43537/15

For plaintiff:
Oleg Rybak, Esq.
The Rybak Firm PLLC
1810 Voorhies Ave., 3rd Fl, Suite 7
Brooklyn NY 11235

For defendant:
Matteo G. Sandusky, Esq.
Law Offices of Daniel J. Tucker
One Metro Tech Center, 7th Fl
Brooklyn, NY 11201

RECITATION, AS REQUIRED BY CPLR2219(A), OF THE PAPERS CONSIDERED IN THE REVIEW OF THIS MOTION:

Notice of Motion 1

Notice of Cross-Motion 2

Answering Affidavit 3

Reply Affidavit 4

In an action to recover assigned first-party no-fault insurance benefits, plaintiff moves for an order: 1) awarding summary judgment in favor of plaintiff pursuant to CPLR 3211(c) or CPLR 3212(a); 2) limiting the issues of fact for trial pursuant to CPLR 3212(g) that the statutory billing forms were mailed to and received by the insurance carrier and that payment of no-fault benefits was overdue; and 3) dismissing defendant’s affirmative defenses pursuant to CPLR 3211(b). Defendant cross-moves for summary judgment, seeking dismissal on the basis that the plaintiff’s assignor failed to appear for an EUO.

To prevail on its motion, plaintiff has the burden to demonstrate by admissible proof that [*2]the no-fault claim forms underlying the action were submitted to the defendant and that either that defendant had failed to deny the claims within the requisite 30-day period, or that defendant had issued timely denials of the claims that were conclusory, vague or without merit as a matter of law (see Insurance Law section 5106[a]; Westchester Med. Ctr. v. Nationwide Mut. Ins. Co., 78 AD3d 1168, 2010 NY Slip Op. 08933 [App. Div., 2d Dept., 2010]).

In the case at bar, plaintiff did not establish that defendant had failed to deny the claims within the requisite 30-day period, or that defendant had issued timely denials that were conclusory, vague or without merit as a matter of law. Plaintiff’s motion is accordingly, denied.

Defendant, in support of the cross-motion for summary judgement, submits affirmation of Netanel Bencheim, Esq. dated November 20, 2017 which states that the assignor did not appear for an EUO.

Failure to appear for an EUO violates a condition precedent to coverage, and the burden is on defendant to show that the requested party failed to appear (Five Boro Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 39 Misc 3d 141(A), 2013 NY Slip Op. 50753(U) [App Term, 2d Dept, 2d & 11th Jud Dists, 2013]). Generally, a statement from an attorney alleging that he or she was present in the office on the relevant dates and that he or she would have been the one to conduct the EUO is sufficient to demonstrate personal knowledge of the no-show (T & J Chiropractic, P.C. v. State Farm Mut. Auto. Ins. Co., 47 Misc 3d 130[A], 2015 NY Slip Op. 50406(U) [App Term, 2d Dept, 2d 11th & 13th Jud Dists, 2015]).

In the case at bar, defendant failed to submit competent proof of assignor’s nonappearance. Mr. Bencheim, a shareholder of Bencheim and Associates states that defendant retained his law firm to conduct plaintiff’s EUO which was scheduled to be held on November 30, 2010, and rescheduled to December 29, 2010 due to plaintiff’s nonappearance. Mr. Bencheim states that he has personal knowledge that “the plaintiff did not attend the examination under oath on December 30, 2010″ which is a day after the scheduled date of the examination. As such, defendant failed to establish that plaintiff failed to appear for the examination on the scheduled date of December 29, 2010.

Moreover, Mr. Bencheim states that he has personal knowledge of plaintiff’s non-appearance for the EUO based on his review of the file. The affirmant does not specify or provide the documents he reviewed, or identify the creator(s) of the unspecified documents. Nor does Mr. Bencheim explain the basis of his detailed recollection of assignor’s non-appearance approximately seven years prior to his November 20, 2017 affirmation.

Accordingly, Mr. Bencheim’s affirmation is conclusory and lacks probative value (Utica Acupuncture P.C. v. Amica Mut. Ins. Co., 55 Misc 3d 126(A), 2017 NY Slip Op. 50331(U) [App. Term., 1st Dept., 2017]).

For the foregoing reasons, plaintiff’s motion and defendant’s cross motion are denied as both parties failed to establish entitlement as a matter of law.

Dated: May 17, 2018
ODESSA KENNEDY
Judge of the Civil Court

702062/16

Counsel for Plaintiff: Law Offices of Gabriel & Shapiro, LLC

Counsel for Defendant: Rossillo & Licata, PC

In this action for the payment of no-fault benefits, defendant moves seeking an order granting it summary judgment and dismissal of this action. Saliently, defendant avers that insofar as it paid the claims submitted by plaintiff in accordance with the relevant fee schedule for such services, it has established its fee schedule defense thereby warranting summary judgment in defendant’s favor. Plaintiff opposes the instant motion asserting that insofar as defendant’s coder misapplies the relevant fee schedule, the amounts paid to plaintiff were insufficient. Thus, plaintiff contends that questions of fact preclude summary judgment.

For the reasons that follow hereinafter, defendant’s motion is granted.

The instant action is for payment of no-fault insurance benefits for medical treatment. The complaint alleges, in relevant part, the following: On August 9, 2015, CHARLES ROBINSON (Robinson) was involved in a motor vehicle accident and thereafter, sought medical treatment from plaintiff for injuries sustained therein. Robinson was covered by an insurance policy issued by defendant, which pursuant to Article 51 of the Insurance Law, required payment of health related expenses and whose benefits Robinson assigned to plaintiff. On September 21, 2015 plaintiff provided treatment to Robinson totaling $3,900, said treatment was covered by defendant’s policy, was billed to defendant, but was nevertheless not paid. Based on the foregoing, plaintiff seeks payment of the aforementioned sums pursuant to the Comprehensive Motor Vehicle Insurance Reparations Act ^[FN1] (11 NYCRR 65-3.1 et seq.).

Standard of Review

The proponent of a motion for summary judgment carries the initial burden of tendering sufficient admissible evidence to demonstrate the absence of a material issue of fact as a matter of law (Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, [*2]49 NY2d 557, 562 [1980]). A defendant seeking summary judgment must establish prima facie entitlement to such relief by affirmatively demonstrating, with evidence, the merits of the claim or defense, and not merely by pointing to gaps in plaintiff’s proof (Mondello v DiStefano, 16 AD3d 637, 638 [2d Dept 2005]; Peskin v New York City Transit Authority, 304 AD2d 634, 634 [2d Dept 2003]). There is no requirement that proof be submitted by affidavit, but rather that all evidence proffered be in admissible form (Muniz v Bacchus, 282 AD2d 387, 388 [1st Dept 2001], revd on other grounds, Ortiz v City of New York, 67 AD3d 21, 25 [1st Dept 2009]). Notably, the court can consider otherwise inadmissible evidence, when the opponent fails to object to its admissibility and instead relies on the same (Niagara Frontier Tr. Metro Sys. v County of Erie, 212 AD2d 1027, 1028 [4th Dept 1995]).

Once movant meets his initial burden on summary judgment, the burden shifts to the opponent who must then produce sufficient evidence, generally also in admissible form, to establish the existence of a triable issue of fact (Zuckerman at 562). It is worth noting, however, that while the movant’s burden to proffer evidence in admissible form is absolute, the opponent’s burden is not. As noted by the Court of Appeals,

[t]o obtain summary judgment it is necessary that the movant establish his cause of action or defense ‘sufficiently to warrant the court as a matter of law in directing summary judgment’ in his favor, and he must do so by the tender of evidentiary proof in admissible form. On the other hand, to defeat a motion for summary judgment the opposing party must ‘show facts sufficient to require a trial of any issue of fact.’ Normally if the opponent is to succeed in defeating a summary judgment motion, he too, must make his showing by producing evidentiary proof in admissible form. The rule with respect to defeating a motion for summary judgment, however, is more flexible, for the opposing party, as contrasted with the movant, may be permitted to demonstrate acceptable excuse for his failure to meet strict requirement of tender in admissible form. Whether the excuse offered will be acceptable must depend on the circumstances in the particular case (Friends of Animals v Associated Fur Manufacturers, Inc., 46 NY2d 1065, 1067-1068 [1979] [internal citations omitted]). Accordingly and generally, if the opponent of a motion for summary judgment seeks to have the court consider inadmissible evidence, he must proffer an excuse for failing to submit it in inadmissible form (Johnson v Phillips, 261 AD2d 269, 270 [1st Dept 1999]).

When deciding a motion for summary judgment the role of the Court is to make determinations as to the existence of bonafide issues of fact and not to delve into or resolve issues of credibility. As the Court stated in Knepka v Talman (278 AD2d 811, 811 [4th Dept 2000]),

[s]upreme Court erred in resolving issues of credibility in granting defendants’ motion for summary judgment dismissing the complaint. Any inconsistencies between the deposition testimony of plaintiffs and their affidavits submitted in opposition to the motion present issues for trial (see also Yaziciyan v Blancato, 267 AD2d 152, 152 [1st Dept 1999]; Perez v Bronx Park Associates, 285 AD2d 402, 404 [1st Dept 2001]). Accordingly, the Court’s function when determining a motion for summary judgment is issue finding not issue determination (Sillman v Twentieth Century Fox Film Corp., 3 NY2d 395, 404 [1957]). Lastly, because summary judgment is such a drastic remedy, it should never be granted when there is any doubt as to the existence of a triable issue of fact (Rotuba Extruders v Ceppos, 46 NY2d 223, 231 [1978]). When the existence of an issue of fact is even debatable, summary judgment should be denied (Stone v Goodson, 8 NY2d 8, 12 [1960]).

No-Fault Law

Pursuant to 11 NYCRR 65-2.4(a) entitlement to no-fault benefits requires compliance with all conditions precedent, one of which is that the eligible injured person or that person’s assignee or legal representative shall submit written proof of claim to the self-insurer, including full particulars of the nature and [*3]extent of the injuries and treatment received and contemplated, as soon as reasonably practicable but, in no event later than 45 days after the date services are rendered (11 NYCRR 65-2.4[c]). Because the No-Fault Law is a derogation of common law, it must be strictly construed (Presbyt. Hosp. in City of New York v Atlanta Cas. Co., 210 AD2d 210, 211 [2d Dept 1994]; Maxwell v State Farm Mut. Auto. Ins. Co., 92 AD2d 1049, 1050 [3d Dept 1983]), and thus, when an insurer fails to timely deny or pay a claim, as required by the statutory schedule, it is precluded from interposing a statutory exclusion defense (id.; Presbyt. Hosp. in the City of New York v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584 [2d Dept 2002]; Mount Sinai Hosp. v Triboro Coach Inc., 263 AD2d 11, 16 [2d Dept 1999]; Presbyt. Hosp. in City of New York v Atlanta Cas. Co., 210 AD2d 210, 211 [2d Dept 1994]).

Similarly, and for the same reasons, compliance with the technical requirements of the no-fault law are preconditions for payment to a medical provider thereunder. Accordingly, a medical provider’s failure to tender a claim and requisite proof to an insurer within 45 days after medical services were rendered authorizes an insurer to deny the claim (Kane v Fiduciary Ins. Co. of Am., 114 AD3d 405, 405 [1st Dept 2014] [“The arbitrators were therefore correct that petitioner was required, but failed, to comply with the conditions precedent to coverage found in the implementing no-fault regulations. He did not submit timely written proof of claim to the insurer, including the particulars regarding the nature and extent of the injuries and treatment received and contemplated.”]; St. Barnabas Hosp. v Penrac, Inc., 79 AD3d 733, 734 [2d Dept 2010]; Sunrise Acupuncture PC v ELRAC, Inc., 52 Misc 3d 126[A], *1 [App Term 2016]). Generally, once an insured receives a claim from a medical provider, it must pay or deny the same within 30 days thereof (11 NYCRR 65-3.8[c]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168, 1168 [2d Dept 2010]; Nyack Hosp. v Gen. Motors Acceptance Corp., 27 AD3d 96, 100 [2d Dept 2005], affd as mod and remanded, 8 NY3d 294 [2007]; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554 [2d Dept 1999]).

However, the foregoing period – within which to deny or pay a claim – can be extended by a proper request for verification (11 NYCRR 65-3.5[b] [“Subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification forms.”]), and when such a request is made, “an insurer is not obligated to pay or deny a claim until all demanded verification is provided” (New York and Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512, 513 [2d Dept 2006]; see Hosp. for Joint Diseases v Elrac, Inc., 11 AD3d 432, 434 [2d Dept 2004]; Nyack Hosp. at 101; [2d Dept 2006]; New York Hosp. Med. Ctr. of Queens at 584 New York & Presbyt. Hosp. v Am. Tr. Ins. Co., 287 AD2d 699, 700 [2d Dept 2001]). A request for verification submitted more than 15 days after a claim is received does not render the same invalid and merely serves to diminish the 30 day period within which to pay or deny a claim once verification is received; such time diminished by the number of days beyond the 15 days within which to request verification prescribed by the No-Fault Law (11 NYCRR 65-3.8[j]; Nyack Hosp. at 100-101 [“Therefore, inasmuch as the defendants mailed the request for additional verification two days beyond the 15-day period, the time within which the defendants had to either pay or deny the claim was reduced from 30 to 28 days.”]). A request for verification, thus, tolls the time within which to pay or deny a claim and such time does not begin to run until the documents are provided (New York & Presbyt. Hosp. at 700 [“Since the respondent did not supply the additional verification of the claim, the 30-day period in which the defendant had to either pay or deny the claim did not begin to run.”]; Westchester County Med. Ctr. at 555).

A medical provider seeking payments under the relevant no-fault policy establishes prima facie entitlement to summary judgment with proof that it submitted a timely claim form to the defendant, proof of the fact and the amount of the loss sustained, and “proof either that the defendant [] failed to pay or deny the claim within the requisite 30-day period, or that the defendant [] issued a timely denial of claim that was conclusory, vague or without merit as a [*4]matter of law” (Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A] [App Term 2011]; see, New York and Presbyt. Hosp. at 513; Westchester Med. Ctr. at 1168; Nyack Hosp. at 100; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742 [2d Dept 2004]; E. Coast Psychological, P.C. v Allstate Ins. Co., 13 Misc 3d 133(A), *1 [App Term 2006]; Mollins v Motor Veh. Acc. Indem. Corp., 14 Misc 3d 133(A), *1 [App Term 2007]). A provider can establish the foregoing with “evidentiary proof that the prescribed statutory billing forms were mailed and received [and] that payment of no-fault benefits [is] overdue” (St. Vincent’s Hosp. of Richmond v Govt. Employees Ins. Co., 50 AD3d 1123, 1124 [2d Dept 2008]). However, an insurer raises an issue of fact sufficient to preclude summary judgment when it tenders evidence evincing a timely denial (id. at 124 [“However, in opposition, the defendant submitted admissible evidence in the form of an affidavit of an employee with knowledge of the defendant’s standard office practices or procedures designed to ensure that items were properly addressed and mailed.”]; New York and Presbyt. Hosp. at 513 [“However, in opposition to the motion, the defendant established that it had made a timely request for additional information and that it timely denied the claim within 30 days of receipt of the hospital records it had requested to verify the claim. Accordingly, the Supreme Court properly denied that branch of the plaintiffs’ motion which was for summary judgment on the first cause of action.”]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16, 17—18 [App Term 2007] [“In the instant case, defendant sufficiently demonstrated that it timely mailed the denial of claim forms at issue based upon its standard office practice or procedure designed to ensure that 18 items are properly addressed and mailed. We note that our prior holding in Contemp. Med. Diag. & Treatment, P.C. v Government Empls. Ins. Co. (6 Misc 3d 137[A], 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists 2005]) should not be interpreted as requiring that an affidavit of mailing must state either that it was the affiant’s duty to ensure compliance with the insurer’s standard office practice or procedure with regard to mailing or that the affiant possessed personal knowledge of such compliance. Rather, as the Appellate Division has repeatedly noted, it is sufficient for the affiant to set forth that he or she possessed personal knowledge that the mailing occurred or describe the standard office practice or procedure used to ensure that items were properly addressed and mailed.”]), or that denial within the 30 day prescribed by law wasn’t given because such period was extended by a request for verification (Nyack Hosp. at 100 [“Here, the defendants presented evidence in opposition to the motion and in support of their cross motion demonstrating that the request for the complete inpatient hospital records mailed to the plaintiff on September 12, 2003, resulted in an extension of the 30-day statutory period.”]; New York Hosp. Med. Ctr. of Queens at 585; New York & Presbyt. Hosp. at 700).

