaintiff failed to rebut defendant’s showing, defendant’s motion for summary judgment dismissing the complaint is granted.

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: September 10, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered September 4, 2007. The order denied a motion by plaintiff for summary judgment and granted a cross motion by “Unitrin Advantage Insurance Company i/s/h/a Kemper Auto & Home Insurance Company” for summary judgment dismissing the complaint.

Order modified by providing that plaintiff’s motion for summary judgment and the cross motion for summary judgment dismissing the complaint are denied without prejudice; as so modified, affirmed without costs.

In this action, plaintiff, a provider, seeks to recover assigned first-party no-fault benefits from the named defendant, Kemper Auto & Home Insurance Company (Kemper). In June 2005, plaintiff submitted its no-fault claim to Unitrin Advantage Insurance Company (Unitrin). During the claims process, a law firm representing Kemper scheduled examinations under oath (EUOs) of the assignor’s physician. “Unitrin Kemper Auto and Home” sent plaintiff a letter stating that there would be a delay in the consideration of its claim pending the completion of the scheduled EUOs. After the physician failed to appear for the EUOs, Unitrin issued a denial of claim form in September 2005. Thereafter, plaintiff commenced the instant action against Kemper. Unitrin served and filed an answer in which it stated that it was “i/s/h/a [incorrectly sued herein as] Kemper Auto & Home Insurance Company.” After receiving the answer, plaintiff did not move to amend the caption or join Unitrin as a party; rather, it moved for summary judgment, with Kemper still listed in the caption as the lone defendant. Plaintiff’s attorney stated in the moving papers that his affirmation was “in support of the within motion seeking summary judgment against the defendant, Kemper Auto & Home Insurance Company.” Plaintiff, however, served this motion upon Unitrin’s attorneys. A cross motion for summary [*2]judgment dismissing the complaint was served and filed by “Unitrin Advantage Insurance Company i/s/h/a Kemper Auto & Home Insurance Company,” asserting, inter alia, that plaintiff had sued the wrong insurer. By order entered September 4, 2007, the court below denied plaintiff’s motion and granted Unitrin’s cross motion. The instant appeal by plaintiff ensued.

Plaintiff’s motion for summary judgment against Kemper must be denied since its motion papers were served upon Unitrin, the action was based upon a claim submitted to Unitrin, and there has been no showing that Kemper and Unitrin are effectively a single entity. Moreover, given the fact that Unitrin is not currently a formal party to this action, and its cross motion seeks to dismiss the complaint which is asserted against a different entity, its cross motion is similarly denied.

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: September 10, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered August 9, 2007. The order, insofar as appealed from, denied defendant’s cross motion for summary judgment.

Order, insofar as appealed from, modified by granting defendant’s cross motion for summary judgment to the extent of awarding it summary judgment dismissing plaintiff’s second and third causes of action; as so modified, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the court denied plaintiff’s motion for summary judgment and defendant’s cross motion for summary judgment. Defendant appeals from so much of the order as denied its cross motion for summary judgment.

In support of its cross motion for summary judgment, defendant established that it paid $297.50 towards plaintiff’s $311 claim and that it timely denied the balance of said claim on the ground that the fee charged was excessive. Since defendant did not establish as a matter of law that the fee charged was excessive, defendant was not entitled to summary judgment dismissing the balance of said claim. With respect to the claims in the sums of $848 (second cause of action) and $628 (third cause of action), defendant’s affirmed peer review report established prima facie that there was no medical necessity for the supplies provided by plaintiff, which evidence was unrebutted. As a result, defendant’s cross motion for summary judgment should have been granted to the extent of awarding it summary judgment dismissing plaintiff’s second and third causes of action (see Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. [*2]Khodadadi Radiology, P.C. v N.Y. Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Plaintiff’s contention, that the peer review report was inadmissible since it contained a stamped facsimile of the doctor’s signature, was raised for the first time on appeal and, thus, plaintiff waived any objection thereto (Dowling v Mosey, 32 AD3d 1190 [2006]; cf. Support Billing & Mgt. Co. v Allstate Ins. Co., 15 Misc 3d 126[A], 2007NY Slip Op 50496[U] [App Term, 2d & 11th Jud Dists 2007]; Vista Surgical Supplies, Inc. v Travelers Ins. Co., 14 Misc 3d 128[A], 2006 NY Slip Op 52502[U] [App Term, 2d & 11th Jud Dists 2006]). Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: September 10, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Dolores L. Waltrous, J.), entered March 27, 2007. The order denied plaintiff’s motion for summary judgment.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. The court below denied plaintiff’s motion on the ground that plaintiff’s affidavit was insufficient. This appeal by plaintiff ensued.

