A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co. (2004 NY Slip Op 51847(U))

Civil Court of the City of New York, Kings County

323338/03

Sylvia Hinds-Radix, J.

Plaintiffs commenced this action to recover first-party no-fault benefits for medical services rendered to their assignor, pursuant to Insurance Law § 5101 et. seq., as well as statutory interest and attorney’s fees. Thereafter, plaintiffs moved for summary judgment on their claims in the amount of $14,628.06, on the ground that defendant failed to pay or to deny their claims within the statutory 30-day period as required by Insurance Law section 5106 [a] ( Amaze Med. Supply Inc.v. Eagle Ins. Co., NYLJ, Dec. 29, 2003, at 21 Col 1 [App Term, 2d &11th Jud Dists]).

1. SUMMARY JUDGMENT STANDARD

The rule governing summary judgment requires the proponent of a summary judgment motion to make a prima facie showing of entitlement to judgment as a matter of law, tending admissible evidence to eliminate any material issues of fact from the case ( Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]; Torterello v. Carlin, 260 AD2d 201 [1st Dept. 1999]). The burden of production as well as the burden of persuasion always rests on the proponent of the motion (Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]).

If the moving party satisfies those standards, the burden shifts to the opponent to rebut [*2]that prima facie showing by presenting evidence in admissible form establishing the existence of triable issues of fact ( see, CPLR 3212, subd [b]; Zuckerman v. City of New York, 49, NY2d 557 [1980]; Davenport v. County of Nassau, 279, AD2d 497 [2001]; Pragano v. Kingsburg, 182 AD2d 270 [2nd Dept.1992]; Kaufman v. Silver, 90 NY2d 204, 208 [1997]). It is well settled that Summary judgment should be denied if there is any doubt as to the existence of a triable issue of fact ( Freese v. Schwartz, 203 AD2d 513 [2nd Dept. 1984]).

When deciding a motion for summary judgment, the court must review the evidence in the light most favorable to the non-moving party, and must give that party all of the reasonable inferences that can be drawn from the evidence ( Louniakov v. M.R.O.R. Realty Corp., 282 AD2d 657 [2nd Dept. 2001]; SSBSS Realty Corp. v. Public Service Mut. Ins. Co., 253 AD2d 583, 584-585 [1st Dept. 1998]).

11. COVERAGE OF MEDICAL EXPENSES PURSUANT TO INSURANCE LAW 5106 (a)

Pursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, within (30) thirty days after a claimant submits proof of the facts and the amount of loss sustained, an insurer is required to either pay or deny a claim for insurance coverage of medical expenses arising from a motor vehicle accident (see, 11 NYCRR § 65.15 (g) (3); Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195, 200 [1997]; Mount Sinai Hosp., v. Triboro Coach, 263 AD2d 11, 16 [2nd Dept. 1999]; New York Med. Center of Queens v. Country-Wide Ins. Co., 295 AD2d 583 [2nd Dept. 2002]).

The 30 day period may be extended by a request for verification pursuant to 11NYCRR

65.15 (d) (1) (2). (See, New York Hosp. Med. Ctr. of Queens v. Country Wide Ins. Co., 295 AD2d 584 [2nd Dept. 2002]; Presbyterian Hosp. In the City New York v. Maryland Cas. Co., 90 NY2d 279 [1997]).

If the requested verification has not been supplied to the insurer within 30 calendar days, after the original request, the insurer shall issue a follow-up request within 10 calendar days of the insured failure to respond. See, 11 NYCRR 65.15 (e) (2), now 15 days 11NYCRR 65-3.5 (b). S&M Supply v. Allstate Insurance Co., 2003 NY SLIP Op 51191 [U] [App Term, 2d & 11thJud Dists]. “An insurer shall not issue a denial of claim form . . . prior to its receipt of verification of all of the relevant information requested . . . “(New York Hosp. Med. Ctr. Of Queens v. Country-Wide Ins. Co., 295 AD2d 583, 585 [2002]; Glassman D.C., PC v. State Farm Mut. Auto. Ins. Co., 192 Misc2d 264, 265 [App Term, 2nd & 11 Jud Dists. 2002]).

If the additional verification required by the insurer is 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 (see, 11 NYCRR 65.15 [d] [3]).

The only exception to the 30 day rule is where a carrier’s untimely denial is based upon the defense of lack of coverage, or a medical condition for which the patient was treated was not “related to the accident” (Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195 [1997]). To withstand a motion based on this defense, the insurer has the burden to come forward with proof in admissible form to establish “the fact” or the evidentiary foundation for its belief that the patient’s treatment was unrelated to the accident (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]). [*3]

Failure to pay or deny a claim within the 30- day period requirement, absent a request for additional verification, renders benefits “overdue,” and precludes the insurer from disclaiming liability based on a breach of a policy condition or a statutory exclusion defense (St. Clare’s Hosp. v. Allicity Ins. Co., 201 AD2d 720 [2nd Dept. 1994]). All overdue payments bear interest at a rate of 2% per month, and the claimant is entitled to recover attorney’s fees where a “valid claim or portion” was denied or overdue (see, Insurance Law 5106 (a); Presbyterian Hosp. in the City of New York v. Maryland Cas. Co., 90 NY2d 274 [1997]).