Conversely, once an insurer establishes a timely denial on grounds that a plaintiff failed to tender a claim within 45 days, the insurer establishes prima facie entitlement to summary judgment (St. Barnabas Hosp. v Penrac, Inc. at 734; Sunrise Acupuncture PC at *1). In addition, an insurer who demonstrates that despite proper requests for verification, verification was never received resulting in a denial of the claim also establishes prima facie entitlement to summary judgment (New York Hosp. Med. Ctr. of Queens v QBE Ins. Corp., 114 AD3d 648, 649 [2d Dept 2014]; New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492, 493 [2d Dept 2006]; Nyack Hosp. at 99; Cent. Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2d Dept 2005]; Hosp. for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534 [2d Dept 2004]; Westchester County Med. Ctr. at 555). This is particularly true when a demand for verification remains unanswered for more than 120 days. To be sure, 11 NYCRR 65-3.5(o) states that

[a]n applicant from whom verification is requested shall, within 120 calendar days from the date of the initial request for verification, submit all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply. The insurer shall advise the applicant in the verification request that the insurer may deny the claim if the applicant does not provide within 120 calendar days from the date of the initial request either all such verification under the applicant’s control [*5]or possession or written proof providing reasonable justification for the failure to comply.

Additionally, 11 NYCRR 65-3.8(b)(3) states that an insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the applicant has not submitted all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply, provided that the verification request so advised the applicant as required in section 65-3.5(o) of this Subpart.

Thus, when the insurer establishes denial of a claim because a demand for verification went unanswered for 120 days or more, prima facie entitlement to summary judgment is established (Hosp. for Joint Diseases v Elrac, Inc., 11 AD3d 432, 434 [2d Dept 2004] [relying on 11 NYCRR 65.11[m][3] which is now 11 NYCRR 65-3.8[b][3], the court held that “[t]he defendant denied the claim on October 9, 2002, more than 180 days after NY & P Hospital first notified it of the claim. Under these circumstances, the claim was properly denied.”]; Hempstead Gen. Hosp. v New York Cent. Mut. Fire Ins. Co., 232 AD2d 454, 454 [2d Dept 1996] [same]; TAM Med. Supply Corp. v Tri State Consumers Ins. Co., 57 Misc 3d 133(A), *1 [App Term 2017]). Significantly, in Hosp. for Joint Diseases the court held that defendant – the insurer – established prima facie entitlement to summary judgment with an affidavit from a claims representative, who based on his review of defendant’s business records established defendant’s defense – timely denial (id. at 433-434)^[FN2] .

With respect to the value of medical services rendered, 11 NYCRR 65-3.8(g) limits the amounts payable to those promulgated by the chairman of the worker’s compensation board for industrial accidents. To be sure, Insurance Law § 5108(a) states that

[t]he charges for services specified in paragraph one of subsection (a) of section five thousand one hundred two of this article and any further health service charges which are incurred as a result of the injury and which are in excess of basic economic loss, shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board for industrial accidents, except where the insurer or arbitrator determines that unusual procedures or unique circumstances justify the excess charge.

Thus, Insurance Law § 5108(a) limits a medical provider’s recovery under the no-fault portion of an insurance policy, and said limitation is further reiterated within 11 NYCRR 65-3.8(g)(ii), which obviates an insurer’s obligation to pay for services exceeding the amounts allowed under Insurance Law § 5108(a) (see 11 NYCRR 65-3.8[g][ii][“Proof of the fact and amount of loss sustained pursuant to Insurance Law section 5106(a) shall not be deemed supplied by an applicant to an insurer and no payment shall be due for such claimed medical services under any circumstances . . . for those claimed medical service fees that exceed the charges permissible pursuant to Insurance Law sections 5108(a) and (b) and the regulations promulgated [*6]thereunder for services rendered by medical providers.”]).

Thus, an insurer is only required to pay for claimed medical services in the amounts prescribed by the relevant fee schedule and such defense is available even if payment or denial are not tendered within 30 days of the submission (Oleg’s Acupuncture, P.C. v Hereford Ins. Co., 58 Misc 3d 151[A], *1 [App Term 2018] [“Thus, defendant was not required to establish that it had timely denied the claims in order to preserve its fee schedule defense, as the services at issue had been provided between May 7, 2014 and July 16, 2014.”]; Z.M.S. & Y Acupuncture, P.C. v GEICO Gen. Ins. Co., 58 Misc 3d 143(A), *1 [App Term 2017] [“Since the services here were rendered after April 1, 2013, the defense that the amounts sought to be recovered exceed the amount permitted by the workers’ compensation fee schedule is not subject to preclusion.”]; Surgicare Surgical Assoc. v Natl. Interstate Ins. Co., 50 Misc 3d 85, 87 [App Term 2015]). Accordingly, a defendant establishes entitlement to summary judgment when it establishes that all sums paid to a medical provided were in accordance to the prevailing fee schedule, even if less than the amount billed (Z.M.S. & Y Acupuncture, P.C. at *1 [“Defendant demonstrated that it had fully paid plaintiff for the services at issue in accordance with the workers’ compensation fee schedule for acupuncture services performed by chiropractor.”]; Surgicare Surgical Assoc. at 86 [“Plaintiff billed $10,800 for the services (associated with arthroscopic knee surgery), but defendant-insurer paid only $5,996.67 on the claim, an amount in accordance with the New Jersey Fee Schedule.”]). Thus, an insured establishes its fee schedule defense when it tenders an affidavit from a professional coder who opines that the amounts paid for medical services were in accordance with and pursuant to the relevant fee schedule (Jaga Med. Services, P.C. v Am. Tr. Ins. Co., 56 Misc 3d 134(A), *1 [App Term 2017]; Compas Med., P.C. v Am. Tr. Ins. Co., 56 Misc 3d 133(A), *1 [App Term 2017]; Sama Physical Therapy, P.C. v Am. Tr. Ins. Co., 53 Misc 3d 129(A), *1 [App Term 2016]; GBI Acupuncture, P.C. v 21st Century Ins. Co., 48 Misc 3d 140(A), *1 [App Term 2015]; Raz Acupuncture, P.C. v AIG Indem. Ins. Co., 28 Misc 3d 127(A), *2 [App Term 2010]; Great Wall Acupuncture, P.C. v GEICO Ins. Co., 26 Misc 3d 23, 25 [App Term 2009]).

Defendant’s motion for summary judgment is granted insofar as the evidence tendered in support thereof establishes that defendant timely paid plaintiff’s claim in accordance with the relevant fee schedule. While the amount paid was less than the amount billed, defendant establishes that the amount billed was in excess of the amount allowed for the procedure actually performed under the relevant fee schedule.

In support of its motion, defendant submits an affidavit by Peg Kohle (Kohle), defendant’s Claim Specialist, who states, in pertinent part, as follows: Since January 2015, Kohle has been employed by defendant as a Claims Specialist in defendant’s no-fault department. Kohle is personally familiar with defendant’s business practice as it relates to the processing New York Personal Injury Claims (PIP), including defendant’s Enterprise Claims System (ECS) and the creation of all documents related to defendant’s decisions concerning PIP claims. After detailing defendant’s custom and practice with respect to receipt, processing, paying and/or denying PIP claims submitted to it by medical providers, Kohle describes documents relevant to this action, appended to her affidavit, and which she incorporates by reference. Specifically, Kohle states that on November 2, 2015, defendant received a bill from plaintiff for medical treatment it provided to Robinson on September 21, 2015. As per the form, plaintiff sought no-fault reimbursement from defendant in the amount of $3,900. A review of defendant’s claim file indicates that Robinson had been involved in an accident on August 9, 2015 and made a no-fault claim from defendant in connection therewith. Kohle states that upon defendant’s review of the bill, defendant paid the claim pursuant to the New York State Workers Compensation Fee Schedule. Specifically, on December 1, 2015, defendant denied a portion of the claim while concomitantly paying $291.32 to plaintiff. Defendant’s denial of the claim was memorialized in a denial form sent to plaintiff and within an explanation of review form appended thereto. Kohle asserts that the foregoing forms are defendant’s business records, generated in the regular course of defendant’s business records.

Defendant also submits an affidavit by Charles Campanelli (Campanelli), Operations Manager for Signet Claim Solutions, LLC (Signet), who states, in pertinent part, as follows: Signet’s business includes the retention, upon request, of fee schedule and medical coding experts to perform reviews of medical records and bills for purposes of determining whether services were billed in accordance with the relevant fee schedule. Defendant is Signet’s client and was retained to hire an expert to review a plaintiff’s bill for medical services provided to Robinson. In connection with defendant’s retention of Signet, defendant provided relevant records to Signet, including plaintiff’s bill and the records provided by plaintiff with the same. Signet then retained Mercy Acuna (Acuna), an expert, to review the foregoing records, and who then provided Signet with a report memorializing her opinion. Acuna’s report was created and retained in the regular course of Signet’s business and said report was appended to Campanelli’s affidavit.

Defendant submits an affidavit by Acuna, wherein she incorporates by reference, her report within which she proffers her opinion regarding plaintiff’s bill for services rendered to Robinson. Acuna states that her report is accurate, that the opinion in her report is based on her education, training and experience as well as a review of plaintiff’s bill, the records appended thereto and the relevant New York State Workers Compensation Chiropractic Fee Schedule.

Defendant submits the bill referenced by Kohle, which indicates that on September 21, 2015, it treated Robinson. Specifically, the bill indicates that it performed Pain Fiber Nerve Conduction Studies (PFNCS) upon Robinson’s upper and lower extremities, that 9599 was the corresponding Fee Schedule Treatment Code and that the value of said services was $3,900. The reports appended to the bill indicate upon which what parts of the body the procedures were performed and the results thereof. Defendant also submits the denial of claim form and explanation of review form referenced by Kohle, which indicate that on December 1, 2015, it paid plaintiff $291.32 for the services rendered to Robinson. The explanation of review form indicates that $291.32 represents payment for the tests performed at $145.66 for the upper extremities and $145.66 for the lower extremities. Per defendant’s form, the foregoing rates are in accordance with the relevant fee schedule.

Defendant submits Acuna’s report and the documents upon which she relied (plaintiff’s reports regarding the tests performed upon Robinson, AMA CPT Assistant, New York Workers’ Compensation Chiropractic Fee Schedule, information regarding the AXON II Neural Scanner). Acuna states that she is a Registered Nurse and also a member of the American Academy of Professional Coders (AAPC), a national coding certification organization. Acuna has also worked as a coding reimbursement specialist since 1997 and in order to join AAPC took classes in coding and compliance. Based on Acuna’s review of the foregoing documents, she states that because PFNCS testing only measures amplitude and not velocity/latency, the test performed by plaintiff on Robinson was a quantitative sensory test. As per the AMA CPT Assistant, Acuna states that the appropriate treatment/billing code for the test performed is 0110T. According to the New York Workers’ Compensation Chiropractic Fee Schedule, the foregoing treatment code has no fixed Relative Value and instead, contains a “BR” under the Relative Value column which means the billing physician has to “establish a unit value consistent in relativity with other unit values shown in the schedule.” Acuna opines that the closest corresponding treatment code for the testing performed is 95904 which has a Relative Value of $12.60. Since the Conversion Factor in the schedule applicable to plaintiff is $5.78 (Region 4), the allowable fee for the testing performed is $72.83 per extremity (Relative Value x Conversion Factor), for a total of $145.66 for the lower extremity and an additional $145.66 for the upper extremity. Thus, as per the fee schedule, plaintiff was entitled to receive and, did in fact, receive $291.42 for the tests performed.

Based on the foregoing, defendant establishes prima facie entitlement to summary judgment insofar as the foregoing evidence establishes that defendant timely paid the instant claim in accordance with the relevant fee schedule.

Again, as noted above, an insurer is only required to pay for claimed medical services in the amounts prescribed by the relevant fee schedule (Oleg’s Acupuncture, P.C. at *1; Z.M.S. & [*7]Y Acupuncture, P.C. at *1; Surgicare Surgical Assoc. at 87). Thus, a defendant establishes entitlement to summary judgment when it establishes that all sums paid to a medical provided were in accordance to the prevailing fee schedule, even if less than the amount billed (Z.M.S. & Y Acupuncture, P.C. at *1; Surgicare Surgical Assoc. at 86). An insured establishes its fee schedule defense by tendering an affidavit from a professional coder who opines that the amounts paid for medical services were in accordance with and pursuant to the relevant fee schedule (Jaga Med. Services, P.C. at *1; Compas Med., P.C. at *1; Sama Physical Therapy, P.C. at *1; GBI Acupuncture, P.C. at *1; Raz Acupuncture, P.C. at *2; Great Wall Acupuncture, P.C. at 25).

Here, Acuna, an expert coder opines, based on a review of plaintiff’s bills, the reports of treatment rendered to Robinson, and ample reference material, including the applicable fee schedule, that the amounts billed by plaintiff are at variance and in excess of the relevant fee schedule such that the amounts paid by defendant were appropriate and in accordance to the fee schedule. As such, defendant establishes prima facie entitlement to summary judgment.

Nothing submitted by plaintiff raises an issue of fact sufficient to preclude summary judgment. Significantly, plaintiff’s submission is bereft of any evidence and it proffers no countervailing expert opinion. Instead, plaintiff, by counsel, actually agrees with the bulk of Acuna’s opinion – conceding that its initial treatment code was improper, that 0110T is the appropriate code for the tests performed, but that 95864 is the most appropriate code under the relevant fee schedule. As such, plaintiff urges that it is entitled to compensation for each nerve tested rather than for just the lower and upper extremities.

