[*1]

Civil Court of the City of New York, New York County, June 24, 2013

APPEARANCES OF COUNSEL

Dodge & Monroy, P.C., Melville, for defendant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, LLC, Garden City, for plaintiff.

{**40 Misc 3d at 788} OPINION OF THE COURT

James E. d’Auguste, J.

Defendant Utica Mutual Insurance Company seeks summary judgment dismissing plaintiff New Century Medical Diagnostics, P.C.’s no-fault benefits action.

The parties’ submissions demonstrate that New Century timely submitted its claims and Utica timely denied the claims{**40 Misc 3d at 789} based upon New Century’s failure to appear at two scheduled examinations under oath. Defaulting in appearing at properly scheduled examinations under oath [*2]represents a failure to comply with a condition precedent to coverage. (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559 [1st Dept 2011]; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2d Dept 2006].) New Century has not denied its nonappearance, but asserts that the notices were defective because they sought the production of a specific individual. In advancing this argument, New Century relies upon a New York State Insurance Department^[FN*] opinion letter holding that a no-fault medical provider can produce any individual with personal knowledge at a scheduled examination under oath. (Ops Gen Counsel NY Ins Dept No. 09-06-10 [June 2009, Alexander Tisch, Esq.].) The Insurance Department, however, did not opine that an insurer’s attempt to secure the production of a particular person renders the entire verification request a nullity. Rather, the opinion letter merely holds that a no-fault provider is permitted to designate any individual with knowledge irrespective of an insurer’s demand that a specific individual appear. Thus, while New Century was not required to produce the specific person Utica requested, its failure to produce any person at the scheduled examinations under oath permitted Utica to deny New Century’s claims.

Accordingly, Utica’s motion for summary judgment dismissing the complaint is granted.

Footnotes

Footnote *: The Insurance Department is now a part of the Department of Financial Services.

Civil Court of the City of New York, Kings County

072854/09

Attorney for Plaintiff:

Gary Tsirelman P.C.

65 Jay Street, 3rd Floor

Brooklyn, NY 11201

Attorney for Defendant:

Law Office of Solowan & Welden

Dominick Dale, Esq.

170 Froehlich Farm Blvd.

Brooklyn, NY 11797

Katherine A. Levine, J.

The novel issue presented at trial is whether the bill submitted by plaintiff Jamaica Medical Supply Inc. (“plaintiff” or “Jamaica”), for the rental of medical supply equipment on its face constituted a reasonable justification for plaintiff’s untimely submission of written proof of claim or whether plaintiff had an independent obligation to submit a written reasonable justification for its late bill upon receiving the denial from defendant Geico Insurance Company (“Geico”).^[FN1]

Plaintiff Jamaica Medical Supply Inc. (“plaintiff” or “Jamaica”), a medical equipment company, commenced this action to recover the sum of $3475.00 for medical supplies it rented to its assignor Hilma Thornhill (“Thornhill”). At the commencement of the trial, both sides stipulated to each other s prima facie cases. In its NF-10 form, Geico denied the claim on the grounds that plaintiff violated the revised Mandatory Personal Injury Protection Endorsement (“Endorsement”or “PIP”) contained in the revised No-Fault Regulations—11 NYCRR ｧ65-1.1— [*2]by failing to submit its proof of claim for services to Geico within 45 days from the date services were rendered. The denial contained an explanation under reason 45 and set forth that “late notice will be excused where the applicant can provide reasonable justification of the failure to give timely notice.” The burden therefore shifted to plaintiff at trial to establish a clear and reasonable excuse for its untimely submission of the bill.

During the trial, defendant made a motion in limine to preclude the testimony of plaintiff’s owner on the ground that plaintiff failed to respond, during the claims phase, to defendant’s request in its denial to provide a reasonable excuse for its late claim. The Court took the motion under advisement but allowed the plaintiff to testify. Admitted into evidence were two no fault bills dated May 1, 2009, for a water circulating pump/cold pad and for a “passive motion exercise machine (“CPM”) along with the setting up and fitting of the machine and a pad. While both medical supplies were dispensed on March 6, 2009, the return receipt for the water circulating pad was dated March 20, 2009 where as the return receipt for the CPM unit was dated April 6, 2009. Also admitted into evidence were delivery receipts for the CPM unit and water circulating pump wherein Thornhill acknowledged receiving the items and promised to return the units in the same condition as received within two- six weeks of delivery.

Based upon the above, it is clear that plaintiff submitted a claim for the water circulating pump/cold pad 56 days after it was delivered and 42 days after it was returned by the assignor. Plaintiff submitted the claim for the CPM Unit/soft pad kit 56 days after it was delivered and 25 days after it was returned to plaintiff. While both claims were therefore submitted to Geico beyond the 45 days from date of delivery of the equipment, they were sent within 45 days after the rental equipment was returned.

Plaintiff’s president and owner, Mike Kmaimov (“Kmaimov”), testified that due to the exorbitant price of the equipment, Jamaica Medical only rents the CPM unit and water circulating pump. Since the equipment is rented, it was not possible for plaintiff to send the no -fault bill to the insurer within 45 days of disbursement since plaintiff could not ascertain the number of the days that the machines would be rented, and hence the cost of the rental, until the machines were returned. Kmaimov also testified that in some instances a doctor will be re prescribe the machines and it is “impracticable” for the plaintiff to pick up a new prescription and redeliver the machines.

Plaintiff submits that its provision of all the rental documents and no fault bills to defendant on May 1st constituted a reasonable excuse for the alleged late submission of the claim. Plaintiff argues that defendant bears the burden of reviewing the claim documents which clearly showed that the since the durable medical equipment (“DME”) were rentals, they “could not have been billed 45 days” from their initial disbursement. Plaintiff therefore asserts it could not send the no fault bill to defendant until the rental was complete. Yet, in the same breadth, plaintiff admits that case law and state DME guidelines mandate that the date of service must be [*3]the date the supplies were dispersed.

Pursuant to 11 NYCRR §65-1.1 (b) all claims must be submitted within “45 days after the date (the) services (were) rendered”. Where one proof of claim is submitted for several medical treatments, the 45 day period commences “the day after the first treatment is rendered.” SZ Med. P.C. v. Country-Wide Ins. Co., 12 Misc 3d 52, 55 (App. Term, 2d Dept. 2006) citing NY Ins Dept Informal Op No. 03-06-30 (June 30, 2003). See, Health Care Associates (Varallo) v. Geico, 2010 NY Slip Op 50094(U), 26 Misc 3d 1214(A) (Civil Ct., Richmond Co. 2010). These time limitations shall apply “unless the eligible injured person [or that person’s representative] submits written proof providing clear and reasonable justification for the failure to comply with such time limitation.” 11 NYCRR ｧ65-1.1. This duty follows from an insurer’s obligation to include within a denial, based upon the failure to timely submit a proof of claim advise to the applicant that late notice will be excused where the applicant can provide reasonable justification of the failure to give timely notice. 11 NYCRR ｧ65-3.3 (e). See, Radiology Today, P.C. v. Citiwide Auto Leasing, Inc., 15 Misc 3d 92 (App. Term, 2d Dept. 2007).

As plaintiff concedes that the case law and state DME guidelines mandate that the date of service be the date the supplies were dispersed, it cannot argue that its 45 days to submit a claim runs from the date that the rental equipment is returned. Furthermore, both of the rented DMEs were returned within the 45 day period, thus making it possible for plaintiff to still timely submit its claim forms to defendant. Given this fact, plaintiff’s attempt to distinguish rental equipment from equipment it sells to the assignor is of no significance. Similarly, plaintiff’s attempt to explain away the 45 day rule at trial by claiming that both the disbursement and return rental forms that it sent to defendant were self explanatory has no merit. Had the items been returned after the 45 days had already expired, the Court might consider whether these forms on their face constituted a reasonable justification for failure to give timely notice.

Since plaintiff could have timely submitted its claims upon the return of the rental equipment, defendant was not under an obligation to some how glean why plaintiff waited until May 1, 2010 to submit its claim forms. Defendant followed the regulations by including within its denial advice to plaintiff that its late notice excused it plaintiff could provide a reasonable justification. Having failed to respond to defendant’s request at the claims phase, plaintiff cannot interpose its justification at trial. Prestige Medical & Surgical Supply, Inc. v. Chubb Indemnity, 2010 NY Slip Op 50449(U), 26 Misc 3d 145(A) (App. Term, 2d Dept. 2010); Delta Diagnostic Radiology, P.C. v. MVAIC, 2007 NY Slip Op. 52143(U), 17 Misc 3d 1125(A) (Civil Ct., Kings Co. 2007).

