[*1]

Supreme Court, Appellate Term, Second Department, April 9, 2004

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. Shapiro Beilly Rosenberg Aronowitz Levy & Fox, LLP, New York City (Roy J. Karlin of counsel), for respondent.

{**3 Misc 3d at 44} OPINION OF THE COURT

Memorandum.

Order unanimously modified by providing that plaintiff’s motion is granted to the extent of awarding plaintiff partial summary judgment in the sum of $2,598.04, and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees, and for all further proceedings on the remaining portion of the claim in accordance with the decision herein; as so modified, affirmed without costs.

In this action to recover $2,998.04 in assigned first-party no-fault insurance benefits, defendant insurer denied all but $780.96 of plaintiff’s $3,779 claim for medical equipment on the ground that the supplier’s prices exceeded the prevailing rates for such equipment in plaintiff’s “geographic location” (cf. 11 NYCRR 68.5 [b]) and because certain of the items claimed, two “TENS Belts” ($78) and two “TENS Accessory Kits” ($122), were duplicative of other items for which benefits were paid. In Kings Med. Supply v Allstate Ins. Co. (2003 NY Slip Op 1681[U] [App Term, 9th & 10th Jud Dists]), the court concluded that because the Insurance Department regulation permitting reference to “the prevailing fee in the geographic location of the provider” pertains only where “the superintendent has not adopted or established a fee schedule applicable to the provider” (11 NYCRR 68.5 [b]), and that the [*2]regulatory limitation on a provider’s medical equipment to 150% of cost (11 NYCRR Appendix 17-C, part E [b] [1]) is an applicable fee schedule within the contemplation of 11 NYCRR 68.5 (b), an insurer may not deny a claim on the ground that the fees alleged exceeded the prevailing rates in the provider’s geographical location. If, as defendant urges, the premises underlying the determination that such a rule “help[s] contain the no-fault premium” (Goldberg v Corcoran, 153 AD2d 113, 118 [1989] [internal quotation marks omitted]) are unsound, the solution is remedial action by the appropriate regulatory authority. Defendants claim denial, although timely, was factually insufficient in that it failed to provide any specifics with regard to its conclusory defense that certain of the prescribed medical equipment was duplicative. Under the circumstances, the defenses proffered in the denial forms were ineffective to avoid preclusion. A timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law (Insurance Law § 5106 [a]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d {**3 Misc 3d at 45}11 [1999]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 140[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]).

However, plaintiff’s proof in support of the summary judgment motion included previously unproduced documents revealing that the equipment prescribed each assignor did not include the aforementioned “TENS accessory kit” ($122) and “TENS belt with straps” ($78), listed in the equipment provided each assignor and for which plaintiff sought $400 in no-fault health benefits. As we noted in Amaze Med. Supply v Eagle Ins. Co. (supra), where a plaintiff interjects an issue of fact in support of its motion for summary judgment which, if true, negates its prima facie case, if not amounting to a complete defense to a portion of the claim, namely, that the cost of unprescribed medical equipment is not a recoverable no-fault benefit, plaintiff should be estopped from invoking the waiver and preclusion rules which would otherwise apply in a no-fault benefits action (see 11 NYCRR 65.15 [d] [1], [2]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 701 [2001]). The defect was not apparent on the face of an otherwise sufficient claim, and insurers should not be required to demand such verification in every case to preserve the defense where no basis therefor is discerned, to the detriment of the purposes of the no-fault legislation, in essence, “to encourage prompt payment of claims, to discourage investigation by insurers and to penalize delays” (Dermatossian v New York City Tr. Auth., 67 NY2d 219, 225 [1986]).

Thus, partial summary judgment should have been granted in the amount of $2,598.04. The matter is remanded to the court below for a calculation of the statutory interest and attorney’s fees due on said amount (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [h] [1]; 65.17 [b] [6]; St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [1995]), and for all further proceedings on the remainder of the claim.

Pesce, P.J., Patterson and Golia, JJ., concur.

Supreme Court, Appellate Term, Second Department, March 17, 2004

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. DeSena & Sweeney, LLP, Hauppauge (Lisa M. Dawson of counsel), for respondent.

{**4 Misc 3d at 84} OPINION OF THE COURT

Memorandum.

On the court’s own motion, appeals consolidated for purposes of disposition.

Order unanimously affirmed without costs.

In these actions to recover $7,393.37 in assigned first-party no-fault benefits provided its assignors, with the exception of the claim for $290.64 in the action appealed under calendar No. 2003-469 N C, the entire claim asserted in the action appealed under calendar No. 2003-470 N C, and the claim for $358.04 in the action appealed under calendar No. 2003-471 N C, plaintiff established its entitlement to the benefits prima facie, by proof that it submitted the completed statutory forms setting forth “the fact and amount of loss sustained” (Insurance Law § 5106 [a]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]; see Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). Defendant’s failure timely to deny any of the claims for which a prima facie case is established (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [d] [1]) precluded most defenses thereto (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]).

