Civil Court of the City of New York, Bronx County

045155/08

Plaintiff represented by:

David Streiner, Esq.

Law Offices of Melissa Betancourt PC

Defendant represented by:

John DeOliveira, Esq.

Law Offices of Teresa M. Spina

Jose A. Padilla Jr., J.

The issue raised in this no-fault action for first party benefits concerns the admissibility of identifiable confidential medical records in a public civil judicial proceeding where no HIPAA authorization or Privacy Rule exception has been demonstrated. On 9/19/11, this Court conducted a bench trial in this no-fault action, wherein the parties stipulated to plaintiff’s prima facie case thus shifting the burden of proof to defendant insurer. In response to the Court’s inquiry whether defense counsel had a HIPAA authorization executed by assignor Shalina Akter (“Akter”), defense counsel conceitedly replied that he neither had one nor required one. Defense counsel argued HIPAA was inapplicable to a no-fault action, but did not cite any statutory or regulatory scheme to allow disclosure of Akter’s identifiable confidential health information in a public civil trial.

The Privacy Rule (45 CFR Titles 160 and 164) promulgated by the United States Department of Health and Human Services under authority granted in the Health Insurance Portability and Accountability Act (“HIPAA”) (Pub. L. No. 104-991, 110 US Stat 1936, codified in various titles of the United States Code) prohibits the disclosure of an identifiable patient’s medical record in a public civil judicial proceeding without the patient’s authorization, subject to certain exceptions (45 CFR §164.508; Matter of Miguel M., 17 NY3d 37, rearg den __NY3d __, 2011 NY Slip Op 86319). The Privacy Rule contains exemptions for disclosure of confidential health records where: 1) the information is to be exchanged for billing purposes (45 CFR [*2]§164.506); 2) in a workers’ compensation action (45 CFR §164.512 [1]); or 3) submission of a claim to an arbitration panel (45 CFR §164.506). None of these scenarios are present herein.^[FN1] HIPAA regulations can be pre-empted upon a demonstration that state law offers “more stringent” protections (see, HIPAA §264 [c][2]; Privacy Rule 45 CFR §160.203 [b]), but none was shown by counsel, nor found to exist herein by this Court.

The Privacy Rule authorizes disclosure of health information, subject to certain conditions, “in the course of any judicial or administrative proceeding,” in a response to “an order of a court or administrative tribunal” (45 CFR §164.512 [e][1][i]) or “a subpoena, discovery request or other lawful process” (45 CFR § 164.512 [e][1][ii]). The Privacy Rule also contains an exception for subpoenas and the like. This exception is conditioned on the demonstration of “satisfactory assurance,” from the party seeking the information, of compliance with the elements set forth in 45 CFR §165.512 (e)(1)(iii). Due to defendant’s position that HIPAA did not apply to no-fault actions, it intentionally failed to avail itself of the above-noted procedures under the Privacy Rule. The Court notes that plaintiff’s counsel never offered nor acknowledged if its office had ever obtained a HIPAA authorization from its assignor or exchanged one with opposing counsel.

Previously, this Court had repeatedly informed defendant’s law firm, among others, of the need to comply with the HIPAA statute’s authorization prerequisites.^[FN2] While HIPAA does not create a private cause of action for those aggrieved (see, 65 CFR §2566), failure to comply with HIPAA and the Privacy Rule can result in imposition of federal civil and criminal penalties (42 USC §1320d-5). These fines and penalties range from as low as $100 per incident/annual maximum of $25,000 for repeat violations for negligent disclosures, to $50,000 per violation with annual maximum of $1.5 million for uncorrected wilful negligent violations; along with fines of up to $250,000 and imprisonment for up to 10 years where unauthorized identifiable health information has been intentionally used for “commercial advantage” (see, American Recovery and Reinvestment Act of 2009, Public L. No. 111-5). The mere “inconvenience” to the insurer or assignee of first party no-fault benefits does not justify disregarding the confidentiality interest protected by HIPAA and the Privacy Rule. Accordingly, this Court imposes the judicially sanctioned remedy of exclusion of proposed medical testimonial evidence (Matter of Miguel M., supra [medical records obtained in violation of HIPAA or the Privacy Rule and the information contained in those records were deemed inadmissible in a proceeding to compel assisted outpatient treatment]), in the absence of a HIPAA authorization or compliance with the Privacy Rule exceptions. [*3]

In light of the stipulation between the parties, the exclusion of any proposed defense medical testimony on the issue of medical necessity and the lack of any other evidence submitted in opposition to plaintiff’s prima facie case, the Clerk of the Court is directed to enter judgment in favor of plaintiff against defendant insurer GEICO Insurance Company in the sum of $1346.76 with statutory interest, cost and fees as of 5/29/08.

This constitutes the Decision and Order of this Court.

Dated:11/3/11_______________________

Jose A. Padilla, Jr.

Judge of the Civil Court

Footnotes

Footnote 1:“The maxim expression unius est exclusio alterius is applied in the construction of the statutes, so that where a law expressly describes a particular act, thing or person to which it shall apply, an irrefutable inference must be drawn that what it omitted or not included was intended to be omitted or excluded,” (NY Statutes §240). Since HIPAA explicitly exempts pre-authorization in workers compensation and arbitration cases but made no exemption for no-fault actions, the only inescapable conclusion is that Congress did not mean to exclude no-fault benefits related actions from HIPAA or the Privacy Rule.

Footnote 2: Defense counsel’s reliance on the NYS Department Insurance Opinion Letter, dated July 8, 2003, is misplaced as that letter’s analysis and conclusion dealt primarily with HIPAA’s inapplicability in a workers’ compensation setting.

[*1]

Civil Court of the City of New York, Bronx County, April 7, 2010

APPEARANCES OF COUNSEL

Ferdinand Diaz for claimant. Jaffe & Koumourdas (Peter Coates of counsel), for defendant.

{**28 Misc 3d at 861} OPINION OF THE COURT

Fernando Tapia, J.

In these nonpayment of no-fault insurance benefits cases before the Commercial Small Claims Part, this court, after oral testimony and review of submitted cases/statutes from claimant, hereby dismisses these cases without prejudice.

Does the Commercial Small Claims Part have subject matter jurisdiction to try a no-fault case when a specific No-Fault Part exists within New York City Civil Court? This court finds that it does not. Thus, under New York City Civil Court Act § 1805-A,^[FN1] the above-captioned case is transferred to the No-Fault Part for proper adjudication.

I. Factual Background

Claimant is an assignee for an individual patient who sought health care treatment from a motor vehicle accident. Claimant’s representative is not an attorney. On or about December 10, 2009 claimant’s representative appeared before the Commercial Small Claims Part to recover [*2]no-fault benefits from defendant Countrywide Insurance, which is represented by counsel.^[FN2]

Claimant seeks $4,365.52 and $5,000 from defendant for unpaid no-fault bills. Defendant argues that the cases should be dismissed for lack of subject matter jurisdiction because claimant became an assignee of the claim that originally belonged to an individual, and not to a commercial entity. Claimant’s representative counters with a First Department Appellate Term case (claimant’s representative relies on East End Med., P.C. v Oxford Health Ins., Inc. [12 Misc 3d 135(A), 2006 NY Slip Op 51229(U) (App Term, 1st Dept 2006)], which will be discussed later) which ruled in favor of the plaintiff, stating that the claim could be heard in the Small Claims Part.

II. The Small Claims Part: Truly a “People’s Court”

A. Brief Discussion on the Small Claims Part

Small claims court is an informal court that is part of Civil Court. (See A Guide to Small Claims Court, Unified Court System; see also Siegel, NY Prac § 581 [4th ed].) As such, there{**28 Misc 3d at 862} is no requisite motion practice involved. In fact, motion practice is discouraged in small claims. (See Weiner v Tel Aviv Car & Limousine Serv., 141 Misc 2d 339, 341 [Civ Ct, NY County 1988] [where movant sought to dismiss pro se claimant’s case, the Civil Court held that the Small Claims Part need not entertain a pretrial motion, absent extraordinary circumstances].)

Under CCA 1809 (1) (“Procedures relating to corporations, associations, insurers and assignees”),

“[n]o corporation, except a municipal corporation, public benefit corporation, school district or school district public library wholly or partially within the municipal corporate limit, no partnership, or association and no assignee of any small claim shall institute an action or proceeding under this article, nor shall this article apply to any claim or cause of action brought by an insurer in its own name or in the name of its insured whether before or after payment to the insured on the policy” (emphasis added).

The purpose of CCA 1809 (1) is to keep businesses from using the Small Claims Part as claimants. (See Siegel, Supp Practice Commentaries, McKinney’s Cons Laws of NY, CCA 1809, 2010 Electronic Update.) To address whether businesses can use the Small Claims Part, then, CCA 1809-A was enacted by the New York State Legislature. A discussion follows.

B. CCA Article 18-A: Legislative Enactment Governing the

1. Legislative History and Intent of Article 18-A

In 1987 the New York Legislature enacted CCA article 18-A, which outlines the [*3]jurisdictional parameters for commercial cases in the Small Claims Part.^[FN3]

Under CCA 1809-A (“Procedures relating to corporations, associations, insurers and assignees”), “[a]ny corporation . . . which has its principal office in the city of New York and an assignee of any commercial claim may institute an action or proceeding under this article” (CCA 1809-A [a] [emphasis added]).

Furthermore, under CCA 1801-A (“Commercial claims defined”), ” ‘commercial claim’ . . . shall mean and include any cause of action for money only not in excess of the maximum amount permitted for a small claim in the small claims part of{**28 Misc 3d at 863} the court . . . provided that . . . the claimant is a corporation, partnership or association.” (CCA 1801-A [a].)^[FN4]

Commercial litigants can therefore initiate suit in the Commercial Small Claims Part. The Unified Court System also has a booklet titled A Guide for the Use of the Commercial Claims Part which is available to the public.

Article 18-A has been criticized for simply paralleling the existing article 18 instead of being an independently distinct rubric for commercial claims being brought to the Small Claims Part. (See Siegel, General Practice Commentary on “Commercial” Small Claims Article, McKinney’s Cons Laws of NY, Book 29A, UCCA 1801-A, at 815-816.) Nevertheless, there are relevant sections germane to the cases at hand that explain why the Commercial Small Claims Part is not the proper venue.

2. Implications of Article 18-A Regarding the Above-Captioned Cases

As mentioned earlier, motion practice is discouraged in small claims. No-fault matters, on the other hand, command motion practice because of their complicated nature.^[FN5] It therefore follows that these two no-fault cases be transferred to the No-Fault Part for proper adjudication in the interest of justice, so that the assignee can be accommodated accordingly.

According to CCA 1802-A (“Parts for the determination of commercial claims established”), the Commercial Small Claims Part “[s]hall not be exclusive of but shall be alternative to the procedure . . . with respect to actions commenced in the court by the service of a summons.” That is, Commercial Small Claims Part is to be used as an alternative forum, not an exclusive one.

In the cases at hand, the most relevant section is CCA 1809-A (“Procedures relating to corporations, associations, insurers and assignees”), which states that no individuals or corporations shall take an assignment of any claim or demand, with the intent and for the purpose of bringing an action or proceeding in the Commercial Small Claims Part (CCA 1809-A [b]). As assignment by an individual to a corporation is neither a small claim nor a commercial claim because it was assigned; neither is it a commercial claim because it was not originally commercial{**28 Misc 3d at 864} when the [*4]assignment was made.^[FN6] This effectively precludes the bringing of a common medical benefits case in the Small Claims Part.