As such, the complaint is dismissed with prejudice.

The foregoing constitutes the Decision and Order of the Court.

Dated: June 10, 2013______________________________

Hon. Katherine A. Levine

Judge, Civil Court

ASN by _______on___________

Footnotes

Footnote 1:A number of cases were consolidated at trial for the purposes of this issue.

Civil Court of the City of New York, Kings County

068326/2011

ATTORNEYS FOR PLAINTIFF:

Ilona Finkelshteyn, Esq

2503 65th Street

Brooklyn, NY 11204

ATTORNEYS FOR DEFENDANT:

Law Offices of Spina, Korshin & Welden

170 Froehlich Farm Blvd.

Woodbury, NY 11797

Katherine A. Levine, J.

PapersNumbered

Notice of Motion and Affidavits Annexed………….. …………………………1

Notice of Cross-Motion and Affidavits Annexed.. ………………………….2

Answering Affidavits………………………………………………………………….. .

Replying Affidavits……………………………………………………………………..

Exhibits………………………………………………………………………………………..

Other: ………………………………………………………………………………………….

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

This case was submitted solely on the unanswered question of whether the No-Fault Regulations require a defendant insurance company to respond to a letter from a plaintiff medical provider objecting to an EUO request as being unreasonable.

Plaintiff LK Health Products, Inc. (“plaintiff” or “LK”), a medical equipment company, [*2]commenced this action to recover the sum of $2,779.63 for medical supplies it provided to its assignor. Defendant GEICO General Insurance Company (“defendant” or “GEICO”) cross moves for summary judgment based upon plaintiff’s failure to show up at an EUO. Defendant sent plaintiff two EUO requests which explained that GEICO’s investigation into plaintiff’s business practices raised questions as to the accuracy of its billing and coding practices, its calculations, and whether the items billed for were the actual items provided to the patients.

In response to the defendant’s EUO request, plaintiff sent a letter which referenced the assignor’s name, the date of service and the amount outstanding. It read: “Please acknowledge this as a formal objection to the EUO request. It is my belief that you do not have a reasonable basis for an EUO request as regulation 68 requires. If there is any kind of information that you need, please request it in the form of verification request. In response to your attached letter, please find out filing receipt and verification of true ownership.” Plaintiff sent a filing receipt and verification of true ownership in response to defendant’s EUO letter.

In its motion plaintiff argues that defendant lacked a specific objective justification for the requested EUO and s that once plaintiff objected to the EUO, the burden shifted to the defendant to respond why its EUO request was reasonable. Plaintiff cites to 11 NYCRR §65 – 3.2, entitled “Claim Practice Principles to be Followed by All Insurers,” which provides that insurers are to: “(e) Clearly inform the applicant of the insurer’s position regarding any disputed matter and (f) Respond promptly, when a response is indicated, to all communications from insureds, …” in support of its position.

Defendant counters that its EUOs were properly scheduled based upon the results of its special investigation into the plaintiff’s business practices. Since its initial EUO scheduling letter explained the need for the EUO, defendant argues that it did not have to respond to plaintiff’s objection letter. It also argues that plaintiff’s boilerplate and nonspecific objection to an EUO did not obviate plaintiff’s obligation to appear.

The Court finds plaintiff’s argument unavailing. First, 11 NYCRR 65-3.2 is a generic provision which applies to all claim practices by insurers. In contrast, the Insurance Department has specifically addressed the obligations of insurers regarding No-Fault EUOs. The Department found that 11 NYCRR 65-3.5(e) does not require an insurer to justify its EUO requests or include language setting forth the reasons for requiring the EUO in either its notices for the EUO or its denials based upon an EUO no show. Nor need it even file with the Insurance Department the standards it maintains for determining when EUOs will be requested. (See Office of General Counsel, NYS Ins Dept. Opinion dated 12/22/2006).

The Court first notes that plaintiff has no standing to even raise this argument since it did not request that defendant provide its reasons for seeking an EUO but rather issued an objection letter indicating that it refused to appear. Furthermore, since no justification for an EUO request is necessary, this Court rules that an insurer is not obligated to reply to a plaintiff letter refusing to appear at an EUO and requesting that a defendant justify its reason for the EUO. Here, [*3]defendant went beyond its obligation by providing its reasons for the EUO in its initial scheduling letter. Finally, to rule otherwise would sanction the parties’ sending countless letters to each other, which would violate the intent of the No-Fault Law which encourages the prompt resolution of no fault claims. See New York and Presbyterian Hosp. v. Country-Wide Ins. Co., 17 NY3d 586, 589 (2011); All Boro Psychological Services, P.C. v. GEICO, 38 Misc 3d 268, 272 (Civ. Ct., Kings Co. 2012). The no-fault regulations were adopted by the Superintendent of Insurance in furtherance of these objectives. New York and Presbyterian Hosp., supra at 589 citing Hospital for Joint Diseases v. Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317, (2007).

It is well established that a plaintiff may preserve its right to challenge the reasonableness of the EUO request at the litigation stage if it objects to a requested EUO at the time it receives the notice. Eagle Surgical Supply, Inc v. AIG Ins Co., 2012 NY Slip Op 51711(U), 36 Misc 3d 153(A)(App. Term, 2nd Dept. 2012); All Boro Psychological Services, P.C. v. State Farm Mutual Automobile Ins. Co., 2012 NY Slip Op 51346(U), 36 Misc 3d 135(A)(App. Term, 2nd Dept. 2012). Here, the Court finds that the plaintiff timely objected to the defendant’s EUO request in writing. However, the defendant provided a clear and unambiguous affidavit from its Special Investigative Unit (“SIU”) Manager which substantiated the need for the EUO based upon an investigation it commenced of plaintiff for improper management and billing operations. Therefore, the defendant was justified in requesting the EUO of the plaintiff.

Plaintiff’s failure to show up for an EUO constituted a violation of a condition precedent to coverage, which voided the contract ab initio. Accordingly, the defendant insurer is not obligated to pay the claim, regardless of whether it issued denials beyond the 30 day period. Neomy Medical, P.C. v. American Transit Ins. Co., 2011 NY Slip Op 50536(U), 31 Misc 3d 1208(A)(Civ. Ct., Kings Co. 2011). See Lender Medical Supply, Inc v. Hartford Ins. Co., 2012 NY Slip Op 50903(U), 35 Misc 3d 1226(A)(Civ. Ct., Kings Co 2012). Since the contract has been vitiated, defendant may deny all the claims retroactively to the date of loss. Id.

In light of the above, the plaintiff’s motion is denied, the defendant’s motion is granted and the case is dismissed with prejudice.

The foregoing shall constitute the Decision and Order of the Court.

Dated: May 9, 2013___________________________

Katherine A. LevineJudge, Civil Court

Civil Court of the City of New York, Kings County

71119/2010

Attorneys for Plaintiff STRACAR MEDICAL SERVICES

Law Offices of Gary Tsirelman

65 Jay Street, 3rd Floor

Brooklyn, NY 11201

Attorneys for Defendant NATIONWIDE MUTUAL INS. CO.

Epstein, Harms, McDonald, Esqs.

One Whitehall Street, 13th Floor

New York, NY 10004

Harriet Thompson, J.

Motion Cal No.90Motion Seq. #

Papers Submitted to Special Term

on5/18/2012,

DECISION/ORDER

Recitation, as required by CPLR §2219 (a), of the papers

considered in the review of this Motion

PapersNumbered

Notice of Motion ………………………………. ..1-2

Order to Show Cause and Affidavits Annexed _____________ [*2]

Answering Affidavits .._____1_____

Replying Affidavits ._____________

Exhibits _____________

Other …………………………………………………._____________

PROCEDURAL HISTORY

Every now and then, a clever legal maneuver can change the course of litigation. In this Civil Court action, the Plaintiff had served, in or about July 29, 2010, a Summons and Verified Complaint to recover first-party No-Fault benefits as a result of alleged injuries arising out of an automobile accident which occurred on June 28, 2008. In or about October 22, 2010, the Defendant interposed a Verified Answer which contained various affirmative defenses and a demand for a Bill of Particulars.