Inasmuch as the affidavit submitted by plaintiff’s officer and medical billing manager was insufficient to establish that said person possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Alvarez v Prospect Hosp., 68 NY2d 320 [1986]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]; see also JMD Holding Corp. v Congress Fin. Corp., 4 NY3d 373, 384-385 [2005] [“A conclusory affidavit or an affidavit by an individual without personal knowledge of the facts does not establish the proponent’s prima facie burden”]). Consequently, plaintiff’s motion for summary judgment was properly denied.

Pesce, P.J., Rios and Steinhardt, JJ., concur. [*2]
Decision Date: September 10, 2008

[*1]

Supreme Court, Appellate Term, Second Department, September 10, 2008

APPEARANCES OF COUNSEL

Law Office of Alden Banniettis, Brooklyn (Jeff Henle of counsel), for appellant. Law Office of Karen C. Dodson, Melville (Janine Gentile of counsel), for respondent.

{**21 Misc 3d at 472} OPINION OF THE COURT

Memorandum.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved, pursuant to CCA 1201, for leave to serve a subpoena on defendant outside the City of New York compelling the production of an employee of defendant to testify at the trial. The lower court found that plaintiff did not offer a valid reason to allow service of a subpoena outside the jurisdiction. Plaintiff appeals from the order denying its motion.

In an action pending in the Civil Court of the City of New York, a subpoena may not be served outside the City of New York and the adjoining counties unless the Civil Court, upon a motion establishing to the satisfaction of the court that the interests of justice would be served thereby, permits service of such a subpoena (see CCA 1201). Inasmuch as plaintiff’s moving papers failed to establish that the interests of justice would be served by permitting plaintiff to serve, outside the City of New York and the adjoining counties, a subpoena which would require defendant’s employee to appear at trial, and, in addition, did not set forth the location at which plaintiff sought to serve the subpoena, plaintiff’s motion was properly denied.

To the extent that plaintiff argues that defendant’s response to its notice to admit was improper, the court below properly noted that plaintiff’s remedy lies in the procedure set forth in CPLR 3123 (c).

Pesce, P.J., Rios and Steinhardt, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, September 10, 2008

APPEARANCES OF COUNSEL

Law Office of Alden Banniettis, Brooklyn (Benjamin Sharav of counsel), for appellant.

{**21 Misc 3d at 50} OPINION OF THE COURT

Memorandum.

Order, insofar as appealed from, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed the motion and cross-moved for summary judgment dismissing the complaint, asserting, inter alia, that plaintiff failed to establish its prima facie entitlement to summary judgment and that the complaint should be dismissed because the assignor failed to appear at scheduled examinations under oath (EUOs). By order entered August 10, 2007, the court below denied plaintiff’s motion and granted defendant’s cross motion, finding that plaintiff did not comply with defendant’s verification requests. As limited by its brief, plaintiff appeals from so much of the order as granted defendant’s cross motion for summary judgment dismissing the complaint. Plaintiff contends, inter alia, that defendant did not comply with the EUO scheduling regulations since the initial EUO was not scheduled within 30 days of defendant’s receipt of plaintiff’s claim.

It is uncontroverted that the accident occurred on April 3, 2005, and defendant issued a denial form, dated September 7, 2005, which stated, inter alia, that defendant received the claim on May 18, 2005, and that it was being denied because the assignor failed to attend scheduled EUOs.

In 1974, Department of Insurance Regulation 68 (11 NYCRR part 65), implementing New York’s No-Fault Law, was first promulgated. Effective April 5, 2002, Regulation 68 was revised, and the pertinent part of the revised Regulation 68-C (Insurance Department Regulations [11 NYCRR] § 65-3.5 [d]) stated that if “the additional verification required by the insurer is an examination under oath or a medical examination, the insurer shall schedule the examination to be held within 30 calendar days from the date of receipt of the prescribed verification forms” (emphasis added). However, on April 11, 2002, the Insurance Department promulgated an emergency first amendment to the revised Regulation 68, effective April 5, 2003, which deleted the phrase “an examination under oath or” from Regulation 68-C{**21 Misc 3d at 51} (Insurance Department Regulations [11 NYCRR] § 65-3.5 [d]). Although there were subsequent amendments to Regulation 68-C in 2004 and 2007, the deleted language was never reinstated. The Insurance Department’s decision to delete the foregoing phrase and its subsequent decision not to reinstate such deleted language is a clear indication that such phrase’s “exclusion was intended” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 285 [1997]; cf. S & M Supply v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 130[A], 2004 NY Slip Op 50693[U] [App Term, 9th & 10th Jud Dists 2004] [decided under the April 5, 2002 regulation]; contra All-Boro Med. Supplies, Inc. v Progressive Northeastern Ins. Co., 20 Misc 3d 554 [Civ Ct, Kings County 2008]; All-Boro Med. Supplies, Inc. v Progressive Northeastern Ins. Co., 17 Misc 3d 950 [Civ Ct, Kings County 2007]).