Plaintiff’s opposition, bereft of any evidence to support its assertion is insufficient to raise an issue of fact (LMS Acupuncture, P.C. v Geico Ins. Co., 42 Misc 3d 150(A), *1 [App Term 2014] [“With respect to plaintiff’s remaining claims, defendant demonstrated that it had fully paid plaintiff for those services in accordance with the workers’ compensation fee schedule for acupuncture services performed by chiropractors. In opposition, plaintiff relied upon an affirmation from plaintiff’s counsel which failed to establish the existence of a triable issue of fact.” (internal citations omitted).]). In light of Acuna’s affidavit and a review of the literature upon which she relies, it is clear that medical billing in accordance with the relevant fee schedule requires an expertise beyond the ken of the layman (De Long v Erie County, 60 NY2d 296, 307 [1983] [“The guiding principle is that expert opinion is proper when it would help to clarify an issue calling for professional or technical knowledge, possessed by the expert and beyond the ken of the typical juror.”]). Thus, this Court holds that an issue of fact with regard to her determination – dispositive in this case – can only be raised by the divergent opinion of another expert.

Indeed, assuming arguendo, that here, plaintiff’s attorney affirmation could, by itself, controvert Acuna’s opinion, plaintiff’s scant and conclusory attack on her opinion would nevertheless fall woefully short. For example, counsel makes no effort to reference any relevant documentation for his position that 95864 is the more appropriate billing code. Instead, citing to nothing, he merely asserts the same. Nor does plaintiff’s assertion that Acuna’s opinion is not premised on facts in the record avail it. It is true that expert testimony must be based on facts in the record or personally known to the witness, and that an expert cannot reach a conclusion by assuming material facts not supported by record evidence (Cassano v. Hagstrom, 5 NY2d 643, 646 [1959]; Gomez v New York City Hous. Auth., 217 AD2d 110, 117 [1995]; Matter of Aetna Cas. & Sur. Co. v Barile, 86 AD2d 362, 364-365 [1982]), and here, as discussed in detail, Acuna’s opinion is firmly grounded on facts in the record. Moreover, the documents from which those facts were extrapolated were properly before the Court. Thus, defendant’s motion is granted. It is hereby

ORDERED that the plaintiff’s complaint be dismissed, with prejudice. It is further

ORDERED that defendant serve a copy of this Decision and Order with Notice of Entry upon all plaintiff within thirty (30) days hereof.

This constitutes this Court’s decision and Order.

Fidel E. Gomez, JCC

Footnotes

Footnote 1: 11 NYCRR 65-3.1 states that “[t]he following are rules for the settlement of claims for first-party and additional first-party benefits on account of injuries arising out of the use or operation of a motor vehicle, a motorcycle or an all-terrain vehicle. These rules shall apply to insurers and self-insurers, and the term insurer, as used in this section, shall include both insurers and self-insurers as those terms are defined in this Part and article 51 of the Insurance Law, the Motor Vehicle Accident Indemnification Corporation (MVAIC), pursuant to section 5221(b) of the Insurance Law and any company or corporation providing insurance pursuant to section 5103(g) of the Insurance Law, for the items of basic economic loss specified in section 5102(a) of the Insurance Law.”

Footnote 2: It bears mentioning that the court’s reasoning in Hosp. for Joint Diseases – that “[p]ersonal knowledge of [defendant’s] documents, their history, or specific content are not necessarily required of a document custodian” (id. at 433), for purposes of laying a business record foundation sufficient to admit the documents in evidence, or in that case, for consideration on summary judgment – is merely a recognition of well settled law. Indeed, the business record foundation only requires proof that (1) the record at issue be made in the regular course of business; (2) it is the regular course of business to make said record and; (3) the records were made contemporaneous with the events contained therein (CPLR § 4518; People v Kennedy, 68 NY2d 569, 579 [1986]). Accordingly, “[i]t is well settled that a business entity may admit a business record through a person without personal knowledge of the document, its history or its specific contents where that person is sufficiently familiar with the corporate records to aver that the record is what it purports to be and that it came out of the entity’s files” (DeLeon v Port Auth. of New York and New Jersey, 306 AD2d 146 [1st Dept 2003]).

[*1]

Civil Court of the City of New York, Kings County, February 24, 2018

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for plaintiff.

Jaffe & Koumourdas & Mohavicka, LLP, New York City (Thomas Torto of counsel), for defendant.

Background/History

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved, inter alia, after a final appellate decision in its favor, for additional attorney’s fees pursuant to 11 NYCRR 65-4.6 of “no less than $250,000.00.”

The original order of the Honorable Carolyn Wade, dated March 6, 2009 (2009 WL 10454195 [Civ Ct, Kings County, Mar. 6, 2009, index No. 1208322005]), denied plaintiff’s motion for summary judgment based upon its failure to establish its prima facie case. Subsequently, the decision and order was appealed to the Appellate Term, for the Second, Eleventh and Thirteenth Judicial Districts, which affirmed (31 Misc 3d 21 [2011]). Thereafter, the Appellate Division in Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co. (114 AD3d 33, 46 [2d Dept 2013]), with two dissenting Justices, reversed, holding,

“(T)he plaintiff established, prima facie, its entitlement to judgment as a matter of law by demonstrating that its prescribed statutory billing forms used to establish proof of claim (see 11 NYCRR 65-1.1) were mailed to and received by the defendant and that the defendant failed to either timely pay or deny the claims (see Insurance Law § 5106; 11 NYCRR 65-3.8 [a] [1]; Westchester Med. Ctr. v Progressive Cas. Ins. Co., 89 AD3d at [*2]1082; Westchester Med. Ctr. v GMAC Ins. Co. Online, Inc., 80 AD3d at 604).”^[FN1]

The Court of Appeals affirmed. (See Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498 [2015].){**59 Misc 3d at 581}

Arguments of the Parties Regarding Additional Attorney’s Fees

For context, the court incorporates by reference its prior interim decision and order dated June 2, 2017, and restates relevant portions summarizing the arguments of respective counsel.

Plaintiff argued, inter alia, that as the legal issue of a medical provider’s prima facie showing was an issue that was considered by the Court of Appeals, the same was novel and unique and therefore warrants additional legal fees.

In opposition, defendant contended, inter alia, that plaintiff’s application for attorney’s fees of “no less than $250,000” is beyond this court’s jurisdictional limit, and that nonetheless, plaintiff is not entitled to excess attorney’s fees because the issues in this no-fault action were not novel or complex. For example, in support of its appeal to the Appellate Term, plaintiff’s counsel served and filed a four-page appellant’s brief and when the matter reached the Court of Appeals upon defendant’s appeal of the order of the Appellate Division, the Court of Appeals decision began with established principles encompassing a plaintiff medical provider’s prima facie case and concluded by predicating its conclusion on the admissibility of an affidavit. In short, defendant argued that the issue of evidentiary proof on a summary judgment motion is not novel or unique and that even if plaintiff’s counsel “expended a great deal of ‘time, money and effort’ on this case . . . it is not enough by itself to warrant the award of additional attorney’s fees.”

As to additional attorney’s fees in matters involving a claim for first-party no-fault benefits, 11 NYCRR subpart 65-4, Regulation No. 68-D governs the limitations of the same. The applicable subdivisions read as follows:^[FN2]

“(e) . . . the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850.

“(f) Notwithstanding the limitations listed in this section, if the arbitrator or a court determines that the issues in dispute were of such a novel or unique{**59 Misc 3d at 582} nature as to require extraordinary skills or services, the arbitrator or court may award an attorney’s fee in excess of the limitations set forth in this section. An excess fee award shall detail the specific novel or unique nature of the dispute which justifies the award.” (11 NYCRR 65-4.6 [emphasis added].)

As was observed in Maxwell v State Farm Mut. Auto. Ins. Co. (115 AD2d 190, 192 [3d Dept 1985]):

“The focus on the excess award determination is not necessarily on the results achieved [*3]but on the issues presented, i.e., whether they are novel and/or unique and necessitate extraordinary efforts on the attorney’s behalf . . . . [In this case] the primary issues were settled on well-established rules of contract law and statutory construction. While counsel is to be commended for his efforts, the fact remains that the issues were not so novel or unique as to justify an excess fee award.”

In Dumlao v State Farm Ins. Co. (173 AD2d 517 [2d Dept 1991]), the Court held that the issue of whether the injury was caused by an accident covered under the policy or whether it resulted from a preexisting arthritic condition was not sufficiently unique to warrant departure from the maximum attorney’s fee provided for under the insurance regulation.

In the instant matter, the issue of whether an affidavit of service from a third-party billing company is sufficient to establish plaintiff medical provider’s prima facie case—i.e., entitlement to reimbursement for assigned first-party no-fault benefits—was ultimately certified by the Appellate Division to the Court of Appeals. Inasmuch as the Court of Appeals accepted the certified question, this court found that the issue presented is sufficiently novel so as to warrant consideration of additional attorney’s fees in accordance with 11 NYCRR 65-4.6.^[FN3]

{**59 Misc 3d at 583}As such, a hearing was warranted to determine additional attorney’s fees. Parenthetically, plaintiff’s counsel’s contention that a comparatively large attorney’s fee for a modest principal award is appropriate based upon Matter of Hempstead Gen. Hosp. v National Grange Mut. Ins. Co. (179 AD2d 645 [2d Dept 1992]) is misplaced. The appropriateness of an increased attorney’s fee in excess of $850 will be determined based upon applicable considerations of a reasonable attorney’s fee (see RMP Capital Corp. v Victory Jet, LLC, 139 AD3d 836, 839 [2016] [“the award of attorneys’ fees, whether pursuant to agreement or statute, must be reasonable and not excessive”]).

In Matter of Rahmey v Blum (95 AD2d 294, 300 [2d Dept 1983]), which is a seminal case on the calculation of a reasonable attorney’s fee, the Court laid out an “analytical framework . . . to aid the courts in computing a reasonable attorney’s fee.” (See also Law Off. of Thaniel J. Beinert v Litinskaya, 43 Misc 3d 1205[A], 2014 NY Slip Op 50504[U] [Civ Ct, Kings County 2014].)

The court in Ousmane v City of New York (22 Misc 3d 1136[A], 2009 NY Slip Op 50468[U], *9-10 [Sup Ct, NY County 2009]) utilized the lodestar method, as elaborated in Rahmey, of determining the reasonableness of awarding attorney’s fees and that methodology is expressed as follows:

“A. Hours Reasonably Expended

“The first step to be taken in arriving at a fair and appropriate award of attorneys’ fees [*4]under the lodestar method is to determine whether the number of hours claimed were reasonably ‘expended from contemporaneous time sheets.’ Becker v. Empire of America Federal Savings Bank, 177 AD2d 958 (4th Dept 1991); see also Rahmey, 95 AD2d at 300-301. The court need not automatically accept inadequately documented hours or those hours which reflect ‘padding, i.e., hours that are excessive or otherwise unnecessary.’ Rahmey, 95 AD2d at 301. The following factors are also to be considered in assessing the reasonable hours worked: the extent to which the hours reflect inefficiency or duplicative work; legal work versus non-legal work, investigations, and other work performed{**59 Misc 3d at 584} by non-lawyers; time spent in court differentiated from out-of-court efforts; and the court’s own knowledge, experience and expertise as to the time required to complete a similar task. Id.; see also Matter of Spingarn, 164 Misc 2d 891, 894 (Sup Ct, NY County 1995).” (Emphasis omitted.)

Regarding the hourly fee charged by counsel making the application for attorney’s fees, the court in Carroll v Weill (2008 NY Slip Op 32512[U], *8 [Sup Ct, NY County 2008, Ramos, J.]) stated,

“To determine the reasonable hourly billing rate, the ‘prevailing market rate’ or the rate ‘prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation’ applies (Blum v Stenson, 465 US 886, 896 [1984]); Farbotko v Clinton County of N.Y., 433 F3d 204 [2d Cir 2005]).”

While it is well established that “[t]he focus on the excess award determination is not necessarily on the results achieved but on the issues presented, i.e., whether they are novel and/or unique and necessitate extraordinary efforts on the attorney’s behalf” (Maxwell, 115 AD2d at 192), there is scarcely any case law on the determination of an appropriate attorney’s fee award in this specialized field of no-fault law.

In Liebman v New Jersey Mfrs. Ins. Co. (123 Misc 2d 697 [Civ Ct, Bronx County 1984]), the court granted an excess fee award based upon the court granting an hourly rate that was found within the regulations while allowing the jury to determine the number of hours. At the time, the court held that the attorney’s compensation should be $75 per hour for “out of court time” and $150 per hour for “in court time” (Liebman, 123 Misc 2d at 701). Prior to the repealing of the original Regulation No. 68, which implemented New York’s No-Fault Law, in 2001, the provision pertaining to an attorney’s fee, former 11 NYCRR 65.17 (b) (6) (iv) dictated that

“(a) for preparatory services relating to the arbitration forum or court, the attorney shall be entitled to receive a fee of up to $70 per hour . . . and . . .

“(b) in addition, an attorney shall be entitled to receive a fee of up to $80 per hour for each personal appearance before the arbitration forum or court.”

The revised Regulation No. 68-D, effective post April 5, 2002, incredibly, did not change the hourly compensation (former 11{**59 Misc 3d at 585} NYCRR 65-4.6 [d] [1], [2]). Lastly, the sixth amendment to Regulation No. 68, which is not applicable to the services at issue, which revised certain aspects of attorney’s fees, likewise, did not change an hourly compensation rate for the practice of no-fault law (11 NYCRR 65-4.6 [c]). It appears that the hourly compensation rate was largely unchanged albeit modestly increased from $35 per hour for out of court services and $50 per hour for in court services in the late 1970s (11 NYCRR 65.16 [c] [7] [iii] [a], [b]).

However, the statute in effect at the time services were rendered, 11 NYCRR 65-4.6 (f) (the most recent amendment on Feb. 4, 2015, contains virtually the same language found but under subdivision [e] of 11 NYCRR 65-4.6), is clear and unambiguous, and the words “[n]otwithstanding the limitations listed” and “court may award an attorney’s fee in excess of the limitations,” will be given their plain meaning (State of New York v Patricia II., 6 NY3d 160[*5][2006]) and a legal fee based on the usual and customary hourly fees charged by attorneys practicing no-fault law, taking into consideration reasonably comparable skill, experience, and reputation, under a lodestar or quantum meruit standard, will be awarded if at least one of those standards is met.

Although this court in its interim order dated June 2, 2017, determined that it would award “reasonable” attorney’s fees based on the lodestar standard, the court may also make an award under quantum meruit through its inherent authority to do so. (See Beacon Fed. Sav. & Loan Assn. v Marks, 97 AD2d 451 [2d Dept 1983].)

Even where the attorney rate is found to be reasonable, the court may reduce the fee if it finds the amount of time spent rendering legal services was excessive. See Metropolitan Lofts of NY, LLC v Metroeb Realty 1, LLC (46 Misc 3d 1222[A], 2015 NY Slip Op 50251[U], *12 [Sup Ct, Kings County 2015, Demarest, J.]):

“The Court has further determined, however, that a 10% discount is necessitated by the duplication apparent in some of the billing. Although the hourly billing rates are reasonable, the number of hours is found to be excessive (see NYCTL 1996-1 Trust v Stavrinos Realty Corp., 113 AD3d 602, 604-605 [2d Dept 2014]; Kaygreen Realty Co., LLC v IG Second Generation Partners, L.P., 78 AD3d 1008, 1010 [2d Dept 2010]; Friedman v Miale, 69 AD3d 789, 791 [2d Dept 2010]).”

{**59 Misc 3d at 586}Lastly, the court noted that as the attorney’s fees sought are statutory and are not a part and parcel of the principal award, the jurisdictional limit of $25,000 is not applicable (see NY City Civ Ct Act § 201; Metrotran Adv. Trust Fund v Cado Trans., 156 Misc 2d 725 [Civ Ct, Kings County 1993]).