The Defendant moves this Court by Notice of Motion returnable on November 7, 2011 for summary judgment pursuant to CPLR §3212 on the grounds that the Plaintiff failed to submit proper verification of the claim and failed to attend two properly scheduled Examinations Under Oath (hereinafter “EUO”), a condition precedent to insurance coverage and a violation of the Insurance regulations, precluding recovery of the medical claim. More significantly, the Defendant asserts that the medical services must be denied based on the fraudulent procurement of the insurance policy by the assignor.

On the return date, the attorneys, by written agreement, adjourned the motion to May 9, 2012 for the parties to engage in motion practice.

On the adjourned date, the Plaintiff served and filed opposition papers to the Defendant’s motion. The Plaintiff asserts several claims, to wit: the Defendant failed to properly establish its defense of fraudulent procurement of the insurance policy; procedural irregularities such as the insurance policy annexed to the motion is uncertified and the denials are unsigned; and attacks the credibility of the supporting fact affidavit based on a discrepancy in the number of bills received by the Defendant.

The Defendant relies exclusively on Gramatan Home Investors Corp v. Lousi N. Lopez, 46 NY2d 481, 386 NYS2d 308 (1979) for the proposition that a sister state consent decree that terminated the insurance policy ab initio is not binding on the Plaintiff. The Plaintiff’s rationale is that a “judgment in a prior action against the assignor could not be used to estop the assignee from raising certain matters determined there in the subsequent action where the assignment was made prior to the initiation of the action against [the] assignor” (Affirmation of MARINA MORARU at ¶6). In addition, the Plaintiff argues that the facts in this case are akin to the facts in Gramatan, and concludes that “the assignment in this matter was executed prior to the commencement of the action against the assignor and the Defendant is estopped from relitigating the issue. (Affirmation of MARINA MORARU at ¶7).

The court record does not contain a reply to the opposition by the Plaintiff. [*3]

After oral argument, this court reserved decision and submitted this motion sub judice.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The following facts are uncontroverted. MACKLIN SANTERRIA executed an assignment of benefits before her treatment by the Plaintiff on July 14, 2008. MACKLIN SANTERRIA was treated by the above named Plaintiff for alleged injuries for dates of services from August 13, 2008-September 9, 2008 for the sum of $1,329.23 and for dates of service from September 8, 2008-October 20, 2008 for the sum of $544.68 for a grand total sum of $1,873.91. These bills for the above services were received by the Defendant on September 29, 2008 and October 27, 2008, respectively. The Defendant requested verification on October 6, 2008 and October 27, 2008, respectively. The purported verification stated that the Defendant was conducting an investigation to determine “whether the alleged injuries arose out of the use and operation of our insured vehicle and whether the injured party is an eligible injured party entitled to No-Fault benefits under the above mentioned policy. As a result, we have requested an EUO of the claimant. The EUO is currently scheduled from 10/7/2008.”

The second purported verification provided that the investigation was continuing; the EUO is currently scheduled for 11/7/2008 and requested the production of the following documents from the Plaintiff: office notes and physical therapy notes.

On December 23, 2008, the Defendant notified the assignor that their investigation revealed that the application for the policy of insurance revealed that material misrepresentations were made to the insurer in the procurement of the policy and based on those misrepresentations the company voided the policy back to the date of the insurance application on December 1, 2004.

On December 29, 2008, the medical claims were denied by the Defendant.

In or about February 17, 2009, the Defendant commenced an action in the state of Virginia to void the insurance policy based on fraud by the claimant in the application for the insurance policy.

On August 18, 2009, the assignor, represented by counsel and the Defendant Corporation, also represented by counsel, entered into a Dismissal Order in the state of Virginia which stated, in pertinent part, that “[w]ithout conceding any wrongdoing on her part, Defendant (claimant-assignor) agrees that the policy should be voided ab initio, so that it is ORDERED that the policy described in the Complaint filed herein is voided ab initio”.

The initial substantive issue before this court is whether the affidavits of mailing meet the requirements of the No-Fault law to establish proper proof of mailing of the denials. To that end, and as previously ruled by this court, the common law doctrine of presumption of regularity is still alive in New York State despite arguments to the contrary. (Quality Psychological Services, PC., v. Hartford Insurance Company, 2013 NY Slip Op 50045(U)). Generally speaking, a letter or notice that is properly stamped, addressed and mailed is presumed to be received by the addressee. News Syndicate Co. v. Gatti Paper Stock Corp., 256 NY 211, 176 NE 169 (NY, [*4]1931); New York New Jersey Products Dealers Coop v. Mocker, 59 AD2d 970, 399 NYS2d 280 (NY A.D., 3d Dept., 1977). A simple denial of receipt has been held insufficient to rebut this presumption. Countrywide Home Loans, Inc. v. Brown, 305 AD2d 626, 760 NYS2d 200 (NY AD2d Dept., 2003) .

As Judge Tapia recently stated in Hastava & Aleman Assoc. P.C. v. State Farm Mut. Auto Ins. Co., 24 Misc 3d 1239(A), 899 NYS2d 59 (Civ. Ct., Bx Ct., 2009) “the regulation uses “forward” to describe the manner in which notification is to be effectuated. The only kink is determining what constitutes sufficient “notice” because the regulation does not specify the mailing procedure by which to notify the injured party.” In that case, the court determined that the mailing of a letter by certified mail, return receipt requested is entitled to the same presumption of receipt as regular first-class mail in the absence of the signed returned receipt”. Furthermore, “satisfying No-Fault policy conditions does not have to be compromised at the expense of challenging mailing procedures because proof of mailing of verification letters via regular USPS is enough to create a presumption of receipt. In addition, the use of certified mail does not create a more demanding presumption of mailing and receipt beyond that of a letter that was properly mailed. The regulations make no distinction between sending a letter via regular mail or via certified mail.”

The presumption of receipt 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. Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 776 (2001); Nassau Ins Co. v. Murray, 46 NY2d 828, 414 NYS2d 117 (1978); Matter of Francis v. Wing, 263 AD2d 432, 694 NYS2d 29 (NY A.D. 1st Dept., 1999); Azriliant v. Eagle Chase Assoc., 213 AD2d 573, 575, 624 NYS2d 238 (NY AD2d Dept., 1995); Phoenix Ins. Co v. Tasch, 306 AD2d 288, 762 NYS2d 99 (NY AD2d Dept., 2003); Matter of Colyar, 129 AD2d 946, 947, 515 NYS2d 330 (NY AD3d Dept., 1987). Therefore, affidavits that merely state that the bills were mailed within the statutory time period have been held insufficient to establish proof of actual mailing. Comprehensive Medical v. Lumbermens Mutual Ins. Co., 4 Misc 3d 133(A) (App. Term 9 & 10th Jud. Dists, 2004).

The burden is on the insurer to present an affidavit of an employee who personally mailed the verification and/or denial, or on the other hand, an affidavit of an employee with personal knowledge of the office’s mailing practices and procedures. Such individual must describe those practices or procedures in detail, explicitly denoting the manner in which she/he acquired the knowledge of such procedures or practices, and how a personal review of the file indicates that those procedures or practices were adhered to with respect to the processing of that particular claim (emphasis added).

By demonstrating its routine and reasonable office procedures, the Defendant meets its burden of proof that the notices were mailed to the plaintiff and were received. The burden then shifts to the plaintiff to rebut the presumption of receipt. Abuhamra v. New York Mut. Underwriters, 170 AD2d 1003, 566 NYS2d 156 (NY A.D. 4th Dept., 1991); Residential Holding Corp. v. Scottsdale Ins. Co., supra. Indeed, “[i]n addition to a claim of no receipt, there must be a showing that the routine office practice was not followed or was so careless that it would be unreasonable to assume that the notice was mailed. Nassau Ins Co. v. Murray, 46 NY2d 828, 414 [*5]NYS2d 117 [1978]; See also Badio v. Liberty Mutual Fire Ins. Co., 12 AD23d 229, 785 NYS2d 52 (App. Div., 1st Dept., 2004).

Now, the next significant issue in this case involves the fraudulent procurement of the insurance policy by the assignor.

