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.

[*1]

Civil Court of the City of New York, Kings County, May 25, 2017

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC, Brooklyn (Mikhail Kopelevich of counsel), for plaintiff.

Richard T. Lau & Associates, Jericho (Jeremy Maline of counsel), for defendant.

In this action by a provider to recover assigned first-party no-fault benefits, a bench trial commenced and concluded on May 4, 2017. The parties made no pretrial stipulations. Pursuant to the order of the Honorable Steven Z. Mostofsky, dated February 3, 2016, plaintiff “establishe[d] [its] prima facie case” and the amount in dispute is $2,389.76. The order goes on to indicate, “[t]he sole issue for trial shall be whether the verification requests remain[ ] outstanding.” There were no witnesses appearing on behalf of either party.

The court left the record open solely to address the legal issue of which party bears the burden of establishing whether the verification requests remain outstanding. In support, defendant submitted a posttrial memorandum by Jeremy Maline, Esq., dated May 18, 2017, and in reply, plaintiff submitted a posttrial memorandum by Oleg Rybak, Esq., dated May 22, 2017. In brief, plaintiff’s counsel argued that as the issue of outstanding verification is an affirmative defense, it is the defendant’s burden to establish that verification remains outstanding. Defense counsel argued, inter alia, that the order dated February 3, 2016, should be read to indicate that defendant has met its burden of establishing its defense as defendant has proved “timely and proper mailing of the verification requests and mailing of the 120 day denial.”

It is well settled that an insurer may toll the 30-day period to pay or deny a claim by [*2]properly requesting verification within 15 business days from its receipt of the proof of claim form or bill. (11 NYCRR 65-3.5 [b]; Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723 [Civ Ct, Queens County 2004].) If the

“requested verifications has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call . . . or by mail. At the same time the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in{**56 Misc 3d at 683} writing the missing verification and the party from whom it was requested.” (11 NYCRR 65-3.6 [b].)

“A claim need not be paid or denied until all demanded verification is provided.” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; Prime Psychological Servs., P.C. v ELRAC, Inc., 25 Misc 3d 1244[A], 2009 NY Slip Op 52579[U] [Civ Ct, Richmond County 2009]; see also Insurance Law § 5106 [a]; 11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1].) As for services rendered on or after April 1, 2013, 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 or possession or written proof providing reasonable justification for the failure to comply, the insurer may deny the claim. (11 NYCRR 65-3.5 [o].)

In the court’s view, defendant’s argument that defendant established mailing of the 120-day denial obviates defendant’s burden to demonstrate prima facie that it had not received the requested verification is unpersuasive as the sole issue for trial is whether the verification requests remain outstanding. Defendant generally bears the burden of proving its affirmative defense (Manion v Pan Am. World Airways, 55 NY2d 398 [1982]). Defendant failed to present any witnesses at trial to prove that it, in fact, did not receive any response to its verification requests.

Lastly, defense counsel has not cited any case law that would convince this court to find otherwise. To the extent that defense counsel discusses any outstanding discovery in its memorandum, such issue is not before the court and therefore was not considered.

Based on the foregoing, the court finds that the defendant has failed to meet its burden of establishing its affirmative defense of outstanding verification and as the order of the Honorable Steven Mostofsky found that plaintiff established its prima facie case, the Clerk is directed to enter judgment in favor of the plaintiff in the amount of $2,389.76 with applicable statutory attorney’s fees, interest, costs and disbursements.

[*1]

Civil Court of the City of New York, Kings County, May 26, 2017

APPEARANCES OF COUNSEL

Law Offices of Emilia Rutigliano, P.C., Brooklyn (Michael Tsugel of counsel), for plaintiff.

Rivkin Radler, LLP, Uniondale (John J. Vobis Jr. of counsel), for defendant.

In this action by a provider to recover assigned first party no-fault benefits, plaintiff moves for summary judgment arguing that it established its prima facie entitlement to recovery of its unpaid no-fault bills and defendant cross-moves for summary judgment based upon plaintiff’s purported failure to appear for four examinations under oath (EUO).

Plaintiff argues, inter alia, the denials issued in this matter were untimely as defendant’s EUO scheduling letters were untimely. Specifically, defendant’s letter dated May 19, 2015 which rescheduled plaintiff’s missed EUO on May 8, 2015 is late as the regulations require that the follow-up requests be issued within 10 calendar days of the missed EUO date. Lastly, plaintiff contends that the affidavits proffered by defendant are conclusory and insufficient to establish that the EUO scheduling letters and subsequent denials were timely and properly mailed and that defendant’s affiant fails to demonstrate personal knowledge of plaintiff’s nonappearances.

In reply, defendant contends that the mailing of the EUO notice 11 days after the third missed EUO does not negate plaintiff’s obligation to appear based upon 11 NYCRR 65-3.5 (p). Further, defendant contends that its affiant sufficiently established its standard office procedures as to the issuance of the letters and denials at issue and that plaintiff’s nonappearances for the four EUOs were, likewise, adequately demonstrated.

An insurer may toll the 30-day period to pay or deny a claim by properly requesting verification within 15 business days from its receipt of the proof of claim form or bill. (11 NYCRR 65-3.5 [b]; Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723 [Civ Ct, Queens County 2004].) If the

“requested verification[ ] has not been supplied to the insurer 30 calendar days after the original [receipt], the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by [a] telephone call . . . or by mail. At the same time the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” (11 NYCRR 65-3.6 {**56 Misc 3d at 928}[b].)