Notwithstanding the foregoing, insurers may not employ red tape dilatory practices and schedule EUOs in an unreasonable manner. The Insurance Department Regulations require that verification proceed “as expeditiously as possible” (Insurance Department Regulations [11 NYCRR] § 65-3.2 [c]; see also State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d at 285; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 722 [2006]).

A review of the record indicates that defendant demonstrated that the insurance policy in effect when the EUOs were sought contained an endorsement authorizing such verification (cf. Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50526[U] [App Term, 2d & 11th Jud Dists 2005]; Star Med. Servs. P.C. v Eagle Ins. Co., 6 Misc 3d 56 [App Term, 2d & 11th Jud Dists 2004]). Defendant established that the EUO scheduling letters were timely mailed, on May 25, 2005 and July 5, 2005 (see Insurance Department Regulations [11 NYCRR] § 65-3.5 [b]; § 65-3.6 [b]), by setting forth the standard office practices or procedures used to ensure that such items are properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). The date selected for the initial EUO, June 27, 2005, was not unreasonable, and defendant established that the assignor failed to appear at the scheduled EUOs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d at 722). Plaintiff’s remaining{**21 Misc 3d at 52} contentions are either improperly raised for the first time on appeal or lack merit.

Accordingly, the court below properly granted defendant summary judgment dismissing the action as premature inasmuch as plaintiff’s claims were not overdue (see Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 [2005]).

Pesce, P.J., Rios and Steinhardt, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, September 10, 2008

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. Marshall & Marshall, Jericho (Barbara Carabell of counsel), for respondent.

{**21 Misc 3d at 19} {**21 Misc 3d at 19} OPINION OF THE COURT

Memorandum.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. In a supporting affidavit, plaintiff’s billing manager stated that he had mailed letters to defendant requesting copies of the peer review reports upon which the denial of claim forms were based and that defendant had failed to comply with said request. Plaintiff argued that defendant should therefore be precluded from asserting its defense of lack of medical necessity. In opposition, defendant argued that it had timely denied plaintiff’s claims on the ground that the supplies provided were not medically necessary. Defendant attached to its opposition papers copies of the affirmed peer review reports which set forth with specificity the defense of lack of medical necessity. Defendant, however, did not refute the fact that it had not previously provided plaintiff with copies of the reports. The court below denied plaintiff’s motion on the ground that there are triable issues of fact as to medical necessity. The instant appeal by plaintiff ensued.

An insurer’s submission of a denial of claim form which denies a provider’s claim based upon a peer review report is sufficient to raise the defense of lack of medical necessity. The Appellate Division, Second Department, has noted that such a denial of claim form need not set forth with particularity the factual basis and medical rationale upon which the defense was based, because the provider may, if it so desires, request a copy of the written peer review report from the insurer pursuant to Insurance Department Regulations (11 NYCRR) § 65-3.8 (b) (4) (New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832 [2007]; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2007]; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d 778 [2007]). The Appellate Division further stated that “[h]ad it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form . . . , it would have so provided” (New York Univ. Hosp. Rusk Inst., 39 AD3d at 833; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d at 780; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d at 779).

The Insurance Department Regulations provide no sanction for an insurer’s failure to provide a peer review report upon the written{**21 Misc 3d at 20}{**21 Misc 3d at 20} request for one by a provider (see e.g. A.B. Med. Servs. PLLC v Clarendon Natl. Ins. Co., 12 Misc 3d 143[A], 2006 NY Slip Op 51415[U] [App Term, 2d & 11th Jud Dists 2006]). While plaintiff urges the court to impose the sanction of preclusion here, we decline to do so because “[h]ad it been the intent of the Department of Insurance” to impose such a sanction, “it would have so provided” (New York Univ. Hosp. Rusk Inst., 39 AD3d at 833; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d at 780; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d at 779). Indeed, the application of a preclusion sanction would necessarily entail the wholesale creation of a regulatory scheme, as the Insurance Department Regulations do not provide a time frame within which the request for the peer review report must be made by the provider or complied with by the insurer. Absent these time frames, there is no way to know when a sanction for noncompliance is warranted, and we decline to read such a scheme into the Insurance Department Regulations.