Thus, an assignee may bring a case in the Commercial Small Claims Part, as long as it does not exceed five such suits per month, and as long as its main reason is to have the case tried on its merits, and not as a procedural legal strategy to get a favorable outcome from a forum such as small claims.^[FN7]

Here, claimant relies on East End Med., P.C. v Oxford Health Ins., Inc. (12 Misc 3d 135[A], 2006 NY Slip Op 51229[U]) to put forth its argument that the Commercial Small Claims Part is the proper forum to resolve these cases. In East End Medical, the health care provider (the appellant) sought to recover no-fault insurance benefits from 13 of its patient assignors in this consolidated action. The majority opinion ruled that the appellant’s no-fault case was prematurely dismissed because the merits were not seriously considered. (2006 NY Slip Op 51229[U] at *1.)

It is, however, the cursory sua sponte discussion of subject matter jurisdiction in the dissent that ignites the relevance of East End Medical with respect to the case at hand.^[FN8] According to the dissent, because the claimant’s case was not originally “commercial” as defined pursuant to CCA 1809-A,^[FN9] it could not have been brought in the Commercial Small Claims Part under CCA 1809-A. (2006 NY Slip Op 51229[U] at *2.)

This court, therefore, agrees with the dissent that where there is a more proper forum that specifically addresses claims by{**28 Misc 3d at 865} health care providers for nonpayment of basic economic loss claims, it is that forum that should be regarded as having subject matter jurisdiction. The proper forum with jurisdiction to entertain the type of claim at issue in the instant matter, however, presupposes the existence of a statute that permits through logical reasoning the creation of a judicial forum to most effectively adjudicate no-fault medical benefits claims.

III. Insurance Law Article 51: New York State Comprehensive Automobile Insurance Reparations Act (Also Known as the No-Fault Law)

The No-Fault Insurance Law was created in 1973 for the express purpose of promoting “prompt resolution of injury claims, limit[ing] cost to consumers and alleviat[ing] unnecessary burdens on the courts.” (Byrne v Oester Trucking Inc., 386 F Supp 2d 386, 391 [SD NY 2005], citing [*5]Pommells v Perez, 4 NY3d 566 [2005].)

At the crux of no-fault insurance litigation is the issue of whether the injured party sustained a “serious injury” as defined by Insurance Law § 5102 (d). This “serious injury” threshold, as defined, “provides that in order for a victim of an automobile accident to bring an action for ‘non-economic loss,’ [such as] pain and suffering, he or she must demonstrate ‘serious injury’ [resulting from the accident].” (Lamana v Jankowski, 13 AD3d 134, 136 [1st Dept 2004].)

A determination that the “serious injury” threshold has not been met, however, does not preclude a no-fault claimant from recovering any basic economic loss incurred as a result of a motor vehicle accident (MVA). With a limit of up to $50,000 per person, a claimant can seek to recover for medical services, lost wages, and other reasonable and necessary expenses. It is these types of claims that constitute the overwhelming majority of the No-Fault Part Civil Court case calendar.

In an attempt to handle these claims fairly and expeditiously pursuant to the spirit and letter of the No-Fault Law, a “No-Fault Part” was created in Bronx Civil Court. The No-Fault Part is a specialized court created in Bronx County^[FN10] to handle no-fault basic economic loss claims. This court would have the exclusive authority for entertaining all motions and trials pertaining to these claims.

The No-Fault Part has greatly facilitated the removal of the vast majority of MVA claims from the sphere of common-law{**28 Misc 3d at 866} tort litigation into a quick, sure and efficient system for obtaining compensation for economic loss suffered from a car accident.^[FN11] The nature of the claims exclusively involves payment demands by health care providers (always represented by counsel), as assignees, for health care services and treatment rendered parties (assignors) involved in MVAs.

Likewise, the defendants are exclusively insurance carriers and also invariably represented by counsel. In addition to representation by counsel, limited discovery is allowed in the No-Fault Part. The daily court calendar is divided such that during the morning calendar call, all procedural and nonprocedural motions are heard and orally argued, if not taken on submission. In the afternoon, all bench trials are conducted.^[FN12] This approach, suffice it to say, has generated a fair, uniform, and expeditious adjudication of an otherwise crushing volume of [*6]no-fault cases.

The court’s singular focus on medical benefits claims has allowed judges, attorneys, and court staff to develop the No-Fault Part into an efficient mechanism for the adjudication of these claims. This efficiency is predicated first upon a narrow body of law effectively interpreted and applied by a judge with the sole responsibility of adjudicating medical benefits claims that, secondly, are handled by experienced counsel on a daily basis in an adversarial, but nonconfrontational courtroom setting in the disposition of these claims. The functional structure of the No-Fault Part is consistent, therefore, with one of the No-Fault Law’s goals: the expeditious handling of basic economic loss claims. From a commonsense policy standpoint, the No-Fault{**28 Misc 3d at 867} Part is the proper forum to bring medical benefits claims actions.

IV. Conclusion

In sum, these two cases at hand are not “commercial” per se, based on CCA 1809 (1), as assignees are barred from initiating suit in the Small Claims Part. Instead, they should be adjudicated in the No-Fault Part. Wherefore these cases are hereby dismissed without prejudice so that they can be transferred to the No-Fault Part, which is the proper forum.

Footnotes

Footnote 1: Pursuant to New York City Civil Court Act § 1805-A (b), “[t]he court shall have power to transfer any commercial claim or claims to any other part of the court upon such terms as the rules may provide, and proceed to hear the same according to the usual practice and procedure applicable to other parts of the court.”

Footnote 2: Peter Coates of Jaffe and Koumourdas appeared on the record.

Footnote 3: This took effect on January 1, 1991.

Footnote 4: The amount is currently $5,000.

Footnote 5: An example of a small claims case is where a store customer sues a furniture store for defective furniture. Such a case does not require motion practice, unlike no-fault cases where expert testimony of health care professionals is generally part of proving a plaintiff’s case as to the medical necessity of a treatment or service.

Footnote 6: Dunrite Auto Body & Motors v Liberty Mut. Ins. Co., 160 Misc 2d 168, 171 (Suffolk Dist Ct 1993); see also Arthur F. Engoron, Small Claims Manual: A Guide to Small Claims Litigation in the New York State Courts, at 35 (5th ed 2001).

Footnote 7: To start a commercial claims case, the commercial claimant must give a statement to the commercial claims court clerk as to why she/he is starting a lawsuit. The claimant must also pay a $20 filing fee to the clerk, plus the cost of mailing the notice of the lawsuit to the defendant. The claimant must also file a verification that no more than five commercial claims have been initiated by that claimant anywhere in New York State during a calendar month. (See A Guide for the Use of the Commercial Claims Part, at 2 [1996].)

Footnote 8: In East End Medical, subject matter jurisdiction was neither raised nor briefed by the party on appeal. The Appellate Term therefore broached the issue on its own.

Footnote 9: “Commercial” means any corporation, partnership, or association with its principal office in New York State can initiate suit in the Commercial Small Claims Part, so long as the entity is not a collection agency or entity that take assignments of debts. (See CCA 1809-A; see also A Guide for the Use of the Commercial Claims Part, at 1 n 1 [1996].)

Footnote 10: Both Brooklyn and Queens Civil Court have created a similar No-Fault Part to accommodate such cases.

Footnote 11: The purpose of no-fault auto insurance is to encourage expeditious resolution of claims without the necessity of imposing an additional burden on courts. (See Matter of Gretka [General Acc. Group], 100 Misc 2d 170 [Sup Ct, Erie County 1979].)

Benefits to be paid on a “no-fault” basis were adopted by the New York State Legislature as a means of reducing the caseload of the courts and to provide a fair and adequate way of recovering for those injured in auto accidents. (See Gamble v Randolph, 91 Misc 2d 436 [Rochester City Ct 1977].)

The object of Insurance Law of 1939 § 670 et seq. was to assure prompt compensation to accident victims of substantially all of their economic loss without regard to fault. (See Matter of Criterion Ins. Co. of Wash., D.C. [Commercial Union Assur. Co.], 89 Misc 2d 36 [Sup Ct, Nassau County 1976].) This same tenet is echoed in the current No-Fault Law, along with Ohio Cas. Ins. Co. v Continental Ins. Co. (101 Misc 2d 452 [Sup Ct, Erie County 1979]).

Footnote 12: Although nonjury trials are officially held during the morning calendar call and motions during the afternoon calendar call, most motions are able to be resolved in the mornings as well. If not, then they are resolved in the afternoon calendar.

Civil Court of the City of New York, Bronx County

CV-030992-09/BX

For Plaintiff:

Michael C. Rosenberger of

Rapuzzi, Palumbo & Rosenberger, P.C.

For Defendant:

Diana Leahy of McDonnell & Adels, PLLC

Fernando Tapia, J.

In this no-fault action regarding the recurring issue of Examination Under Oath [“EUO”] letters and their presumption of mailing, this Court, after oral arguments and review of the motion papers, hereby GRANTS Defendant’s Pre-Answer Motion to Dismiss Plaintiff’s Complaint.

The above-captioned matter is demonstrative of other no-fault cases that have similar issues because the case at hand involves two topics that other motions seek to resolve: (1) violation of no-fault policy conditions and (2) unanswered verification requests. Those two main problems in turn spawn the ancillary issue regarding sufficient mailing procedures to make timely requests.

I. VIOLATION OF POLICY CONDITIONS

Defendant argues that Plaintiff’s Complaint must be dismissed as a matter of law because Plaintiff violated no-fault policy conditions when it failed to appear for its scheduled EUO. Plaintiff, in turn, claims that Defendant failed to provide a copy of the subject insurance policy in [*2]its moving papers as well as failed to show that the EUO letters were actually sent.

Section I of 11 NYCRR § 65-1.1 states the following with respect to conditions for proof of claim:

“Upon request by the Company, the eligible injured person or that person’s assignee orrepresentative shall:

(a) execute a written proof of claim under oath;

(b) as may reasonably be required to submit to examinations under oath by any person named bythe Company and subscribe the same;

(c) provide authorization that will enable the Company to obtain medical records; and

(d) provide any other pertinent information that may assist the Company in determining the amountdue and payable.”

In the instant case, Plaintiff claims that Defendant unnecessarily cited the aforementioned policy condition because “[t]he central issue here is derived from the terms contained within the written policy agreement between the parties.” See Pl.’s Aff. in Opp. at p. 6. Plaintiff therefore asserts that in order for Defendant to prevail on its motion, the State Farm policy itself should be included as part of the record instead of depending on the no-fault regulations under 11 NYCRR § 65-1.1. To support its argument, Plaintiff discusses Allstate Ins. Co. v. Ganesh, 8 Misc 3d 922 (Sup Ct, Bronx County 2005), a case dealing with a petitioner’s arbitration stay of an uninsured motorist claim.