“For the purposes of counting the 30 calendar days after proof of claim, wherein the claim becomes overdue pursuant to section 5106 of the Insurance Law, with the exception of section 65-3.6 of this Subpart, any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.” (11 NYCRR 65-3.8 [l].)

Plaintiff also relies upon Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co. (233 AD2d 431 [2d Dept 1996]), where the Court found that the follow-up requirements for verification requests are to be “strictly construed.” In Presbyterian, the insurer, after not receiving a response to its initial request for additional verification, did not issue a follow-up request and after receiving the requested records three months later, issued a denial shortly thereafter. As such, the 30-day period within which the carrier should have either paid or denied the claim had run “ ’even before verification [was] obtained’, due to the carrier’s ‘lack of diligence in obtaining the verification’ ” (Presbyterian, 233 AD2d at 433, citing Keith v Liberty Mut. Fire Ins. Co., 118 AD2d 151, 154 [2d Dept 1986]). In Concourse Chiropractic, PLLC v Fiduciary Ins. Co. of Am. (35 Misc 3d 146[A], 2012 NY Slip Op 51058[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), the court found that the insurer’s follow-up request was untimely when its follow-up request was issued more than a month after the nonappearance at the first scheduled EUO. However, the foregoing cases and their progeny were decided on a set of facts and circumstances prior to the promulgation and application of the fourth amendment of 11 NYCRR subpart 65-3. The fourth amendment of 11 NYCRR subpart 65-3, subdivision 65-3.5 (p) (fourth amendment), was enacted on January 30, 2013 and reads as follows:

“(p) With respect to a verification request and notice, an insurer’s nonsubstantive technical or immaterial defect or omission, as well as an insurer’s failure to comply with a prescribed time frame, shall not negate an applicant’s obligation to comply with the request or notice. This subdivision shall apply to medical services rendered, and to lost earnings and other reasonable and necessary expenses incurred, on or after April 1, 2013.”

There appears to be no higher court analysis of the phrase: “as well as an insurer’s failure to comply with a prescribed time frame, shall not negate an applicant’s obligation to comply{**56 Misc 3d at 929} with the request or notice.” Nonetheless, and comparably, in Pine Hollow Med., P.C. v Global Liberty Ins. Co. of N.Y. (25 Misc 3d 244 [Civ Ct, Kings County 2009]), the court reasoned that “defendant should not be deprived entirely of the opportunity to review and obtain the needed proof by dint of its one-day tardiness in submitting its follow-up request” and that “[i]t would be patently absurd and contravene the meaning of 11 NYCRR 65-3.8 (j) to impose a more draconian punishment on an insurer who is one day late in requesting follow-up verification than on an insurer who is one day late in requesting additional verification” (id. at 250). It would appear that the fourth amendment addresses such deficiency and is in accord with the foregoing opinion. Thus, it is within this framework upon which the court evaluates the matter at hand.

As an initial matter, upon a review of defendant’s proffered affidavit, the court notes that the affidavit of Cerean Edwards lacks the name of the person whom it was sworn printed beneath the signature as required by CPLR 2101 (a). However, CPLR 2101 (f) states:

“(f) Defects in form; waiver. A defect in the form of a paper, if a substantial right of a party is not prejudiced, shall be disregarded by the court, and leave to correct shall be freely given. The party on whom a paper is served shall be deemed to have waived objection to any defect in form unless, within fifteen days after the receipt thereof, the party on whom the paper is served returns the paper to the party serving it with a statement of particular objections.”

To the extent that plaintiff’s counsel did not proffer any objection to the affidavit in its opposition papers and the same does not prejudice a substantial right of plaintiff, the court finds such defect to have been waived (see generally Devonshire Surgical Facility, LLC v Allstate Ins. Co., 38 Misc 3d 127[A], 2012 NY Slip Op 52351[U] [App Term, 1st Dept 2012]; Complete Orthopedic Supplies, Inc. v State Farm Mut. Auto. Ins. Co., 23 Misc 3d 5 [App Term, 2d Dept, 2d & 11th Jud Dists 2009]).

As to the facts of this case, defendant contends that upon receipt of the bills at issue, defendant issued an initial demand for EUO scheduled for March 23, 2015.^[FN1] When plaintiff failed to appear, defendant issued a request dated March 26, 2015 for{**56 Misc 3d at 930} EUO on April 14, 2015. Defendant contends that plaintiff failed to appear and thus issued another request dated April 20, 2015 for EUO on May 8, 2015. When plaintiff failed to appear, defendant issued a request dated May 19, 2015 for EUO on June 16, 2015. As plaintiff failed to appear for the fourth time, defendant issued a denial dated June 24, 2015.^[FN2]

In the instant matter, the court finds that defendant submitted sufficient proof in admissible form to demonstrate that the EUO scheduling letters were properly and timely mailed. Upon review of the affidavit of Cerean Edwards, defendant’s claims associate, the court finds that defendant, through its standard office policies and procedures, has established the timely and proper mailing of its letters scheduling plaintiff’s EUO and the denials at issue (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2d Dept 2008]; Flushing Traditional Acupuncture, P.C. v GEICO Ins. Co., 36 Misc 3d 156[A], 2012 NY Slip Op 51767[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]; Hollis Med. Servs., P.C. v GEICO Ins. Co., 36 Misc 3d 156[A], 2012 NY Slip Op 51768[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). Defendant also proffered the affirmation of Ryan Goldberg, Esq., who affirmed that he was present in the office to conduct the examination under oath of plaintiff on March 23, 2015, April 14, 2015, May 8, 2015 and June 16, 2015 and that plaintiff failed to appear for the same. The court finds that the affirmation sufficiently demonstrated plaintiff’s nonappearances (see Olmeur Med., P.C. v Nationwide Gen. Ins. Co., 41 Misc 3d 143[A], 2013 NY Slip Op 52031[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]).