However, the preclusion rule does not apply to a defense based on a claim of fraud (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 201 [1997]; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 752 [2002]). Defendant’s proof in each case included, inter alia, examinations of the assignors under oath and an investigator’s affidavit which revealed significant discrepancies in the assignors’ accounts of their activities before and after the accident and irregularities with respect to the insured’s various identities and addresses. Moreover, based on the assignors’ statements upon their examination, there are additional questions of fact as to whether certain of the medical services were fraudulently rendered in that they were not medically responsive to the injuries reported by the assignors or continued long after the reported symptoms abated. Under the circumstances herein, such allegations raise triable issues as to whether the automobile accident was a deliberate event staged in furtherance of a scheme to defraud, or whether medical services were fraudulently provided, a defense which survives preclusion, unlike the bare claim of lack of medical necessity here precluded by defendant’s failure timely to deny the claim (cf. Penny v Pembrook Mgt., 280 AD2d 590, 591 [2001]; A.B. Med. Servs. v Eagle Ins. Co., 3 Misc 3d 8 [App Term, 9th & 10th Jud Dists 2003]).

We note that even absent the claim of fraud, the court properly denied summary judgment as to the aforementioned claims for $290.64 and $358.04. The alleged provider claimant was Royalton Chiropractic, P.C., on whose behalf the assignor had executed assignment of benefits forms. However, Royalton is not named as a party plaintiff in either of these two actions, and in the supporting affidavit submitted in each action the deponent, on whose authority [*2]the claim forms are sought to be proved, states only that she is an officer of “plaintiff,” presumably A.B. Medical Services PLLC, the only captioned plaintiff. {**4 Misc 3d at 85}

Likewise, the court also properly denied summary judgment as to all claims asserted in calendar No. 2003-470 N C. In an affidavit in support of the motion, Bella Safir alleges merely that she is the “practice and billing manager” and an “officer” of “plaintiff.” Ms. Safir does not state for which named plaintiff she is a manager and an officer. Consequently, the affidavit in which Safir states that “plaintiff” provided defendant with complete claim forms is insufficient to establish said fact inasmuch as the affidavit does not lay the necessary foundation for the admissibility of said forms as to any of the named plaintiffs (see A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 138[A], 2004 NY Slip Op 50903[U] [App Term, 9th & 10th Jud Dists 2004]).

Accordingly, in view of the foregoing, plaintiff’s motion for summary judgment was properly denied (see A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 138[A], 2004 NY Slip Op 50902[U] [2004] [decided herewith]).

McCabe, P.J., Lifson and Skelos, JJ., concur.{**4 Misc 3d at 86}

[*1]

Supreme Court, Appellate Term, Second Department, December 24, 2003

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellants. Samuel K. Rubin, Bethpage (Lawrence R. Miles of counsel), for respondent.

{**3 Misc 3d at 9} OPINION OF THE COURT

Memorandum.

Order unanimously modified by providing that plaintiffs’ motion for summary judgment is granted to the extent of awarding it partial summary judgment in the sum of $10,635.26, and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees, and for all further proceedings on the remaining portion of the claim in accordance with the decision therein; as so modified, affirmed without costs.

Plaintiffs commenced this action to recover $10,805.26 in assigned first-party no-fault benefits, plus interest and attorney’s fees, pursuant to Insurance Law § 5101 for medical services rendered to their assignor for injuries she sustained in a motor vehicle accident. Thereafter, plaintiffs moved for summary judgment. Defendant opposed the motion which was denied by order of the court below entered September 26, 2002.

A review of the record indicates that with the exception of one of two $170 claims filed on behalf of Daniel Kim’s Acupuncture P.C., plaintiffs established their entitlement to summary judgment for the recovery of no-fault benefits prima facie by proof that they submitted to defendant the completed claim form (Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2003 NY Slip Op 51700[U] [decided herewith]; Sehgal v Royal Ins. Co. of Am., NYLJ, Apr. 15, 1999, at 31, col 4 [App Term, 9th & 10th Jud Dists]; accord S & M Supply v GEICO Ins., 2003 NY Slip Op 51192[U] [App Term, 2d & 11th Jud Dists]; Choicenet Chiropractic v Allstate Ins. Co., 2003 NY Slip Op 50672[U] [App Term, 2d & 11th Jud Dists]; see Dermatossian v New York City Tr. Auth., 67 NY2d [*2]219, 225 [1986]). The burden then shifted to defendant to demonstrate a triable issue whether plaintiffs are entitled to all or any portion of the benefits sought (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

While we agree that the preclusion rule does not apply to a defense based on a claim that the incident was not an accident but a deliberate event staged in furtherance of a scheme to defraud the insurer (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 201 [1997]; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 752 [2002]), defendant’s sole proof of the matter, in the form of an affidavit of its investigator, failed to raise a triable issue of fraud. Here, the report, which was unsworn, alleged, essentially, only that the “uncooperative”{**3 Misc 3d at 10} insured (but not the assignor) had been involved in prior accidents alleged to be “suspicious,” and as to the assignor, recommended merely that the payment of benefits be deferred pending further investigation. Such unsubstantiated hypotheses and suppositions are insufficient to raise a triable issue of the assignor’s fraud, and partial summary judgment should have been granted as to the properly proven claims (see Penny v Pembrook Mgt., 280 AD2d 590, 591 [2001]). However, the court properly denied summary judgment as to one claim for $170, proof of which was omitted from the motion papers.