In Ganesh, the respondent, the injured individual, sought coverage from the offending party’s insurance carrier [State Farm-petitioner]. State Farm disclaimed the coverage on the basis that the collision was not a motor vehicle accident [“MVA”], but instead, was an intentionally staged event, thereby constituting fraud. State Farm therefore disclaimed coverage to the injured party because per its written policy, intentionally caused losses are not covered. Id. at 923.

The Bronx Supreme Court held that State Farm did not validly disclaim coverage because it did not give sufficient admissible evidence that it was a staged event [i.e. offering the written policy as admissible evidence]. According to Hon. Billings, “[b]ecause no party introduced State Farm’s policy in evidence, State Farm never proved, most fundamentally, that the policy . . . excluded intentionally caused losses or losses involving particular conduct or imposed any conditions on anyone relating to a claimed loss.” Id. As such, the petitioner’s arbitration stay was granted and the respondent was allowed to seek coverage under State Farm’s policy.

Here, Plaintiff’s reliance on Ganesh is flawed because unlike Ganesh, this instant action deals with the issue of an EUO “no-show” which is expressly outlined in the no-fault regulations, guiding principles which written policies are based upon. Ganesh, on the other hand, dealt with the issue of coverage with respect to a questionably fraudulent claim that requires dissection of the written policy itself. Ganesh is also distinguishable from the case at bar because the relief sought in Ganesh was for a stay of arbitration of an uninsured motorist claim, as opposed to dismissal of the complaint based on non-compliance to policy conditions. As such, Ganesh fails to support Plaintiff’s claim that Defendant is required to provide the written policy as evidence. [*3]

Revisiting 11 NYCRR ｧ 65-1.1, that section is part of the revised no-fault regulations which took effect on April 5, 2002, and adopted the mandatory Personal Injury Protection [“PIP”] endorsement authorizing EUOs to be incorporated into insurance policies. In other words, compliance to a scheduled EUO is read into the written policy, and the insurer is not required to offer it as evidence to prove its claim.^[FN1] Likewise, in the case at hand, Defendant is not required to include its written policy as part of the record because its defense [of the EUO “no-show”] is found in the Endorsement. Thus, the mandatory Endorsement applies whether or not the written insurance policy actually contains it. Based on the moving papers, the date of accident was on August 27, 2008. According to NY Insurance Law ｧ 3425 (a)(8), “With respect to auto insurance, ‘required policy period’ means a period of one year from the date as of which a covered policy becomes effective after first issuance or voluntary renewal.” Furthermore, under SZ Medical P.C. v. State Farm Mutual Auto Ins. Co., 9 Misc 3d 139(A) (App Term 1st Dept 2005), the date of the written policy’s issuance determines if the Endorsement is applicable, and not the date when the plaintiff submits a claim. Applying the above to the instant action, the subject insurance policy contract could be deemed to have been issued/renewed well after April 5, 2002, given that the date of accident occurred well over six years after the effective Endorsement date. It would therefore be duplicative to submit a copy of the policy because its legislative intent was to read the Endorsement into all policies [post-April 5, 2002].^[FN2] As such, Defendant does not need to submit the policy contract because the insurance contact in effect incorporates the Endorsement that authorizes EUOs under 11 NYCRR ｧ 65-1.1.

Plaintiff in the case at bar is therefore in violation of the policy condition requiring submission of EUOs for verification purposes in order to make a determination of first-party benefits because Plaintiff did not appear at the two scheduled EUOs as required by the Endorsement. Accordingly, Plaintiff failed to submit valid proof of claim. The discussion now turns to the mailing mechanics involved in procuring such verifications.

II. VERIFICATION REQUESTS

A. Defendant’s contentions

According to 11 NYCRR § 65-3.5 (a), once the insurer receives the NF-2 application for benefits, the insurer “[s]hall forward to the parties . . . those prescribed verification forms it will [*4]require prior to payment of the initial claim.”^[FN3]

In this instant matter, the issue before the Court is whether the mailing of a letter via certified mail return receipt requested is entitled to the same presumption of receipt as regular first-class mail in the absence of the signed returned receipt. This Court determines that it is.

Here, Defendant argues that Plaintiff did not appear to the scheduled EUO despite timely notification to Plaintiff.^[FN4] To substantiate its argument, Defendant provided a sworn affidavit from a calendar clerk at the law office who explained that she was personally responsible for scheduling/handling EUOs. See Toyla Hogan Aff. at ¶ 1. Defendant also provided a sworn affidavit from a Claims Representative who attested her personal knowledge of State Farm’s mailing procedures of EUO letters via certified mail.^[FN5] See Alyson Johnson-Shaw Aff. at

¶¶ 3, 7.

Plaintiff counters that Defendant failed to meet its prima facie burden of proving that the two EUO letters were actually mailed because Defendant’s supporting affidavits are not from individuals who personally mailed the EUO letters. See Pl.’s Aff. in Opp. at pp. 6-7. Plaintiff further argues that Defendant’s affidavits “[a]re actually just a string of several irrelevant and/or conclusory assertions.” Id. at p. 10. To support its contentions, Plaintiff relies on Clark v. Columbian Mut. Life Ins. Co., 221 AD2d 227 (1st Dept 1995).

In Clark, the defendant moved for summary judgment on the basis that no triable issues of fact remained with respect to denying the plaintiff’s life insurance proceeds, especially after sending notices to the plaintiff to make payments so that his life insurance policy would remain active. The plaintiff denied receipt of those notices and further argued that the defendant’s deponent who testified on the regular office procedures of mailing the notices failed to show that he was aware of the computer-generated mailing log which listed the names of those receiving such notices. Id. at 228. The Court denied the motion, finding no presumption of receipt by the insured. Id. at 228-29.

Plaintiff’s reliance on Clark is misplaced because Defendant in the instant case submitted mail lists into evidence, whereas the deponent in Clark was not even aware of the computer-generated mail lists that were used for cross-referencing of the envelopes containing the notices. See Def.’s Reply Aff. at ¶ 6. In addition, the plaintiff in Clark expressly denied receipt of the notice. Here, Plaintiff, in its pleadings, did not explicitly or implicitly deny that it never received the EUO letters. Instead, Plaintiff contends that Defendant failed to show that the EUO letters were actually mailed. This Court therefore turns to the final issue of the presumption [*5]of mailing/receipt.

B. Plaintiff’s contentions

What constitutes “sufficient mailing” under no-fault regulations with respect to raising the presumption that an EUO letter was sent and received via certified mail, return receipt requested?

Here, Plaintiff contends that Defendant has the burden to show that the EUO requests were actually mailed. Based on Defendant’s sworn statements, the EUO letters were sent via certified mail. Thus, the question before the Court is whether the use of certified mail return receipt requested creates a more demanding presumption of mailing and receipt threshold above and beyond that of a letter sent via regular first-class USPS mail. The court finds that it does not.

1. Legal presumption: a basic discussion

This Court finds that Defendant has met its burden because the Court adheres to the longstanding precept that a basic fact [i.e. a mailed letter] raises the existence of a presumed fact [i.e. receipt of the letter] until the presumption is rebutted by admissible evidence.

Under Rule 301 of the Federal Rules of Evidence, a “[p]resumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption . . .” Sufficient evidence can therefore be considered by a fact finder in order to rebut a presumption.^[FN6] The least sufficient approach to a presumption is the “permissible inference” one in which a fact finder may conclude that a presumed fact exists. See Black’s Law Dictionary, 8th ed 2004. A permissible presumption, then, allows someone to infer that a presumed fact does exist from a basic one. Applying this to the mailed letter example, it can therefore be presumed that proper mailing occurred and it is more likely than not that the letter was received.^[FN7]

Does the presumption of receipt by regular mail apply to items of sent certified mail?

2. Rebutting the presumption

Defendant established prima facie proof that it mailed requests for additional verification of the claim by providing sworn affidavits from two State Farm office employees as well as an employee from the office of Defendant’s lawyers, all who have personal knowledge of mailroom procedures of EUO letters. See Def.’s Reply Aff. at ¶¶ 10-11.

More importantly, Defendant submitted its mail list which is not only additional prima facie proof of mailing, but is key to creating the presumption of receipt.^[FN8] The very function of [*6]“return receipt” is to provide proof of delivery, as guaranteed by the U.S. Postal System.^[FN9]

Here, Plaintiff relies on State of New York v. International Fidelity Ins. Co.,

181 Misc 2d 595 (Sup Ct, Albany County 1999) to support its contention that Defendant failed to meet its prima facie burden to prove actual mailing of the EUO letters. In Int’l Fidelity —a non-no-fault case— the movant-plaintiff-NYS sought to prove that it never received the defendant’s cancellation notices about the terminated bonds which were sent via certified mail. The cross-movant-defendant-IFIC argued that it was entitled to summary judgment because NYS could not rebut the presumption of receipt of the cancellation notices. Id. at 599.

The Albany County Court held, inter alia, that routine office practices cannot create a presumption of receipt of letters sent via certified mail. Id. As the Court stated, “To create a presumption of receipt, IFIC has the burden of describing a standard office procedure used to ensure that items are properly mailed, or provide proof of the actual mailing.” Id.

Plaintiff’s reliance on Int’l Fidelity is misplaced because State Farm submitted both sworn affidavits from a claims representative with personal knowledge about mailroom procedures and proof of actual mailing to complement those affidavits, as previously mentioned in II.A. of this decision. See also Hernandez, supra. Furthermore, State Farm retained its mail lists, unlike the plaintiff [NYS] in Int’l Fidelity, who destroyed its mail logs. See Int’l Fidelity, 181 Misc 2d 595 at 598-99.

Also, in the case at hand, even if Ms. Johnson-Shaw, the State Farm Claims Representative, did not attest that she was personally responsible for preparing the EUO letters and mailing them via certified mail, return receipt, the fact that State Farm retained its mail lists serves as its safety net, thereby allowing it to create the presumption of receipt because those mail lists represent actual proof of mailing. Defendant should therefore not be punished for taking advantage of various mailing options which aim to ensure delivery from both the sender’s and recipient’s ends.

Mailing procedures’ technological developments, today, ensure that items are mailed and received so that presumptions can be eliminated. In fact, the USPS has the capacity to reproduce the image of the green return receipt card as a PDF attachment when certified mail is procured via the internet, or else when the sender did not receive the green card back and instead goes to the USPS to follow up on the status of the card. See FN. 9.

As footnoted earlier, the regulation is not specific about the means in which to send substantially equivalent written notices to the required parties; it merely instructs the insurer to “forward” them. See NYCRR § 65-3.5 (a). In fact, it may very well have been the legislative intent of the NY Insurance Department to be vague in order to avoid enforcement of a particular form of mailing in the event it becomes outdated, which would breed any problems regarding receipt. Until the no-fault regulations streamline its mailing requirement, it is presumed that a properly addressed letter that was mailed was duly delivered to the intended individual when using any method of mailing that the USPS offers, however basic or sophisticated that form of mailing is.

III. CONCLUSION [*7]

Satisfying no-fault policy conditions does not have to be compromised at the expense of challenging mailing procedures because proof of mailing of verification letters via regular USPS is enough to create a presumption of receipt. In addition, use of certified mail does not create a more demanding presumption of mailing and receipt beyond that of a letter that was properly mailed. The regulations make no distinction between sending a letter via regular mail or via certified mail.