Thus, in this instance, the court finds that the insurer’s one-day tardiness in issuing its follow-up request for the EUO scheduled for June 16, 2015 to be a technical defect excusable under 11 NYCRR 65-3.5 (p). Further, under 11 NYCRR 65-3.5 (p), plaintiff’s obligation to appear for an EUO was not negated{**56 Misc 3d at 931} based upon the one-day tardiness in light of the fact that there were three prior EUOs previously scheduled in a timely manner, where plaintiff failed to appear for all four scheduled EUOs and where plaintiff “failed to allege, much less prove, that it had responded in any way to the EUO requests at issue” (Professional Health Imaging, P.C. v. State Farm Mut. Auto. Ins. Co., 52 Misc 3d 134[A], 2016 NY Slip Op 51026[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). Similarly, in Infinity Health Prods., Ltd. v Eveready Ins. Co. (67 AD3d 862 [2d Dept 2009]), the Appellate Division, in reversing the Appellate Term’s determination in favor of plaintiff where defendant’s follow-up request for additional verification was sent three days prior to the expiration of a full 30 calendar days as dictated by 11 NYCRR former 65-15 (e) (2) (now 11 NYCRR 65-3.6 [b]), stated the following:

“Indeed, in light of the particular factual circumstances herein, it would be incongruous to conclude that the Insurance regulation regarding follow-up verification, or any other statute or rule, warrants a result which would, in effect, penalize an insurer who diligently attempts to obtain the information necessary to make a determination of a claim, and concomitantly, rewards a plaintiff who makes no attempt to even comply with the insurer’s requests.” (Infinity Health Prods., Ltd. v Eveready Ins. Co., 67 AD3d 862, 865 [2d Dept 2009]; see also Triangle R Inc. v Praetorian Ins. Co., 30 Misc 3d 129[A], 2010 NY Slip Op 52294[U] [App Term, 1st Dept 2010].)

To the extent that this court finds 11 NYCRR 65-3.5 (p) applicable to the unique set of facts and circumstances before it, the court notes that this provision may invariably create additional litigation rather than serving the purpose of the no-fault legislation, which is to encourage expeditious resolution of claims (see New York Hosp. Med. Ctr. of Queens v Motor Veh. Acc. Indem. Corp., 12 AD3d 429, 430 [2004], quoting Dermatossian v New York City Tr. Auth., 67 NY2d 219, 225 [1986]). Thus, even in finding in favor of defendant in this matter, the court notes that such ruling is limited to the facts and circumstances of the instant case.

Therefore, based upon the foregoing, plaintiff’s motion for summary judgment is denied. Defendant’s cross motion for summary judgment is granted and plaintiff’s complaint is dismissed.

Footnotes

Footnote 1:The court notes that as to the two bills at issue, both demands were made one to two business days beyond the requisite 15 business days and as such, the number of days beyond 15 business days would only reduce the calendar days allowed for the issuance of a denial pursuant to 11 NYCRR 65-3.8 (l).

Footnote 2:The court notes that the affidavit of defendant’s affiant, Cerean Edwards, contained what appears to be a scrivener’s error in part II, paragraph 10, where Ms. Edwards states that plaintiff did not appear for the EUO on April 14, 2015. When read in whole, the date denoted by Ms. Edwards does not appear to be correct. However, the same is without any consequence as only an attorney affirmation adequately demonstrates plaintiff’s nonappearances for the scheduled EUOs.

[*1]

Civil Court of the City of New York, Kings County, December 8, 2016

APPEARANCES OF COUNSEL

Law Offices of Ilona Finkelshteyn, P.C., Brooklyn, for plaintiff.

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

Plaintiff Clear Water Psychological Services PC seeks to recover no-fault benefits assigned to it by Oshane Crooks (assignor) and moves for summary judgment on the grounds that the bills it submitted to American Transit Insurance Company remain unpaid. Defendant cross-moves for a 90-day stay of the action pending a determination by the Workers’ Compensation Board as to whether the assignor was acting as an employee at the time of the subject automobile accident which occurred on November 10, 2014, and whether he is entitled to workers’ compensation benefits.

At issue is the admissibility of the signed but uncertified police accident report dated November 10, 2014, which indicated that at the time of the accident, the assignor was driving a vehicle with a taxi license plate number and that there were two passengers in the vehicle, to establish that the assignor was acting in the course of his employment. Defendant submits that the report mandates that the 90-day stay be granted.