The Court in DeGregorio v Bender (52 AD3d 645, 646 [2d Dept 2008]) summarized the standards:

“In fixing an award of legal fees in quantum meruit, the court should consider ‘evidence of the time and skill required in that case, the complexity of the matter, the attorney’s experience, ability, and reputation, the client’s benefit from the services, and the fee usually charged by other attorneys for similar services’ ” (citing Rosenzweig v Gomez, 250 AD2d 664 [1998]).

The Attorney’s Fee Hearing

The court held an attorney’s fee hearing on September 26, 2017, September 27, 2017, September 28, 2017, and October 3, 2017, pursuant to 11 NYCRR 65-4.6.

Testimony of Max Valerio, Esq. (Plaintiff’s Witness)

The court heard testimony from Max Valerio, Esq., a subpoenaed witness, who testified on behalf of the plaintiff’s counsel that he is a former partner of the law firm and has worked on “hundreds of appeals.” Mr. Valerio estimated that he spent approximately 20 hours doing research and 20 hours writing the four-page brief which was submitted to the Appellate Term. Mr. Valerio had no independent recollection and no contemporaneous time records. Mr. Valerio estimated that he spent 5-10 hours preparing for the Appellate Term argument. Mr. Valerio testified that he also spent 10-20 hours preparing the motion for leave to appeal to the Appellate Division. After the motion was granted, he was involved in drafting the brief which was eventually submitted to the Appellate Division. No one else helped him in researching, writing or editing the brief. Mr. Valerio testified that he “probably” spent 80 hours working on the appellate brief, or a period of approximately two weeks. There was no record on appeal prepared by plaintiff’s counsel inasmuch as the appeal was based on the clerk’s return. Mr. [*6]Valerio testified that he read the opposition brief from the defendant and spent between 10-20 hours working on the reply and two to four hours preparing for oral argument in the Appellate{**59 Misc 3d at 587} Division. Mr. Valerio’s hourly rate in 2005 ranged from $300-$500 per hour depending on the nature of his legal services rendered. There was an argument he made in the Appellate Division which lasted one-half hour.

The court accepts Mr. Valerio’s testimony to the extent that he performed legal services regarding the appeal covering the period up to and including the argument before the Appellate Division, and that he alone worked on the briefs, and that the lowest rate utilized when billing at an hourly rate was $300 per hour, but otherwise finds his testimony generally not credible.

Testimony of David Gottlieb, Esq. (Plaintiff’s Witness)

The court heard testimony from David Gottlieb, Esq., who worked for plaintiff’s counsel in 2010 and has perfected hundreds of appeals in the Appellate Term, and the Appellate Division, First and Second Departments, as well as two appeals in the New York State Court of Appeals. Mr. Gottlieb was on Brooklyn Law School’s Law Review and was admitted in 2005. Mr. Gottlieb has conducted approximately 100 no-fault bench trials. Mr. Gottlieb prevailed in his law firm’s competition as to who would present the oral argument in the Court of Appeals. The draft of the Court of Appeals brief was circulated throughout the law firm for feedback from other members of the firm. Mr. Gottlieb testified that he spent approximately six hours reviewing the record, and eight hours reviewing and researching citations within the defendant’s brief. The first draft of the Court of Appeals brief took 10 hours, the second draft took 20 hours. The final draft took 10 hours. There were at least 43 emails involving feedback from other members of the firm. The reply brief (Court of Appeals) took six hours to get through (14 pages). Mr. Gottlieb checked all cites and quotes. After reviewing the reply in the Court of Appeals, Mr. Gottlieb prepared a motion to allow the filing of amicus briefs. The preparation for the argument in the Court of Appeals was 28 hours. Mr. Gottlieb reviewed videos of arguments made in the Court of Appeals in preparation and spent a total of 130 hours working on the appeal to the Court of Appeals including oral argument. There were costs from the appellate printers, but no bills for these costs were admitted into evidence. Mr. Gottlieb did not keep contemporaneous time records.

The court accepts Mr. Gottlieb’s testimony that he performed legal services regarding the appeal covering the period of time{**59 Misc 3d at 588} from the date of the Appellate Division decision through the decision in the Court of Appeals, but because there was inadequate testimony regarding hourly rate fees and no contemporaneous time records, the court otherwise finds his testimony insufficient for establishing a reasonable hourly rate or time spent providing legal services. Under cross-examination, regarding certain services performed, Mr. Gottlieb testified as follows, “from what I remember . . . (2 hours of watching videos)” and “cannot tell for sure.”

Stephan Belinfanti, Esq. (Plaintiff’s Witness)

Mr. Belinfanti was admitted to the bar in 2001, and worked for Country-Wide Insurance Co. as a staff attorney in mid-2004, as well as other insurance defense firms and eventually started working for plaintiff’s counsel in September 2010. Mr. Belinfanti has conducted hundreds of bench trials and six jury trials, three of which concluded with a verdict, and has perfected a number of appeals. This court has had Mr. Belinfanti appear before it at numerous bench trials and recognizes his talent and competence. However, Mr. Belinfanti likewise did not keep any contemporaneous time records and the court is unwilling to accept testimony regarding estimates of “minimum” time spent in performing certain legal tasks. The court did not find Mr. [*7]Belinfanti’s testimony regarding attorney rates, to the extent there was such testimony, to be sufficient.

Gary Tsirelman, Esq. (Plaintiff’s Witness)

Mr. Tsirelman is the principal of the plaintiff’s counsel’s firm and has been an attorney for 16 years. Mr. Tsirelman is well qualified in the area of no-fault law having an office of 40 employees with 16 lawyers with 95% of his cases involving no-fault. Mr. Tsirelman testified that he spent 10 hours working on the appeal in the Appellate Term, six hours researching and editing, three hours working up defendant’s brief, and one hour discussing the appeal with Mr. Valerio. Regarding the appeal to the Appellate Division, Mr. Tsirelman spent 40 hours working on the appeal as follows: 20 hours editing/researching, 10 hours reading and rereading defendant’s brief and 10 hours discussing procedure and strategy with Mr. Valerio. Mr. Tsirelman detailed how 10 attorneys participated in moot court in preparation for the argument in the Court of Appeals. Mr. Tsirelman spent 10 hours editing and researching the Court of Appeals brief, three hours considering anticipated opposition,{**59 Misc 3d at 589} and six hours helping to get Mr. Gottlieb ready for his oral argument in the Court of Appeals.

Mr. Tsirelman testified that senior attorneys are billed at $500/hour for Racketeer Influenced and Corrupt Organizations Act no-fault defenses, declaratory actions, and breach of contract cases. This rate is placed in all retainers except for no-fault cases. The court finds that certain of the tasks were duplicative and excessive.

Sedmund Resciniti (Defendant’s Witness)

Mr. Resciniti is an attorney with 57 years’ legal experience who has a significant background in insurance law and testified on behalf of the defendant as someone with specialized knowledge in the area of No-Fault Law. Mr. Resciniti testified that he was employed by Allstate Insurance Company in 1960 and since 1962 maintained his own practice with a specialty in insurance law and no-fault. Although Mr. Resciniti testified regarding his interpretation of the statute as to the maximum hourly rate that can be charged by an attorney in an excess fee application, such an interpretation is completely disregarded because such province resides exclusively with the court. (See Measom v Greenwich & Perry St. Hous. Corp., 268 AD2d 156, 159 [1st Dept 2000] [“(e)xpert testimony as to a legal conclusion is impermissible”], citing People v Kirsh, 176 AD2d 652, 653 [1991], lv denied 79 NY2d 949 [1992].) However, the court does consider Mr. Resciniti’s opinion that the hourly rate for no-fault legal services was $50 per hour between 2005 and 2015.^[FN4] Mr. Resciniti has perfected six to seven appeals in the Court of Appeals, 35-40 appeals in the Appellate Division, and argued in approximately 20 matters in the Appellate Division, First and Second Departments, but has never tried a no-fault case in civil court and has only appeared in arbitration proceedings. Mr. Resciniti testified as to the time it would take to accomplish certain tasks by the plaintiff and that any time above the following estimates is unreasonable: drafting Appellate Term brief (1.5-2 hours); preparation for and oral argument in the Appellate Term (1.5 hours); drafting motion for leave to appeal to the Appellate Division (duplicative of Appellate Term motion) (one hour); drafting Appellate Division brief (12 hours); drafting reply brief (four hours); oral argument in Appellate Division (and preparation, two hours); drafting brief in Court{**59 Misc 3d at 590} of Appeals (eight hours); and oral argument in Court of Appeals (and preparation, two hours). According to Mr. Resciniti, the total reasonable hours for the appeal could [*8]not exceed 32.5-33 hours and any hours in excess of these hours is duplicative or excessive.

The court finds that the testimony of Mr. Resciniti comes much closer to the reasonable hours expended in prosecuting the appeals than the evidence presented by plaintiff’s counsel and the estimates of defendant’s witness will be treated as a concession of the reasonable minimum number of hours that were required to prosecute the appeals. Where defendant presents an expert who renders an opinion regarding the reasonable hours expended, defendant concedes those hours. (Cf. Kuehne & Nagel v Baiden, 36 NY2d 539, 544 [1975] [“in the absence of either party challenging the verity of the alleged facts, as is true in the instant case, there is, in effect, a concession that no question of fact exists”]; cf. Schifter v Commercial Travelers Mut. Acc. Assn. of Am., 183 Misc 74 [1944], affd 269 App Div 706 [1945]; see also Annotation, Proper Procedure and Course of Action by Trial Court, Where Both Parties Move for Summary Judgment, 36 ALR2d 881.)

Legal Analysis

The court is unable to utilize the lodestar method to determine reasonable attorney’s fees because plaintiff’s counsel’s firm did not keep any contemporaneous billing records and did not provide the court with proof of a “reasonable hourly billing rate,” by showing the “prevailing market rate” or the rate “prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation” (Carroll v Weill, 2008 NY Slip Op 32512[U], *8; Matter of Rahmey v Blum, 95 AD2d 294 [2d Dept 1983]). However, the court may accept, at a minimum, the 33 hours conceded by the defendant (cf. Kuehne & Nagel v Baiden) and the statutory rate of $70 for legal services rendered out of court or $80 for legal services rendered in court. (See former 11 NYCRR 65-4.6 [d] [1], [2].)

The court rejects all testimony regarding an hourly rate of plaintiff’s counsel’s attorneys of between $500 to $1,000 per hour because such testimony only pertained to hourly rates charged by plaintiff’s firm having to do with matters other than the type of litigation or appeal ultimately argued in the Court of Appeals. The court accepts plaintiff’s counsel’s respective testimony regarding the experience of its attorneys which included years of practice and areas of expertise.{**59 Misc 3d at 591}

Unlike federal courts which strictly apply only a lodestar analysis (New York State Assn. for Retarded Children, Inc. v Carey, 711 F2d 1136 [2d Cir 1983]), state courts frequently determine reasonable attorney’s fees on a quantum meruit basis in a multitude of contexts under its inherent authority. (See Matter of First Natl. Bank of E. Islip v Brower, 42 NY2d 471 [1977] [where court refused to accept contractual provision mechanically applying a rate of 15% for attorney’s fees upon default judgment and only accepted such percentage as a limitation of such “reasonable fees” up to such percentage based on a “quantum meruit” basis]; see Matter of Greenfield, 127 AD3d 1189, 1192 [2d Dept 2015] [involving an estate matter, where an appellate court affirmed the trial court’s quantum meruit award of attorney’s fees in the absence of the law firm keeping contemporaneous time records]; see Padilla v Sansivieri, 31 AD3d 64, 67 [2d Dept 2006] [a matter involving a personal injury case where a disbarred attorney is claiming a fee prior to his disbarment, “there is case law expressly recognizing that the calculation of an award of legal fees as a portion of a contingent fee and based on an hourly rate are both properly fixed as quantum meruit determinations”], citing Lai Ling Cheng v Modansky Leasing Co., 73 NY2d 454, 459 [1989].)

As Justice Rivera determined in Nawaz v Boryczka (34 Misc 3d 1234[A], 2012 NY Slip Op 50367[U], *2 [Sup Ct, Kings County 2012]), “quantum meruit” is defined to be “as much as he [or she] deserve[s].” (Black’s Law Dictionary 1119 [5th ed 1979], quantum meruit.) Making that [*9]determination requires an assessment of the value of the services rendered. (See Ruggiero v Gross Plumbing & Heating, 226 AD2d 984, 986 [3d Dept 1996] [where appellate court reversed trial court in making quantum meruit determination on papers because, “the affidavit submitted by the (law) firm in support of its fee request lacked evidence of other significant factors generally considered when determining fee requests under quantum meruit, namely, the total time spent, the hourly rate charged, the amounts customarily charged for similar services in the same locality and the difficulty of the case”].)

The time spent by plaintiff’s counsel in attending the attorney’s fee hearing is not compensable as a “fee on a fee.” (See Matter of Hempstead Gen. Hosp. v National Grange Mut. Ins. Co., 179 AD2d 645, 646 [2d Dept 1992]; Kumble v Windsor Plaza Co., 161 AD2d 259, 261 [1st Dept 1990].){**59 Misc 3d at 592}

Issue: Is there enough evidence in the record to award plaintiff’s counsel’s fees under a theory of quantum meruit?

At the hearing, numerous documents were admitted into evidence but these documents alone are insufficient to make a quantum meruit attorney’s fee award. (See Neals v Cox, 240 AD2d 380, 380-381 [2d Dept 1997] [“(a)ssuming, arguendo, that the case file was admissible in evidence, no evidence was submitted of the hours worked on the case and the respondent’s hourly rate. Accordingly, the respondent failed to prove the value of her services on a quantum meruit basis (see, Glickson v Eli Lilly & Co., 234 AD2d 416; Sparks v Barry’s Plumbing & Heating Corp., 230 AD2d 606; Ruggiero v Gross Plumbing & Heating, 226 AD2d 984)”].) Here, there is no doubt that time was spent in the preparation of the numerous documents that were placed into evidence, but the court would engage in pure speculation regarding establishing the actual time involved in preparing those documents.

Given that legal fees in no-fault cases are determined on an hourly rate or a percentage of the recovery (11 NYCRR 65-4.6 under current subdivision [c] [$70/$80 per hour] with a maximum of $1,400 for in/out of court services or under current subdivision [b] up to 20% of recovery not to exceed $1,360), and that plaintiff’s counsel’s firm practices virtually all no-fault law, some explanation should have been offered as to why no time records were kept.

The court is being asked to use its own experience and expertise (Matter of Rahmey v Blum, 95 AD2d 294, 300 [2d Dept 1983]) to determine the reasonable hours, if any, above the hours conceded by the defendant and to further determine the reasonable hourly rates, if determined, above those specified in the statute (11 NYCRR 65-4.6). The plaintiff’s counsel in its posttrial memorandum of law is asking the court to consider the case of Matter of Hempstead Gen. Hosp. v National Grange Mut. Ins. Co. (179 AD2d 645 [2d Dept 1992]) where the Appellate Court affirmed the trial court’s setting of the attorney hourly rate in a no-fault matter of $175 per hour in 1989 which adjusted by the Bureau of Labor Statistics inflation calculator is equivalent to $354 in 2017.