We note, finally, that while plaintiff concededly failed to respond to defendant’s several requests for verification in the form of an examination of the assignor under oath, not only did defendant fail to prove that the requests were timely (11 NYCRR 65-3.5 [a]), but such requests would not have tolled the 30-day claim determination period because at the time plaintiffs filed the instant claims there was no provision in the insurance regulations for such a procedure (compare 11 NYCRR 65.12 [d], with 11 NYCRR 65-3.5 [e] [eff Apr. 5, 2002]; A.B. Med. Servs. v Lumbermens Mut. Cas. Co., 2003 NY Slip Op 51392[U] [App Term, 2d & 11th Jud Dists]; Bronx Med. Servs. v Lumbermans Mut. Cas. Co., 2003 NY Slip Op 51022[U] [App Term, 1st Dept]).

Accordingly, the matter is remanded to the court below for a calculation of the statutory interest and an assessment of attorney’s fees due on $10,635.26, the portion of the claims for which summary judgment is granted (Insurance Law § 5106 [a]; 11 NYCRR 65-3.9 [a]; 65-3.10 [a]; see St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [1995]) and for all further proceedings on the remaining claim.

Doyle, P.J., Winick and Skelos, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, December 9, 2003

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellants. Teresa M. Spina, Woodbury (Emilio A. Cacace of counsel), for respondent.

{**2 Misc 3d at 26} OPINION OF THE COURT

Memorandum.

Order unanimously reversed without costs, motion for summary judgment on their claims granted and matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees.{**2 Misc 3d at 27}

In this action to recover $4,643.74 in first-party no-fault benefits, two of the plaintiffs moved for summary judgment, Royalton Chiropractic P.C. on two claims, one for $1,730.58 for tests rendered April 13, 2001, and one for $1,757.62 for tests rendered April 16, 2001, and A.B. Medical Services, PLLC on its two claims, each for $302.12. Defendant opposed, citing said plaintiffs’ failure to prove the treatments’ medical necessity and otherwise to allege a prima facie case for summary judgment. Summary judgment should have been granted as to the four claims.

We have rejected arguments that a no-fault benefits claimant is obligated to prove the treatment’s medical necessity, at the claim stage or in support of its motion for a summary judgment in a subsequent action on the claim (see Amaze Med. Supply v Eagle Ins. Co., 2003 NY Slip Op 51701[U] [decided herewith]; Choicenet Chiropractic v Allstate Ins. Co., 2003 NY Slip Op 50672[U]; Park Health Ctr. v Prudential Prop. & [*2]Cas. Ins. Co., 2001 NY Slip Op 40650[U]; see also Sehgal v Royal Ins. Co. of Am., NYLJ, Apr. 15, 1999, at 31, col 4 [App Term, 9th & 10th Jud Dists]). Having failed to timely mail or otherwise deliver its determination form with respect to Royalton’s $1,730.58 claim, that is, to “pay or deny the claim in whole or in part” (11 NYCRR 65-3.8 [c]) within 30 days of receipt as required by Insurance Law § 5106 (a) (see Nyack Hosp. v Progressive Cas. Ins. Co., 296 AD2d 482, 483 [2002]; Damadian MRI in Canarsie v Countrywide Ins. Co., 194 Misc 2d 708 [2003]), defendant waived nearly all objections and defenses thereto, relating to the adequacy of the proof of claim (New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 701 [2001]) or to its propriety (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; New York & Presbyt. Hosp. v Empire Ins. Co., 295 AD2d 325 [2002]). We also agree that defendant failed to demonstrate that it took any action on Royalton’s $1,757.62 claim after Royalton timely responded to its request for medical verification, thereby waiving any defenses to said claim. Finally, given A.B. Medical Services’ unrebutted proof that it mailed Kaufman’s claims on September 24, 2001, defendant’s March 2002 verification requests were clearly untimely (11 NYCRR 65-3.5 [a]; 65-3.6 [b]) and thus summary judgment should also be granted as to this claim.

The matter is remanded to the court below for a calculation of the statutory interest and an assessment of attorney’s fees due on $4,092.44, the portion of the claim for which summary judgment {**2 Misc 3d at 28}was sought (Insurance Law § 5106 [a]; 11 NYCRR 65-3.9 [a]; 65-3.10 [a]; see St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [1995]), and for all further proceedings on the remainder of the claim.

Aronin, J.P., Golia and Rios, JJ., concur.