Burke Physical Therapy, PC v State Farm Mut. Auto. Ins. Co. (2021 NY Slip Op 50624(U))

CV-740154-19/KI

Attorney for Plaintiff: Oleg Rybak, Esq. The Rybak Firm, PLLC1810 Voorhies Ave., 3rd Floor, Ste. 7, Brooklyn, NY 11235

Attorney for Defendant: Alisa Burns, Esq., McDonnell Adels & Klestzick, PLLC 401 Franklin Ave., 2nd Floor, Garden City, NY 11530

The court’s Decision and Order is based upon consideration of the following papers:

CPLR 2219(a) Recitation

NOTICE OF MOTION & AFFIDAVITS ANNEXED 1

OPPOSITION/CROSS-MOTION 2

REPLY/OPPOSITION TO CROSS-MOTION 3

EXHIBITS

In this No-Fault action, Plaintiff medical provider seeks reimbursement for seven bills which cover a period of medical services provided from October 2, 2018 through January 24, 2019. Defendant acknowledges timely receipt of Plaintiff’s seven bills and now moves for summary judgment on its outstanding verification request defense. Plaintiff cross moves for summary judgment pursuant to CPLR 3212 and to dismiss Defendant’s affirmative defenses pursuant to CPLR 3211(b).

“The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case” (Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). “The failure to make such prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers” (id.). In order to prevail on a motion based on an outstanding additional verification request defense, the movant must establish that the plaintiff failed to comply with its additional verification requests (Compas Medical, P.C. v. New [*2]York Cent. Mut. Fire Ins. Co., 50 Misc 3d 146[A] [App Term, 2d Dept., 11th & 13th Jud. Dists. 2016]; Compas Med., P.C. v Farm Family Cas. Ins. Co., 38 Misc 3d 142[A] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists. 2013]; TAM Medical Supply Corp. v. Tri State Consumers Ins. Co., 57 Misc 3d 133[A] [App Term, 2d Dept., 2d, 11th & 13th Jud. Dists. 2017]).

As an initial matter, the court finds that Defendant established timely mailing of its verification requests pursuant to 11 NYCRR 65-3.5(b) for each of the seven bills at issue through the affidavit of claims specialist Timothy Dacey. However, the proper denial of the bills remains an issue of fact as Defendant failed to establish its outstanding verification request defense.

Defendant mailed post-EUO requests for additional verification to Plaintiff on December 4, 2018, January 18, 2019, February 7, 2019 and March 5, 2019 wherein it requested the following documents:

1. Burke’s federal and state tax returns for 2017 to the present, including any W-2s, 1099’s, and quarterly payroll tax returns.

2. Burke’s bank records for the period December 1, 2017 to the present, including any statements, deposits slips and cancelled checks.

3. Burke’s general ledgers for the period December 1, 2017 to the present, or such other documents as reflect its financial condition, payments made and payments received.

4. Any documents relating to or reflecting any agreement, contract, lease, deal, arrangement or understanding with any person or entity providing management, billing, collection, consulting, or administrative services to Burke during the period December 1, 2017 to the present, including Expert Billing Solutions and Streamline Services.

5. Any documents relating to or reflecting any payment to or received from any person or entity providing management, billing, collection, consulting, or administrative services to Burke during the period December 1, 2017 to the present, including Expert Billing Solutions and Streamline Services.

6. All contracts, leases, subleases and agreements concerning Burke’s operations at 941 Burke Avenue, Bronx, New York, including the written agreement with Seo Han Medical, P.C.

7. All contracts, leases, subleases and agreements concerning Burke’s operations at 764 Elmont Road, Elmont, New York, including the written agreement with Starmed Group, Inc.

8. All contracts, leases, subleases and agreements concerning Burke’s operations at 2625 Atlantic Avenue, Brooklyn, New York, including the written agreement with 2625 Group, Inc.

9. All contracts, leases, subleases and agreements concerning Burke’s operations at 152-180 Rockaway Boulevard, Jamaica, New York.

10. All contracts, leases, subleases and agreements concerning Burke’s operations at 80-12 Jamaica Avenue, Woodhaven, New York, including the written with 19413 Northern Boulevard, Inc.

11. All contracts, leases, subleases and agreements concerning Burke’s operations 424 East 147th Street, Bronx, New York, including the written agreement with 19413 Northern Boulevard, Inc.

12. All contracts, leases, subleases and agreements concerning Burke’s operations at 5037 Broadway, New York, New York, including the written agreement with 19413 Northern Boulevard, Inc.

13. All contracts, leases, subleases and agreements concerning Burke’s operations at 2510 Westchester Avenue, Bronx, New York, including the written agreement with 19413 Northern Boulevard, Inc.

14. All contracts, leases, subleases and agreements concerning Burke’s operations 90-04 Merrick Road, Merrick, New York, including any written agreement with Life Health Care Medical, P.C.

15. All contracts, leases, subleases and agreements concerning Burke’s operations at 2025 Davidson Avenue, Bronx, New York, including any written agreement with Seasoned Chiropractic P.C.