Both New York common law and the Insurance Law establish that the insurance carrier may rescind and/or void any insurance policy if it can be shown that a material misrepresentation was made at the time of the procurement of the insurance policy. See BW Sportswear , Inc. v. Those Certain Underwriters at Lloyd’s of London, 32 Misc 3d 1245(A), 2011 435767, 2 (NY Sup. Ct., NY County, 2011)(Oing, J.) citing Kiss Construction NY Inc. v. Rutgers Casualty Ins. Co., 61 AD3d 412, 877 NYS2d 253 (1st Dept., 2009); NY Ins. Law §3105. As part of the Motor Vehicle Financial Security Act, the Vehicle and Traffic Law (hereinafter “VTL”) § 313 states in part that: “(1)(a) No contract of insurance for which a certificate of insurance has been filed with the commissioner shall be terminated by cancellation by the insurer until at least twenty days after mailing to the named insured at the address shown on the policy a notice of termination by regular mail, except where the cancellation is for non-payment of premium in which case fifteen days notice of cancellation by the insurer shall be sufficient.” See also Rules of New York Automobile Insurance Plan §18 [2] which provides that VTL §313 also applies to the cancellation of a policy issued under the assigned risk plan. (Aetna Cas. & Sur. Co. v. O’Connor, 8 NY2d 359, 207 NYS2d 679, 170 NE2d 681 (1960)). It has long been recognized that this provision “supplants the insurance carrier’s common law right to cancel a contract of insurance retroactively on the grounds of fraud or misrepresentation, and mandates that the cancellation of a contract pursuant to its provisions may only be effected prospectively” (Teeter v. Allstate Ins. Co., 9 AD2d 176, 192 NYS2d 610, affd, 9 NY2d 655, 212 NYS2d 71, 173 NE2d 47; Aetna Cas. & Sur. Co., v. O’Connor, 8 NY2d 359, 207 NYS2d 679, 170 NE2d 681; Olivio v. GEICO of Washington D.C., 46 AD2d 437, 362 NYS2d 873; Reliance Ins. Co. v. Daly, 38 AD2d 715, 329 NYS2d 504 (AD2d Dept., 1972) ; See also Matter Liberty Mut. Ins. Co. v. McClellan, 127 AD2d 767; DiDonna v. State Farm Mut. Auto. Ins. Co., 259 AD2d 727; A-Drive Corp v. General Acc. Group, 114 AD2d 430; Pilato v. Nassau Ins. Co., 79 AD2d 971.

It has also been held that by allowing only prospective cancellation of an automobile liability insurance contract, the law places on the insurer the burden of discovery of any fraud before issuing a policy or at the earliest possible moment thereafter, and prevents interference with the rights of third parties who may have been injured as a result of the negligence of the insured during the term of the contract. Aetna Cas. & Sur. Co., v. O’Connor, supra; Matter Liberty Mut. Ins. Co. v. McClellan, supra; Olivio v. GEICO of Washington D.C., supra. See also Matter of Insurance Co of North America v. Kaplun, 274 AD2d 293, 713 NYS2d 214 [AD2d Dept., 2000].

The insurance carrier that is precluded from rescinding a policy retroactively due to fraud is not without a remedy. For example, if the insurer is required to pay benefits under the policy to a third party, it may bring an action against its insured to recover such losses (See Reliance Ins. Co. v. Daly, 38 AD2d 715, 329 NYS2d 504 (AD2d Dept., 1972)). In Reliance Ins. Co v. Daly, supra, the Appellate Division refused to allow the insurance carrier to rescind the policy because [*6]of the misrepresentations of its insured, but concluded that “nothing in the applicable law precludes a suit for damages after the insurer’s responsibilities to a third party have been satisfied” (38 AD2d at 716).

In addition, and most significant, when the insured brings an action to recover benefits under a policy, the insurance carrier may assert as an affirmative defense that the insured’s misrepresentation and/or fraud in obtaining the policy precludes any recovery by the insured (See DiDonna v. State Farm Mut. Auto. Ins. Co., supra; Mooney v. Nationwide Mut. Ins. Co., 172 AD2d 144). “Just as the public interest is not disserved by a suit brought by the insurer against its insured who fraudulently procured the policy, neither is it disadvantaged if the insurer is relieved of a claim asserted against it by such an insured. If it is established, as defendant here affirmatively alleges, that plaintiff acquired his policy by fraudulent means, denying plaintiff the right to recover would not impinge in any way upon the protection the policy accords innocent victims, would not subvert the statutory proscription against retroactive cancellation and would comport with elementary fairness” (Mooney v. Nationwide Mut Ins. Com., supra, at 149). Similarly, where the right to coverage is asserted in a declaratory judgment action by the insured, the insurance carrier may defend on the ground that the insured was a participant in the fraudulent issuance of the policy (Taradena v. Nationwide Mut. Ins. Co., 239 AD2d 876; Travelers Indem. Co. v. Avelino, 191 AD2d 229; cf., Eagle Ins. Co. v. Liberty Mut. Ins. Co., 267 AD2d 347).

The only limitation to the above rule was recently brought to the fore front by the Appellate Division in the case of Westchester Med. Centre v. GMAC, 2011 NY Slip Op 00217 [80 AD3d 603] in which the court held that “although the defendants contend that they submitted evidence showing that the plaintiff’s assignor misrepresented his state of residence in connection with the issuance of the subject insurance policy, the defendants are precluded from asserting that defense, as a result of their untimely denial of the claim (See Fair Price Med. Supply Corp. v. Travelers Indem. Co., 10 NY3d 556; 564 [2008]; Hospital for Joint Diseases v. Travelers Prop. Cas. Ins. Co., 98 JNY3d at 319; Westchester Med. Ctr v. Lincoln Gen. Ins. Co., 60 AD3d 1045, 1046-1047- [2009]).

In A.B. Medical Servs. PLLC v. Commercial Mut. Ins. Co., 12 Misc 3d 8, 820 NYS2d 378 At 2d Dept., 2006) the Appellate Term found that the rule that an insurer cannot retroactively cancel a contract of insurance on the grounds of fraud or misrepresentation protects only innocent injured third parties and does not apply to a health care provider who deals with the assignor-insured at its peril in accepting an assignment of the insured No-Fault benefits. Consequently, the defense of fraudulent procurement of an insurance policy, which is nonwaivable, and thus exempt from the 30 day preclusion rule, was available to the Defendant. “We hold that only innocent third parties who are injured are protected (id at 298) and not health care providers who deals with the assignor-insured at its peril in accepting an assignment of the insured’s no-fault benefits. (cf. Matter of Metro Med. Diagnostics v. Eagle Ins. Co., 293 AD2d 751, 75-752 [2002])”.

Based on the above, it appears that there is a conflict in authority between the Appellate Division and the Appellate Term. The former states that the procurement defense is waivable if not preserved in the denials and the latter states that it is a nonwaivable defense. Since this issue [*7]is not before the court, this court is not duty bound to address this issue.

One final issue that has been raised by the Plaintiff. The Plaintiff seeks to convince this court that based on the ruling in Gramatan Home Investors Corp. supra, the Dismissal Order from the Virginia court is not binding on this Plaintiff. The Plaintiff argues that the assignment in this case that was executed prior to the commencement of this action would not estop the Plaintiff from relitigating this case. The facts in Gramatan are worth a brief discussion. A vinyl siding company entered into a contact with a homeowner. The company assigns the rights to the contract to Home Investors Trust who then assigned to Gramatan. Subsequently, the Attorney General prosecuted the vinyl company for fraud and voided the contract between the homeowner and the company. After the conclusion of that case, Gramatan sued the homeowner on the contract. The homeowner moved for summary judgment stating the judgment in the earlier case collaterally estopped the plaintiffs from enforcing the terms of the contract. The court, reversing the Appellate Division, stated that “an assignee is deemed to be in privity with the assignor where the action against the assignor is commenced before there has been an assignment. In that situation the subject matter of the assignment was then embroiled in litigation and was subject to the claims of third parties and the assignee is charged with notice that his rights to the assignment are subject to competing claims. Conversely, an assignee is not privy to a judgment where the succession to the rights affected thereby has taken place prior to the institution of the suit against the assignor [S]ince there is no dispute that the assignment was made well before commencement of the consumer fraud action against the plaintiff’s assignor, plaintiff is not bound by the terms of that judgment”. The Plaintiff reasons that since the assignment in this case was granted before the Virginia Dismissal Order, the Plaintiff is not bound by the terms of that order. This Court disagrees and as provided below, Gramatan is clearly distinguishable from the instant case.