WHEREFORE Defendant’s Pre-Answer Motion to Dismiss Plaintiff’s Complaint is hereby GRANTED.

This constitutes the decision and order of this Court.

Dated: July 2, 2009____________________________________

Bronx, NYHon. Fernando Tapia, J.C.C.

Footnotes

Footnote 1: See Dana Woolfson LMT, a/a/o Tania Rega v. GEICO, 20 Misc 3d 948 (Civ Ct, NY County 2008) (holding that an insurer does not need to produce the insurance policy at trial to show that the contract contained the Endorsement).

Footnote 2: See Eagle Chiropractic, P.C. a/a/o Annette Monk et. al. v. Chubb Indemnity Ins. Co., 19 Misc 3d 129(A), 2008 WL 712036 (NY Sup App Term 9th & 10th Jud Dists 2008) (stating that the Endorsement was required to be included in auto insurance policies issued or renewed after April 5, 2002).

Footnote 3: The regulation uses “forward” to describe the manner in which notification is to be effected. The only kink is determining what constitutes sufficient “notice” because the regulation does not specify the mailing procedure by which to notify the injured party.

Footnote 4: The EUO was requested with respect to the medical bill of $67.40 which was submitted after other bills were disclaimed. See Def.’s Aff. at ¶ 11. The sought-after EUO is for Theresa M. Hastava, D.C., the individual in question for being fraudulently involved with the healthcare practice. See Claudia Fulco Aff. at ¶ 19.

Footnote 5: Per 11 NYCRR ¶ 65-3.6 (b), timely verification requests are made either via phone calls or by mail. Defendant sent the first EUO letter via certified mail on or about October 29, 2008, with reference numbers 102808JK35 and 102808JK36. The second letter was sent on or about December 1, 2008, with reference numbers 120108JK24 and 120108JK25. See Def.’s Reply Aff. at ¶¶ 10-11.

Footnote 6: As per Notes of Committee on the Judiciary, House Report No. 93-650.

Footnote 7: See Nassau Ins. Co. v. Murray, 46 NY2d 828, 829 (NY 1978) where the 1st department held that “It is settled law that a properly addressed and stamped envelope placed in a U.S. mailbox is presumed to have been received by the addressee.”

Footnote 8: See Hernandez v. Merchants Mut. Ins. Co., 14 Misc 3d 1215(A) (Sup Ct, Bronx County 2006), where movant-defendant-insurer sought summary judgment to dismiss the plaintiff’s complaint, arguing it timely disclaimed coverage via written notice and quoting Residential Holding Corp. v. Scottsdale Ins., 286 A.D2d 679 (NYAD 2d Dept 2001) (where proof of actual mailing or proof of a standard office practice/procedure designed to ensure that items are properly addressed and mailed).

Footnote 9: See , accessed June 22, 2009.

Civil Court of the City of New York, Bronx County

020438-08

Appearance of Counsel-

Plaintiff- Michael J Palumbo, 188 East Post Road, suite 300, White Plains, NY 10601, 914-681-7117

Defendant- Teresa M. Spina, 170 Froehlich Farm Blvd, Woodbury, NY 11797, 516-496-5800

Elizabeth A. Taylor, J.

The issue before the Court is whether the submission of a notice to admit is [*2]sufficient to establish a prima facie case to recover no-fault first party benefits for unpaid medical expenses.

Under CPLR §3123 a notice to admit is a “written request for admission by the latter of the genuineness of any papers or documents…described in and served with the request, or of the truth of any matters of fact set forth in the request, as to which the party requesting the admission reasonably believes there can be no substantial dispute at the trial and which are within the knowledge of such other party or can be ascertained by him upon reasonable inquiry.” (CPLR §3123(a)). If a party fails to respond to a notice to admit within 20 days after service, the matters therein are deemed admitted for the purpose of the pending litigation. (CPLR §3123(a)). A notice to admit is a vehicle for resolving and eliminating matters that may be factually relevant but are not really in dispute, thus a notice to admit is not permissible to seek admissions to material issues. (Villa v. New York City Hous. Auth., 107 AD2d 619, 620 [1984][1st Dep’t]).

In order to establish a prima facie case for first party no-fault benefits a plaintiff must present the claim forms submitted to the insurer in admissible form, then establish that the payment of benefits is overdue, and prove the claim and assignment forms were served upon insurer. (Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742, 742-743 [2004][2nd Dep’t]). Laying the proper evidentiary foundation is commonly done by a witness who can testify that the claim form is a business record pursuant to CPLR §4518. However, it has become increasingly popular for plaintiffs to attempt to forgo the necessity of a witness through the use of interrogatory responses and responses or lack of responses to notices to admit to establish their prima facie case.

The Appellate Term, First Department has allowed the use of interrogatory responses to establish a prima facie case, stating “having admitted receipt of plaintiff’s claims for no-fault first party benefits, defendants may not now be heard to argue that plaintiff failed to establish that the claims had been mailed and received. (P.L.P. Acupuncture, P.C., v. Travelers Indem. Co., 19 Misc 3d 126(A) [2008][N.Y.App. Term 1st Dept.], quoting Fair Price Med. Supply, Inc. v. St. Paul Travelers Ins. Co., 16 Misc 3d 8,9 [2007][N.Y.App. Term 1st Dept.]). However, there are notable differences between the use of interrogatories and a notice to admit. As previously mentioned, a notice to admit may not be used to seek answers to material issues, whereas, an interrogatory is given under oath and may be used to address any relevant question. (Villa at 620). Furthermore, the use of a defendant’s response to interrogatory questions in which it is stated that the claims were mailed and received followed by a subsequent denial is much different than the scenario in which a defendant fails to respond to a notice to admit and it is therefore deemed admitted that they received the claim.

Courts differ drastically on the treatment of the notice to admit to establish a prima facie claim. A number of courts find that the use of a notice to admit seeking admissions as to the receipt of relevant claim forms, bills and defendant’s denial of the same goes to the “heart of the matter” or is a “material issue” and therefore, inadmissible to establish plaintiff’s prima facie case. (see RJ Med. P.C. v. All-State Ins. Co., 15 Misc 3d 1140(A) [2007][NY City Civ. Ct. Bronx County]; PDG Psychological, [*3]P.C. v. State Farm Ins. Co., 12 Misc 3d 1183(A) [2006][N.Y.City Civ. Ct. Kings County]). Meanwhile, other courts have held that the information requested in the notice to admit does not individually go to the “heart of the matter” even though collectively they may be dispositive. (see Seaside Med., P.C. v. General Assur. Co., 16 Misc 3d 758 [2007][NY Dist. Ct. Suffolk]). Further, other courts have held that the admissions of the receipt of relevant claim forms, bills and denials by notice to admit does not go to the “heart of the matter” and is therefore permissible; however, it does not establish a prima facie case because the formalities of the business record exception to the hearsay rule have not been observed. (Bajaj v. General Assur. Co., 18 Misc 3d 25, 28 [2007][NY App. Term 2nd Dept.]).

This Court is cognizant that the Second Department and First Department often differ on matters concerning no-fault litigation. However, since the First Department has yet to speak on the matter, this Court is bound by the Bajaj decision of the Appellate Term, Second Department. “The doctrine of stare decisis requires trial courts…in this department to follow precedents set by the Appellate Division of another department until the Court of Appeals or [the Appellate Division of this department] pronounces a contrary rule.” (Striver 140 v. Cruz, 1 Misc 3d 29, 31 [2003][NY App. Term 2nd Dept.]), quoting Mountain View Coach Lines v. Storms, 102 AD2d 663, 664 [1984][2nd Dept.]).

The Second Department has held that a plaintiff must lay a proper foundation for the admissibility under the business records exception to establish a prima facie case. (Bajaj at 28). According to Bajaj,the use of a notice to admit to ask the defendants if they have received the claim form is a proper use of the notice to admit. (id.). If defendant fails to respond to this notice to admit, it is then admissible that the defendant in fact received plaintiff’s claim form. (id.). However, an acknowledgment by defendant that they received the claim form is not a concession of the facts set forth in the claim. (id.). It remains the plaintiff’s burden to lay the sufficient foundation establishing that the claim form is a business record, and as such, is admissible to prove the truth of the matters asserted therein. (id.). This holding continues to be upheld by the Second Department. (see Vista Surgical Supplies, Inc. v. State Farm Mutual Ins. Co., 22 Misc 3d 128(A) [2009][N.Y.App. Term 2nd Dept.]).

Accordingly, the Court finds that an admission by notice to admit that defendant received plaintiff’s claim form is not a concession of the facts set forth in the claim form. The plaintiff still has the burden to establish the claim form is admissible as a business record exception to the hearsay rule to prove the truth of the matters asserted therein. Due to their failure to establish that the claim forms are business records, plaintiffs have not established a prima facie case. It is noted that the plaintiffs called no witnesses to testify.

Accordingly, plaintiff’s actions are dismissed.

The foregoing shall constitute the decision and order of this Court.

Dated: __April 30, 2009_______________

J.C.C.

Civil Court of the City of New York, Bronx County

1741/07

Plaintiff:

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Esqs.

Edward A. Cespedes, Esq.

of Counsel

150 Herricks Road

Mineola, New York 11501

(516) 741-4799

Defendant:

McDonnell & Adels, P.C.

Diana Leahy. Esq.

401 Franklin Avenue

Garden City, New York 11530

(516) 328-3697

Sharon A. Aarons, J.

Plaintiff commenced this action to recover no-fault first party benefits for unpaid medical services provided to Anthony Montes in the amount of $1,221.04, together with statutory interest, statutory attorney’s fees and costs and disbursements. This matter came before this Court for trial on December 7, 2007. In support of its prima facie case, plaintiff submitted a copy of its summons [*2]and complaint, a Notice to Admit and defendant’s Responses to the Notice to Admit, which were marked and entered into evidence as Court Exhibits I, II and III, respectively. Neither plaintiff nor defendant presented any witnesses nor proffered any other evidence. After review of these Court Exhibits and oral argument the Court ruled that plaintiff had not established a prima facie case and granted defendant’s motion for a directed verdict. Due to the fact that it has now become increasing common for plaintiffs seeking to recover no-fault first party benefits to attempt to establish its/their prima facie case at trial through the use of a Notice to Admit and the responses thereto, has resulted in the trial courts being divided on this issue (compare RJ Med., P.C. v. All-State Ins. Co., 15 Misc 3d 1140(A), 841 NYS2d 823 (Civ. Ct., Bronx County, 2007);PDG Psychological, P.C. v. State Farm Mut. Auto Ins. Co., 12 Misc 3d 1183(A), 824 NYS2d 766 (Civ. Ct., Kings County, 2006), with Seaside Med., P.C. v. General Assur. Co., 16 Misc 3d 758, 842 NYS2d 234 (Dist. Ct., Suffolk County, 1st Dist. 2007); New York Massage Therapy P.C. v. State Farm Mut. Ins. Co., 14 Misc 3d 1231(A), 836 NYS2d 494 (Civ. Ct., Kings County, 2006), the Court stated it would issue a formal written Decision/Order addressing the matter.