We note that even in the absence of a sanction imposed by the Insurance Department Regulations, a provider is not without any recourse where an insurer fails to provide a requested peer review report. The prescribed NF-10 denial of claim form provides that a complaint may be made by the provider to the Insurance Department whose “regulations themselves provide for agency oversight of carriers” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 322 [2005]). In any event, if the matter proceeds to the litigation stage, the provider may seek disclosure of the peer review report.

Accordingly, since defendant’s opposition papers established a triable issue of fact based on a defense of medical necessity, the court below properly denied plaintiff’s motion for summary judgment.

Pesce, P.J., Rios and Steinhardt, JJ., concur.

—[*1] Richard A. Dubi, P.C., Dix Hills, N.Y., for appellants.

McDonnell & Adels, P.C., Garden City, N.Y. (Korri Abrams Frampton and Martha Henley of counsel), for respondents.

In an action, inter alia, to recover damages for common-law fraud and unjust enrichment and for a judgment declaring that the plaintiffs have no obligation to pay no-fault claims submitted by the professional corporation defendants, the defendants David Stemerman and Proscan Imaging, P.C., appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Murphy, J.), entered August 14, 2007, as denied their motion for summary judgment dismissing the complaint insofar as asserted against them and granted that branch of the plaintiffs’ cross motion which was for discovery of certain financial documents.

Ordered that the order is affirmed insofar as appealed from, with costs.

The plaintiff One Beacon Insurance Group, LLC, and its subsidiaries and affiliates (hereinafter the plaintiffs), are providers of automobile insurance policies which include coverage under the “no-fault” insurance law (Insurance Law § 5101, et seq.). The plaintiffs commenced this action against numerous professional medical service corporations (hereinafter the PCs), management companies, and the individuals who owned them, and licensed healthcare professionals, alleging that the PCs were fraudulently incorporated in the names of licensed healthcare professionals while, in fact, the PCs were owned, operated, and controlled by unlicensed persons and their management companies in violation of applicable statutes and regulations. The plaintiffs, inter alia, seek repayment of no-fault claims already paid to the PCs and a judgment declaring that they are not obligated to pay outstanding claims. The defendants David Stemerman and his radiology practice, Proscan Imaging, P.C. (hereinafter Proscan) (hereinafter together the appellants), moved for summary judgment dismissing the complaint insofar as asserted against them, and the Supreme [*2]Court denied their motion, finding the existence a triable issue of fact as to whether Proscan was fraudulently incorporated.

Applicable provisions of the no-fault law require insurers to reimburse patients or their medical provider assignees for “basic economic loss” (Insurance Law § 5102 [a] [1]). A provider of healthcare services is not eligible for reimbursement, however, “if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York” (11 NYCRR 65-3.16 [a] [12]). The Court of Appeals has interpreted 11 NYCRR 65-3.16 (a) (12) to allow insurance carriers to withhold reimbursement for no-fault claims from fraudulently licensed medical corporations and to “look beyond the face of licensing documents to identify willful and material failure to abide by state and local law” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 321 [2005]). State law mandates that professional service corporations be owned and controlled only by licensed professionals (see Business Corporation Law § 1503 [a]; §§ 1507, 1508), and that licensed professionals render the services provided by such corporations (see Business Corporation Law § 1504 [a]).

Here, the appellants made a prima facie showing of their entitlement to judgment as a matter of law by submitting evidence that Stemerman, a licensed physician, was the sole shareholder of Proscan, performed or oversaw all medical services provided by Proscan, and was the sole signatory on Proscan’s bank account.

However, in opposition to the motion, the plaintiffs submitted sufficient evidentiary proof to raise an issue of fact as to whether Proscan was actually controlled by a management company owned by unlicensed individuals in violation of the Business Corporation Law (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d at 320-321; Montgomery Med., P.C. v State Farm Ins. Co., 12 Misc 3d 1169[A], 2006 NY Slip Op 51116[U] [2006]; A.T. Med., P.C. v State Farm Mut. Ins. Co., 10 Misc 3d 568, 569 [2005]; cf. A.B. Med. Servs. PLLC v Prudential Prop. & Cas. Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50504[U] [2006]). Accordingly, the appellants’ motion for summary judgment was properly denied with respect to all three causes of action, which allege fraudulent incorporation.

The Supreme Court properly granted that branch of the plaintiffs’ cross motion which was for disclosure of certain financial documents. Contrary to the appellants’ contention, the plaintiffs were not required to make a showing of “good cause” for such disclosure (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d at 322; see Matter of Andrew Carothers, M.D., P.C. v Insurance Cos. Represented by Bruno, Gerbino & Soriano LLP, 13 Misc 3d 970, 972-973 [2006]), as the documents were “material and necessary in the prosecution” of this action (see CPLR 3101 [a]). Spolzino, J.P., Santucci, Eng and Leventhal, JJ., concur.