Facts stated in a police report are not admissible unless they constitute an exception to the hearsay rule (Memenza v Cole, 131 AD3d 1020, 1021-1022 [2d Dept 2015]). If the report is based upon the officer’s personal observations while carrying out police duties, it is admissible as a business record. (Id.; CPLR 4518 [a]; Wynn v Motor Veh. Acc. Indem. Corp., 137 AD3d 779, 780 [2d Dept 2016]; see also Bhowmik v Santana, 140 AD3d 460, 461 [1st Dept 2016] [police accident report, in which officer recorded his own observations that the plaintiff smelled of alcohol and appeared to be intoxicated, was not based on hearsay, and was therefore admissible].)

Pursuant to Vehicle and Traffic Law §§ 603-a and 604, whenever a motor vehicle accident results in serious physical injury, and such accident either is discovered by a police officer, or reported to an officer within five days after an accident, it is the duty of the police to immediately investigate the facts and complete a report on a form prescribed by the Commissioner of Motor Vehicles, a copy of which shall be sent to the Commissioner{**54 Misc 3d at 917} within five business days of the completion of such investigation report (People v Quackenbush, 88 NY2d 534, 539 [1996]; Bouet v City of New York, 125 AD3d 539, 540 [1st Dept 2015]). In New York City, the prescribed police accident report (PAR) is the MV-104AN. (See State of New York Department of Motor Vehicles, Police Accident Report Manual, https://dmv.ny.gov/forms/p33Part01.pdf.)

In the instant action, Police Officer (P.O.) Stephenson filled out this form. The fifth line on the PAR asks for the plate numbers of the vehicles involved in the accident, and the table following line 7 asks for a list of all involved in the accident. As P.O. Stephenson filled out the particulars of the license plate number and the names of the passengers, one can only conclude that his notations were based on his personal observations at the scene of the subject accident.

Although the MV-104AN is signed at the bottom by P.O. Stephenson, it is not certified, and defendant’s cross motion for summary judgment does not contain an affidavit or other sworn evidence from someone with personal knowledge establishing its authenticity or accuracy. CPLR 4518 (c) permits a police report to be admitted as proof of the facts recorded therein only if “[it] bear[s] a certification or authentication by the head of the . . . [police] department . . . or by an employee delegated for that purpose.” Since the MV-104AN is not certified, it does not qualify for admission under CPLR 4518 (c) (Nationwide Gen. Ins. Co. v Bates, 130 AD3d 795, 796 [2d Dept 2015]; Adobea v Junel, 114 AD3d 818 [2d Dept 2014]; Cheul Soo Kang v Violante, 60 AD3d 991 [2d Dept 2009]).

Although the PAR may not be admitted into evidence in its current form, defendant’s motion still presents factual questions regarding the assignor’s status as an employee of a taxi base, as plaintiff does not dispute the truthfulness of P.O. Stephenson’s observations that the vehicle involved in the subject accident had a taxi license plate. Pursuant to Workers’ Compensation Law § 2 (3) and (4), the term “employer” includes a person or entity who leases a taxicab, and concomitantly, the term “employee” includes “a driver, operator or lessee who contracts with an owner, operator or lessor for the purpose of operating a taxicab” (see Matter of Mihalaris v UTOG 2-Way Radio, 299 AD2d 677, 678 [3d Dept 2002]). The question of the assignor’s employment status and his entitlement to benefits under the Workers’ Compensation Law must be resolved at a hearing before the Board, which has primary jurisdiction over{**54 Misc 3d at 918} deciding these matters (Siekkeli v Mark Mariani, Inc., 119 AD3d 766, 768 [2d Dept 2014]; Dunn v American Tr. Ins. Co., 71 AD3d 629, 630 [2d Dept 2010]; Speroni v Mid-Island Hosp., 222 AD2d 497, 498 [2d Dept 1995]).

In light of the above, defendant’s motion is granted to the extent that this action shall be [*3]stayed for 90 days pending a prompt application to determine the applicability of the Workers’ Compensation Law to plaintiff’s claim.

[*1]

Civil Court of the City of New York, Kings County, December 8, 2016

APPEARANCES OF COUNSEL

Law Offices of Aloy O. Ibuzor, New York City, for defendant.

The Rybak Firm, PLLC, Brooklyn (Oleg Rybak of counsel), for plaintiff.

The novel issue presented is whether a no-fault insurer must request examinations under oath (EUOs) of all conceivable entities within 15 business days of receipt of a written notice of claim, as provided in 11 NYCRR 65-3.5 (b), or whether its 15 days in which to request an EUO starts anew after it completes one EUO and discovers the need for an additional EUO of another entity.

Plaintiff Sure Way NY, Inc. seeks to recover from defendant Travelers Insurance Co. no-fault benefits for services and medical equipment it provided to its assignor Rachel Constantino for alleged injuries she sustained in a motor vehicle accident which occurred on July 26, 2013.

Defendant received plaintiff’s two bills on September 16, 2013 (first bill), and October 2, 2013 (second bill), respectively, and made two successive verification requests for each bill seeking, inter alia, documentation describing the equipment provided, including wholesale invoices, information regarding the model number, manufacturer, and serial number, and cancelled checks used to pay the invoices. Defendant made verification requests on the two bills between September and November 2013. Petitioner does not challenge the timeliness of these requests.