This court will apply a flat hourly rate of $250 as reasonable for the legal services provided and makes an award of a legal fee only to the following extent:{**59 Misc 3d at 593}

Therefore, based upon the foregoing, plaintiff’s motion for additional attorney’s fees pursuant to 11 NYCRR 65-4.6 is granted and defendant is directed to make payment of $12,325 to plaintiff’s counsel within 30 days of the court’s decision or plaintiff may enter judgment.

Footnotes

Footnote 1:The exception was plaintiff’s claim dated November 17, 2004, in the amount of $139, which was denied based on “results from [an] independent medical exam the claimant attended on [September 21, 2004].” (See Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 114 AD3d at 36.)

Footnote 2:Plaintiff commenced this action in September 2005, prior to the adoption of the sixth amendment to 11 NYCRR 65-4.6, and as such, the amendment is not applicable and the subdivision as cited is the text of the regulation prior to the amendment. However, it should be noted that amended subdivision (e) has the same language as found in former subdivision (f).

Footnote 3:Indeed, the acceptance of a certified question by the Court of Appeals is discretionary (see 22 NYCRR 500.27 [a]; see also 22 NYCRR 500.22 [b] [4] [requiring movants to submit, inter alia, “(a) concise statement of the questions presented for review and why the questions presented merit review by this Court, such as that the issues are novel or of public importance, present a conflict with prior decisions of this Court, or involve a conflict among the departments of the Appellate Division”]; Liriano v Hobart Corp., 92 NY2d 232, 243 [1998] [the Court of Appeals declined to accept a certified question where “(t)he Second Circuit’s opinion does not indicate that there is an unsettled or open question of New York substantive law”]; Tunick v Safir, 94 NY2d 709, 711-712 [2000] [the Court of Appeals noting that “the certification procedure can provide the requesting court with timely, authoritative answers to open questions of New York law, facilitating the orderly development and fair application of the law and preventing the need for speculation”]).

Footnote 4:In 2005 11 NYCRR 65-4.6 (d) (1) and (2) reflected an hourly rate of $70/$80 depending on in court or out of court work with a cap of $1,400.

[*1]

Civil Court of the City of New York, Richmond County, February 7, 2018

APPEARANCES OF COUNSEL

Baker Sanders, L.L.C., Garden City, for plaintiff.

Law Offices of Daniel J. Tucker, Brooklyn, for defendant.

American Transit Insurance Company (hereinafter, defendant) filed this motion to stay the action pending a determination from the Workers’ Compensation Board (hereinafter, the Board) on whether Chiropractic Testing Services of New York (hereinafter, plaintiff) could be paid for treatment of Nelson De La Cruz (hereinafter, assignor) under workers’ compensation. Defendant claims that since assignor was injured in the course of employment, his claims should be covered by workers’ compensation and not personal injury protection and, therefore, the matter must be adjudicated by the Board before it reaches this court.

Plaintiff argues that in order for the court to stay the proceeding, defendant must establish the existence of an employer-employee relationship, citing Matter of Global Liberty Ins. Co. v Abdelhaq (36 AD3d 909 [2d Dept 2007]) where a stay was denied because the claimant failed to submit evidence that the cab driver’s base was his employer at the time of the accident. This case is distinguishable from Global Liberty, however, because assignor did not own his vehicle. Here, American United Transportation (hereinafter, the cab company) owned the vehicle and was named as the insured on the automobile insurance policy.

According to Workers’ Compensation Law § 2 (3), a livery base shall be deemed the “employer” of a driver if it must register with the Taxi & Limousine Commission and is [*2]not an “independent livery base” as defined in section 18-c.^[FN1] Even in cases where the driver owned the vehicle and paid for its fuel and{**59 Misc 3d at 252} maintenance, the Board has found an employer-employee relationship because the vehicle carried the dispatcher’s sign and telephone number, the dispatcher provided his radio, and the dispatcher exerted control over which calls he would pick up and how much he could charge (see Matter of Olistin v Wellington, 3 AD3d 618 [3d Dept 2004]).

Insurance Law § 5102 (b) (2) states that a no-fault claimant is entitled to reimbursement for economic loss less amounts “recovered or recoverable” from workers’ compensation benefits. The Court of Appeals has held that a no-fault insurer may attain “party in interest” status to a Board proceeding, upon the discretion of the Workers’ Compensation Law Judge (WCLJ), while the WCLJ makes the determination whether an employer-employee relationship existed (Liss v Trans Auto Sys., 68 NY2d 15 [1986]). The courts have consistently ruled that the legislature has vested “primary jurisdiction” in the Board over the issue of the availability of coverage under the Workers’ Compensation Law, and that plaintiffs have “no choice but to litigate this issue before the Board” (id. at 21).

The Court of Appeals has further held that, where the availability of workers’ compensation hinges upon the resolution of questions of fact or upon mixed questions of fact and law, the plaintiff may not choose the courts as the forum for the resolution of such questions (O’Rourke v Long, 41 NY2d 219, 228 [1976]). Essentially, where a determination as to whether an accident arose out of a plaintiff’s employment is likely to require extensive fact-finding, the court should, “in the exercise of sound discretion,” defer to the Board (Jing Huo Lac v American Tr. Ins. Co., 19 Misc 3d 1146[A], 2008 NY Slip Op 51177[U], *3 [2008], citing Weber v State of New York, 104 Misc 2d 947 [Ct Cl 1980]).

Defendant need not prove that assignor was employed by the cab company at the time of the accident, but merely show “potential merit” to its claim so as to trigger a determination by the Board (A.B. Med. Servs. PLLC v American Tr. Ins. Co., 8 Misc 3d 127[A], 2005 NY Slip Op 50959[U], *1 [App Term, 2d Dept, 2d & 11th Jud Dists 2005]).^[FN2]

In this case, we do not know the degree of control exerted by the cab company over assignor, but that should not preclude{**59 Misc 3d at 253} plaintiff’s duty to seek recovery under workers’ compensation. The facts that the cab company owned the vehicle involved in the accident and is named as the insured on its automobile policy show “potential merit” that the cab company is not an independent livery base and, therefore, assignor would be covered under workers’ compensation.

The motion to stay is granted, pending a determination by the Workers’ Compensation Board on the parties’ rights under the Workers’ Compensation Law.

In the event plaintiff fails to file proof with the court of an application to the Workers’ Compensation Board within 90 days of the date of the order entered hereon, the court shall grant [*3]summary judgment in favor of defendant dismissing the complaint unless plaintiff shows good cause why the complaint should not be dismissed.

Footnotes

Footnote 1:The Board designates a livery base as an “independent livery base” if the: (a) base is not the owner/registrant of any vehicle it dispatches; (b) drivers use their own clothing; (c) drivers set their own schedules; (d) drivers select which dispatches they want to pick up; (e) drivers are free to contract with other bases; (f) base does not issue a W-2 or any federal withholding; (g) drivers pay for their own fuel and maintenance for the vehicle; (h) base does not issue fines or penalties except refusal to provide dispatches in response to driver misconduct; and (i) driver cannot be fired or discharged.

Footnote 2:Plaintiff produced assignor’s sworn statement that he was not working when the accident occurred and a sworn statement by his purported employer that assignor was not working, and was not en route to or from work at the time of the accident; defendant interposed only a claims adjuster’s assertion that defendant had “made the determination that the [assignor] was eligible for Workers’ Compensation” which in turn was based solely on an employer’s unsworn statement dated 18 months before the accident and a police accident report.

67257/10

Counsel for Plaintiff: Leon Kucherovsky, Esq.

Counsel for Defendant: Peter C. Merani, PC

In this action for the payment of first-party benefits – no fault payments for medical treatments – defendant moves seeking an order pursuant to, inter alia, CPLR § 5019(a), modifying this Court’s Judgment, entered November 5, 2015. Saliently, defendant avers that the Judgment should be modified and the amount therein reduced to zero on grounds that defendant’s insured exhausted no-fault the limits of the relevant policy. Plaintiff opposes the instant motion asserting that defendant’s failure to raise the instant defense issue at the time this case was tried – despite being aware of the same – precludes application of the same.

For the reasons that follow hereinafter, defendant’s motion is denied.

The instant action is for the payment of no-fault insurance benefits for medical treatment. The complaint and exhibits appended thereto allege, in relevant part, the following: On September 2, 2009, LESSIE BENJAMIN (Benjamin) sought medical treatment from plaintiff for injuries sustained in a motor vehicle accident occurring on August 4, 2009. Lessie was covered by an insurance policy issued by defendant, which pursuant to Article 51 of the Insurance Law, required payment of health related expenses and whose benefits Lessie assigned to plaintiff. The treatments provided by defendant to Lessie totaled $2,272.66, were covered by defendants’s policy, were billed to defendant, but were nevertheless not paid. Based on the foregoing, plaintiff seeks payment of the aforementioned sums pursuant to the Comprehensive Motor Vehicle Insurance Reparations Act ^[FN1] (11 NYCRR 65-3.1 et seq.).

On May 15, 2015 after a trial, this Court (Franco, J.) issued a decision finding that based on the relevant fee schedule, of the sums sought by plaintiff, it was entitled to $588 plus costs and interest. The Court directed a judgment, and the same was entered on November 5, 2015. [*2]On January 14, 2016, plaintiff executed the judgment upon defendant’s assets.

Defendant’s motion seeking, inter alia, modification of the judgment pursuant to CPLR § 5019(a) – reducing the amount of the judgment to zero on grounds that Lessie has exhausted the relevant policy – is denied. Significantly, as will be discussed below, while defendant’s liability for any medical claims under the no-fault portion of its policy is generally limited to $50,000, here, it is alleged and unrebutted that defendant was aware that it had exhausted its policy prior to the entry of the relevant judgment but failed to raise the issue at trial.

It is well settled that [a]n insurer is not required to pay a claim where the policy limits have been exhausted” (Hosp. for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534 [2d Dept 2004]). Stated differently, where an insurer has paid the full monetary limits set forth in the relevant policy, its duties under the contract of insurance cease (id. at 534; Hosp. for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534 [2d Dept 2004]; Presbyt. Hosp. in City of New York v Liberty Mut. Ins. Co., 216 AD2d 448, 448 [2d Dept 1995]; Presbyt. Hosp. in the City of New York v Gen. Acc. Ins. Co. of Am., 229 AD2d 479, 480 [2d Dept 1996]).

Indeed, in the context of actions seeking the payment of medical expenses under the no-fault portions of an insurance policy, the foregoing is no less true. Thus, even when a judgment is issued against an insurer requiring it to pay for medical expenses incurred by its insured under the no-fault provisions of its insurance policy, if the insurer has exhausted the amount for which it is liable under the policy, the judgment can generally not be enforced (St. Barnabas Hosp. v Country Wide Ins. Co., 79 AD3d 732, 733 [2d Dept 2010]; Hosp. for Joint Diseases v Hertz Corp., 22 AD3d 724, 725 [2d Dept 2005]; Countrywide Ins. Co. v Sawh, 272 AD2d 245, 245 [1st Dept 2000] [“The arbitrators exceeded their authority in directing the payment of the $2,250 at issue, as the award was in excess of the $50,000 limit of the subject insurance policy. When an insurer has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (internal citation and quotation marks omitted).]; Presbyt. Hosp. in the City of New York, 229 AD2d at 480 [2d Dept 1996]; Presbyt. Hosp. in City of New York, 216 AD2d at 448; Allstate Prop. and Cas. Ins. Co. v Northeast Anesthesia and Pain Mgt., 51 Misc 3d 149(A), *1 [App Term 2016]; Harmonic Physical Therapy, P.C. v Praetorian Ins. Co., 47 Misc 3d 137(A), *1 [App Term 2015]; Allstate Ins. Co. v Demoura, 30 Misc 3d 145(A), *1 [App Term 2011]). Thus, when an insured establishes that it has exhausted the no-fault limits under its policy because it paid all amounts allowed under the policy to medical providers, it is generally not liable for any other amounts (Hosp. for Joint Diseases at 725 [“The evidence submitted in support of the motion established, among other things, that the defendants’ payments to other health providers and the defendants’ payment of the plaintiff’s initial claim totaled $23,744.21, and that the defendants forwarded to the plaintiff the remaining amount they were obligated to pay under the policy, namely, $26,255.79, which resulted in the $50,000 policy limit being exhausted. The Supreme Court granted the defendants’ motion, finding that the defendants’ payment satisfied the judgment and exhausted the policy limit, and that the information subpoena was rendered academic.”]; Countrywide Ins. Co. at 245;Harmonic Physical Therapy, P.C. at *1).

The foregoing defense, however, may be waived. With regard to when an insured is required to interpose the defense of policy exhaustion to prevent the payment of outstanding claims, the case law appears to be clear. Indeed, the appellate authority on this issue as well as trial court precedent establishes that defendant’s failure to raise the issue – when known – constitutes waiver. In Mount Sinai Hosp. v Dust Tr., Inc. (104 AD3d 823, 825 [2d Dept 2013]), defendant sought to modify a judgment issued against it after plaintiff was granted summary judgment on the issue of whether defendant – an insurer – owed plaintiff – a medical provider – money under a no-fault policy for medical services rendered to defendant’s insured (id. at 824). The court held that insofar as defendant failed to assert that it had exhausted the no-fault limits of its policy in opposition to plaintiff’s motion for summary judgment, only raising it after it sought to modify the judgment, such modification was barred (id. at 825 [“The issue of partial exhaustion of the defendant’s coverage was raised for the first time after the judgment was [*3]entered, even though the plaintiff had previously moved for summary judgment on the complaint, seeking a certain amount of benefits . . . The failure to present such reasonable justification by itself requires denial of the defendant’s motion.”]). Clearly, then, the holding in Mount Sinai Hosp., which deems the defense of policy exhaustion waived when known and not raised in relation to summary judgment also requires waiver when the defense is known prior to trial and not raised. While the appellate courts in the First Department have yet to address this issue, one case in this very Court has decided the issue – on identical facts – in a plaintiff’s favor.

In Big Apple Ortho Medical Supply, Inc. V Allstate Insurance Company (NYLJ 1202756440119, *1 [Civil Ct, Bronx County 2016]), the court declined to modify the judgment issued against an insurer for the payment of no-fault benefits on grounds that the defense of policy exhaustion was raised for the first time in a post judgment motion (id. at *2-3). Significantly, the court there concluded that defendant could have raised the defense at trial but failed to do so (id.). Other trial courts have also declined to modify a judgment requiring the payment of no-fault benefits when the defense is raised after judgment is rendered but could have been raised prior thereto (Ortho Passive Motion Inc. v Allstate Ins. Co. 55 Misc 3d 794, 797 [NY Dist Ct 2017]). In Ortho Passive Motion Inc., the court denied defendant’s post judgment motion to modify and reduce the same to zero on grounds that the exhaustion of the policy’s no-fault limits precluded payment on the judgment (id. at 795). The Court denied the application, concluding that defendant was aware of the fact that it could not satisfy the judgment at the time the case was tried and in failing to raise it, could not be accorded the relief sought (id. at 895).