Notwithstanding arguments by Plaintiff and the rule in Gramatan, the primary issue is whether the judgment of dismissal in the Virginia court is entitled to enforcement in the Civil Court in this county. Absolutely.

As a general rule, there are two types of foreign judgments: the judgment of a court of another state-“sister-state judgment”, and the judgment of a court of another nation.

The Uniform Enforcement of Foreign Judgments Act that is embodied in Article 54 of the CPLR prescribes the procedural requirements for enforcement of foreign judgments in New York State. As Professor David A. Siegel observed the title of the statute is a bit misleading. Although it seems to apply to all foreign judgments, in fact, it applies only to the American judgments. See CPLR Practice Commentaries, §C5401:1.

It has been long established by federal and state law that the Full Faith and Credit Clause of the United States Constitution dictate compulsory recognition of sister-state judgments including judgments of federal courts, territorial courts, the District of Columbia as well as judgments of courts of other states. Justice Cooper, in Peng v. Hsieh, 31 Misc 3d 528, 528 NYS2d 285, 2011 NY Slip Op 21061, recently discussed that long standing federal right. He stated that “it is the firm principal of our federalist system of government that full faith and credit must be given to each state to those “public Acts, Records, and judicial proceedings of every other state.” US Cons., Art. IV, §1. This doctrine is premised on the notion that “[t]he judgment [*8]of a state court should have the same credit, validity and effect, in every other court of the United States which it had in the state where it was pronounced Hampton v. McConnel, 16 U.S. (3Wheat) 234, 235, 4 L.Ed. 378 (1818); See also Williams v. North Carolina, 317 U.S. 287, 63 S.Ct. 207, 87 L.Ed. 279 (1942)”. See also Matter of Bennett, 84 AD3d 1365, 1367, 923 NYS2d 715; Madjar v. Rosa, 83 AD3d 1011, 923 NYD2d 561.

The constitutional requirement of full faith and credit precludes any inquiry into the merits of the judgment, the logic or inconsistency of the decision underlying it or the validity of the legal principles on which it is based (Cradle Co. v. Tri-Angle Assoc., 18 AD3d 100, 798 NYS2d 360 (1st Dept., 2005). Based on these underlying principles, out of state judgments inherently possess res judicata effect as to those issues conclusively decided, thereby avoiding relitigation of those previously decided issues in any other state. Said another way, the application of full faith and credit to the judgment of sister-state is the functional equivalent of “interstate res judicata” (DiCaprio v. DeCaprio, 219 AD2d 819, 631 NYS2d 975 appeal dismissed 87 NY2d 967, 642 NYS2d 195, 644 NE2d 1258, lv denied 88 NY2d 802, 645 NYS2d 445, 668 NE2d 416 rearg, denied 89 NY2d 861, 653 NYS2d 283, 675 NE2d 1236).

While the merits of the judgment of a sister-state may not be collaterally attacked, a judgment debtor may challenge the judgment on the basis of a lack of personal jurisdiction (J D Fin. Co v. Patton, 284 AD2d 164, 166, 727 NYS2d 71 (2001). The court’s review of a foreign judgment, is thus, limited to whether the rendering court had jurisdiction, an inquiry which the courts steadily mandate to include due process considerations (Fiore v. Oakwood Plaza Shopping Ctr., 78 NY2d 572, 577, 578 NYS2d 115, 585 NE2d 364 Cert. denied 506 US 823, 113 S.Ct. 75, 121 L.Ed.2d 40; HO v. McCarthy, 90 AD3d 710, 935 NYS2d 310 (AD2d Dept., [2011]); Fleet v. Costelloe, Inc., 19 Misc 3d 29, 856 NYS2d 436 (AT 2d Dept., [2008]; Mortgage Money Unlimited, v. Schaffer, 1 AD2d 773, 774 [2003]). See also States Resources Corp. v. Whittingham, 32 Misc 3d 1210(A), 932 NYS2d 763, 2011 WL 2640864 (NY. Sup.), 2011 NY Slip Op 51241(U).

In addition, see a recent decision by Chief Justice Lippman in the matter of John Galliano S.A. v. Stallion, Inc., 15 NY3d 75, 930 N.E.2d 756, 904 NYS2d 683 (2010) which involved a foreign money judgment and his analysis of CPLR Article 53, namely, CPLR 5304 which sets forth grounds for nonrecognition of a foreign judgment including the lack of personal jurisdiction (CPLR§5304[a][2]) or the failure of the aggrieved party to receive “notice of the proceedings in sufficient time to enable him to defend” (CPLR §5304[b][2]). See also Khallad v. Blanc, 96 AD3d 1574, 947 NYS2d 859 (NY AD 4d Dept., 2012) finding that the Florida Court had personal jurisdiction over a husband and thus, the judgment was entitled to full faith and credit.

A default judgment of a sister-state can also be accorded full faith and credit in New York (HO v. McCarthy, 90 AD3d 710, 935 NYS2d 310 (AD2d Dept., [2011]); Rockland Industries, Inc. v. Horowitz, 50 AD3d 661, 854 NYS2d 232 (2d Dept., 2008); Progressive Intern. Co. v. Varun Continental, Ltd., 16 AD3d 476, 791 NYS2d 181 (2d Dept., 2005); JDC Finance Comp. I LP v. Patton, 284 AD2d 164, 727 NYS2d 71 (AD 1st Dept., 2001); Staton Wholesale v. Barker, 257 AD2d 902, 684 NYS2d 44 (3d Dept., 1999).The public policy of this state in favoring resolution of disputes on the merits does not preclude enforcement of a foreign default judgment. John Galliano S.A. v. Stallion, Inc., supra. [*9]

This court has purposely limited its discussion to sister-state judgments and not foreign states or nations. Those decrees of other nations are accorded recognition only through comity; only recognized in the court’s discretion, guided and controlled, among other things, by the circumstances of that particular case and provided that the foreign court had proper jurisdiction, the judgment was not fraudulently obtained and does not go against our state’s public policy. (Galliano S.A. v. Stallion, Inc., supra; Society of Lloyd’s v. Grace, 278 AD2d 169, 718 NYS2d 327 (1st Dept. 2000).

Having discussed the frame work of the insurance law and regulations to lay the proper foundation for our analysis in the case at bar, the court makes the following findings of facts and conclusions of law.

It is undisputed that the Plaintiff submitted a proper proof of claim in the form of a health care services application (NF-3) for reimbursement for health care services rendered to the assignor, MACKLIN SANTERRIA.

The Plaintiff claims that there is a question of fact as to whether the denials and letters are copies of documents sent to the assignor have no merit. The affidavits of STEVEN KLIMEK, a Claims Specialist at the Defendant Corporation since October 9, 2000, sufficiently informs the court of his handling of No Fault claims including investigations of all claims; making coverage determinations; evaluating the bills; making a determination of verification requests and if an IME or peer review are needed, to determine insurance coverage. He also stated with sufficient detail the Defendant’s mailing procedures used in connection with written requests for EUO’s and/or the production of other documents as well as the mailing of any denial of claim forms based upon his employment duties at Nationwide. He explicitly describes the mailing procedures of the Defendant in paragraphs 9 (a)-(f). Based upon his knowledge of Defendant’s mailing practices and procedures and his review of the file in the instant matter, he informs the court that the Defendant received the medical bills on September 29, 2008 and October 20, 2008 and describes the verification process which is part of his daily responsibilities. He affirms that he personally handled this claim and brings to this court’s attention that the denials annexed as Exhibit E were issued by him and mailed pursuant to standard office practice and procedures. This evidence is not disputed by the Plaintiff, except by inadequate generalities, which can not defeat a motion for summary judgment.

The Defendant also proffers the affidavit of EDWARD MCGUIRE, a No Fault Claims Manager, who completes the practices and procedures of the Defendant insurer’s mailing procedures. He affirms that the denials and EOBs are completed by the Claims Reps, printed by them, and are printed and mailed in duplicate and placed in the mail baskets for pick for delivery to the mail room in the North Syracuse and New York claims office. All of the mail that is picked up on a particular day is delivered to the US Post Office on the same day. The court also finds this affidavit reliable and is ample proof of the completion of the mailing practices and procedure of the Defendant.