On December 19, 2013, while the requested verification remained outstanding, defendant conducted an EUO of the assignor, which plaintiff also concedes was timely. The assignor’s testimony raised questions regarding the accuracy of the billing and coding associated with the claims submissions, and the legal relationship between the plaintiff’s corporation and the individuals who performed the services. As a result, on January 9, 2014, defendant sent a letter to plaintiff requesting that it appear for an EUO scheduled for January 29, 2014. After plaintiff failed to appear for the EUO, defendant sent a second{**56 Misc 3d at 291} scheduling letter to plaintiff dated January 31, 2014, requesting that plaintiff appear for an EUO on February 18, 2014. Plaintiff again failed to appear.

Based upon plaintiff’s failure to respond to the verification requests and failure to appear for the two scheduled EUOs, defendant issued a denial of plaintiff’s claims on February 20, 2014. Plaintiff does not dispute that it failed to respond to the verification requests or that it failed to appear for the EUOs. Defendant moves for summary judgment on the grounds that plaintiff breached a condition precedent to coverage by failing to attend the EUOs. Plaintiff cross-moves for summary judgment on the ground that defendant did not timely mail a request for an EUO within 15 days of its receipt of plaintiff’s claim.

In Prestige Med. P.C. v Travelers Home & Mar. Ins. Co. (56 Misc 3d 284 [Civ Ct, Kings County 2014]), this court held that before an insurance company can take advantage of denying a claim for failure to appear for an EUO beyond the 30-day period pursuant to Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC (82 AD3d 559 [1st Dept 2011]), it must first comply with the notification time lines contained in the verification procedures. This court reached this result because an EUO, as cogently noted by the Honorable Fred J. Hirsh in Tarnoff Chiropractic, P.C. v GEICO Ins. Co. (35 Misc 3d 1213[A], 2012 NY Slip Op 50670[U], *5 [Nassau Dist Ct 2012]), “is a hybrid between a condition precedent to coverage and verification.” Thus, most of the procedural time lines governing EUOs are contained in the regulations relating to verification. (Prestige at 286; see also Country-Wide Ins. Co. v Castro, 2016 NY Slip Op 31505[U] [Sup Ct, NY County 2016].)

11 NYCRR 65-3.5 details the verification procedures to be followed after the insurer receives the completed application for no-fault benefits (NYS form N-F 2). The injured party or that party’s assignee (medical services provider) must then submit written proof of claim (claim form—usually verification of treatment by attending physician or other health care provider—NYS form N-F 3) to the insurer within 45 days after the date the medical services are rendered (Prime Psychological Servs., P.C. v Nationwide Prop. & Cas. Ins. Co., 24 Misc 3d 230, 233 [Civ Ct, Richmond County 2009]). 11 NYCRR 65-3.5 (b) authorizes an insurer, upon [*2]receiving the written proof of claim or its substantial equivalent written notice, to request{**56 Misc 3d at 292} “any additional verification required . . . to establish proof of claim . . . within 15 business days of receipt of the prescribed verification forms.” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 299 [2007]; see A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 101 AD3d 53 [2d Dept 2012]; Prestige at 286.) By properly requesting additional verification within 15 days from the receipt of the proof of claim form, an insurer may toll the 30-day period in which it must deny the claim. (Prestige at 286, citing Prime Psychological Servs., 24 Misc 3d at 233.) If the requested verification has not been supplied to the insurer within 30 days after the original request, the insurer shall, within 10 days, follow up upon its request for verification either by a telephone call or by mail (11 NYCRR 65-3.6 [b]).

EUOs and independent medical examinations (IMEs) are considered to be part of an insurer’s “entitlement to ‘additional verification’ ” following receipt of a provider’s statutory claim forms (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 19 [App Term, 2d Dept, 2d & 11th Jud Dists 2004], affd in part 35 AD3d 720 [2d Dept 2006]; see 11 NYCRR 65-3.5 [d]; see also Prime Psychological, 24 Misc 3d at 233; All-Boro Med. Supplies, Inc. v Progressive Northeastern Ins. Co., 20 Misc 3d 554 [Civ Ct, Kings County 2008]). Therefore, the written request or demand letter for an EUO must be mailed by an insurer within 15 days of receipt of the proof of claim form (Allstate Ins. Co. v American Comprehensive Healthcare Med. Group, P.C., 2016 NY Slip Op 31175[U] [Sup Ct, NY County 2016]; see National Liab. & Fire Ins. Co. v Tam Med. Supply Corp., 131 AD3d 851, 851 [1st Dept 2015]; American Tr. Ins. Co. v Jaga Med. Servs., P.C., 128 AD3d 441, 441 [1st Dept 2015]; O & M Med., P.C. v Travelers Indem. Co., 47 Misc 3d 134[A], 2015 NY Slip Op 50476[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Prestige at 286; see also Unitrin Advantage Ins. Co. v Better Health Care Chiropractic, P.C., 2016 NY Slip Op 30837[U] [Sup Ct, NY County 2016] [an insurer must comply with the no-fault insurance regulations governing the claim procedure which prescribe specific time frames for requesting and scheduling EUOs and IMEs in order to satisfy its prima facie burden on a motion for summary judgment declaring that no coverage exists based on the failure of a claimant or medical provider to appear for an EUO or IME]).

In Prestige, this court ruled, in a case of first impression, that when an insurer obtains new information from an EUO of the assignor, which gives it reason to conduct an EUO of the{**56 Misc 3d at 293} assignee provider, the insurer must send the EUO request to the assignee within 15 business days of the date the EUO of the assignor was held. This court now provides the rationale for this ruling: that the decision to conduct the EUO of the assignee was based upon new information, causing this to be a new verification request, as opposed to a follow-up request upon a party who has not responded or did not respond in full to the initial request for information.