III. PLAINTIFFS MOTION FOR SUMMARY JUDGMENT

In support of its motion for summary judgment in this action, plaintiffs submitted the affidavit of David Safir, who states in his affidavit that he is the billing manager for the plaintiffs. Mr. Safir avers that he personally mailed all of the claim forms for no-fault medical services to the defendant, and defendant failed to pay or deny the claims within thirty days of receipt of the claims.

A review of plaintiffs’ motion papers indicates that plaintiffs established their prima facie entitlement to judgment by submitting proof that the statutory claim forms were mailed and received, and that defendant did not pay or deny the claims within the prescribed statutory 30-day period (Amaze Med. Supply Inc., v. Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 [2004]). The burden then shifted to the defendant to demonstrate the existence of a triable issue of fact requiring a trial on the action ( Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986]; St. Luke’s Roosevelt Hosp., v. American Tr. Ins. Co., 274 AD2d 511 [2nd Dept. 2000]).

IV. DEFENDANT’S OPPOSITION

Defendant, in its opposition to plaintiffs’ motion, admits to receipt of plaintiffs’ claims but contends that it denied the claims based on multiple grounds of (1) failure of plaintiffs’ assignor to appear for Scheduled Independent Medical Examinations (2) fees for medical supplies purchased were excessive as per the Workers’ Compensation Schedule (3) injury causation and (4) medical necessity.

(a) Failure to Appear for Scheduled Independent Medical Examinations

Defendant alleges that plaintiffs’ assignor violated a policy condition of the insurance policy by failing to appear for scheduled independent medical examinations (IMEs), thus precluding any recovery of benefits thereunder. In support of its allegation, defendant relies on the affidavit of Dan Ross, an employee of Alliance Health Medical, P.C., which is an outside entity that provides services for the defendant.

Mr. Ross states in his affidavit that his review of the file, and records pertinent to plaintiffs’ assignor, revealed that, defendant forwarded IME scheduling letters dated June 10, 2003 to plaintiffs’ assignor, requesting her to attend IMEs scheduled for June 26, 2003, and June 30, 2003. Mr. Ross further states that on July 2, 2003, Alliance Health Medical notified the defendant, that plaintiffs’ assignor failed to appear for the scheduled IMEs. In its opposition papers, defendant attached two copies of IME letters addressed to plaintiffs’ assignor, requesting the assignor to attend IME’s scheduled for June 26, 2003 and June 30, 2003. The letters were each dated June 10, 2003.

This court finds that defendant fail to comply with the follow-up procedures and timetable for verification set out in the governing regulations of 11NYCRR 65-3.5 (b), by [*4]following up with an additional request for verification, or by notifying plaintiffs’ assignor of her right to follow up procedures and timetable for verifications ( S&M Supply v. Allstate Insurance Co., 2003 NY SLIP Op 51191 [U] [App Term, 2d & 11thJud Dists]; Presbyterian Hosp. in the City of New York v. Aetna Cas,. & Sur. Co., 233 AD2d 432; Metro Med. Diagnostics v. Lumbermens Ins. Co., 189 Misc2d 597 (2001) [App Term 2d and 11th Jud Dists]).

Furthermore, no probative evidence was submitted by the defendant to establish that the IME letters were ever sent to plaintiff’s assignor. Mr. Ross states that a review of the file and records reveal that defendant forwarded IME request letters to plaintiff’s assignor, without averring that he mailed the request himself. He did not state in his affidavit that he had personal knowledge that the letters were mailed to plaintiffs’ assignor ( Rue v Stokes, 191 AD2d 245 [1993]; LI First Aid Medical Supply Inc., v. Progressive Cas Inc. Co., 196 Misc2d 258, nor has he created a presumption of mailing by relying on defendant’s business records or by describing the standard office practice or procedure used by the defendant to ensure that its requests are properly mailed ( see, CPLR section 4518 (a); Residential Holding Corp., v. Scottsdale Ins. Co., 286 AD2d 679 [2nd Dept. 2001]).