The dearth of dispositive appellate authority in this department is, of course clear, and any argument to the contrary is unavailing. Indeed, in neither Harmonic Physical Therapy, P.C., (47 Misc 3d 137[A]) nor Demoura (30 Misc 3d 145[A]), did the Appellate Term, First Department have occasion to address the issue at bar – whether failing to raise the defense of policy exhaustion prior to judgment, when the same was known at the time of trial – bars the applicability of the defense. At best, the court in Demoura held that “[a] defense that the coverage limits of the policy have been exhausted may be asserted by an insurer despite its failure to issue a denial of the claim within the 30-day period” (id. at 145). This of course does not avail a defendant since it is one thing to fail to raise a defense prior to the initiation of an action, without having such failure constitute waiver, and quite another to raise the same after a judgment in an action has been issued. Especially when the defendant had prior knowledge that its policy had been exhausted.

Here, in support of its motion defendant submits the policy issued to Lessie, which indicates at Page 12, under the section titled “Limits of Liability” that

[t]he limit of our liability for Medical Expense Benefits as stated on the Policy Declarations, is the maximum we will pay per any one insured person for any motor vehicle accident.

Notably, the policy declarations submitted by defendant fail to indicate the limits of any no-fault benefits under the policy. Defendant also submits a host of documents – checks – indicating that it paid in excess of $50,000 for medical services on behalf of Lessie, its insured. According to the checks, all payments were made prior to 2011.

Based on the foregoing, defendant’s motion must be denied. First, defendant fails to establish that the policy at issue in fact limits no-fault benefits to $50,000. As noted above, the policy declaration documents submitted are bereft of any indication that the policy had a no-fault benefit, let alone the limits thereof.^[FN2]

Notwithstanding the foregoing, defendant’s motion must be denied for a more substantive reason. On this record, the assertion that when this case was tried in 2015, defendant was aware [*4]that its policy had been exhausted and nevertheless failed to raise such defense remains unrebutted. This is fatal.

As discussed above, when a defendant knows it has exhausted its policy and fails to raise it concomitantly with notice of the same, any motion seeking to modify a judgment based on that defense must be denied. (Mount Sinai Hosp. at 825;Ortho Passive Motion Inc. at 895; Big Apple Ortho Medical Supply, Inc. at *2-3). Here, plaintiff asserts that defendant had exhausted its policy prior to the time the case was tried such that defendant should have raised the same during the trial. This assertion remains unrebutted and it is, in fact, borne out by defendant’s own evidence – the checks purporting all payments made on behalf of Lessie – which indicate no payments beyond 2011 – four years prior to trial. Thus, since defendant’s position is that the checks submitted establish exhaustion of the policy, it is bound by the dates therein, which establish exhaustion prior to trial.

Accordingly, the record establishes that defendant knew and could have raised the foregoing defense, nevertheless failed to raise its exhaustion defense at trial or prior thereto; raising it for the first time after judgment was entered and with the instant motion. Defendant is, thus, barred from availing itself of this defense and its motion must be denied (Mount Sinai Hosp. at 825;Ortho Passive Motion Inc. at 895; Big Apple Ortho Medical Supply, Inc. at *2-3).

Defendant’s reliance on Hosp. for Joint Diseases is misplaced and unavailing. While it is true that in that case defendant was allowed to avail itself of the exhaustion defense after a judgment had been entered, the court only so held insofar as “the defendants were not previously afforded a full and fair opportunity to contest that issue” prior to the entry of judgment (id. at 725-726). Here, of course, defendant was aware of its exhaustion defense at the time of trial, could have raised and litigated the same, but did not. Nor does St. Barnabas Hosp., avail defendant. Significantly, while the court in that case did allow the defendant to modify the judgment on grounds of policy exhaustion, it did so by rejecting the plaintiff’s contention on appeal – that defendant was collaterally estopped from raising the defense because such issue was not raised in connection opposition to plaintiff’s motion for summary judgment (id. at 733). Indeed the Court noted that

[c]ontrary to the plaintiff’s contention, since the only issues decided in connection with the motion for summary judgment on its cause of action to recover no-fault medical payments were the questions of whether the defendant had failed to pay or deny the relevant claim within the statutory time frame, and whether the defendant had received verification of that claim, the defendant is not collaterally estopped from seeking to modify the amount of the judgment that was in satisfaction of the plaintiff’s claim, based upon the contention that the policy limits have been partially exhausted (id. at 733.) That court’s holding is, thus, limited to its facts and indeed appropriate since the doctrine of collateral estoppel, a narrower species of the doctrine of res judicata, prevents a party from re-litigating an issue when the issue was previously litigated and decided against the party or his/her privies (Ryan v New York Telephone Company, 62 NY2d 494, 500 [1984]; see Buechel v Bain, 97 NY2d 295, 303-304 [2001]; David v Biondo, 92 NY2d 318, 322 [1998]; Gramartan Home Investors Corp. v Lopez, 46 NY2d 481, 485 [1979]; Lumbermens Mutual Casualty Company v 606 Restaurant, Inc., 31 AD3d 334, 334 [1st Dept 2006]; Zimmerman v Tower Insurance Company of New York, 13 AD3d 137, 139 [1st Dept 2004]; Mulverhill v State of New York, 257 AD2d 735, 737-738 [3d Dept 1999]; Tamily v General Contracting Corporation, 210 AD2d 564, 567 [3d Dept 1994]). In order to invoke the preclusive effects of collateral estoppel it must be demonstrated that the issue being raised is identical to an issue previously litigated and decided, that the issue is decisive in the present action, was also decisive and resolved in the prior action, that the party against whom the doctrine is being asserted had a full and fair opportunity to contest and litigate the issue in the prior action, or that his privies had such an opportunity (Buechel at 303-304; David at 322; Ryan at 500; Gramartan Home Investors Corp. at 485; Lumbermens Mutual Casualty Company at 334; Zimmerman at 139; Mulverhill at 737-738; Tamily at 567; Browing Avenue Realty Corp. v Rubin, 207 AD2d 263, 266 [1st Dept 1994]; [*5]Color by Pergament, Inc. v O’Henry’s Film Works, Inc., 278 AD2d 92, 93 [1st Dept 2000]; Comi v Breslin & Breslin, 257 AD2d 754, 757 [3d Dept 1999]).

Thus, St. Barnabas Hosp., does not stand for the proposition – as urged – that a defendant cannot waive and can, therefore, raise the defense of exhaustion at any time. Rather, in that case, the court merely held that collateral estoppel did not preclude defendant from raising the issue after judgment was entered because the same had not been raised and litigated on plaintiff’s motion for summary judgment; the foregoing being essential elements of collateral estoppel. It is hereby

ORDERED that all stays be hereby lifted. It is further

ORDERED that plaintiff serve a copy of this Decision and Order with Notice of Entry upon all parties within thirty days (30) hereof.

This constitutes this Court’s decision and Order.

Dated: February 1, 2018

Hon. FIDEL E. GOMEZ, JCC

Footnotes

Footnote 1: 11 NYCRR 65-3.1 states that “[t]he following are rules for the settlement of claims for first-party and additional first-party benefits on account of injuries arising out of the use or operation of a motor vehicle, a motorcycle or an all-terrain vehicle. These rules shall apply to insurers and self-insurers, and the term insurer, as used in this section, shall include both insurers and self-insurers as those terms are defined in this Part and article 51 of the Insurance Law, the Motor Vehicle Accident Indemnification Corporation (MVAIC), pursuant to section 5221(b) of the Insurance Law and any company or corporation providing insurance pursuant to section 5103(g) of the Insurance Law, for the items of basic economic loss specified in section 5102(a) of the Insurance Law.”

Footnote 2: Defendant’s failure is not fatal since the Insurance Law mandates that all automobile insurance polices in this state provide no-fault coverage for medical expenses incurred by an occupant in a motor vehicle accident in the sum of $50,000 (see, Insurance Law § 5102[a][1], § 5103[a][1]).

[*1]

Civil Court of the City of New York, Kings County, December 18, 2017

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC, Brooklyn, for plaintiff.

Peter C. Merani, P.C., New York City, for defendant.

Plaintiff’s motion to reargue its motion for summary judgment is decided as follows:

In this action to recover assigned first-party no-fault benefits, plaintiff submitted a claim form and invoice to defendant for services rendered to Cosby Reavis on October 8, 2013. According to plaintiff’s claim, these services related to various codes promulgated under the Official New York Workers’ Compensation Medical Fee Schedule (the fee schedule), including code 20999, which is a “By Report” code. Defendant denied plaintiff’s claim in part because plaintiff did not bill its services in accordance with the applicable fee schedule. Plaintiff filed the instant action and both parties moved for summary judgment.

With specific regard to plaintiff’s motion to reargue, this court denied plaintiff’s motion for summary judgment with respect to plaintiff’s claim for payment under code 20999 (52 Misc 3d 491 [2016]). The court reasoned that, because code 20999 is a “By Report” code, plaintiff was required to submit certain information about the services provided in order to establish a proper billing rate as part of its prima facie case. Plaintiff did not provide this information, and consequently, plaintiff did not meet its initial burden of proof on summary judgment.

Plaintiff now moves to renew and reargue its motion for summary judgment. A motion for leave to renew is addressed to the court’s sound discretion and can be granted only if it is shown that there are new facts, although in existence at the time the original motion was made, that were unknown to the movant and therefore were not brought to the court’s attention (Semenov v Semenov, 98 AD3d 962, 963 [2d Dept 2012]). To the extent the facts are new, plaintiff must offer a reasonable justification for its failure to present such facts on the prior motion (id.).

A motion to reargue must show that there was a point of law or fact that was overlooked in the prior motion, and cannot be based on arguments different from those originally stated in the prior motion (NYCTL 1998-1 Trust v Rodriguez, 154 AD3d 865, 865 [2d Dept 2017]; Rodriguez v Gutierrez, 138 AD3d 964, 966-967 [2d Dept 2016]).

Plaintiff argues that “academic literature” dictates that dry needling is commonly billed under code 20999, and attaches this “literature” to its motion to renew and reargue. As an{**60 Misc 3d at 683} initial matter, plaintiff does not explain why it did not offer this “literature” in support of its underlying motion for summary judgment, and so it cannot be considered for the motion to renew (Semenov, 98 AD3d at 963). Likewise, the court cannot consider this “literature” as part of the motion to reargue, as it is a new theory not advanced in the underlying motion (NYCTL 1998-1, 154 AD3d at 865; Rodriguez, 138 AD3d at 966-967).

Even if this court were to consider this “literature,” plaintiff provides no reason why the court should give it any weight or deference. The referenced document is titled “Local Coverage Determination (LCD): Pain Management (L33622).” Plaintiff offers no explanation about who authored the document, who uses this document, how it is used, or the weight, if any, the medical community gives the document. All this said, the document makes a passing statement that dry needling should be billed under code 20999. Even assuming this were true, it would not change the “By Report” designation in the fee schedule, which requires a medical provider to submit a report with its bill to establish the proper billing rate.

Additionally, plaintiff argues that this court incorrectly interpreted plaintiff’s prima facie burden as established by Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co. (25 NY3d 498, 507 [2015]). Plaintiff argues that Viviane Etienne holds that plaintiff’s prima facie burden is limited only to proving timely submission of a claim form, and that payment is overdue. In its underlying decision in this action, this court explained that, in order to determine the appropriate monetary value of services designated “By Report,” the Official New York Workers’ Compensation Medical Fee Schedule directs the medical provider to provide certain information to justify its billing. These documents and information (i.e., the “report”) are part of the “completed claim form” (see Viviane Etienne, 25 NY3d at 507), and thus part of plaintiff’s prima facie burden, so that defendant has sufficient notice of the services being billed in order to make a proper decision on the claim. Plaintiff does not argue that the court [*3]overlooked or misunderstood a point of law. Instead, plaintiff simply disagrees with the court’s reasoning.

After plaintiff filed the instant motion, the Appellate Term issued its decision in Bronx Acupuncture Therapy, P.C. v Hereford Ins. Co. (57 Misc 3d 145[A], 2017 NY Slip Op 51452[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]). {**60 Misc 3d at 684}In Bronx Acupuncture, the plaintiff medical provider sought payment for services submitted under a “By Report” code. The defendant insurance company denied the claim because the plaintiff did not provide certain documentation. The appellate court treated the documentation as a request for additional documentation, and held that defendant’s denial was not proper because it did not request the documentation in accordance with 11 NYCRR 65-3.5 (b) (Bronx Acupuncture, 57 Misc 3d 145[A], 2017 NY Slip Op 51452[U], *1).

That said, the specific legal issue confronted in this action is whether the “report” in a “By Report” claim is an additional form of documentation or verification, as is generally the case when a carrier requests copies of medical records, or subsequent letters of medical necessity, or rather, in this unique circumstance, whether the “report” in a claim billed “By Report” is actually an integral part of the bill or claim form, and so whether it must be included in order to constitute a “completed claim form.” If it is the latter, then it would be an element of plaintiff’s prima facie burden to produce such a “completed claim form,” under Viviane Etienne. It would not constitute a separate, new element of the prima facie burden.

I acknowledge, support, and endeavor to follow the principles laid out in Viviane Etienne. Further, I am mindful of the Appellate Term’s decision in Bronx Acupuncture and its potential implication in this case. That said, I find that it is definitional to the submission of any claim that the claim form must be complete, and that to satisfy the prima facie burden laid out in Viviane Etienne, completed claim forms must provide the necessary data to identify both the value of the claim and the basis for calculating that value. It is the satisfaction of this prima facie threshold that shifts the burden to the insurer to pay or deny the claim, or to demand further verification, within the times specified in the regulations. Alone in the applicable fee schedule, the “By Report” code provides no inherent value. The code is a wild card which invites the provider to name the value of the claim and to explain, in narrative form, the basis of calculation for that value. Without the report, the “By Report” code is not reduced to a defined service with a calculated value, and the insurer has no basis to either pay or deny the associated claim. For these reasons, I find that the report is a necessary component of the bill for a “By Report” claim. Its absence renders the claim form incomplete, fails to satisfy the prima facie requirements laid out in Viviane Etienne{**60 Misc 3d at 685}, and so fails to trigger the insurer’s obligation to timely pay or deny the claim.

For the foregoing reasons, plaintiff’s motion to renew and reargue is denied.

725730/2016

Attorney for Plaintiff:
Damin J. Toell Esq. from the Law Offices of Damin J. Toell, P.C.

Attorney for Defendant:
Jamila Shukry Esq. from McCormack & Mattei, P.C.

In this action by a provider to recover assigned first-party no-fault benefits, Plaintiffs seeks reimbursement for chiropractic manipulation under anesthesia of assignor Maria Baez’ cervical spine, thoracic spine, lumbar spine, pelvis and left shoulder on December 21, 2016, January 4, 2016 and January 8, 2016, arising out of an accident on October 13, 2015.

Both parties stipulated that Plaintiff established its prima facie case by timely submitting the bills at issue to Defendant and Defendant established timely mailing the denial. The sole issues remaining for trial were the defenses of medical necessity and whether Plaintiff was properly reimbursed by Defendant pursuant to the fee schedule and calculations applied.