This court then addressed the ramifications that flow from a request for an additional EUO that was not made within the 15 days prescribed in the regulations. It applied precedent governing untimely requests for additional verification to untimely requests for EUOs. In Nyack Hosp. v General Motors Acceptance Corp. (27 AD3d 96 [2d Dept 2005]), the Second Department ruled that when an insurer is late in requesting additional verification beyond the 15-day time period, the insurer’s time to either pay or deny the claim is reduced. 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. In so ruling, the Appellate Division relied on 11 NYCRR 65-3.8 (l), which states that “[f]or the purposes of counting the 30 calendar days . . . , with the exception of section 65-3.6 [follow-up requirements], any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.” In Prestige, the insurer requested an EUO of the provider four days after the expiration of the 15-day time period from which the assignor’s EUO was conducted, resulting in the provider having to subtract those four days from the 30 days it had to pay or deny the claim after the provider failed to show up for the scheduled EUO follow-up on April 23, 2012.

Similarly here, defendant insurer sent a letter requesting an EUO of the provider on January 9, 2014, some 21 calendar days, or 15 business days, after the EUO was conducted of the assignor on December 19, 2013. It therefore did not have to subtract any days from the 30 days it had in which to issue a denial after the provider failed to appear for its EUO on February 18, 2014. Since defendant issued its denial on February 20, 2014, only two days after the EUO no-show, its denial was timely. Defendant also properly established that it properly generated and mailed the two EUO notification letters, and that the insurer failed to appear for the EUO. (IDS Prop. Cas.{**56 Misc 3d at 294} Ins. Co. v Stracar Med. Servs., P.C., 116 AD3d 1005 [2d Dept 2014]; Synergy First Med., P.L.L.C. v Allstate Ins. Co., 53 Misc 3d 130[A], 2016 NY Slip Op 51365[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; Professional Health Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 52 Misc 3d 134[A], 2016 NY Slip Op 51026[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]).

Accordingly, the defendant’s motion for summary judgment is granted and the plaintiff’s cross motion for summary judgment is denied.

[*1]

Civil Court of the City of New York, Kings County, November 30, 2016

APPEARANCES OF COUNSEL

Law Offices of Emilia I. Rutigliano, P.C., Brooklyn, for plaintiff.

Bruno, Gerbino & Soriano, LLP, Melville, for defendant.

Plaintiff’s motion for summary judgment and defendant’s cross motion for summary judgment are decided as follows:

Plaintiff brought this action against defendant to recover assigned first-party no-fault benefits. Plaintiff sufficiently established its prima facie entitlement to summary judgment through the affidavit of its owner, Irina Kazanskaya, who states that plaintiff mailed three claims for benefits to defendant’s Arizona location. The first claim is dated December 8, 2014, in{**55 Misc 3d at 189} the amount of $1,114.84 (claim 1); the second claim is dated January 6, 2015, in the amount of $1,087.39 (claim 2); and the third claim is dated February 5, 2015, in the amount of $384.23 (claim 3). Ms. Kazanskaya states that none of the claims were paid within 30 days of defendant’s receipt of the claim (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 507 [2015]). Ms. Kazanskaya further established plaintiff’s procedures for generating and mailing the claims (St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 1123 [2d Dept 2008]).

Following submission of each of the claims, defendant had 30 days from receipt to pay or deny the claim for any defense, other than a non-precludable defense (Viviane Etienne Med. Care, 25 NY3d at 506). According to the affidavit of Travis Miller, a no-fault litigation supervisor with defendant, defendant received claim 1 on December 17, 2014, and generated a denial of that claim on June 3, 2015. Defendant received claim 3 on February 20, 2015, and generated a denial of that claim on June 8, 2015. As to claim 2, defendant never denied it, and defendant alleges that it did not receive this claim. As Mr. Miller explains, defendant mailed the denials within one day of generating them.

Mr. Miller further states in his affidavit that defendant denied plaintiff’s claims because of plaintiff’s purported failure to appear for an examination under oath (EUO). Failure to attend an EUO is a precludable defense that must be preserved through a timely denial (Compas Med., P.C. v Praetorian Ins. Co., 49 Misc 3d 145[A], 2015 NY Slip Op 51667[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Because defendant denied claim 1 and claim 3 more than 30 days after receipt, defendant’s EUO no-show defense is waived unless defendant’s time to pay or deny the claim was tolled such that its June 2015 denials were timely.

In this case, defendant contends that it timely requested recorded statements, verification requests, and EUOs from plaintiff and Venton Carmichael, the assignor, which effectively tolled the time by which defendant had to either pay or deny claims 1 and 3. First, Mr. Miller states in his affidavit that defendant sought to obtain a “recorded statement” from the assignor. To that end, Mr. Miller states that defendant sent letters to plaintiff and the assignor requesting the recorded statement. These letters are dated December 24, 2014, January 8, 2015, and February 4, 2015. Mr. Miller states that defendant{**55 Misc 3d at 190} obtained the recorded statement from the assignor on March 12, 2015.

