King’s Med. Supply Inc. v Allstate Ins. Co. (2005 NYSlipOp 50451(U))

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal by plaintiff from an order of the District Court, Nassau County (S. Jaeger, J.), entered February 17, 2004, which denied its motion for summary judgment.

Order unanimously reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees.

In this action to recover assigned first-party no-fault benefits for medical supplies furnished its assignors, plaintiff established prima facie entitlement to summary judgment by proof that it submitted claim forms setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; 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]). Defendant’s failure to pay or deny the Tsvetkov claim within the prescribed 30-day period (11 NYCRR 65.15 [g] [3], now 11 NYCRR 65-3.8 [c]) precludes defendant from interposing defenses to that claim with exceptions herein inapplicable (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]) and summary judgment should have been granted as to said claim.

Defendant denied the remaining claims on the sole ground that plaintiff failed to produce [*2]the “initial narrative report[s] from the preparing physician” pursuant to a timely initial verification request (11 NYCRR 65.15 [d] [1], now 11 NYCRR 65-3.5 [a]). However, while an insurer need not pay or deny a claim until all requested verification is received (11 NYCRR 65.15 [g] [2] [iii], now 11 NYCRR 65-3.8 [b] [3]), the insurance regulations also impose on the insurer, when an initial verification request is not honored within 30 days, the duty to follow up with a second request within 10 days (now 15 days) (11 NYCRR 65.15 [d] [2], now 11 NYCRR 65-3.5 [b]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2002]). Any attempt by the insurer to deny the claim prior to exhausting the verification protocols is premature and of no effect (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]; King’s Med. Supply v New York Cent. Mut. Fire Ins. Co., 5 Misc 3d 136[A], 2004 NY Slip Op 51550[U] [App Term, 2d & 11th Jud Dists]). Since the tolling of the 30-day claim determination period, which occurred upon defendant’s initial verification request (11 NYCRR 65.15 [d] [1], [2], now 11 NYCRR 65-3.5 [a], [b]), lapsed in the absence of a timely follow-up request, defendant must be deemed to have failed to pay or deny the claims within the statutory time, precluding the defense based
on the failure to produce requested verification, as well as the additional defenses interposed for the first time in opposition to the summary judgment motion (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 665 [2004]).

Accordingly, plaintiff’s motion for summary judgment is granted, and the matter remanded to the court below for a calculation of statutory interest and an assessment of
attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.
Decision Date: March 31, 2005