Plaintiff’s Notice to Admit (Court Exhibit II) asked the defendant to admit the following eleven items:

1. The defendant received the claims(s) for No-Fault benefits that are the subject of thisaction.

2. The defendant received the N-F-3 Verification of Treatment Form(s) that are the subjectof this action.

3. The defendant received the bill(s) that are the subject of this action.

4. The defendant received Assignment of Benefits Form(s) for the claim(s) that are thesubject of this action.

5. Annexed hereto are true and accurate copies of the plaintiff’s bill(s), claim(s) and/orN-F-3(s) referenced in 1 through 3 above, and the Assignment of Benefits formsreferenced in 4 above.

6. The defendant received the summons and complaint in this action.

7. The defendant received plaintiff’s bill(s) and/or N-F-3(s) referenced in 1 through 3 above,and the Assignment of Benefits form(s) referenced in 4 above, more than thirty daysbefore the defendant received the summons and complaint in this action.

8. The defendant has not paid the bill(s), claims(s) and/or N-F-3(s) referenced in 1 through3 above.

9. The defendant has not paid the bill(s), claims(s) and/or N-F-3(s) referenced in 1 through3 above, in full. [*3]

10. The defendant did not mail requests for verification to the plaintiff for the plaintiff’sbill(s), claims(s) and/or N-F-3(s) referenced in 1 through 3 above.

11. The defendant issued a policy of insurance covering the vehicle(s) plaintiff’s assignor(s)was/were in, or by which the assignor(s) was/were injured, at the time of the underlyingmotor vehicle accident(s).

Defendant’s verified Response to plaintiff’s Notice to Admit contained the same verbatim response to each of the eleven questions of the Notice to Admit which reads as follows:

Objection. The Notice to Admit goes to the heart of the matter being litigated and,

as such, is an improper use of a Notice to Admit. The Hawthorne Group, LLC v. RREVentures, et al., 7 AD3d 320, 324 (1st Dep’t 2004) and Sagiv v. Gamache, 26 AD3d 368, 369 (2nd Dep’t 2006); Defendant further objects as Plaintiff is asking Defendant to admit the genuineness and authenticity of any documents provided heretofore which is improper as such is exclusively within Plaintiff’s knowledge. Spawton v. James E. Strates Shows, Inc., 75 Misc 2d 813, 349 NYS2d 295 (Sup. Ct. Erie County, 1973) (emphasis added).

CPLR §3123(a) provides, inter alia, as follows:

Each of the matters of which an admission is requested shall be deemed admitted

unless within twenty days after service thereof or within such further time as the

court may allow, the party to whom the request is directed serves upon the party

requesting the admission a sworn statement either denying specifically the matters

of which an admission is requested or setting forth in detail the reasons why he

cannot truthfully either admit or deny those matters.

Here, the defendant neither admitted, denied or set forth a reason why he could not truthfully either admit or deny those matters sought in the Notice to Admit. Unlike requests for written interrogatories where a party is permitted to object and state the reason with reasonable particularity (CPLR§3133 (a)), such a procedure is not authorized with a Notice to Admit (CPLR§3123(a)). Webb v. Tire and Brake Distributor, Inc., 13 AD3d 835, 786 NYS2d 636 (3rd Dept. 2004). If a party believes that any of the requests for admissions are improper the correct procedure is seek a protective order under CPLR§3103. Kowalski v. Knox, 293 AD2d 892, 741 NYS2d 291 (3rd Dept. 2002). Otherwise, they may be deemed be admitted. Id. at 892; Tire and Brake Distributor, Inc., 13 AD3d at 838. Notwithstanding the fact that a party fails to respond to a Notice to Admit or its responses are improper, it is still the function of the court to review the propriety of the Notice to Admit and disregard same if the requests are improper. Eddyville Corp. v. Relyea, 35 AD3d 1063, 827 NYS2d 315 (3rd Dept. 2006).

The defendant herein contends that the admissions sought by plaintiff in its Notice to Admit are improper because they go to the heart of the matter being litigated. The purpose of a Notice to Admit is to obviate the necessity of producing witnesses to testify at trial pertaining to facts and/or documents where there “can be no substantial dispute at the trial and which are within the knowledge of the other party or can be ascertained by him upon reasonable inquiry.” CPLR§3123(a). An analysis of plaintiff’s Notice to Admit and relevant case law reveals that none of the individual [*4]questions for which admissions are sought rise to the level of matters that go to the “heart of the matter” and consequently the admissions sought by the plaintiff in its Notice to Admit were proper. Bajaj v. General Assurance, 2007 NY Slip Op. 27487 (App. Term, 2nd and 11th Jud. Dists.); General Assur. Co., 16 Misc 3d at 763-767; Marigliano v. State Farm Mut. Auto Ins. Co., 12 Misc 3d 1180(A), 824 NYS2d 764 (Civ. Ct., Richmond County, 2006); State Farm Mut. Ins. Co., 836 NYS2d at 494. Notwithstanding that the admissions sought by the plaintiff in its Notice to Admit were proper, the plaintiff by failing to append the documents it specifically stated were attached to its Notice to Admit, did not establish its prima facie case. State Farm Mut. Auto Ins. Co. 824 NYS2d at 764.

Parenthetically, the Court notes that the issue in no-fault health care provider case of whether use solely of a Notice to Admit and/or a defendant’s responses or lack thereto can establish a prima facie case has resulted in an apparent split of authority between the Appellate Term, 2nd and 11th Jud. Dists., and the Appellate Term, 1st Department. The Appellate Term, 2nd and 11th Jud. Dist., has unequivocally held in Bajaj that a Notice to Admit by itself is insufficient to establish a prima facie case and that a health care provider was required to tender evidentiary proof of the transaction sued upon in admissible form. However, the Appellate Term, 1st Dept., in Fair Price Med. Supply, Inc. v. St. Paul Travelers Ins. Co., 16 Misc 3d 8, 838 NYS2d 848 (2007), sustained a plaintiff’s prima facie case at trial based solely on defendant’s responses to plaintiff’s demand for verified written interrogatories. Unlike Bajaj, Fair Price did not require the submission of evidentiary proof of the transaction sued upon. Accordingly, in this department it appears, based upon Fair Price, that a plaintiff can establish solely through the use of a Notice to Admit and/or a defendant’s responses thereto a prima facie case.

CONCLUSION

For the reasons stated above, plaintiff had not established a prima facie case, defendant’s motion for a directed verdict is granted and plaintiff’s complaint is dismissed .

The foregoing constitutes the decision and Order of the Court.

Dated: January, 2008______________________________

Bronx, New YorkSharon Aarons, J.C.C.

[*1]

Civil Court of the City of New York, Bronx County, December 10, 2007

APPEARANCES OF COUNSEL

Law Offices of Teresa M. Spina, Woodbury (Emilio A. Cacace of counsel), for defendant. Leon Kucherovsky, New York City (Alan Goldstein of counsel), for plaintiff.

{**18 Misc 3d at 723} OPINION OF THE COURT

Sharon Aarons, J.

Relief Requested

Defendant moves for an order, pursuant to CPLR 2221 (e), granting defendant leave to renew and ordering a new trial based upon a change in law. Defendant’s motion is granted. Written opposition was submitted. Defendant’s motion for leave to renew is granted and upon renewal this court’s decision/order, dated October 31, 2006, is vacated, and plaintiff’s motions in limine for preclusion and for a directed verdict are denied.

Procedural Background[*2]

Plaintiff assignee brought this action against defendant, the assignor’s no-fault carrier, to recover for health services rendered to the assignor on December 10, 2004 in the nature of medical equipment supplied following the motor vehicle accident on October 28, 2004. Defendant contends that the medical equipment for which the plaintiff submitted a bill seeking $1,152 was not medically necessary.

Factual Background

On October 31, 2006 the parties appeared for trial of this action. They entered into a written stipulation, in writing and on the record, that plaintiff’s submission of the bill for services, the assignment of benefits and defendant’s denial of claim form (collectively admitted as plaintiff’s exhibit 1) would meet plaintiff’s burden of proof establishing its prima facie case. The parties further stipulated the timeliness and mailing of defendant’s denial of claim form. At the trial of this action, plaintiff made a motion in limine to preclude the peer review doctor from testifying and to preclude the defendant’s defense of lack of medical necessity on the grounds that the defense of lack of medical necessity was not preserved because the defendant’s denial of claim form, while asserting the defense of lack of medical necessity, neither specified the factual basis nor the medical rationale, and a copy of the peer review was not sent to the plaintiff. The court granted the plaintiff’s motions for preclusion and for a directed verdict in favor of the plaintiff and against the defendant in the amount of $1,152 with interest from August 2, 2005. The court’s granting of plaintiff’s motions was based upon the authority of the Appellate Term, Second{**18 Misc 3d at 724} and Eleventh Judicial Districts, rendered in A.M. Med. Servs., P.C. v Allstate Ins. Co. (12 Misc 3d 144[A], 2006 NY Slip Op 51426[U], *3 [2006]), which stated that

“this court has repeatedly held that where a denial of claim form fails to set forth with sufficient particularity the factual basis and medical rationale for its denial based upon lack of medical necessity, the defendant is precluded from asserting said defense. In the instant case, defendant’s denial of claim forms with respect to said claims, and the accompanying explanation of benefits forms, merely advised plaintiff that the claims were denied pursuant to a peer review report and that a copy of said report would be sent to plaintiff under separate cover. Since there is no evidence that the peer review was sent to plaintiff under separate cover within the 30-day claim determination period, and the denials of claims were otherwise devoid of any factual basis for the denials, defendant is precluded from asserting lack of medical necessity as a defense to said claims and plaintiff is entitled to summary judgment upon said claims” (citations omitted).

On November 3, 2006 the defendant served upon plaintiff a notice of appeal from the court’s decision/order and filed same with the Clerk of the Court on November 17, 2006.

Discussion and Analysis

The 1999 amendment of CPLR 2221 codified the rules pertaining to reargument and [*3]renewal motions. CPLR 2221 (e) (2) makes clear that a motion to vacate or modify a prior order on the ground that there has been a change in the law that would change the prior determination is a renewal motion. While the 1999 amendment set forth a specific time frame for the making of a motion to reargue (30 days after service of a copy of the order determining the prior motion with notice of entry [CPLR 2221 (d) (3)]), a motion to renew contains no statutory time prescription. The issue of the timeliness of a motion to renew under the 1999 statutory amendment was addressed by the Appellate Division, Second Department, in Glicksman v Board of Educ./Cent. School Bd. of Comsewogue Union Free School Dist. (278 AD2d 364 [2000]). In Glicksman the plaintiff’s complaint was dismissed. No appeal was taken from the order/judgment of dismissal. Subsequently, there was a change in the decisional law and seven months later a renewal motion ensued{**18 Misc 3d at 725} pursuant to the then recently amended CPLR 2221 (e) (2). The motion court granted the renewal motion and the Appellate Division reversed. The Appellate Division held that there was no indication in the legislative history of any intent to change the long-standing rule regarding finality of judgments and that a motion to renew may not be made after judgment was entered and no appeal was pending. Glicksman reaffirms that the law remains unchanged and that a motion to renew based upon a change in the law must still be made while the case is sub judice, i.e., still pending in the court system. (See also Daniels v Millar El. Indus., Inc., 44 AD3d 895 [2d Dept 2007]; Matter of Eagle Ins. Co. v Persaud, 1 AD3d 356 [2d Dept 2003].) Plaintiff does not assert that the defendant was untimely in the service or filing of its notice of appeal or that defendant’s appeal was dismissed. Consequently, defendant’s motion is timely since no judgment was entered and an appeal was pending and, as such, the court retains jurisdiction to determine the instant motion.