A bench trial was commenced and completed on October 24, 2017. Defendant produced a chiropractor, Dr. Thomas McLaughlin who conducted a peer review of Ms. Baez’ records and testified that the series of manipulations under anesthesia performed on Ms. Baez were not medically necessary. Dr. McLaughlin testified that Ms. Baez did not have surgery, and generally, most patients who receive manipulation under anesthesia are people who recently underwent surgery and cannot move a joint because of the increase of scar tissue (tr at pp. 18-19). Furthermore, Dr. McLaughlin testified that Ms. Baez’ records indicate she had an upper neuron region disorder and manipulation under anesthesia would be inappropriate for a person with such a disorder (tr at p. 15 lines 3-14). Dr. McLaughlin also testified that, in this case, Ms. Baez’ medical records reflected that Ms. Baez’ condition since the accident remained consistent in many respects, but showed improvement in others, and Plaintiff did not allow Ms. Baez to proceed with physical therapy to its full potential before performing manipulation under anesthesia (tr at p. 32 lines 1-10). He testified that some of Ms. Baez’ other doctors recommended further physical therapy, and none of them recommended manipulation under anesthesia (tr at p. 24 lines 12-20). Dr. McLaughlin also testified on direct examination that Ms. [*2]Baez’ initial consultation for manipulation was performed on the same date as her first manipulation under anesthesia (tr at p. 14 lines 5-16), but, on cross-examination, Dr. McLaughlin admitted that his statement on direct examination was incorrect and that the initial consultation for manipulation under anesthesia was actually five days before the first procedure (tr at pp. 25-26).

Specifically, Dr. McLaughlin testified that, Dr. Alex Khait, the doctor who performed the procedures on Ms. Baez, used the National Academy of Manipulation Under Anesthesia guidelines in deciding to perform the procedure, and that under the guidelines the procedure should be used when it would be the “most efficacious care for the person.” He disagreed that manipulation under anesthesia was the “most efficacious care” for Ms. Baez at the time it was done (tr at p. 18 lines 7-24).

Defendant also produced Christine Madigan, a Senior Litigation Representative for Defendant who testified that Defendant was billed for $3,572.91, and should have been instead been billed $1,462.47, based on the correct fee schedule (tr at p. 37 lines 21-25). Ms. Madigan testified which codes and modifiers should have been used and how often they should have been billed in calculating its invoice. During her testimony, Ms. Madigan testified that Defendant was charged three times in one day for manipulation under anesthesia to the cervical, thoracic and lumbar spines, even though the code should have been billed only once per day under the multiple procedure rule (tr at p. 47 lines 3-11).

Plaintiff presented an additional witness, chiropractor Dr. Robert Luca, to rebut Dr. McLaughlin’s testimony regarding the medical necessity of the procedures. Dr. Luca testified twenty-five points of contention with Dr. McLaughlin’s analysis. He testified that manipulation under anesthesia served to “restore the proper joint both mechanical and physiological” with stretching to remobilize the joint and “re-establish the normal or near normal resting length of the muscles tendons and ligaments as well as reactivate something called collateral inhibition physiological response” (tr at p. 54 lines 7-24). He testified that the procedure is not only reserved for patients who have undergone surgery. Among his reasons that the procedure was necessary in Ms. Baez’ case was that “the patient has responded favorably to conservative chiropractic medical treatment, but continued to experience chronic pain or persistent pain”; Ms. Baez had two to six weeks of care at least before the procedure, but suffered continuing pain that interfered with her lifestyle, and Ms. Baez refused other options for treatment (tr at p. 56 lines 3-23). He stated that these reasons were listed in the criteria set by the National Academy of Manipulation Under Anesthesia for a patient who would be an appropriate candidate for manipulation under anesthesia (tr at pp. 55-56). He also disagreed with Dr. McLaughlin and stated that, from his review of the medical records and the peer review, it appeared that Ms. Baez had “plateaued” and was “rebounding” into a “downward cycle,” even though her initial response to treatment was good (tr at p. 62 lines 10-25). He also thought that Ms. Baez received a sufficient course of treatment prior to manipulation under anesthesia (tr at p. 63 lines 6-13).

The issue here is whether Defendant, through the testimony of its expert witness, satisfied its burden of establishing a lack of medical necessity and, if it did so, whether Plaintiff proved, by a preponderance of the evidence, that the services rendered were medically necessary (see New Horizon Surgical Ctr, LLC v Allstate Ins. Co., 52 Misc 3d 139[A][App Term 2d Dept 2016]; see also Park Slope Med. & Surgical Supply v Travelers Ins. Co., 37 Misc 3d 19 [App Term, 2d Dept 2012]).

“A no-fault insurer defending a denial based on lack of ‘medical necessity’ must at least show that the services were inconsistent with generally accepted medical/professional practice (Citywide Soc. Work & Psy. Serv., PLLC v Travelers Indem. Co., 3 Misc 3d 608, 609 [Civ Ct, Kings County 2004]). “Generally accepted practice is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling” (Id. at 616). Unless there is reference to “generally accepted” medical/professional practice, conflicting expert testimony will only show a difference in professional medical judgment between two doctors (Id. at 612).

In this trial, the conflicting opinions of Dr. McLaughlin and Dr. Luca demonstrate a difference in professional medical judgment regarding whether manipulation under anesthesia was appropriate for the assignor in this case, in light of the standards set forth by the National Academy of Manipulation Under Anesthesia.

Defendant did not present sufficient evidence to establish that the manipulation under anesthesia was inconsistent with generally accepted professional practice considering Ms. Baez’ medical treatment and condition at the time. Therefore, the evidence was insufficient to carry defendant’s burden of proving that the services were not medically necessary.

However, based on the credible and uncontroverted testimony of Ms. Madigan, this court finds that Defendant has met its burden of showing that the appropriate amount for the invoices at issue was $1,462.47 instead of $3,572.91. Plaintiff submitted no evidence or testimony to rebut Ms. Madigan’s testimony.

Therefore, judgment is awarded in favor of Plaintiff. The Clerk is directed to enter judgment in favor of Plaintiff in the amount of $1,462.47, together with applicable statutory interest, attorney fees and costs.

This constitutes the Decision and Order of the Court.

Dated: December 13, 2017
Kings, New York
____________________
Mary V. Rosado, J.C.C.

Decided on July 31, 2017

Civil Court of the City of New York, Kings County

CV-700505-13/BX

Plaintiff- Law Firm of Israel, Israel and Purdy, LLP by Scott H. Fisher, Esq.

Defendant- Law Firm of McCormick & Mattie, PC by Stafford Harmit, Esq.

The plaintiff, Quality Medical Care, PC, commenced this action against the defendant, Progressive Casualty Insurance Company, to recover first-party no-fault benefits for medical services rendered to their assignor-insured, Tammy Murphy, the insured pertaining to an automobile policy issued to her on August 2, 2011.

The plaintiff was represented by Scott H. Fisher, Esq., of counsel to the law firm of Israel, Israel and Purdy, LLP, and defendant was represented by Stafford Harmit, Esq., of counsel to the law firm of McCormick & Mattie, PC.

The bench trial in the above-captioned matter was conducted on June 2, 2017. Prior to the taking of any testimony the attorneys for the respective parties introduced a written Stipulation which, in relevant part, acknowledged that plaintiff had timely submitted a complete proof of claim to the defendant on or about August 20, 2012; that the business records of the plaintiff would be admitted into evidence as Exhibit 1 without objection and was attached to the Stipulation; that the business records of the defendant would be admitted into evidence as Exhibit 2 without objection and was attached to the Stipulation; acknowledged that defendant timely mailed a Denial of Claim form to the plaintiff on the date indicated therein, to wit: September 7, 2012, which form was contained within Exhibit 2; and that if any payments have been made by the defendant, the total disputed amount for the underlying bills is $1,979.30; that should there be an award in favor of the plaintiff the award should include statutory interests, attorney fees, costs and disbursements; and that the only issues to be decided at trial are those issues preserved in defendant’s denial of claim forms, to wit: based upon an investigation conducted by the defendant, the patient and the insured, Tammy Murphy, is not an eligible injured party on the basis of having violated Part VII-The General Provisions of the automobile policy for having made misrepresentations in the insurance application that constitute a condition [*2]precedent for coverage to be in effect.

The attorney for the plaintiff, Scott H. Fisher, Esq., after having submitted the aforementioned written Stipulation in evidence furthermore stated that the policy was issued on August 2, 2011, and that the patient (and assignor-insured), Tammy Murphy, misrepresented her address in the insurance application.

Essentially, this court must determine whether or not the patient misrepresented her address. Under no-fault law, the burden is on the defendant insurance company to establish the misrepresentation.

Pursuant to the submission of the written Stipulation and the attached evidentiary materials, plaintiff’s attorney took the posture that he had made out his prima facie case to entitle payment of the medical fees sought and rested on the record.

The attorney for the defendant insurance company, Stafford Harmitt, Esq., argued that based on the alleged misrepresentation made by the assignor-insured at the time she applied for automobile insurance that the insurance company had the right to deny the claim.

The defendant proceeded with its defense by calling Jerianne Green as a witness. Ms. Green identified herself as a claims adjuster and litigation specialist employed by the defendant for the past 13-½ years. Ms. Green testified that her job responsibilities required her to review lawsuits filed for payment on medical bills and to make the determination whether to pay the bills or to deny them, and if payment was to be denied she would defend the decision denying payment by testifying in Court. Ms. Green testified that she was familiar with the facts and circumstances of the case based on having reviewed the file in preparation for trial.

Without objection by plaintiff, Ms. Green provided a copy of the insurance policy application which was marked as Defendant’s Exhibit A. The policy application (Exhibit A) indicated that on August 2, 2011 the patient and the assignor-insured, Tammy Murphy, listed her address as being 116 Bidwell Terrace, Rochester New York 14609. In addition, Ms. Green without objection by plaintiff provided certified copies of two (2) motor vehicle accident reports, NYS Department of Motor Vehicle forms MV-104 and MV-104AN, marked as Defendant’s Exhibits B-1 and B-2, respectively.

The significance of defendant’s Exhibits B-1 and B-2 is that on the date of the motor vehicle accident, to wit: July 4, 2012, Ms. Tammy Murphy, provided a residential address of 123-65 147 Street, Jamaica New York 11436, to the reporting police officer(s), not the Rochester, New York address she had provided nine (9) months earlier in her insurance application. In fact, according to the defendant’s Exhibits B-1 and B-2, Ms. Murphy’s residential address on the date of the accident, to wit: July 4, 2012, was based on and corroborated by the address contained in her New York State driver’s license and motor vehicle registration certificate.

Ms. Green furthermore testified that attributable to the discrepancy in the residential address provided by Ms. Murphy at the time she applied for insurance and the address indicated in the accident report that the defendant insurance company’s procedures were to request verification of the address to corroborate and establish that the insurance applicant actually resided at the address stated in the application when the policy was first taken out. Based on the failure of Ms. Murphy to receive correspondence mailed to her by the defendant as said correspondence was returned by the post office as undeliverable and the further failure to provide [*3]any proof of her Rochester, New York residence on the date the policy was taken out the defendant denied the claim for medical services on the basis of fraud and misrepresentation in the insurance application.

Ms. Green acknowledged that she herself never conducted any investigation of Ms. Murphy’s residence nor had any involvement with the case other than reviewing the file for purposes of testifying at trial, ie., Ms. Green had no personal knowledge of the matters that she testified about at the trial.

The best that this court can surmise, is that there must be a price differential in the policy premiums charged in Rochester, New York and Jamaica, New York, with the latter premiums being higher as this appears to be the motive attributed by defendant to the plaintiff’s assignor, Tammy Murphy, to perpetrate a fraudulent scheme by procuring the subject insurance policy at a reduced insurance premium. The defense asserted by the defendant is that as a consequence Ms. Murphy’s medical provider, the plaintiff, is not eligible to recover assigned no-fault benefits.

Assuming arguendo that Ms. Murphy had used a fraudulent scheme to procure insurance the defendant, pursuant to Vehicle and Traffic Law Section 313, would not have been able to terminate the policy by canceling it until after it mailed a notice of termination by regular mail to her as an insurance carrier’s common-law right to cancel a contract of insurance pursuant to its provisions may only be effected prospectively. (Matter of Liberty Mutual Insurance Company v. McClellan, 127 AD2d 767, [1987; see also Matter of Cruz v. New Millennium Construction Corp., 17 AD3d 19 [2005]; Matter of MetLife Auto & Home v. Agudelo, 8 AD3d 571 [2005]; Matter of Integon Insurance Company v. Goldson, 300 AD2d 396 [2002]; Matter of Insurance Company of New Amsterdam v. Kaplun, 274 AD2d 293 [2000]). The statute “places the burden on the insurer to discover any fraud before issuing the policy, or as soon as possible thereafter, and protects innocent third parties who may be injured due to the insured’s negligence” (Matter of Insurance Company of New Amsterdam v. Kaplun, 274 AD2d 293 [2000]). In this case there has been no allegation nor any proof that the defendant effectively canceled the subject insurance policy pursuant to VTL Section 313 prior to July 4, 2012, the date of occurrence of the accident.

However, in “an action to recover benefits under a policy, the insurance carrier may assert as an affirmative defense that the insured’s misrepresentations and/or fraud in obtaining the policy precludes any recovery by the insured” (Matter of Insurance Company of New Amsterdam v. Kaplun, 274 AD2d 293 [2000]). This is essentially the defense that the defendant insurance company, Progressive Casualty Insurance Company, has asserted.

It has been held that health care providers deal with the as assignor-insured at their peril in accepting an assignment of the insured’s no-fault benefits. (Matter of Insurance Company of New Amsterdam v. Kaplun, 274 AD2d 293 [2000]). Contrary to plaintiff’s contention, the defense of fraudulent procurement of an insurance policy, which is non-waivable and hence exempt from the 30-day preclusion rule, may be asserted as against plaintiff-providers in this action seeking to recover assigned no-fault benefits (Matter of Metro Medical Diagnostics v. Eagle Insurance Company, 293 AD2d 751 [2002]).

Included in Exhibit 1 of the written Stipulation is a photocopy of the New York State motorist license to the assignor-insured, Tammy M. Murphy, as well as a New York State insurance identification card issued to her on or about October 27, 2011, by Progressive, defendant in the above-captioned matter. Ms. Murphy’s driver’s license was issued to her on July [*4]22, 2010, and lists her residence at said time as 123-65 147 Street, Jamaica New York 11436. Therefore on August 2, 2011, the time that the insurance application was submitted Ms. Murphy’s residence address on file with the New York State Department of Motor Vehicles was in Jamaica, New York. Said driver’s license had been issued a little over a year at the time that Ms. Murphy submitted her application for insurance, which application was admitted into evidence without objection by the plaintiff and was marked Defendant’s A in evidence. It is furthermore noted by this court that the motor vehicle sought to be insured by Ms. Murphy on August 2, 2011, was a 2005 Mitsubishi Gallant which according to the insurance application was garaged in ZIP Code 14609, i.e., Rochester, New York.

Also included in Exhibit 1 of the written Stipulation is a New York State insurance identification card issued by Progressive on October 27, 2011, to Ms. Murphy for a 2008 Dodge, as a “REPLACEMENT VEHICLE”. By issuing a New York State insurance identification card to Ms. Murphy on October 27, 2011, reflecting the Jamaica, New York residential address Progressive Casualty Insurance Company had actual notice that she was no longer residing in Rochester, New York, as of said date. As such the plaintiff, had eight (8) months prior knowledge that Ms. Murphy was residing in New York City prior to the July 4, 2012, motor vehicle accident.