16. All contracts, leases, subleases and agreements concerning Burke’s operations at 550 Remsen Avenue, Brooklyn, New York.

17. All contracts, leases, subleases and agreements concerning Burke’s operations at 1122A Coney Island Avenue, Brooklyn, New York, including the written agreement with Marina Gadaborshev/MG Chiropractic, P.C.^[FN1]

Defendant states that it properly denied all seven bills due to Plaintiff’s failure to provide the requested documentation within 120 days or “written proof providing a reasonable justification for the failure to comply” (Defendant 1, ¶17). However, in the following paragraph, Defendant acknowledges receipt of Plaintiff’s written responses, by letters dated February 26, 2019 and April 16, 2019. Defendant attaches these letters and two of State Farms’ response letters dated March 11, 2019 and April 24, 2019 as an exhibit to its motion papers (Def. 1, exh. 4).

In Plaintiff’s four-page letter dated February 26, 2019, Plaintiff objects to Defendant’s verification request on both procedural and substantive grounds, citing case law and the No-Fault statutes in support of its arguments. The letter further demonstrates that Plaintiff provided similar written objections in previous correspondences along with specific responses to each of the items on Defendant’s list:

“State Farm has now received from Burke Physical all documents in its possession that are responsive to State Farm’s verification requests. As noted in previous correspondences with regards to State Farm’s unduly burdensome, improper and illegal request for additional documents/information listed in paragraphs 1-17 on page 4-5 of your Letter, it should be stated again for the record that the carrier has already been provided with the items in paragraphs 4, 5, 6, 7, 8, 10, 11, 12, 13 and 17 during the EUO. Meanwhile, the items in paragraphs 9, 14, 15 and 16 cannot be provided due to their verbal/oral nature. As for items in paragraphs 1, 2 and 3, they are improper to be requested by the carrier in the first place for the reasons supra.”

In cases where a medical provider sent a similar response to a verification request, courts have denied an insurer summary judgment based on an outstanding verification request defense. In Mount Sinai Hosp. v. Auto One Ins. Co., the Second Department found that the defendant insurer failed to demonstrate its prima facie entitlement to summary judgment as the record [*3]revealed that the medical provider hospital replied to the verification requests with respect to the records in its possession that it was authorized to release. However, the court did find triable issues of fact regarding the “propriety” of the defendant’s verification requests and whether the documents requested existed or were in the possession of the hospital (Mount Sinai Hosp. v. Auto One Ins. Co., 121 AD3d 869 [2d Dept. 2014]; Pro-Align Chiropractic, P.C. v. Travelers Property Casualty Ins. Co., 58 Misc 3d 857 [Dist Ct, Suffolk County 2017]).

Further, the No-Fault rules do not require a medical provider to provide each and every document requested by the insurer. New York Insurance Law Section 65-3.5(o) states that the applicant must provide “all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply.” (11 NYCRR 65-3.5[o] [emphasis added]). Just as Defendant asserts its right to request all information necessary to verify a claim, Plaintiff’s right to object to such requests is codified in the no fault statute as noted in each of Defendant’s verification request letters:

“Please be advised that pursuant to 11 NYCRR 65-3.5(o), State Farm may deny the claim if Burke Physical Therapy does not provide within 120 calendar days from the date of this initial verification request all of the documents identified above under Burke Physical Therapy control or possession or written proof providing reasonable justification for the failure to comply” [emphasis added].

This principle is affirmed by the caselaw Defendant directly quotes in its opposition affirmation: “If a plaintiff deems a verification request to be defective and or unreasonable, it is incumbent on that plaintiff to convey that information to the defendant and to state the reasons thereof, thereby giving the defendant the opportunity to respond accordingly” (Canarsie Chiropractic P.C. a/a/o Day v. Adirondack Mut. Auto. Ins., 27 Misc 3d 1228[A] [Civ. Ct. Kings Cty., 2010]).

Here, Plaintiff objected to Defendant’s requests with strong and detailed arguments in its February 26, 2019 and April 16, 2019 letters. In its response letters dated March 11, 2019 and April 24, 2019, Defendant argued that its requests were proper and repeated its demand for all seventeen items listed in its original request, including those items which Plaintiff stated did not exist. In the instant motion, Defendant disregards these correspondences and either denies Plaintiff’s response altogether or characterizes Plaintiff’s response as a “generic refusal to provide any of the requested verification” (Def. 3, ¶16). Defendant also fails to properly address the arguments and issues raised in Plaintiff’s objection letters. Rather, Defendant argues that Plaintiff is barred from objecting to the propriety of the requests because of its failure to respond. This argument is without merit under the circumstances and wholly inconsistent with the documents provided in Defendant’s motion papers. Further, the objection letters raise an issue of fact regarding Plaintiff’s compliance with 11 NYCRR 65-3.5(o). Based on the foregoing, Defendant failed to meet its summary judgment burden on its outstanding verification defense.