Subsequent to the issuance of this court’s decision/order and judgment, dated October 31, 2006, the Appellate Division, Second Department, decided the case of A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co. (39 AD3d 778 [2007]). That Court (at 779) stated as follows:

“For the reasons set forth in A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co. (39 AD3d 779 [2007] [decided herewith]), and New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co. (39 AD3d 832 [2007] [decided herewith]), we disagree with the Appellate Term’s conclusion that the defendant’s denial of claim forms were insufficient because they failed to set forth with sufficient particularity the factual basis and medical rationale upon which they were based. The applicable regulations provide that if a no-fault claim is denied in whole or in part based on a medical examination or peer review report requested by the insurer, then the insurer shall release a copy of that report to, among others, the applicant or its attorney, upon written request (see 11 NYCRR 65-3.8 [b] [4]). Had it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form (see NYS Form N-F 10; 11 NYCRR 65-3.4 [c] [11]), it would have so provided.”

The Appellate Term, First Department, concurred in A.I.D. Med. Supplies v GEICO Gen. Ins. Co. (15 Misc 3d 140[A], 2007{**18 Misc 3d at 726} NY Slip Op 51044[U] [2007], specifically citing A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co.; see also Andrew Carothers, M.D., P.C. v New York Cent. Mut. Fire Ins. Co., 16 Misc 3d 136[A], 2007 NY Slip Op 51613[U] [App Term, 2d & 11th Jud Dists 2007]; Delta [*4]Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]).

As previously stated, prior applicable law mandated that a denial of claim based upon lack of medical necessity must set forth with sufficient particularity the factual basis and medical rationale for such denial. This could be set forth either in the denial of claim form or in a peer review report attached to the denial of claim form or sent to plaintiff within 30 days of the denial under separate cover. Since this was not done in the case at bar, this court, applying applicable law, held that the defense of lack of medical necessity was not preserved. The decisions of the appellate courts, cited above, subsequently ruled that pursuant to applicable Insurance Department regulations, upon request, an insurer is required to release a copy of the peer review report to the applicant or its attorney; that a denial based upon lack of medical necessity is not insufficient because it fails to set forth the factual basis and medical rationale; and that had it been the intent of the Insurance Department to require the factual basis and medical rationale in the denial it would have so provided. Hence, herein, the fact that the denial of claim form does not state a factual basis or a medical rationale does not invalidate the denial that was timely sent as so stipulated at trial by the plaintiff.

Accordingly, defendant’s motion must be granted.

Conclusion

Defendant’s motion for leave to renew is granted and upon renewal this court’s decision/order, dated October 31, 2006, is vacated, and plaintiff’s motions in limine for preclusion and for a directed verdict are denied. The Clerk of the Court, upon being served with a copy of this order with notice of entry is directed to place this action upon an appropriate calendar for trial and to notify the respective parties herein. Since this action is being restored to the trial calendar as a result of a change in existing law made by the Appellate Division, neither the filing of a new notice of trial nor the payment of any additional fees are required.

Civil Court of the City of New York, Bronx County

79629/02

Nelida Malave-Gonzalez, J.

Plaintiff commenced this action to recover no-fault first party benefits for unpaid medical services provided to Fabio Vargas in the amount of $2, 498.38. In support of its prima facie case, plaintiff submitted a Notice to Admit. Neither plaintiff nor defendant presented any witnesses.

To establish a prima facie case for first party no-fault benefits, proof of a properly submitted statutory claim form or its substantial equivalent is sufficient. The burden then shifts to the defendant to establish the lack of medical necessity. 11 NYCRR §§ 65.3.4(c), 65-3.8(c), CPLR § 5106.The issue before this Court is whether the submission of a Notice to Admit is sufficient to establish a prima facie case to recover no-fault first party benefits for unpaid medical services.

A Notice to Admit is ” . . . a written request for admission . . . of the genuineness of any papers or documents described in and served with the request, or of the truth of any matters of fact set forth in the request, as to which the party requesting the admission reasonably believes there can be no substantial dispute at the trial and which are within the knowledge of such other party or can be ascertained by him upon reasonable inquiry. C.P.L.R. § 3123. Failure to timely respond to a Notice to Admit, either by denial or detailed reason as to why a denial or admission is not possible, shall result in those items requested deemed admitted. However, a Notice to Admit may not be used to elicit an admission of fundamental and material issues or ultimate facts. Meadowbrook-Richman, Inc. V. Cicchiello, (1st Dept. 2000); PDG Psychological, P.C. v. State Farm Ins. Co., 12 Misc 3d 1183(a)(2006).

The issue before the bench is considerably new. A cursory search of New York cases reveals no “on point” appellate decisions which would bind this Court. As such, an analysis of both arguments is worthwhile.

As defined above, a Notice to Admit may be used to settle any fact that is not at issue. A Notice to Admit should not contain any questions that would require that the opposing party concede any material facts. It is for this reason that failure to respond to a notice to admit is deemed as an admission. Conversely, if Notice to Admit is permitted as the sole evidence to [*2]establish a prima facie case, logical reasoning would follow that there was no material issues presented at trial and thus no prima facie case made.

One cannot deem any failure to respond to a Notice to Admit as an admission to a material fact. To allow such would spawn an abuse of this disclosure device and contradict the purpose of the Notice to Admit. Further, it would prevent attorneys from regarding their ethical duty to actively participate in the litigation of each case as well as timely responding to documents submitted by opposing counsel.

Recently, in Fair Price Medical Supply v. St. Paul Travelers Ins. Co., 2007 NY Slip Op. 27173, the Appellate Division, First Department affirmed a case where interrogatories were admitted to prove plaintiff’s prima facie case. Specifically, to establish that in response to the interrogatories, defendant admitted that it received the no-fault claims and made partial payment on the claims. The case at bar is distinguishable from Fair Price Medical Supply for many reasons. Although both discovery devices, the Interrogatory and a Notice of Admit function quite differently.^[FN1] First, an Interrogatory must be given under oath, where as a Notice to Admit need not be. Further, an Interrogatory may be used to unearth any relevant subject. However, as defined above, a Notice to Admit may not be used to seek answers to material issues to be resolved at trial. Sagiv v. Gamache, 26 AD3d 368 (2nd Dept. 2006).The instant case is further distinguished from Fair Price Medical Supply because that defendant responded to the Interrogatories. The Appellate Division found it contradictory that the defendant now claims that plaintiff’s did not submit proof that the claims were mailed, received or overdue although these issues were admitted under oath in response to the interrogatory. That is not the case here.

Plaintiff’s Notice to Admit requested the following admissions:

1. That the bill(s) attached to the Summons and Complaint was received by the defendant.

2. That said bill(s) was received on or before 12-01-2002.

3. That defendant did not mail a denial of claim form NF-10 to the plaintiff within thirtydays of receipt of said bill.

4. That defendant did not issue any requests for verification to the plaintiff.

5. That the occurrence of the underlying accident is not disputed.

6. That the assignor’s involvement in said accident is not disputed.

7. That there was a policy of insurance in effect covering the accident of 12/21/01.

8. That the injuries claimed were causally related to the motor vehicle accident.

9. That RJ Medical, P.C. is properly licensed in the State of New York.

10. That the assignor complied with all notice requirements.

11. That plaintiff complied with all notice requirements.

12. That the bill submitted was in accordance with the New York State WorkersCompensation Fee Schedule.

Plaintiff did not submit bills or any other documents to this Court to support the Notice to Admit. Defendant did not respond to the Notice to Admit and alleged at trial, that the plaintiff never submitted the requisite bills or forms with the Notice to Admit. Nor were said bills or [*3]forms previously provided. Defendant’s failure to respond to the Notice to Admit would deem the question of whether the bills were previously submitted as an admission and thus conceded at trial. Although technically correct, the requested admissions go to the heart of the matter. The requested admissions are of material issue at the trial. A no-fault first party benefits case requires only that the requisite bills, forms and substantially equivalent documents be admitted to prove a prima facie case. If admitted to by default during discovery, which is what happens when no response to the Notice to Admit is effectuated, it alleviates the plaintiff any burden of moving forward on its prima facie case. Thus, resulting in the plaintiff having established absolutely no material issue at trial upon which this court could hang the proverbial hat.

The plaintiff did not provide any additional evidence at trial and thus is unable to prove through admissible evidence that payment was not made on a timely submitted claim. As such, plaintiff’s action is dismissed.

The foregoing constitutes the Decision and Order of the Court.

Dated:______________________________________________

Hon. Nelida Malave-Gonzalez, J.C.C.

Footnotes

Footnote 1: CPLR 3130(1).

Civil Court of the City of New York, Bronx County

74244/03

Lizbeth González, J.

The plaintiff is a medical provider who seeks payment for no-fault medical services rendered to the assignor. The claim was rejected by the defendant-insurer on the ground of lack of medical necessity. At trial, the plaintiff’s bills were not accepted into evidence pursuant to CPLR 4539(b) because its computer copies, unlike the originals, were unsigned. The defendant’s interrogatories, however, establish that the plaintiff’s bills were received and that a deficiency in the amount of $1261.81 remains outstanding. The defendant, which produced no witnesses, argues that the claim should be denied because the plaintiff failed to introduce into evidence an assignment of benefits as part of its prima facie case. This Court is compelled to follow the authority of the Appellate Term, First Department, which recently held that an insurer’s failure to object to the adequacy of a plaintiff’s no-fault claim form within 10 days of receipt waives any defenses based thereon, including any deficiencies in the assignment of benefits. (Laufer v Lumberman’s Mutual Casualty Co., NYLJ, Oct. 17, 2005, at 27, col. 1 .) The defendant, which failed to introduce its denial into evidence, concedes that no objection to the plaintiff’s omission of its assignment was raised.

After careful consideration, this Court determines that the plaintiff met its prima facie burden by a preponderance of the credible evidence. The Clerk of the Court is directed to enter judgment for the plaintiff in the amount of $1261.81 together with statutory interest, attorney’s fees and costs.

This constitutes the decision and judgment of the Court.

Dated:January 5, 2006

So ordered,

_________________________________

Hon. Lizbeth González

Supreme Court, Bronx County

13527/2005

For Petitioner

Matthew E. Schaefer Esq.

Freiberg & Peck, LLP

12 East 41st Street, New York, NY 10017

Lucy Billings, J.

Petitioner seeks to vacate a New York No-Fault Arbitration Panel award dated February 24, 2004, granting respondent’s claim for reimbursement of medical expenses arising from a motor vehicle collision. Petitioner claims the arbitrator lacked jurisdiction over petitioner. C.P.L.R. § 7511(b)(1)(iii). While the court may lack personal jurisdiction over petitioner, based on the uncontradicted attestation that petitioner has not transacted or been licensed to transact business in New York, C.P.L.R. §§ 301 and 302; LaMarca v. Pak-Mor Mfg., 95 NY2d 210, 214 (2000), petitioner still may have been subject to the arbitration forum, so that the arbitrator’s award was within her power. C.P.L.R. § 7511(b)(1)(iii).