By demonstrating its routine and reasonable office procedures, the Defendant meets its burden of proof that the notices were mailed to the Plaintiff and were received. The burden now shifts to the Plaintiff to rebut the presumption of receipt and to raise a triable issue of fact. Abuhamra v. New York Mut. Underwriters, supra; Residential Holding Corp. v. Scottsdale Ins. [*10]Co., supra.

The bills for the above services were received by the Defendant on September 29, 2008 and October 27, 2008, respectively. The Defendant requested verification on October 6, 2008 and October 27, 2008, respectively. The prescribed thirty (30) day time line to pay or deny a claim was tolled until the insurer received proper verification of all relevant information requested of the injured party or provider. 11 NYCRR 65.15 (g), (7); St. Vincent Hospital of Richmond v American Tr. Ins. Co., 299 AD2d 338, 370 750 NYS2d 98 (NY A.D., 2002). The burden does not shift to the insurer to pay or deny the claim until the required party has complied with the verification request.

Instead of making any further verification request, on December 23, 2008, the Defendant voided the policy back to the date of the application of December 1, 2004, and subsequently, the medical bills were denied by the Defendant on December 29, 2008 by written notice in the form of a denial.

The court has reviewed the answer in this case and notes that the Defendant did not specifically allege fraud in the procurement of this insurance policy. However, the denial explicitly preserves the fraud in the procurement of the policy defense and as provided above, the denial was timely.

However, based on the well settled case precedent discussed above, New York law prohibits the termination of the insurance policy retroactively and this court finds that the termination action ab initio by the Defendant is void as a matter of law. Notwithstanding the impropriety of the termination of the insurance policy by the Defendant, the assignor, with the assistance of counsel, agreed in a two attorney stipulation in the Dismissal Order in Virginia, to void the insurance policy ab initio. It is well-settled law in New York that stipulations of settlement are favored by the courts and are not likely cast aside. (Hallock v. State of New York, 64 NY2d 224, 485 N.Y.S.2d 510, 474 N.E.2d 1178 (Ct of Appeals, 1984), citing Matter of Galasso, 35 NY2d 319, 321, 361 N.Y.S.2d 871 [1974]) particularly when made in open court (Hallock, 64 NY2d at 230, 485 N.Y.S. 510, 474 N.E.2d 1178, citing Matter of Dolgin Eldert Corp., 31 NY2d 1, 10, 334 N.Y.S.2d 833 [1974]).

Therefore, a Stipulation “will not be destroyed without a showing of good cause sufficient to invalidate a contract such as fraud, collusion, mistake, accident, or some other ground of the same nature.” (Campbell v. Bussing, 274 A.D. 893, 893, 82 N.Y.S.2d 616 [2nd Dept. 1947]; see also Hallock, 64 NY2d at 230, 485 N.Y.S. 510, 474 N.E.2d 1178; Matter of Frutiger, 29 NY2d 143, 149-150, 324 N.Y.S.2d 36 [1971]; Canino v. Electric Tech Corp., et al., 49 AD3d 1050, 1051, 856 N.Y.S.2d 683 [3d Dept. 2008] [applying the standard for vacating a stipulation in the context of amending a stipulation]. Thus, absent a showing of fraud, collusion or mutual mistake, a party to a stipulation may not avoid the consequences of the agreement. (Romero v. Martinez, 280 AD2d 58, 721 N.Y.S.2d 17 [1st Dept. 2001]).

The facts in this case does not support any finding that the Dismissal Order of Virginia was based on fraud, collusion, mistake, accident, or some other ground of like import. A party may waive their rights, even constitutional rights, in a stipulation and the court will not impose on the rights of the parties to chart their own litigation course. The court can only presume that [*11]the assignor had little alternative than to resolve the case in the state of Virginia since the evidence, if true, was overwhelmingly favorable to the Defendant Corporation. The assignor was probably also highly motivated to resolve the Virginia case to avoid possible prosecution and to enable her to obtain automobile insurance from another carrier.

As important, this sister-state Dismissal Order is entitled to recognition by this court and is the procedural equivalent of “interstate res judicata”. To determine otherwise, would be contrary to the spirit and letter of federal and state law. As provided above, the constitutional requirement of full faith and credit precludes any inquiry into the merits of the judgment, the logic or inconsistency of the decision underlying it or the validity of the legal principles on which it is based (Cradle Co. v. Tri-Angle Assoc., 18 AD3d 100, 798 NYS2d 360 (1st Dept., 2005). There is apparently no issue of the lack of personal jurisdiction since the assignor appeared with counsel and consented to the terms of the Dismissal Order. Therefore, this court will enforce the Virginia Dismissal order according to its terms. The claimant acknowledged and agreed in a sister state’s order that the policy was void from its inception and based on her agreement, there were no rights that she could have assigned to the Plaintiff. Hence, the court finds that there was no policy of insurance in effect for the claimant on the date of the accident and any claims by the Plaintiff against the Defendant are void. However, in the event that any innocent third parties seek claims under this insurance policy, notwithstanding, the Dismissal Order, the Defendant is required to protect and provide coverage to those third parties who may have been injured as a result of the negligence of the insured during the term of the contract. Aetna Cas. & Sur. Co., v. O’Connor, supra; Matter Liberty Mut. Ins. Co. v. McClellan, supra; Olivio v. GEICO of Washington D.C., supra. See also Matter of Insurance Co of North America v. Kaplun, 274 AD2d 293, 713 NYS2d 214 [AD2d Dept., 2000]. To determine otherwise, would be contrary to our state laws and case precedent.

After reviewing the other contentions raised by the Plaintiff, this court finds that they lack merit in fact and law.

For all of the reasons stated above, the Defendant’s motion for summary judgment is granted and the complaint is dismissed with prejudice.

This order and decision is without prejudice to any claims that the Plaintiff may have against the assignor for the payment of medical services provided herein. See Reliance Ins. Co. v. Daly, 38 AD2d 715, 329 NYS2d 504 (A.D., 2nd Dept., 1972).

A courtesy copy of this decision and order shall be mailed by the court to both parties.

The Defendant shall submit a judgment of dismissal to the Clerk of the Court and upon issuance thereof, shall serve a copy of the judgment and this order and decision with notice of entry on the Plaintiff within 30 days thereafter.

This constitutes the decision and order of this court.

_____________________________________________________________ ________ [*12]

DateApril 22, 2013HON. HARRIET THOMPSON

Judge of the Civil Court

Civil Court of the City of New York, Kings County

053664/11

Attorneys for Plaintiff:

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, New York 11747

Defendant Pro-Se:

Natural Healing Acupuncture, P.C.

P.O. Box 350-076

Brooklyn, NY 11235

Katherine A. Levine, J.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion

PapersNumbered

Notice of Motion and Affidavits Annexed………….. ………………………………………………1

Notice of Cross-Motion and Affidavits Annexed.. ……………………………………………….

Answering Affidavits………………………………………………………………………………………….

Replying Affidavit of defendant………………………………………………………………………….

Exhibits……………………………………………………………………………………………… …………….

Other: ………………………………………………………………………………………………………………

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

Petitioner Allstate Insurance Company (“petitioner” or “Allstate”) moves pursuant to CPLR §7511 to vacate the master arbitrator’s award dated July 1, 2011 for $927.99. Petitioner challenges the master arbitrator’s confirmation of the original arbitrator’s decision on the grounds that it is “arbitrary, capricious and contrary to well-settled law.” [*2]

Pursuant to Insurance Law ｧ5106, entitled “Fair Claims Settlement,” the master arbitrator has the authority to review an arbitrator’s award and vacate or modify it “in accordance with simplified procedures to be promulgated or approved by the superintendent.” These procedures are contained in 11 NYCRR 65-4.10(a) and include (1) any ground provided in article 75 of the CPLR, except CPLR 7511(b)(1)(iv) and (4) that an award rendered was incorrect as a matter of law, with the exclusion of procedural or factual errors committed in the arbitration. See Petrowsky v. Allstate Ins. Co., 54 NY2d 207, 210 (1981).