The timely mailing of Plaintiff’s bills is established as Defendant acknowledged timely receipt of those bills. However, in its cross motion, Plaintiff failed to establish its full compliance with Defendant’s verification requests or that the requests themselves were improper. It is well settled that summary judgment is appropriate when sufficient evidence in admissible form is presented to demonstrate the absence of any material issues of fact (Alvarez v. Prospect Hosp., 68 NY2d 320 [1986]; Zuckerman v. City of New York, 49 NY2d 557 [1980]). In support of its cross-motion, Plaintiff attaches the December 8, 2020 affidavit of John Nasrinpay, wherein he avers the following: “I personally responded and mailed on 01/18/2019, 03/07/2019, [*4]04/05/2019 and 05/07/2019 the verification response in issue in this case to the address designated by defendant on the verification requests, to the extent that such response was proper and in my possession.” The affiant provides no further details as to which documents constituted the “verification response in issue” that were “proper” and in his “possession.” Further, while the affidavit refers to the responses provided, there is no admissible documentation to that effect as Plaintiff fails to attach copies of the allegedly mailed responses to its motion. The arguments within Plaintiff’s motion objecting to the propriety of Defendant’s verification requests are equally vague and conclusory. Accordingly, Plaintiff’s request for summary judgment is denied.

Likewise, Plaintiff failed to provide the court with any legal or factual grounds to dismiss Defendant’s affirmative defenses. To prevail on a motion to dismiss an affirmative defense pursuant to CPLR 3211(b), ” the plaintiff bears the burden of demonstrating that the affirmative defense is ‘without merit as a matter of law'” (Bank of New York v. Penalver, 125 AD3d 796, 797 [2d Dept. 2015] quoting Vita v. New York Waste Servs., LLC, 34 AD3d 559, 559 [2d Dept. 2006]). Plaintiff cites no legal authority and provides no substantive or even intelligible argument to support dismissal of Defendant’s affirmative defenses. The bulk of Plaintiff’s arguments against Defendant’s verification requests are conclusory, vague and repetitive. They are also intertwined with Plaintiff’s arguments against Defendant’s discovery demands, a matter which Plaintiff improperly raises in its motion. Further, as both Plaintiff’s arguments and supporting papers fail to establish, in evidentiary form, Plaintiff’s allegations of having mailed verification in compliance with Defendant’s request, this court will not hear Plaintiff’s objections regarding the substance of those requests (see Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [2d Dept. 1999]; Compas Medical, P.C. v. New York Cent. Mut. Fire Ins. Co., 50 Misc 3d 146[A]).

Further, Defendant’s fraudulent incorporation defense is a non-precludable affirmative defense (State Farm Mut. Auto. Ins. Co. v. Mallela, 4 NY3d 313 [2005]; 11 NYCRR 65-3.16[a]). An insurance carrier may, at any time, assert a non-precludable “Mallela defense” and deny payment based on the medical provider’s fraudulent incorporation (Matter of Acuhealth Acupuncture, P.C. v. Country-Wide Ins. Co., 149 AD3d 828 [2d Dept. 2017]; Lexington Acupuncture, P.C. v. General Assur. Co., 35 Misc 3d 42, 44, [App. Term, 2d, 11th & 13th Jud. Dists 2012]). “Inasmuch as the defense of ‘fraudulent incorporation’ is not subject to the preclusion rule, the defendant may raise this defense in its answer, even if not asserted in the claim denial” (Island Chiropractic Testing, P.C. v Nationwide Ins. Co., 35 Misc 3d 1235[A] [Dist Ct, Suffolk County 2012]). Accordingly, Plaintiff failed to establish that dismissal of any of Defendant’s affirmative defenses, including its outstanding verification defense, is warranted under CPLR 3211 (b).

Finally, in its opposition, Plaintiff objects to the discovery demands served with Defendant’s Answer. However, as noted above, the matter is not properly before the court as Plaintiff does not move for relief based on the discovery demands. Plaintiff states, “Defendant has failed to demonstrate its entitlement to the discovery demanded in these matters. In light of that fact, Defendant cannot possibly be entitled to an Order compelling responses to improper discovery demands.” Yet, Defendant has not moved to compel discovery demands.

Based on the foregoing, Defendant’s motion for summary judgment is granted solely to the extent that it established timely mailing of its verification requests. Plaintiff’s cross-motion for summary judgment is granted to the extent that timely receipt of the bills has also been [*5]established. The remainder of Plaintiff’s cross-motion is denied. Defendant’s outstanding verification defense remains an issue of fact for trial.

This constitutes the decision and order of this court.

ENTER.

June 30, 2021

Brooklyn, NY

Hon. Consuelo Mallafre Melendez

Judge, Civil Court

Footnotes

Footnote 1:In its letter dated February 26, 2019, intra, Plaintiff claims that items 4, 5, 6, 7, 8, 10, 11, 12, 13 and 17 were provided during the EUO and items 9, 14, 15 and 16 could not be provided due to their verbal nature. Plaintiff objected to the propriety of Defendant’s request for items 1, 2 and 3.