I.CONTACTS WITH NEW YORK

It is undisputed that petitioner is a Pennsylvania corporation transacting business in that state. Although not addressed in the petition or supporting affidavits, the arbitration decision concludes, and petitioner does not contradict, that it insured a vehicle involved in the collision from which the claimed medical expenses arose and which occurred in New York. A contract of insurance covering a vehicle travelling in New York does not amount to sufficient contact with the state to confer jurisdiction. C.P.L.R. § 302(a)(1); Chase Manhattan Bank v. AXA Reins., UK, 300 AD2d 16, 19 (1st Dep’t 2002); New York Cent. Mut. Ins. Co. v. Johnson, 260 AD2d 638, 639 (2d Dep’t 1999).

No evidence or even allegations, however, indicate that the insured vehicle was not registered in New York or that the vehicle owner was not a New York resident. These facts may bear on whether the court would have jurisdiction here. Preferred Mut. Ins. Co. v. Fu Guan Chan, 267 AD2d 181, 182 (1st Dep’t 1999); New York Cent. Mut. Ins. Co. v. Johnson, 260 AD2d at 639.

II.THE REQUIREMENT THAT INSURERS SUBMIT TO ARBITRATION

More to the point for purposes of the arbitrator’s power, C.P.L.R. § 7511(b)(1)(iii), the owner and operator of a motor vehicle insured for liability by a Pennsylvania insurer still may be “covered persons” under New York Insurance Law § 5102(j), if the vehicle had in effect the “financial security” required by New York Vehicle and Traffic Law (VTL) § 311. NY Ins. Law § 5102(j); Marshall v. Nationwide Mut. Ins. Co., 166 AD2d 852, 853 (3d Dep’t 1990). Since even [*2]a non-resident owner of a vehicle travelling in New York must comply with New York law, making the owner liable for the vehicle’s negligent operation, VTL § 388(1) and (3), a non-resident owner’s failure to maintain the required financial security subjects the owner to penalties. VTL § 318(4). See Servido v. Superintendent of Ins., 53 NY2d 1041 (1981), aff’g 77 AD2d 70, 85 (1st Dep’t 1980); General Acc. Ins. Co. v. Tran, 246 AD2d 543, 544 (2d Dep’t 1998); Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d 358, 359 (Sup. Ct. Kings Co. 2005). “Financial security” means “ability to respond in damages for liability arising out of the ownership, maintenance or use of a motor vehicle as evidenced by an owner’s policy of liability insurance.” VTL § 311(3). VTL § 311(4)(a) defines an “owner’s policy of liability insurance” as a liability policy with prescribed minimum limits.

If the vehicle involved here was owned by a New York resident or registered in New York, so that petitioner in fact transacted business here, requiring petitioner’s policy covering the vehicle to meet VTL § 311(4)(a)’s requirements, NY Ins. Law § 5107, or petitioner’s policy otherwise met them, petitioner would be an “insurer” subject to New York’s claims settlement procedures. NY Ins. Law §§ 5102(g), 5106(b). Those procedures in turn require insurers to provide the option of arbitration by the New York No-Fault Arbitration Panel for claimants seeking benefits. Id.; Hospital for Joint Diseases v. Allstate Ins. Co., 5 AD3d 441, 442 (2d Dep’t 2004).

If the vehicle was registered in a state other than New York, then to be an “insurer” subject to New York’s arbitration procedures, NY Ins. Law §§ 5102(g), 5106(b); 11 N.Y.C.R.R. § 65.18(a)(1), petitioner, “an unauthorized insurer” in New York, but “authorized to transact business in another state,” must have filed a consent to service and a declaration that petitioner’s policy be considered in compliance with VTL § 311. VTL § 311(4)(c). See VTL § 344(a); 11 N.Y.C.R.R. § 65-1.8(c); Marshall v. Nationwide Mut. Ins. Co., 166 AD2d at 853; Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d at 360 & n.1. Such actions by the insurer are akin to an agreement to arbitrate or participation in the arbitration process, subjecting the insurer to the arbitration forum’s jurisdiction. Nardor v. Gondol, 17 AD3d 142, 143 (1st Dep’t 2005).

Medical expenses arising from a collision involving a vehicle registered outside New York and covered by an insurer authorized only in another state may be compensable based not only on the insurer’s conformance with the above statutory provisions. Compensation also may be available based on an insurance policy that itself permits an interpretation extending coverage to meet other states’ financial security requirements, commonly referred to as an “‘Out-of-State Insurance’ clause.” General Acc. Ins. Co. v. Tran, 246 AD2d at 544. See American Home Assur. Co. v. Employers Mut. of Wausau, 54 NY2d 874 (1981), aff’g 77 AD2d 421, 427 n.4, 428 (1st Dep’t 1980); Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d at 361 & n.2.

III.THE ARBITRATION AWARD

The arbitrator relied on New York Insurance Law § 5107. That statute requires insurers transacting or authorized to transact business in New York to sell, whether in New York or in another state, motor vehicle liability policies that meet New York’s financial security requirements and to reimburse medical expenses arising out of insured vehicles’ use in New York. Midwest Mut. Ins. Co. v. Pisani, 250 AD2d 512, 513 (1st Dep’t 1998); Allstate Ins. Co. v. Ramos, 234 AD2d 41, 42 (1st Dep’t 1996). While petitioner may not have presented the arbitrator with admissible evidence that petitioner neither transacts, nor is authorized to transact business in New York, and therefore is not subject to § 5107, petitioner does attest to those facts here, albeit without specifically addressing where the vehicle owner resides or where the vehicle is registered.

Nonetheless, even though Insurance Law § 5107 may not apply to petitioner, the provisions outlined above, in particular VTL §§ 311(4)(c) and 344(a) and 11 N.Y.C.R.R. § 65-1.8(c) or the “out-of-state insurance clause,” may apply. If they do, they would require petitioner to reimburse medical expenses arising out of its insured vehicles’ use in New York and subject petitioner to New York’s arbitration procedures, NY Ins. Law §§ 5102(g), 5106(b); 11 N.Y.C.R.R. § 65.18(a)(1), regardless whether Insurance Law § 5107 applies. General Acc. Ins. [*3]Co. v. Tran, 246 AD2d at 544; Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d at 361 & n.2.

IV.THE RELEVANT FACTS

Although petitioner presents facts relevant to the court’s jurisdiction and to Insurance Law § 5107’s application, the record does not reveal, first, where petitioner’s insured vehicle was registered or where the vehicle owner resided. Even if the vehicle was registered outside New York and the owner is a nonresident of this state, the record nowhere discloses petitioner’s vehicle liability policy: whether it complied with New York’s financial security requirements, whether petitioner filed a declaration that the policy be considered in compliance, or whether it contained an out-of-state insurance provision. VTL §§ 311(4)(c), 344(a); 11 N.Y.C.R.R. § 65-1.8(c); General Acc. Ins. Co. v. Tran, 246 AD2d at 543-44; Marshall v. Nationwide Mut. Ins. Co., 166 AD2d at 853; Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d at 360-61 & ns. 1-2. These facts all bear on whether the policy may in fact provide for payment of first party benefits for a collision in New York and require petitioner to provide claimants the option of arbitration by the New York No-Fault Arbitration Panel. NY Ins. Law §§ 5103, 5106(b); 11 N.Y.C.R.R. §§ 65.18(a)(1), 65-1.8(c).

V.CONCLUSION

In sum, the issue here is not whether the court has jurisdiction over petitioner, but whether the arbitrator did, or, more precisely, whether the arbitrator had the power to award respondent benefits payable by petitioner. C.P.L.R. § 7511(b)(1)(iii). Absent the facts determinative of this issue, the court denies the petition to vacate the arbitration award. This decision constitutes the court’s order and judgment dismissing the proceeding.

DATED: December 31, 2005_______________________

LUCY BILLINGS, J.S.C.

Supreme Court, Bronx County

20926/2004

Dianne T. Renwick, J.

In this special proceeding, pursuant to CPLR Article 75, petitioner CNA Insurance^[FN1] seeks a permanent stay of arbitration of a claim for supplemental underinsured motorist (SUM) benefits sought by claimant Kim Hampton. The SUM claim stems from an automobile accident involving a van insured by petitioner. At the time of the accident, claimant Hampton had been riding as a passenger in the van. After settling her personal injury action against the tortfeasor,^[FN2] Hampton sought SUM benefits under the endorsement of the policy issued by petitioner CNA Insurance. Petitioner, however, avers that claimant is not entitled to SUM benefits because the subject [*2]automobile accident was not the cause of her femur fracture. (The femur is the thighbone; it extends from the hip to the knee.) This Court now renders a determination based upon the testimonial and documentary evidence presented at the framed issue hearing, which suggests two alternative causes of claimant’s femur fracture, the impact of the car collision and a slip and fall on sidewalk ice.

Framed Issue Hearing

Eyewitnesses’ Description of the Car Accident

At the framed issue hearing, claimant Kim Hampton, who is legally blind, testified that on March 11, 1999, she was riding as a passenger in a van owned by her employer Advocates for the Blind. Hampton was seated, her lap seat belt fastened, in the first row of bench seats, behind the front passenger seat. There was an arm rest in the down position next to Hampton’s right leg. Upon crossing the intersection of 67th Street and 78th Avenue, Queens, the van collided with a another vehicle that had failed to obey a stop sign. As a result, the van sustained a “very heavy” impact to the front passenger side, causing it to swerve, propel forward and strike a building. Hampton reported that the impact from the first collision was “very heavy,” but the seat belt prevented her from falling off her seat. The impact caused Hampton’s glasses to fly off her face, and her upper right leg, from just above the knee, to up around her hip, to hit either the armrest or the door of the van. Hampton believed her upper right leg hit the door or the armrest, but she could not actually see without her glasses. Upon impact, Hampton felt a lot of pain in her right leg. Hampton then felt a second impact when the vehicle struck the building.

Immediately after the second impact, Hampton smelled smoke and got scared. Feeling that the van might explode, she moved to exit the van. She turned her body to the right, toward the rear passenger side door. While remaining seated, Hampton, who was heavy set (weighing close to 240 pounds) placed her left foot on the van’s interior step, in an effort to move her body toward the side door. She then opened the door and moved herself onto the floor of the van by sliding onto her bottom, while her leg remained dangling in a partially straightened position. Hampton grabbed the van door in an attempt to assist herself in standing up, but she could not do it and fell onto the sidewalk, directly in front of the van.

According to the driver of the van, Ruperto Duncan, the impact from the car was “very heavy.” After the van ran into the building and began to “smoke,” he exited the van’s driver’s side and walked around to the passenger’s side. Duncan then observed Hampton lying injured on the ground. Duncan informed the police personnel, who arrived at the scene to assist Hampton, that she had fallen on sidewalk ice upon exiting the van. At the hearing, Duncan, however, conceded that he did not actually witness her fall. In fact, Duncan testified that he did not speak with Hampton about the accident. He had no recollection how he got that information, but assumed that she had fallen on ice.