CPLR ｧ7511(b) provides that an award may be vacated if the court finds that the rights of a party were prejudiced by (i) corruption, fraud or misconduct in procuring the award, (ii) the arbitrator’s partiality, or (iii) an arbitrator exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made. The master arbitrator’s power to review an arbitrator’s award is therefore broader than the parameters contained in CPLR article 75. See Petrofsky v. Allstate, supra at 210.

Arbitrations held pursuant to Insurance Law ｧ5106 are classified as compulsory because insurers are required to submit no-fault claims to binding arbitration at the option of the claimant. State Farm Mutual Automobile Ins. Co. v. Kissena Medical Imaging, PC, 2009 NY Slip Op 52094(U), 25 Misc 3d 1214(A)(Sup. Ct., Nassau Co. 2009) citing Nyack Hosp. v. GEICO., 139 AD2d 515, 516 (2nd Dept. 1988). In cases of compulsory arbitration, judicial review under CPLR article 75 is broad and imports the “arbitrary and capricious” standard included in Article 78 proceedings. Petrofsky, supra at 211.

The award must be in accord with due process and supported by adequate evidence in the record. Santer v. Bd. of Educ., East Meadow U. F. S. D, 101 AD3d 1026, 1027 (2nd Dept. 2012) citing Motor Veh. Mfrs. Assn. of U.S. v State of New York, 75 NY2d 175, 186 (1990). Due process of law requires that the arbitrator’s determination have a basis not only in his good faith, but in the law and record. Santer, supra at 1027 citing Mt. St. Mary’s Hosp. of Niagara Falls v Catherwood, 26 NY2d 493, 507 (1970). Furthermore, the standard is whether the award was supported by a reasonable hypothesis’ and was not contrary to what could be fairly described as settled law. Mtr of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 224 (1996); Metropolitan Radiological Imaging, P.C. v. Country-Wide Ins. Co., 2008 NY Slip Op 50539(U), 19 Misc 3d 130(A)(App. Term, 2nd Dept. 2008) citing Mtr of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d 762, 763 (2nd Dept. 2005). These standards govern both a master arbitrator’s review of the original arbitration award and the court’s review of the master arbitrator’s award. Petrofsky, surpa at 211.

The issue before the original arbitrator was which fee schedule should apply in the absence of a discrete Workers’ Compensation Fee Schedule applicable to licensed acupuncturists. Petitioner contended that licensed acupuncturists are entitled to be paid at the same fee schedule rates as medical doctors certified in acupuncture. The original arbitrator looked to the proposed amendment to 11 NYCRR ｧ68, which would permit licensed acupuncturists to charge the same fee that licensed physicians certified to perform acupuncture were permitted to charge. The Regulatory Impact Statement accompanying the proposed amendment reasoned that the higher fee should govern since acupuncturists may only bill for acupuncture treatment, while [*3]chiropractors and medical doctors certified in acupuncture may bill for acupuncture along with their primary service. The arbitrator therefore found that “fairness dictates that licensed chiropractors [or acupuncturists] be reimbursed at the higher medical fee schedule rate.”

The arbitrator failed to mention, much less follow the Appellate Term’s decision in Great Wall Acupuncture v. GEICO Gen. Ins. Co., 16 Misc 3d 23 (App. Term, 2nd Dept. 2007), which addressed the issue and applied the fee schedule for licensed chiropractors to acupuncture services provided by licensed acupuncturists. In Great Wall, the Appellate Term analogized licensed chiropractors to licensed acupuncturists based on the similar training they underwent for licensure in order to perform acupuncture services, while contrasting them to physicians, who only had to obtain certification in order to perform acupuncture. The Appellate Term further noted the Department of Insurance’s lack of “specific guidance as to which particular fee schedule should be applied to a licensed acupuncturist performing acupuncture,” and urged it to do so. Great Wall, supra at 24.

Although acknowledging Great Wall, supra, and the fact that the proposed legislation to increase the reimbursement rates for both chiropractors and acupuncturists was still pending, the master arbitrator confirmed the award. The master arbitrator found that Allstate impermissibly sought to have him conduct a de novo review, and that the lower arbitrator’s award had “a plausible basis in the evidence presented” and thus conformed to applicable law.

This Court does not understand the reasoning behind the master arbitrator’s award. Allstate did not seek a de novo or a factual review, as prohibited by Petrofsky, supra. Rather, petitioner argued that the decision was arbitrary and capricious and contrary to well settled law. This Court cannot countenance an award which finds that proposed or pending legislation trumps well established precedent, i.e. Great Wall, supra. Therefore, the award is vacated and the Court directs that the arbitrator calculate the fees owed to respondent in accordance with the fee schedule for licensed chiropractors who perform acupuncture.

The foregoing constitutes the Decision and Order of the Court.

Dated: April 3, 2013__________________________

Katherine A. LevineJudge, Civil Court

[*1]

Civil Court of the City of New York, Queens County, March 28, 2013

APPEARANCES OF COUNSEL

McDonnell & Adels P.L.L.C., Garden City, for defendant. Tsirelman & Valerio, P.C., Long Island City (Max Valerio of counsel), for plaintiff.

{**39 Misc 3d at 829} OPINION OF THE COURT

James E. d’Auguste, J.

The motion by defendant State Farm Mutual Automobile Insurance Company to reargue is granted to the extent that the{**39 Misc 3d at 830} court reconsiders its earlier determination granting plaintiff Lotus Acupuncture P.C. summary judgment and upon reconsideration adheres to its original determination.

The facts of the case are not in dispute: State Farm sent an initial and follow-up request for an examination under oath (EUO) that were not complied with by Lotus. The sole legal issue is whether the insurer’s follow-up request was timely. The resolution of this issue rests on an analysis of two regulations, 11 NYCRR 65-3.6 and 65-3.8. The first regulation, 11 NYCRR 65-3.6, requires that the follow-up request be mailed within 10 calendar days. The regulation also references a 30-day outside deadline for the submission of verification material. The second regulation, 11 NYCRR 65-3.8, provides that an EUO verification request is completed on the day it is scheduled to occur. The court interpreted the regulations as measuring the accrual date for sending the follow-up request from the defaulted EUO appearance, also known as a “no show” in no-fault parlance. In so ruling, the court found that the 30-day deadline addresses the submission of documents as opposed to a verification request seeking a personal appearance on a specific date. State Farm requests that the court reconsider its determination and supports its application by submitting decisions by several judges of coordinate jurisdiction that decided the issue to the contrary, albeit without any explanation for their determination.

In the absence of appellate guidance, the court invited the Superintendent of the New York State Department of Financial Services’ amicus curiae opinion on the question of “whether [the above referenced regulations], when read together, require[ ] an insurer to send follow up verification [*2]requests within 10 calendar days of a defaulted examination under oath or from the expiration of 30 days from the original requests irrespective of the date the examination under oath appearance was scheduled.” (See order dated Aug. 13, 2012 [d’Auguste, J.].)

On December 3, 2012, the court received correspondence from Martha A. Lees, Esq., General Counsel for Insurance at the Department of Financial Services, attaching an earlier opinion letter setting forth the Superintendent’s continuing position for “when an insurer should send a follow-up verification request after a ‘no-show’ for an examination under oath.” The Superintendent’s position, as originally set forth in a December 22,{**39 Misc 3d at 831} 2006 opinion of the New York State Insurance Department,^[FN*] is that

“[w]hen an EUO is required and the party required to appear fails to attend a scheduled EUO, the insurer must meet [its] obligations under N.Y. Comp Codes R. & Regs. tit 11, § 65-3.6(b) and within 10 calendar days, contact the party from whom verification (the EUO) has been requested and not been provided, i.e. non-attendance at the scheduled EUO, in order to afford the party a second opportunity to attend an EUO.” (Ops Gen Counsel NY Ins Dept No. 06-12-16 [Dec. 2006].)

The Superintendent’s opinion, which is entitled to great deference, firmly supports the court’s original conclusion that a follow-up EUO notice must be sent within 10 calendar days of the missed EUO. Moreover, legal commentary on the subject agrees with the reasonableness of the Superintendent’s regulatory interpretation. (See Larry Rogak, Judge Asks State for No-Fault Clarification, The Rogak Report: Insurance Law Digest [Aug. 23, 2012] [“logic and reason would seem to dictate that the measuring point is the date of the no-show”].)

