April 13, 2005

Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co. (2005 NYSlipOp 50535(U))

Headnote

The relevant facts considered by the court include a medical services provider, plaintiff Ocean Diagnostic Imaging P.C., seeking to recover first-party no-fault benefits for services rendered, as well as the defendant, State Farm Mutual Automobile Insurance Company, denying the claim based on the belief that the injuries did not arise out of an insured incident. The main issue decided by the court was whether the defendant's denial of the claim based on an alleged insurance fraud scheme was valid, despite being untimely. The court held that the defendant was precluded from raising most defenses due to the untimely denial of the claim, but was not precluded from asserting the defense that the collision was in furtherance of an insurance fraud scheme. The court found that the defendant demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage, and accordingly denied both plaintiff's motion for summary judgment and defendant's cross motion seeking summary judgment.

Reported in New York Official Reports at Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co. (2005 NYSlipOp 50535(U))

Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co. (2005 NYSlipOp 50535(U)) [*1]

Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co.

2005 NYSlipOp 50535(U)

Decided on April 13, 2005

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This opinion is uncorrected and will not be published in the printed Official Reports.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 April 13, 2005

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

PRESENT: RUDOLPH, P.J., ANGIOLILLO and COVELLO, JJ.
2004-60 N C

Ocean Diagnostic Imaging P.C., a/a/o Keith DeVouse, Karim Edwards, Appellant-Respondent,
against
State Farm Mutual Automobile Insurance Company, Respondent-Appellant.

Appeal by plaintiff from so much of an order of the District Court, Nassau County (J. Asarch, J.), dated October 1, 2003, as denied its motion for summary judgment and cross appeal by defendant from so much of the same order as denied its cross motion for summary judgment.

Order unanimously affirmed without costs.

In this action to recover first-party no-fault benefits for medical services rendered to its assignors, plaintiff health care provider established a prima facie entitlement to summary judgment by proof that it submitted a 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]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]). Inasmuch as defendant failed to pay or deny the claim within the 30-day statutory period (11 NYCRR 65.15 [g] [3]), it is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]).

However, defendant is 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 [*2]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]). Accordingly, since defendant demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage (see id.; Zuckerman v City of New York, 49 NY2d 557 [1980]), plaintiff’s motion for summary judgment was properly denied. The denial of defendant’s cross motion seeking summary judgment was also correct, inasmuch as the evidence which defendant [*3]
proffered was insufficient to establish, as a matter of law, that “the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp., 90 NY2d at 199; Zuckerman v City of New York, 49 NY2d 557, supra).
Decision Date: April 13, 2005