Conflicting Medical Opinions As to the Cause of the Femur Fracture

At the framed issue hearing, respondent presented a medical expert, Dr. Lynne Richardson, the attending physician at Elmhurst Hospital emergency room on the date of the accident. Dr. Richardson supervised the resident physician, Dr. Stuart Miller, who first saw claimant Hampton in the emergency room. Based upon her examination of the claimant and a review of the pertinent medical record, Dr. Richardson opines, with a reasonable degree of medical certainty, that the femur fracture was caused by the two vehicle impacts on the day of the [*3]accident. Dr. Richardson explains that femur fractures are fairly uncommon as a result of a fall from a standing position because it takes a significant impact to break the femur. In addition, Dr. Richardson considered the fact that, immediately after the collision, the claimant experienced severe pain, which is one of the symptoms of femur fracture. Under the circumstances, Dr. Richardson surmises, the most likely scenario in this case was that the claimant suffered the fracture during the impacts to her lower body within the van, and then fell while attempting to exit the van due to the inability of her injured leg to bear her weight.

Petitioner CNA Insurance’s medical expert, Dr. Andrew Bazos, a neurosurgeon, disagrees with Dr. Richardson’s conclusion. Based upon his review of the pertinent medical record and the witnesses’ statements detailing the accident, Dr. Bazos opines, with a reasonable degree of medical certainty, that the femur fracture resulted from a sidewalk fall on ice, as was reported throughout the medical record, namely the “ambulance triage notes,” the “Rehab Medicine Referral to Psychiatry” and the “resident’s notes.” Dr. Bazos explains that femur fractures are caused by events that involve a lot force; it takes a sudden forceful impact to break the bone. In the doctor’s estimation, the collision could not have created sufficient force to break the femur bone. As support, the doctor relied on the fact that respondent had been wearing her seat belt prior to the accident and that there was no visible deformity in any part of the van near where the injured person had been sitting. In addition, Dr. Bazos explains, had the claimant’s femur been fractured during the car collision, the claimant could not have been able to attempt to get up, as she described, due to the severity of the injury and the claimant’s weight.

Discussion

Courts may stay arbitration where “the particular claim sought to be arbitrated is outside the scope of the agreement to arbitrate.” See County of Rockland v. Primiano Constr. Co., 51 NY2d 1, 7 (1980); CPLR §7503 (b); Sisters of St. John the Baptist, Providence Rest. Convent v. Phillips R. Geraghty Constructor, 67 NY2d 997, 999 (1986). Courts have held that to qualify for no-fault benefits in the form of underinsured/or uninsured motorist coverage, the insured vehicle must be the proximate cause of the claimant’s injuries. See e.g., Walton v. Lumbermens Mut. Cas. Co., 88 NY2d 211, 215 (1996); Farm Family Cas. Ins. Co. v. Trapani, 301 AD2d 740 (3rd Dept. 2003); New York Cent. Mut. Fire Insurance v. Hayden, 209 AD2d 927 (4th Dept. 1994).

The seminal case on this subject is Walton v. Lumbersmen Mut. Cas. Co., 88 NY2d 211, 215 (1996), where the Court of Appeals held that “the vehicle must be the proximate cause of the plaintiff’s injury before the absolute liability imposed by the statute arises.” As the Court explained, “no-fault first party benefits are available only when the motor vehicle is the instrumentality that causes the injury plaintiff claims.” 88 NY2d 211, 213 (1996). Accordingly, “when a plaintiff’s injury is caused by an instrumentality other than the insured vehicle, liability for the losses sustained are more properly addressed outside the area of no-fault motor vehicle insurance.” Id at 214. Such interpretation, the Court held, “reflects the legislature’s intent to draw the line between motor vehicle accidents and all other types of torts and to remove only the former from the domain of common law tort litigation.” Id.

Here, as fully described above, the parties have presented two possible causes of respondent-claimant’s injury (femur fracture). Claimant asserts that her injury was caused by the impact to her body against the van during the collision. In contrast, petitioner claims that Hampton’s injuries had no casual connection to the insured vehicle; that it was caused by a [*4]sidewalk slip and fall on ice. This Court’s determination of which version is more credible would be dispositive of the issue of whether the injury falls within the ambit of no-fault insurance, as having been caused by the insured vehicle. Of course, claimant-respondent’s version falls within the ambit of no-fault insurance since it is based upon the claim that the femur fracture was caused by the impact of her body against the van.

Conversely, petitioner’s version, that claimant’s femur fracture was caused by a sidewalk slip and fall on ice, upon exiting the van, would not support a claim for no-fault insurance, since under such version the insured vehicle would not have been the instrumentality that caused the injury. Contrary to respondent’s allegations, proximate cause is not established merely because injuries occurred while entering or exiting a vehicle. Adopting this approach would be tantamount to equating proximate cause with the term “occupying” a vehicle. However, as noted above, the law is abundantly clear that more than occupancy is required to establish a casual link between a motor vehicle and a claimant’s injuries. Instead, what is required is that the motor vehicle was the actual instrumentality which produced the injuries. See e.g., Walton v. Lumbermens Mut. Cas. Ins. Co, supra; Matter of Farm Family Cas. Ins. Co. v. Trapani, supra; New York Central Mutual Fire Insurance v. Mark Hayden, supra.

Indeed, courts have consistently held that just because an injury occurs in or near a motor vehicle does not mean necessarily that a vehicle was the proximate cause of the claimant’s injuries. For example, in Sochinski v. Bankers & Shippers Ins. Co., 221 AD2d 889 ( 3rd Dept. 1995), the Appellate Division held that the claimant did not qualify for first-party, no-fault benefits even though the injuries occurred while the claimant was in occupancy of the motor vehicle. In Sochinski, the insured was allegedly injured when airborne particles caused by sandblasting at a highway construction site entered the car’s open window and lodged in his eyes. The court held that the claimant did not qualify for first-party, no-fault benefits for his injury to his eye because such injury would have occurred even if he had not been in his motor vehicle. Since the motor vehicle was wholly incidental to the event which produced the injury, it was not the instrumentality, i.e. proximate cause, of the injury. Id.

Likewise, in New York Cent. Mut. Fire Ins. Co. v. Hayden, 209 AD2d 927 (4th Dept. 1994), an injury that occurred immediately upon alighting a motor vehicle did not fall within the ambit of no-fault law because the vehicle itself was not the instrumentality that caused the claimant’s injury. In New York Cent. Mut. Ins. Co. v. Mayden, supra, the personal injuries suffered by the claimant-passenger occurred when he got out of the vehicle and fell through a hole in a railroad trestle after the vehicle’s left wheels became stuck in a gap between the track on the trestle and the road for vehicles. The court found that the injuries were not covered by the passenger’s uninsured motorist (SUM) insurance since the accident did not arise out of the inherent nature of the vehicle. Id.

Conversely, in Farm Family Cas. Ins. Co. v. Trapani, 301 AD2d 740 (3rd Dept. 2003), the claimant’s injuries that occurred while alighting a motor vehicle were deemed to fall within the ambit of no-fault law where the vehicle itself was the instrumentality that caused the claimant’s injuries. In Trapani, supra, the driver lost control of her car and struck a utility pole. The car’s impact moved the pole, causing its power lines to short out and rain sparks and hot pieces of wire down onto the 75-year-old claimant, who was standing in her garden along the roadway near her home. In attempting to run from this hazard, claimant fell and sustained injuries to her head and [*5]left knee. The court found that the vehicle proximately caused the claimant’s injuries since the hazard that caused the fall was triggered by the impact of the car on the pole. Id.

Here, assuming, that claimant Hampton’s injuries are attributed to a slip and fall accident on sidewalk ice, this Court would have to find that such injury does not fall within the ambit of supplemental underinsured motorist coverage, based upon the reasoning of Walton v. Lumbersmen Mutual Casualty Ins. Co., supra, and the aforementioned analogous cases. The hazard that triggered the sidewalk slip and fall —the ice — cannot be attributed, like Farm Family Casualty Ins. Co. v. Trapani, supra, to the use or operation of the automobile. Instead, like in New York Cent. Ins. Co. v. Hayden, supra, and Sochinski v. Bankers and Shippers Insurance Company, supra, the fall would have occurred even if claimant had not been in his motor vehicle. Under the circumstances, the vehicle was the mere situs of the accident, and thus cannot be the proximate cause of the injury. Cf. Lumbermen’s Mut. Cas. Co. v. Logan, 88 AD2d 971(2nd Dept. 1982).

The question that remains is which version does this Court credit as the actual cause of claimant’s femur fracture. In making such determination this Court is guided by several principles applicable in the context of a petition to stay arbitration of a claim for no-fault benefits. The petitioner bears the burden of showing sufficient evidence to justify a stay of the arbitration of respondent’s claim for SUM benefits. See Aetna Casualty & Surety Ins. Co. v. McMichael, 176 AD2d 315 (2nd Dept. 1991); In Re. Nationwide Ins. Co. 170 AD2d 683 (2d Dept. 1991). It is also the general rule that when there is ambiguity as to existence of coverage, doubt must be resolved in favor of the insured and against the insurer. See, Handelsman v. Sea Ins. Co., 85 NY2d 96, 101 (1994). Moreover, where possible, courts will generally opt in favor of ruling for no-fault coverage of an insured under the facts of the particular case, unless such a ruling would not be in cadence with the statutory language and purpose. See e.g., Johnson v. Hartford Insurance Co., 100 Misc 2d 367, 369 (NY Sup.Ct. 1979).

Evaluated under such legal matrix, the proof offered by petitioner is not sufficient to grant a permanent stay of the arbitration of the claim for SUM benefits, when juxtaposed with the proof offered by respondent-claimant. Both medical experts’ conflicting opinions as to the cause of the femur fracture have a legitimate factual foundation, but based on different versions of the accident. Under the circumstances, the determination of the cause of claimant’s injury is dependent, in substantial measure, upon an assessment of the credibility of claimant’s account of her injury, which is more consonant with plaintiff’s expert’s medical opinion. In assessing claimant’s credibility, this Court concludes that Hampton’s testimony was consistent, clear, candid, and, therefore, credible.

This Court, however, is troubled by the fact that the medical evidence is replete with the statement that claimant had fallen on sidewalk ice. Nevertheless, such troubling statement is, in the context of this case, insufficient to counterbalance respondent’s evidence. Significantly, no evidence from any witness was submitted directly attributing the troubling statement to claimant Hampton. Under the circumstance, it is equally likely that the sole source of the statement was the driver who reported it to the police personnel, albeit conceding at the hearing that he had not actually witnessed claimant’s fall; nor could he recollect the source of the statement. Viewed in its totality, the evidence preponderates in favor of a finding that the femur fracture was caused by the impact of the van’s collision with the automobile and building.

[*6]Conclusion

For the foregoing reasons, this petition is denied to the extent of declaring and adjudging that petitioner failed to meet its burden of establishing that claimant’s injuries were not proximately caused by the insured motor vehicle. The Clerk is directed to dismiss the petition forthwith. Accordingly, the parties are directed to proceed to arbitration of the Supplemental Underinsured Motorist (SUM) claim.

This constitutes the Decision, Order, and Judgment of the Court.

Dated: November 29, 2005__________________________

Bronx, New YorkHon. Dianne T. Renwick, JSC

Footnotes

Footnote 1:Transcontinental Insurance Company does business as CNA Insurance Company.

Footnote 2:The van was struck by a motor vehicle driven and owned, respectively, by Margaret and Herbert Adask.