Careplus Med. Supply Inc. v Allstate Ins. Co. (2005 NYSlipOp 51526(U))

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 (Manuel J. Mendez, J.), entered September 28, 2004. The order denied plaintiff’s motion for summary judgment.

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

In this action to recover first-party no-fault benefits for medical equipment furnished to its assignors, plaintiff established its entitlement to summary judgment by its proof that it submitted the functional equivalent of the statutory claim forms (11
NYCRR 65-3.5 [a], [f]), setting forth the fact and 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]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 2004]). Defendant’s failure to pay or deny [*2]assignor Figueroa’s claim for $580 and assignor Rivera’s claims for $840 and $1,085 within the statutory 30-day claim determination period (11 NYCRR 65-3.8 [c]), or to prove a tolling of said period precluded the defenses set forth in the claim denial forms (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; Triboro Chiropractic & Acupuncture PLLC v New York Cent. Mut. Fire Ins. Co., 7 Misc 3d 138[A], 2005 NY Slip Op 50856[U] [App Term, 2d & 11th Jud Dists]).

As for the defenses that survive the preclusion sanction, i.e., the alleged absence of an applicable policy and assignors’ fraudulent conduct with respect to the underlying traffic incidents (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 18-19 [1999]), defendant failed to establish that triable issues exist as to either defense. Defendant’s claim that plaintiff did not prove that its assignors are covered by a policy issued by defendant is without merit as plaintiff’s claim forms established the matter prima facie and defendant offered no proof to the contrary. Further, absent proof sufficient to create a triable issue as to whether any of the traffic accidents were staged with the intent to defraud, defendant failed to prove that the defense was based on “a founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]).

Defendant based its partial denials of most of the remaining claims on the improper ground that the sums sought for the items of medical equipment exceeded an alleged average of suppliers’ prevailing rates in plaintiff’s geographic location. The insurance regulations governing medical equipment and supplies applicable to the instant action limit a provider’s recovery of medical equipment benefits to 150 percent of cost (11 NYCRR Appendix 17-C, part E [b] [1]). This “applicable fee schedule” constitutes the only limitation on recovery and a defendant’s denial of benefits on the ground that the fees sought exceeded prevailing rates for such equipment in the provider’s geographical location has been rejected as without merit (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d & 11th Jud Dists 2004]; King’s Med. Supply v Allstate Ins. Co., 2 Misc 3d 127[A], 2003 NY Slip Op 51681[U] [App Term, 9th & 10th Jud Dists]). It is noted that pursuant to the revised Insurance Department regulations regarding durable medical equipment and supplies, effective October 6, 2004 (see Circular Letter No. 8 [2004]; 11 NYCRR Appendix 17-C, part F, eff. October 6, 2004), the current fee schedule for medical equipment sets forth, as an alternative to the 150 percent limit, whichever is less, the “usual and customary price charged to the general public” (11 NYCRR Appendix 17-C, part F [a] [2]).

As to the defense based on defective assignments, defendant’s failure to seek verification of the assignments or to allege any deficiency in the assignments in its claim denial forms “constitutes a waiver of any defenses with respect [to them]” (Ocean Diagnostic Imaging P.C. v Travelers Prop. Cas. Corp., 7 Misc 3d 137[A], 2005 NY Slip Op 50790[U] [App Term, 2d & 11th Jud Dists]; see also New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2004]; 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]). Defendant’s further claim that plaintiff cannot establish a prima facie case for the delivery of equipment to the assignors because its manager-affiant did not personally supply the equipment or witness the equipments’ “turnover” is also without merit. The affidavit of plaintiff’s officer and billing manager sufficiently “[s]et forth [*3][his] duties so as to support the conclusion that the attached exhibits were sufficiently accurate and trustworthy to merit their admission into evidence pursuant to the business record exception to the hearsay rule (see CPLR 4518 [a]; People v Kennedy, 68 NY2d 569 [1986]), and said exhibits established that the supplies were furnished to the assignor” (King’s Med. Supply, Inc. v Hereford Ins. Co., 5 Misc 3d 55, 56 [App Term, 9th & 10th Jud Dists 2004]; see also Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 141[A], 2004 NY Slip Op 51032[U] [App Term, 9th & 10th Jud Dists]).

We have considered the remaining defenses and find them to be similarly without merit (see Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, 565 [2005]; New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640, supra; Careplus Med. Supply Inc. v Travelers Home and Mar. Ins. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50648[U] [App Term, 2d & 11th Jud Dists]).

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: September 20, 2005