By submitting copies of letters addressed to plaintiffs’ assignor without an affidavit from someone with first hand knowledge attesting how, when, or by whom the letters were mailed, does not in itself support a presumption that the letters were mailed, and received by plaintiffs’ assignor ( American Home Assur. Co., v. Choudary, 255 AD2d 346 [2nd Dept. 1998]; Residential Holding Co., v. Scottsdale Ins Co., 286 AD2d 679, 680 [2nd Dept. 2001]; Presbyterian Hosp. in the City of New York , v. Maryland Casualty Ins. Co., 226 AD2d 613 [2nd Dept. 1996]). Consequently, the affidavit of Mr. Ross was insufficient to raise a triable issue of fact as to whether the requests for independent medical examinations were timely sent to plaintiffs’ assignor.

(b) Fees for Medical Supplies Excessive as per the Workers’ Compensation Law Fee Schedule

The defendant alleges that the fees sought by plaintiffs for medical supplies purchased for their assignor, exceeded those permitted by Workers’ Compensation Law Fee Schedule. It is well settled that, based on a timely denial, an insurer is entitled to interpose the defense that certain charges were not in conformity with the charges permissible under the workers’ compensation fee schedule (Park Health Ctr., v. Prudential Prop & Cas Ins. Co., NYLJ, Dec. 14, 2001 [App Term, 2d & 11th Jud Dists]). Insurance regulation 11 NYCRR 68, Appendix 17-C, Part E (b) (1), provides:

“For medical equipment and supplies (e.g., TENS units, soft cervical collars) provided by a physician or medical equipment supplier, the maximum permissible charge is 150 percent of the documented cost of the equipment to the provider.

This section provides essentially a fee schedule for equipment provided by a medical provider or a medical equipment supplier. In the Instant action, defendant failed to submit evidentiary proof

to establish that the benefits sought for medical supplies were not in conformity with the charges permissible under the workers compensation fee schedule law (Kings Medical Supply v. Travelers Property Casualty Corp., 756 NYS2d 385 [2003]; Abraham v. County Wide Ins. Co., [*5]NYLJ, Feb. 2, 2004 [App Term, 2d &11th Jud Dists]).

Furthermore, since defendant failed to timely deny plaintiffs claim or to seek additional verification of the claims within thirty days of it receipt of the claims, defendant is precluded from raising the defense of excessive fees in its opposition to plaintiffs’ motion for summary judgment (Mt. Sinai v. Triboro Coach, 263 AD2d 11 [2nd Dept. 1999]).

( c) Injury Causation

Defendant argues that there is no casual relationship between the accident and the injury alleged by plaintiffs’ assignor. To support its argument, defendant submitted an unsworn low impact “Automotive Engineering Report”. Defendant argues that the low impact analysis “Automotive Engineering report” concluded that plaintiffs assignor’s treatment was not related to the accident.

Although, defendant is not precluded from asserting the defense that the alleged injuries were not casually related to the accident despite an untimely denial of the claims (Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195 [1997]; Mount Sinai Hosp., v. Triboro Coach, 263 AD2d 11, 16 [2nd Dept. 1999]), this court finds that the unsworn “Automotive Engineering Report” lacks evidentiary value and does not constitute competent proof in admissible form, and cannot be considered in opposition to plaintiffs’ motion for summary judgment (Dotez v. Allstate Ins. Co., [App Term, 9th & 10th Jud Dists.]). Additionally, defendant failed to present a sworn statement from someone with knowledge of the facts or with appropriate expertise to render an opinion (Mt. Sinai Hospital v. Triboro Coach Inc., 263 AD2d 11 [2nd Dept. 1999]).

(d) Medical Necessity

Defendant remaining argument is that the medical treatments rendered to plaintiffs’ assignor were not medically necessary. Lack of medical necessity is a valid defense to an action to recover no fault benefits if stated in a timely denial (Presbyterian Hosp. in the City of New York v. Maryland Casualty Ins. Co., 226 AD2d 613 [2nd Dept. 1996]; Central Gen. Hosp. v. Chubb Group of Ins. Co., 90 NY2d 195 [1997]). Since defendant failed to raise the defense of medical necessity within 30 days of receipt of the plaintiffs’ claims, defendant is precluded from interposing this defense to the motion for summary judgment (New York Presbyterian Hosp., v. Empire Ins., 286, AD2d 322 [2nd Dept. 2001]). Despite the use of a multiple defenses, the defendant cannot prevail if the defenses are not raised within the statutory prescribed period.

V. CONCLUSION

Accordingly, plaintiffs’ motion for summary judgment is hereby granted in its entirety. Judgment shall be entered in favor of plaintiffs in the amount of $14,628.06, together with appropriate statutory interest and attorneys’ fees.

The court did not consider defendant’s amended affirmation in opposition in rendering its decision and order, since the amended papers were not timely served upon the plaintiffs.

This constitutes the decision and order of this court.

Dated: November 10, 2004.

Brooklyn, New York

______________________________ [*6]

SYLVIA HINDS-RADIX

J.C.C.