The record is devoid of what actions, if any, the defendant took in regards to Ms. Murphy’s automobile insurance policy after having actual knowledge that she was residing in Jamaica, New York. Apparently, the defendant subsequent to the automobile accident decided to disclaim payment of Ms. Murphy’s medical bills on the purported basis that at the time the application for insurance was submitted by her that she provided a false residential address.

While it is difficult to determine Ms. Murphy’s actual residence at the time she applied for automobile insurance as the only evidence adduced at trial was based on documentary evidence there is no evidence attesting to her intent. What is known is that at the time of issuance of a driver’s license Ms. Murphy represented to the New York State Department of Motor Vehicles that she was residing in Jamaica, New York. That in filing out an on-line application for insurance Ms. Murphy provided the Rochester, New York address and not the address contained on her driver’s license. Is this a manifestation that Ms. Murphy had relocated to Rochester, New York, and failed to notify the New York State Department of Motor Vehicles of her change in residence? In any event, Ms. Murphy registered a 2005 Mitsubishi in late July or early August 2011 utilizing her address in Rochester, New York. Then within three (3) months time Ms. Murphy registered a replacement vehicle, the 2008 Dodge, for which on October 27, 2011, she was issued another insurance identification card by Progressive which contained the same Jamaica, New York address as reflected in her driver’s license. On July 4, 2012, the date of the accident Ms. Murphy provided the Jamaica, New York address to the police officers who filled out the accident reports and as contained not only on her driver’s license but most importantly on the insurance identification card issued by Progressive three (3) months after procuring an automobile insurance policy. Ms. Murphy did not have Progressive issue an insurance identification certificate for the replacement motor vehicle on October 27, 2011, with the Rochester, New York address. As such, this court does not conclude that Ms. Murphy had any intent to provide a false and fraudulent residential address when filled out the insurance application to obtain automobile insurance.

Any financial benefit to Ms. Murphy for the three (3) month period that the 2008 Dodge was registered in Rochester, New York would have been minimal. The defendant having actual notice that Ms. Murphy was residing in Jamaica, New York should have at a minimum upwardly adjusted the insurance policy premium. If Ms. Murphy had any motive to pay lower premiums then query why the replacement vehicle was not registered by Ms. Murphy in Rochester, New York.

This court holds that the defendant, Progressive Casualty Insurance Company has failed to meet its burden of proof that the assignor-insured, Ms. Murphy, provided a false and fraudulent residential address on August 2, 2011, on her insurance application. Therefore the plaintiff, Quality Medical Care, PC, is entitled to a money judgment in the amount of $1,979.30, plus costs and disbursements and statutory interest.

Dated: July 26, 2017
Bronx, New York
Armando Montano
Judge, Civil Court

[*1]

Civil Court of the City of New York, Kings County, July 20, 2017

APPEARANCES OF COUNSEL

Rivkin Radler LLP, Uniondale (Vincent P. Valente of counsel), for defendant.

Zara Javakov, Esq., P.C., Brooklyn (Adam Waknine of counsel), for plaintiff.

The issue as to which reargument is granted, as to which we find no controlling appellate authority, is whether a no-fault insurer which notices an examination under oath (EUO) of a medical professional provider, as to which the provider timely objects and requests explanation as to the reason for the EUO, is obligated to provide such a reason as a prerequisite to the EUO.

Defendant GEICO Insurance (GEICO) moves for reargument of this court’s decision and order dated March 20, 2017 (March 20 decision), which denied GEICO’s motions for summary judgment in eight cases consolidated for decision.^[FN1] The March 20 decision found that plaintiffs had established their prima facie cases as to timely mailing of bills, receipt thereof by GEICO, and nonpayment of the bills, and that GEICO had made its prima facie case as to timely mailing of requests for examinations under oath and plaintiff provider’s nonappearance for examination. The court held, in relevant part, that “in view of Plaintiff’s request in response to Defendant’s demand for EUO of a reason therefore, and Defendant’s response denying necessity to provide any reason, triable issues exist as to whether Defendant had any legally valid reason for seeking EUOs of Plaintiff provider.” (Mar. 20 decision para 2 thereof.) It is primarily this holding that is challenged by GEICO on reargument.

The Relevant Facts

The relevant facts in each of these cases are similar. In each case, upon receipt of bills from plaintiff, GEICO timely notified plaintiff American Chiropractic Care P.C. (American) to appear for an EUO, and plaintiff’s counsel, upon receipt of that notification, expeditiously wrote to GEICO’s counsel, prior to the date scheduled for the EUO, requesting that GEICO{**57 Misc 3d at 531} provide “good faith reasons, based upon the application of objective standards that serves as justification for demanding [plaintiff] to appear for an EUO.” (See e.g. Letter of Julie Lyumbimova, Esq., dated [*2]Aug. 14, 2014, annexed within exhibit 3 to GEICO’s motion.)

In response to the letters of plaintiff’s counsel requesting a good faith reason for the EUO of the provider, GEICO’s counsel declined to provide any reason, but instead asserted that “GEICO is not required to provide your Client with the objective basis and/or ‘good reasons’ for its request for an EUO,” citing 11 NYCRR 65-3.5 (c), and specifically so much thereof as provides, in relation to the requirement that EUOs to be supported by specific objective justification, that “insurer standards shall be available for review by [State Insurance] Department examiners.” (See Letter of Ryan Goldberg, dated Aug. 26, 2014, part of exhibit 3 to GEICO’s motion.) It is undisputed that following the exchange of such correspondence, plaintiff did not appear for examination.

The Legal Issue

After careful analysis of the case law cited by each party, and the applicable regulations, the court stands by its prior decision that upon receipt of a timely request (that is, sufficiently prior to the date for which the EUO is scheduled to allow for a response), the insurer is required to provide some good faith basis for the EUO, and the requirement that insurer standards for scheduling EUOs are available for review by the Insurance Department does not relieve the insurer from the need to respond, in the manner set forth below, to a timely request on behalf of the provider.

Analysis

The Comprehensive Motor Vehicle Insurance Reparations Act (Insurance Law § 5101 et seq.) and the no-fault regulations (11 NYCRR 65-1.1 et seq.) provide the no-fault insurer with the right to require an EUO of the assignor of the claim, as well as the provider of medical services or supplies. While the right to an EUO of an assignor, that is, an individual who suffered injury as the result of an automobile accident, is virtually automatic, the EUO of a provider stands on different grounds. The reason for this is that there is obvious potential to abuse the EUO of a provider, typically a medical doctor or chiropractor, although it may also be a provider of durable medical{**57 Misc 3d at 532} equipment. The claims at issue in no-fault cases are ordinarily no more than a few thousand dollars, and frequently less than even $1,000. To require a doctor to leave his or her practice for at least half a day, between the time to travel to and from an EUO, and the time actually spent under examination, will often result in a loss of income to the doctor disproportionate to, if not in excess of, the amount of the claim, although here GEICO specifically offered to reimburse American for lost earnings and transportation expenses, as required by the regulations. Equally important, an EUO takes the doctor away from time that would otherwise be spent providing health care to patients. (In this regard, there is no provision to reimburse the provider for the time spent in preparation for the examination, including that necessary to compile and review the numerous documents requested by GEICO in advance of the EUO.) The public interest requires that such disruption of medical professionals not be undertaken lightly or on the proverbial fishing expedition in the hope that some basis, perhaps the provider’s nonappearance, may be developed to deny an otherwise legitimate claim.

This court recognizes, and indeed endorses, the right of an insurer, acting in good faith, to require an EUO of a provider. Such EUOs are an important tool in rooting out fraud, which many believe to be all too prevalent in the medical treatment of no-fault patients. Thus, a balance must be struck between the policy of rooting out and preventing fraud, and not unnecessarily disrupting the practice of a medical professional without a good faith basis for so doing.

On reargument, both plaintiff and GEICO have provided case law supporting their respective [*3]positions. The court notes that virtually all of the cases cited emanate from trial courts or arbitrators, so that there is little, if any, appellate authority on this issue.

GEICO relies on the following cases: City Chiropractic v State Farm (Civ Ct, Kings County, Feb. 24, 2016, Thompson, J., index No. 37182/14 [relying on Department of Insurance opinion letters dated Oct. 15, 2002 and Dec. 22, 2006]); Gotham Massage Therapy v State Farm (Civ Ct, Bronx County, Dec. 20, 2010, Taylor, J., index No. 30502/09); and Karina K. Acupuncture v State Farm (Civ Ct, Kings County, Jan. 3, 2012, Garson, J., index No. 1702/11) as well as various arbitration awards and judgments entered thereon, all holding that the insurer has no obligation to state any reason for an EUO of the provider. (The{**57 Misc 3d at 533} court opinions and orders are annexed as exhibit 5 to GEICO’s moving papers, and the arbitration awards are annexed as exhibit 6.)

None of these cases emanate from an appellate court, so they are not binding on this court. Moreover, while City Chiropractic appears directly on point, as do some of the arbitration awards, both Gotham Massage and Karina K. are factually distinguishable. In Gotham Massage, there is no indication that the provider requested a justification for the EUO prior to its scheduled date. Karina K. refused to appear for its EUO unless the insurer agreed to a series of “non-negotiable” demands, a situation far different from the request of American for an explanation of its good faith basis for an EUO. Accordingly, the legal authority relied upon by GEICO may be distilled into one case directly on point, a second which may or may not be on point depending on facts not contained in the opinion, and arbitration awards, coupled with the opinion letters of the Insurance Department. In response, plaintiff relies on a number of cases which emanate from trial courts, and are as equally lacking in binding authority as those relied upon by GEICO, together with a number of arbitration awards. We note that the trial court cases relied upon by plaintiff, while not controlling, appear to be more closely on point than those cited by GEICO. For example, in Avalon Radiology, P.C. v Ameriprise Ins. Co. (52 Misc 3d 836 [Suffolk Dist Ct 2016]) the court held:

“Thus [provider’s] request for the objective reason in response to the first EUO request triggered an obligation on the part of the . . . insurer to respond by providing the specific objective justification for the EUO request. The insurer’s response in this case to the effect that it was not obligated to do so is plainly wrong.” (52 Misc 3d at 838.)

In Rutland Med., P.C. v State Farm Ins. Co. (45 Misc 3d 1033 [Civ Ct, Kings County 2014]), the court denied the insurer’s motion for summary judgment, finding triable issues where the provider timely objected to appearing for an EUO, as to whether if the insurer failed to respond, the provider’s failure to appear for the EUO was reasonable. In Dynamic Med. Imaging, P.C. v State Farm Fire & Cas. Co. (32 Misc 3d 600 [Nassau Dist Ct 2011]), the court noted, albeit in what is arguably dicta, that the insurer “would also have to establish it had an objective justification for requesting the EUO. Such proof requires affidavits.” (32 Misc 3d 600, 604.) In Victory{**57 Misc 3d at 534} Med. Diagnostics, P.C. v Nationwide Prop. & Cas. Ins. Co. (36 Misc 3d 568 [Nassau Dist Ct 2012]), the court held that “before a claimant provider should be required to produce Mallela^[FN2] material, the insurer must have and articulate a good faith and [*4]factual basis for seeking the information.” (36 Misc 3d 568, 574.) Plaintiff cites other trial court cases and arbitration awards with similar holdings.

While plaintiff cites several Appellate Term cases, they are not controlling, as they dealt with the situation where the respective plaintiff providers, unlike American, did not timely object to the EUO request, but sought to raise objections only in response to the insurer’s subsequent summary judgment motion, following the provider’s nonappearance. While American asserts that those cases provide authority that the Appellate Term would have upheld a timely objection lacking an explanatory response by the insurer, we decline to so read those cases. (See Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 42 Misc 3d 137[A], 2014 NY Slip Op 50134[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 44 Misc 3d 141[A], 2014 NY Slip Op 51310[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; Metro Health Prods., Inc. v State Farm Mut. Auto. Ins. Co., 47 Misc 3d 127[A], 2015 NY Slip Op 50402[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015].)

GEICO asserts that the requirement that its standards for scheduling EUOs of providers be made available to the Insurance Department precludes any request by the provider for a preexamination explanation for an EUO. The court disagrees. First, that requirement neither explicitly nor implicitly provides that Insurance Department oversight is in lieu of or preempts the provider’s right to timely seek an explanation for the EUO. We note that even were the Insurance Department to find an insurer to have abused the EUO process, that would be of little solace to a provider who duly appeared for examination. Moreover, the Insurance Department’s oversight of the standards employed by an insurer is necessarily a different analysis than whether those standards were properly applied with regard to a particular provider.

In balancing the need for insurers to conduct EUOs of providers to root out and prevent fraud against the burden on the{**57 Misc 3d at 535} insurer to respond to a timely request for explanation from the provider as to the reason for an EUO, and the burden on a medical professional to appear for examination, we find the burden on the insurer to respond to be slight. In support of GEICO’s underlying motion, GEICO submitted the affidavit of its special investigator, Victor Hernandez, who set forth in great detail the matters supporting GEICO’s need for an EUO of American. From a review of the Hernandez affidavit, it appears that all of these matters were known to GEICO at the time it noticed the EUO of American. This court sees no reason why GEICO could not have easily responded to American’s request for explanation by setting forth some of the matters now contained in the Hernandez affidavit, rather than by stonewalling and asserting that it did not have to provide any explanation to American.

We do not mean to suggest that GEICO should have responded by setting forth all of the information at its disposal with regard to American, or that it needed to set forth anything under oath. But, in this court’s view, GEICO needed to set forth some explanation, even in the form of a letter from counsel, which might have contained a highly-edited version of the matters set forth in Mr. Hernandez’s subsequent affidavit, to demonstrate a good faith basis for the EUO. The burden on the insurer to make some prima facie showing of good faith is far less than the burden that would be imposed on a provider to appear for examination when there is no good faith basis to request an EUO.

There is another benefit to a rule requiring the insurer to provide a substantive response to a timely objection by a provider to an EUO. A substantive response will allow the provider, with the advice of counsel, to make an intelligent decision whether to appear for the EUO and to be adequately prepared so that the examination may be expeditiously concluded. The good faith, or lack thereof, would be established by the insurer’s substantive response. A provider who fails to appear [*5]for its properly noticed EUO, as to which a substantive response was made to any timely objection, would be subject to summary dismissal of its case. And, as the statute and regulations only require a good faith application of objective standards, it would be extremely difficult, at the least, for the provider to challenge a substantive explanation by the insurer for the EUO, so long as that explanation was made in good faith.{**57 Misc 3d at 536}

Conclusion

Accordingly, while the court has granted reargument, upon reargument, we hold that no controlling facts or applicable law was overlooked in the March 20 decision and order. The court stands by the March 20 decision, and particularly paragraph “2” thereof, holding it to be a triable issue as to whether GEICO had a good faith basis, under objective standards, to seek the EUO of American,^[FN3] given American’s timely objection to the EUO, and GEICO’s refusal to set forth any basis for the examination.

Footnotes

Footnote 1:We similarly consolidated for decision GEICO’s eight motions for reargument.

Footnote 2:State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 (2005).

Footnote 3:American and GEICO dispute whether American attached to its papers in the underlying motion sufficient documents to show that it raised timely objection to EUOs with regard to assignments from certain assignors, namely Jesus and Bella Gutierrez. In reviewing American’s papers, it appears that its counsel’s letter included these claims in a list annexed to that letter referencing these assignors. Nevertheless, as to these assignors, the issues for trial shall include whether American’s counsel timely objects to the EUOs prior to the scheduled date.