King’S Med. Supply v Progressive Ins. (2004 NY Slip Op 50311(U))

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 2nd and 11th JUDICIAL DISTRICTS

Appeal by plaintiff from so much of an order of the Civil Court, Kings County (J. Sullivan, J.), entered August 13, 2002, as denied its motion for summary judgment.

Order unanimously modified by providing that plaintiff’s motion for summary judgment is granted to the extent of awarding it partial summary judgment in the sum of $1,925, and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees and for all further proceedings on the remaining portion of the claim in accordance with the decision herein; as so modified, affirmed without costs.

Plaintiff, a medical supply house, commenced this action to recover first-party no-fault benefits for medical equipment furnished its assignor. Plaintiff subsequently moved for
summary judgment on its two claims: one for $795 (submitted January 31, 2001) and the other for $1,220 (submitted March 1, 2001).

After plaintiff established a prima facie case for summary judgment by establishing that it submitted complete proofs of claim and the amount of the loss (see Amaze Med. Supply Inc. v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists]), the burden shifted to defendant to raise a triable issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). With respect to the $795 claim, defendant conceded that it failed to timely pay or deny the claim within 30 days of the date plaintiff alleged that it should have been in receipt of the mailed claim [*2]forms (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g] [3]), but argued only that it never received the proof of claim. Upon its failure to rebut the presumption of receipt that arose upon plaintiff’s proof of proper mailing (e.g Kihl v Pfeffer, 94 NY2d 118 [1999]), summary judgment should have been granted as to said claim.

With respect to the second claim for $1,220, defendant argued only that its denial was both timely and proper because the assignor failed to cooperate with its verification request in the form of an examination under oath (EUO), as permitted by the Insurance Regulations then in effect and
required by the terms of the insurance policy. However, at the time plaintiff’s claims were filed, EUOs were not available as a form of verification. The provision requiring the injured person to appear for an EUO was not in effect until April 5, 2002 (see 11 NYCRR 65-3.5 [e]). The relevant Insurance Regulation in effect at the time of the plaintiff’s submission of the claims required the injured person to submit to an independent medical examination (IME), but contained no specific reference to an EUO (see 11 NYCRR 65.12). Since there was no provision authorizing such a procedure, defendant’s request that plaintiff submit to an EUO did not toll the 30-day period within which it was required to pay or deny the claim. Nor may defendant base its right to an EUO on the policy provisions providing for “cooperation” because the no-fault endorsement, an “internally complete and . . . distinct part of the insurance policy, . . . cannot be qualified by . . . conditions . . . of the liability portions of the policy” (Utica Mut. Ins. Co. v Timms, 293 AD2d 669, 670 [2002]; see also A.B. Med. Servs. PLLC v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 9th & 10th Jud Dists]; Bronx Med. Serv. P.C. v Lumbermans Mut. Cas. Co., NYLJ, June 13, 2003 [App Term, 1st Dept]).

In light of the foregoing, plaintiff would normally be entitled to the granting of its motion for summary judgment in its entirety. It is noted, however, that the documents which plaintiff included as proof in support of its motion for summary judgment revealed that the medical
equipment prescribed for plaintiff’s assignor did not include the TENS belt ($90) which was listed in plaintiff’s claim as well as in the receipt of items delivered to plaintiff’s assignor. While defenses based on defects in the proof of claim are generally precluded if not timely asserted, plaintiff, having introduced an issue of fact which, if true, amounts to a complete defense to a portion of the claim, should be estopped from invoking the preclusion rules to avoid a defense that the cost of unprescribed medical equipment is not a recoverable no-fault benefit (Amaze Med. Supply Inc. v Eagle Ins. Co., supra). Accordingly, the compensation awarded to plaintiff should be reduced by the amount billed for the unprescribed item.

Thus, plaintiff’s motion for summary judgment should have been granted to the extent of awarding it partial summary judgment in the sum of $1,925. The matter is accordingly remanded to the court below for a calculation of the statutory interest on $1,925, that portion of the claim for which summary judgment is granted, an assessment of attorney’s fees due on $1,925 (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [h] [1]; 65.17 [b] [iii], [v]; see St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [1995]), and for all further proceedings on the remainder of the claim.
Decision Date: April 14, 2004