[1] The question arises as to whether a request for a recorded statement effectively tolls the time by which an insurer must pay or deny a claim. First, we must be clear about what a “recorded statement” is. Defendant’s letters identified the event as a “statement” and, subsequently, as a “recorded statement,” but did not specify what a recorded statement entailed. It merely stated that defendant wanted a statement from the assignor discussing the accident and the injuries sustained. In addition, defendant did not treat the request for a recorded statement as an EUO. In fact, the defendant’s letters state that asking for a recorded statement does not preclude defendant from requiring EUOs or medical examinations. Thus, defendant implies, if not explicitly states, that a recorded statement is distinct from an EUO.

Furthermore, in an apparent matter of first impression, cases in this state have not yet specified what a “recorded statement” is or how it should be treated. Certain cases used the terms “recorded statement” and “EUO” interchangeably, but did not state whether the event in question was a formal examination in which testimony was given under oath (see Westchester Med. Ctr. v Government Empls. Ins. Co., 2009 NY Slip Op 30914[U] [Sup Ct, Nassau County 2009]; see also American Commerce Ins. Co. v Sanford, 2014 NY Slip Op 31108[U] [Sup Ct, NY County 2014]). The term “recorded statement” also has been used in the context of notice of a claim (see Matter of New York Cent. Mut. Fire Ins. Co. [Bett], 12 AD3d 1024, 1024 [4th Dept 2004] [holding that a recorded statement was not enough notice of claim to the insurance company]).

Additionally, the relevant regulation does not explicitly state that recorded statements, however they are defined, toll the time to pay or deny a claim (see 11 NYCRR 65-3.5 [b]). Cases construing 11 NYCRR 65-3.5 (b) do not suggest that the regulation should be read so broadly as to include recorded statements (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 280, 285 [1997] [suggesting in dicta that interrogatories, a “distinct request for information,” would not be a sufficient mode of verification]; but see St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2d Dept 2002] [holding that the statutory period in which insurer was required to pay or deny the hospital’s claim was tolled by a request for patient records that was made by letter rather{**55 Misc 3d at 191} than by prescribed forms]). As a result, there appears to be no basis to hold that a request for a recorded statement should toll the time by which defendant must pay or deny a claim.

[2] Defendant also suggests that the “verification requests/delay letters” it mailed in response to claims 1 and 3 tolled the time to deny the claims. Mr. Miller states that the first verification requests were mailed on December 31, 2014 for claim 1 and on March 3, 2015 for claim 3. Although a verification request may be made in letter form,

“an insurer may not rely on a letter, even if denominated a verification request, that merely informs a claimant that a decision on the claim is delayed pending an investigation, and without specifying a particular form of verification and the person or entity from whom the verification is sought, to toll the 30-day claim determination period” (Ocean Diagnostic Imaging P.C. v Citiwide Auto Leasing Inc., 8 Misc 3d 138[A], 2005 NY Slip Op 51314[U], *1 [App Term, 2d & 11th Jud Dists 2005], quoting Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92, 94 [App Term, 2d & 11th Jud Dists 2004]; New Way Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 49 Misc 3d 148[A], 2015 NY Slip Op 51706[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]).

Here, defendant’s request for “verification” generally seeks “the circumstances surrounding the accident; the causal relationship of the claimed injuries sustained in this accident; and whether there is coverage for this claim.” The defendant fails to state with specificity what part of the claim concerned it and the exact information it needs to conduct an investigation. Furthermore, the verification request itself is included at the end of certain explanations of benefits, which are congested with other information, in minuscule font. Defendant’s requests for additional information are mere delay letters, which did not effectively toll defendant’s time to pay or deny plaintiff’s claims.

Mr. Miller states that, following the request for the assignor’s recorded statement, defendant decided it needed an EUO of plaintiff, and retained the law firm of Bruno, Gerbino & Soriano, LLP to conduct that EUO. According to the affidavit of Shawn Kelleher, Esq., a partner with the Bruno firm, the firm sent a letter to plaintiff, dated March 24, 2015 (97 and 32 days after defendant received claims 1 and 3, respectively),{**55 Misc 3d at 192} asking plaintiff to appear for an EUO on April 17, 2015. When plaintiff did not appear for the EUO, the firm sent a letter to plaintiff, dated April 20, 2015, asking plaintiff to appear for an EUO on May 18, 2015. Mr. Kelleher states that plaintiff did not appear for that EUO, either.

Defendant was required to pay or deny claims 1 and 3 within 30 days of receipt (Compas Med., 2015 NY Slip Op 51667[U], *1). Defendant did not do so. Further, defendant did not toll its time to pay or deny claims 1 or 3, since it requested the EUO more than 30 days after receipt of those claims (Neptune Med. Care, P.C. v Ameriprise Auto & Home Ins., 48 Misc 3d 139[A], 2015 NY Slip Op 51220[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Therefore, defendant’s denials of claim 1 and claim 3 were untimely.

[3] As to claim 2, defendant alleges that the bill was never received. Furthermore, defendant purports that plaintiff’s mailing of the claims to defendant’s Arizona location was improper due to the parties’ past dealings. Proof of proper mailing gives rise to a rebuttable presumption that the item was received by the addressee (Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001]). The presumption may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed (id.). In order to rebut the presumption of receipt, the defendant, in addition to denying receipt, must show that the plaintiff did not follow routine office practices or that plaintiff’s routine office practices are so careless that it would be “unreasonable to assume that the notice was mailed” (see Nassau Ins. Co. v Murray, 46 NY2d 828, 830 [1978]).

