Ocean Diagnostic Imaging v Utica Mut. Ins. Co. (2004 NY Slip Op 50203(U))

District Court Of Nassau County, Third District,

INDEX NO. 003594/03

Steven M. Jaeger, J.

Plaintiff’s motion for summary judgment and defendant’s cross-motion to compel discovery are decided as follows:

The plaintiff, a health care provider and assignee of no-fault benefits, commenced this action against the defendant, the insurer of the assignor, to recover the first party No Fault Law benefits. In this case, the patient/assignor was injured in a motor vehicle accident on July 19, 2002. Plaintiff submitted the claim on the appropriate forms to defendant on September 9, 2002. Defendant’s denial was dated December 2, 2002.

The defendant’s failure to deny the plaintiff’s claim for no-fault benefits within thirty (30) days of receipt of the proof of claim, and the amount of loss sustained as required by Insurance Law 5106, and 11 NYCRR 65.15[g][3], precludes the defendant from asserting an affirmative defense of denial of benefits on various grounds. Presbyterian Hosp. v. Maryland Cas. Co., 90 NY2d 274 [1997]. Defendant’s late denial form designates assignor’s (Abbott) failure to appear for independent medical examinations on October 25, 2002 and November 8, 2002 as the basis for the claim denial. The first IME was not scheduled until more than 30 days after the claim was received.

In response to this application and in support of defendant’s cross-motion for summary judgment, defendant contends that the insured owner/operator of the car may have possibly staged this as a fraudulent accident with assignor Abbott as a passenger. Defendant further contends that assignor Abbott’s failure to appear for two scheduled independent medical examinations (as stated on defendant’s denial form) was based on indicia of fraud and was for “Examination under Oath”. The latter examination was not requested until December 10, 2002 and the denial forms provided by each party differs as to riders attached.

Defendant’s position appears to be that, (1) the claim denial, despite its express language, is in fact based on fraud and, (2) a claim arising from an insurance fraud scheme is not a covered accident and therefore, the late denial of same would not necessarily be fatal to defendant’s defense. Metro Med. Diagnostics, P.C. v. Eagle Ins. Co., 293 AD2d 751 (2d Dept 2002). Defendant’s fraud claim or defense is only substantiated by the unsworn reports of investigators that examined the subrogor’s signatures on forms ostensibly signed after each treatment. The [*2]conclusion is that the treatment forms were signed all at once or in groups. No evidentiary proof was provided, however, in opposition to the motion for summary judgment. The Court also notes that the denial of claim form (NF-10) provided by defendant (and dated March 10, 2003) differs from the one provided by plaintiff (dated December 2, 2002) in that each contains materially different riders. No explanation for this is offered by the defendant. Nor does the defendant explain how alleged fraud in providing medical services constitutes a “non-covered” accident under the applicable no-fault statutes and regulations.

In this case, the defendant notified the plaintiff on or about December 2, 2002 that it was denying benefits based upon a failure to attend IMEs. Pursuant to State Farm v Domotor, 266 AD 2d 219 (2d Dept 1999), the Court finds that this denial excused the plaintiff from further compliance with any further requests or demands from the defendant. “An insurance carrier may not, after repudiating liability, create grounds for its refusal to pay by demanding compliance with proof of loss provisions of its policy. Rather, the insurance carrier ‘must stand or fall upon the defense upon which it based its refusals to pay’.” 266 AD 2d at 220.

Accordingly, the plaintiff has met their burden in demonstrating a prima facie showing of entitlement to judgment as a matter of law. Alvarez v. Prospect Hospital, 68 NY2d 320. Notwithstanding defendant’s late investigations, defendant has not shown the existence of evidentiary facts sufficient to toll the statutory limits for denials of claims. An insurer is required to either pay or deny a claim for medical services rendered under No-Fault within 30 days from receipt of proof of the claim (e.g., the bill), which proof shall include verification (IME) requested by the insurer pursuant to 11 NYCRR §65-3.5, Insurance Law §5106(a); 11 NYCRR §65-3.8(a). This 30 day period may be extended by an insurer’s timely request for further verification of the claim. New York Presbyterian Hospital v. American Transit Insurance Company, 287 AD2d 699, (2d Dept 2001). There is no documentation of timely requests by defendant.

Plaintiff’s motion for summary judgment is granted in the amount of $1,758.40, plus interest at 2% per month from October 9, 2002, together with attorneys’ fees of 20% thereof, not to exceed $850.00. 11 NYCRR §65(17)((b).

Defendant’s cross-motion for an order of preclusion regarding discovery is denied as moot in view of the aforementioned decision.

So Ordered:

Dated: March 29, 2004 District Court Judge

Decision Date: March 29, 2004