May 25, 2006

Delta Diagnostic Radiology, P.C. v State Farm Mut. Ins. Co. (2006 NY Slip Op 51345(U))

Headnote

The court considered that the plaintiff had submitted a claim for first-party no-fault benefits for medical services rendered to its assignor, and that the defendant failed to pay or deny the claim within the 30-day prescribed period. The main issue decided was whether the defendant was precluded from raising certain defenses due to the untimely denial of the claim, and whether there was a lack of coverage. The holding of the case was that plaintiff's motion and defendant's cross motion for summary judgment should have been denied, as the defendant was not precluded from asserting the defense that the collision was in furtherance of an insurance fraud scheme, and an issue of fact existed as to whether there was a lack of coverage.

Reported in New York Official Reports at Delta Diagnostic Radiology, P.C. v State Farm Mut. Ins. Co. (2006 NY Slip Op 51345(U))

Delta Diagnostic Radiology, P.C. v State Farm Mut. Ins. Co. (2006 NY Slip Op 51345(U)) [*1]

Delta Diagnostic Radiology, P.C. v State Farm Mut. Ins. Co.

2006 NY Slip Op 51345(U) [12 Misc 3d 140(A)]

Decided on May 25, 2006

Appellate Term, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 25, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

PRESENT: : PESCE, P.J., RIOS and BELEN, JJ
2005-1285 Q C.

Delta Diagnostic Radiology, P.C., a/a/o Jean Wislyne, Appellant,
against
State Farm Mutual Insurance Co., Respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Anna Culley, J.), entered June 10, 2005. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment.

Order modified by denying defendant’s cross motion for summary judgment; as so modified, affirmed without costs.

In this action to recover first-party no-fault benefits for medical services rendered to its assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted the claim, setting forth the fact and the amount of the loss 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]; 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 failed to pay or deny the claim within the 30-day prescribed period (11 NYCRR 65-3.8 [c]) and failed to show that its time to deny the claim was tolled (see Star Med. Servs. P.C. v Eagle Ins. Co., 6 Misc 3d 56 [App Term, 2d & 11th Jud Dists 2004]). Accordingly, it was precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). However, defendant was not precluded from asserting the defense that the collision was in furtherance of an insurance fraud scheme, despite the untimely denial of the claim (see Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]).

The affidavit submitted by defendant’s special investigator was sufficient to demonstrate that defendant’s denial was based upon 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]; GPM Chiropractic, P.C. v State Farm Mut. Ins. Co., 7 Misc 3d 138[A], 2005 NY Slip Op [*2]50861[U] [App Term, 2d & 11th Jud Dists]). Thus, an issue of fact exists as to whether there was a lack of coverage. Consequently, plaintiff’s motion and defendant’s cross motion for summary judgment should have been denied.

Pesce, P.J., Rios and Belen, JJ., concur.
Decision Date: May 25, 2006