To begin, defendant’s contention that plaintiff should have known that its location was not in Arizona is without merit. Plaintiff claims that it sent the three claims to the same Arizona address, and defendant acknowledges that it received at least two of them. As to the mailing of claim 2, plaintiff submitted an official United States Postal Service (USPS) mailing form designed to provide a record for accountable mail. However, the document contains conflicting date stamps: one stamp for January 8, 2015, and the other for January 8, 2016. Thus, the date of actual mailing is unclear. Essentially, plaintiff did not establish that claim 2 was mailed pursuant to its own office procedures. Although Ms. Kazanskaya, who claims to have personal knowledge of company’s procedures, detailed the{**55 Misc 3d at 193} office procedures for mailing, the dueling date stamps on the USPS form conflict with the procedures described in her affidavit. Hence, office procedures do not establish proper mailing in this instance (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 547-548 [2d Dept 2006]; see also Alur Med. Supply, Inc. v GEICO Ins. Co., 27 Misc 3d 142[A], 2010 NY Slip Op 51053[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]). Because questions of fact prevent this court from finding that plaintiff mailed claim 2, this court likewise does not presume that defendant received claim 2.

For the foregoing reasons, defendant’s cross motion for summary judgment is denied. Plaintiff’s motion for summary judgment is granted only as to claims 1 and 3. Plaintiff may enter judgment for $1,499.07 plus statutory costs, attorney’s fees, disbursements and interest. With regard to claim 2, plaintiff has not yet established that the claim was timely mailed. However, if claim 2 is shown to have been timely mailed, then it was not timely denied by defendant. Accordingly, this case shall proceed to trial to determine whether or not claim 2 was timely mailed.

[*1]

Civil Court of the City of New York, Queens County, October 17, 2016

APPEARANCES OF COUNSEL

Kim, Patterson & Sciarrino, P.C., Bayside, for defendants.

Serpe, Andree, & Kaufman, Huntington, for plaintiff.

Defendants’ motion pursuant to CPLR 3211 (a) (1) and (5){**54 Misc 3d at 346} dismissing plaintiff’s complaint and plaintiff’s cross motion for sanctions are decided as follows:

Plaintiff commences this subrogation action to recover $15,200 in additional personal injury protection benefits (APIP) paid to plaintiff’s subrogor. Prior to the commencement of this action a workers’ compensation hearing was held on November 24, 2008 determining that Kareem Atkins, the claimant, was in the course of employment with subrogor, Darci Plumbing Co., Inc., and was awarded basic economic loss as a result of an auto accident which occurred on March 17, 2008. Defendants now move to dismiss the complaint pursuant to CPLR 3211 (a) (1) on the ground that defendants’ defense is founded upon documentary evidence and CPLR 3211 (a) (5) on the ground that plaintiff’s cause of action cannot be maintained because of collateral estoppel and res judicata. Plaintiff also cross-moves for sanctions against the defendants pursuant to CPLR 8303-a for frivolous and unethical motion practice.

In support of the motion defendants submit the decision of the Workers’ Compensation Board awarding claimant, who is plaintiff’s subrogor’s employee, basic economic loss benefits as a result of the car accident of March 17, 2008. Defendants argue that the workers’ compensation benefits were the exclusive source of coverage for first-party benefits. Defendants also claim that the workers’ compensation decision was res judicata. Plaintiff subrogee claims in opposition that it paid APIP to the claimant, which was in addition to the statutory basic economic loss paid by the workers’ compensation award and therefore its right to subrogate these additional payments was reserved.

New York’s No-Fault Law requires that an owner of a vehicle has insurance coverage providing first-party benefits consisting of reimbursement for basic economic loss (health expenses, loss of earnings and other reasonable and necessary expenses) to the extent specified by statute. Where workers’ compensation insurance coverage exists for an injured motorist, the workers’ compensation insurer must pay the injured motorist’s basic economic loss up to $50,000 in lieu of statutory no-fault benefits. (Insurance Law §§ 5102 [a], [b]; 5103 [a].) There is no dispute in this matter that workers’ compensation was required to pay the basic economic loss for the accident. However, in this matter plaintiff subrogee paid APIP to claimant pursuant to its contract of insurance with subrogor, claimant’s employer. The issue at bar is whether APIP payments are synonymous{**54 Misc 3d at 347} with the statutory basic economic loss benefit or a contractual benefit in addition to the statutory basic economic loss benefit.

11 NYCRR 65-1.3 defines APIP benefits as:

“Additional first-party benefits are payments equal to extended economic loss reduced by: . . .

“(b) amounts recovered or recoverable on account of personal injury to an eligible injured person under State or Federal laws providing . . . workers’ compensation benefits . . . which amounts have not been applied to reduce first-party benefits recovered or recoverable under basic economic loss.”

Since an insured’s subrogation rights with regard to payment of APIP benefits are equitable rather than statutory in nature, they exist under common law. (Allstate Ins. Co. v Stein, 1 NY3d 416 [2004].) The workers’ compensation award in this matter may be distinguishable from the APIP benefits. Therefore the workers’ compensation award was not res judicata and plaintiff is not precluded from asserting its subrogation rights for any amounts paid in addition to the statutory basic economic loss benefits paid by workers’ compensation in lieu of first-party benefits. Accordingly, defendants’ motion to dismiss is denied in its entirety.

Plaintiff’s cross motion seeking sanctions against the defendants is further denied.