The court is granting reargument as it considered the additional input from the Department of Financial Services. Upon reargument, the court adheres to its original determination that the 10-calendar-day deadline for sending a follow-up verification request is measured from the date the initial EUO is missed. As State Farm’s follow-up request was untimely, Lotus was properly granted summary judgment.

Footnotes

Footnote *: In October 2011, the Insurance Department merged with the Banking Department to create a newly-formed Department of Financial Services.

Civil Court of the City of New York, Kings County

CV-100846/2006

Attorney for Plaintiff:

Stefan Belinfanti

Gary Tsirelman, P.C.

65 Jay Street, 3rd Floor

Brooklyn, NY 11201

Attorney for Defendant:

Dominick Dale

Korshin & Weldon, Esqs.

170 Froehlich Farm Boulevard

Woodbury, New York 11797

Ingrid Joseph, J.

Plaintiff AR Medical Rehabilitation, P.C. (referred to interchangeably as “plaintiff” or “AR Medical Rehabilitation”) initiated this action against defendant Geico General Ins. Co. (“defendant”) to recover assigned first party no fault benefits for services provided to assignors Celeste Russell, Robin Williams, and Edwina McDonald. This court conducted a bench trial on January 14, 2013, wherein the parties were represented by counsel.

Prior to commencement of the trial the defendant made an oral motion in limine to preclude Alexander Rozenberg, M.D. (“Dr. Rozenberg”) from testifying and to dismiss the case based upon its contention that the instant action raises Mallela issues pursuant to State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]. The defendant claimed Dr. Rozenberg conspired with two individuals, Inna Polack and Alexander Polack (collectively, the “Polacks”), to fraudulently incorporate multiple medical professional service corporations, including AR Medical Rehabilitation. The defendant indicated that Dr. Rozenberg operated as the straw man for the illegal companies but the Polacks, who are lay persons and unauthorized to collect no fault benefits under New York law, actually owned the businesses. The defendant posited that there were prior rulings [*2]from different court proceedings that when taken together support its position.

The defendant presented the court and plaintiff’s counsel with two decisions that were rendered at various stages of a RICO (Racketeer and Influenced Corrupt Organizations Act) action, wherein Allstate Insurance Company sued the Polacks, Dr. Rozenberg, two other individuals, three medical management companies (Mighty Management Group Inc., Mighty Management LLC, and Blue Wave Management), the plaintiff in this action, AR Medical Rehabilitation, and two other professional medical companies (AR Medical Art, P.C. and Yonkers Medical Art, P.C.). The documents submitted consisted of a decision rendered by United States District Court Judge Arthur Spatt (“Judge Spatt”) (Allstate Insurance Company v Rozenberg, 590 F Supp 2d 384 [ED NY 2008]) and a Report and Recommendation prepared by Magistrate Judge Boyle (“Magistrate Boyle”) (Allstate Insurance Company v Polack, 2012 WL 4489282 [ED NY 2012]) (collectively, “RICO action”) (defendant’s exhibits A and B, respectively). The defendant also submitted two decisions from the Supreme Court, Kings County, Criminal Term (People v Rozenberg, 21 Misc 3d 235, 862 NYS2d 895 [Sup Ct, Kings County 2008] and People v Rozenberg, Sup Ct, Kings County, April 24, 2009, McKay, J., Indictment No. 5545-06) as well as the Determination and Order from a hearing conducted by the State of New York Department of Health Board for Professional Medical Conduct (Matter of Alexander Rozenberg, BPMC No.10-271, December 17, 2010) (defendant’s exhibits C-E, respectively). The defendant indicated that each proceeding evinced the same operative fact pattern of insurance fraud involving Dr. Rozenberg and AR Medical Rehabilitation.

Plaintiff’s attorney countered that the cases were not dispositive on the issue of whether AR Medical Rehabilitation can pursue no fault benefits in a civil action, because none of the cases resulted in a determination that the company is a Mallela corporation. Plaintiff also argued that Judge Spatt’s 2008 decision should not be considered with respect to the in limine issue since that decision addressed only whether certain causes of action should be dismissed. Additionally, plaintiff pointed out that Magistrate Boyle’s report and recommendation was not binding, because there was no proof that it had been adopted by Judge Spatt.

The defendant, with the plaintiff’s consent and the court’s permission, was given an extension of time to produce Judge Spatt’s decision adopting the recommendations of Magistrate Boyle. On the day of trial, the court reserved decision on the in limine issue and permitted plaintiff to call Dr. Rozenberg as a witness with the understanding that such testimony would be stricken and a verdict rendered in favor of the defendant if the court later determined, based on the documents submitted, that in limine relief is warranted. Subsequently, on January 19, 2013, the defendant submitted a third case (Allstate Insurance Company v Polack, US Dist Ct, SD NY, 08-CV-565, Spatt, J., 2012) from the RICO action.

The court is being asked to determine whether the defendant’s motion in limine should be granted, or, if in limine relief is not warranted, whether the plaintiff met its prima facie case of entitlement to no fault benefits at trial?

After carefully reviewing the documents submitted, the court finds that the defendant has failed to demonstrate entitlement to the relief sought in its in limine application. While the decisions submitted are replete with discussion about an alleged conspiracy to defraud New York’s No Fault regime, they are devoid of any finding that Dr. Rozenberg was a participant, or that AR Medical Rehabilitation was the fruit of a fraudulent scheme. Judge Spatt’s 2008 decision addresses two motions to dismiss for failure to state a cause of action that were made by Dr. Rozenberg and other defendants in that case. Judge Spatt discussed the allegations contained in Allstate’s complaint but did not reach a conclusion as to whether AR Medical Rehabilitation was an illegally formed [*3]company, nor did he render a decision concerning Dr. Rozenberg’s involvement in the alleged illegal activity. Thus, there are no findings of fact or even an adverse inference that can be drawn from that decision that would have a binding effect on Dr. Rozenberg or the plaintiff in this case.

The defendant’s reliance on Magistrate Boyle’s report and recommendation and Judge Spatt’s 2012 decision adopting that report is misplaced. Allstate moved for default judgment in the RICO action against some of the defendants, and Judge Spatt referred the matter to Magistrate Boyle to report and recommend a decision on the motion. Magistrate Boyle referenced Dr. Rozenberg and AR Medical Rehabilitation in his analysis but stated clearly at the outset of the report, that Allstate voluntarily dismissed the action against Dr. Rozenberg and AR Medical Rehabilitation (Allstate Insurance Company v Polack, 2012 WL 4489282 [ED NY 2012]). Consequently, there were no recommendations that would have an effect on any of the issues central to this trial, because neither Magistrate Boyle in his report, nor Judge Spatt in his order adopting that report (Allstate Insurance Company v Polack, US Dist Ct, SD NY, 08 Civ 565, Spatt, J., 2012) addressed the issue of Dr. Rozenberg or the corporate structure of AR Medical Rehabilitation on the merits.

Additionally, the criminal case and Determination and Order of the State Board for Professional Medical Conduct (“BPMC”) run counter to the defendant’s argument. In the criminal matter Dr. Rozenberg was indicted on multiple counts of falsifying business records and insurance fraud but convicted only of certain charges that pertain to an assignor not named in the instant action (see People v Rozenberg, 21 Misc 3d 235, 862 NYS2d 895 [Sup Ct, Kings County 2008] and People v Rozenberg, Sup Ct, Kings County, April 24, 2009, McKay, J., Indictment No. 5545-06). In this case, the doctor testified, on direct examination, that he had been indicted on several criminal charges but stated that fifty-six (56) of the charges resulted in either a dismissal or acquittal. Dr. Rozenberg admitted that he was convicted on one count of falsifying business records and one count of insurance fraud but explained that the convictions concerned a specific patient whose “initial evaluation” had been coded and erroneously billed as a “consultation” (tr. 16-19). Dr. Rozenberg indicated that there is a $25.00 difference between the two codes and that he was found guilty of falsifying that specific business record. Subsequently, by order dated December 17, 2010, the Board for Professional Medical Conduct determined that revocation of the doctor’s license to practice medicine was the appropriate penalty for committing the aforementioned crimes. The court finds that while Dr. Rozenberg’s convictions and license revocation may have some bearing on his credibility, they do not affect his ability to testify as a prima facie witness.

The court has discussed the defendant’s substantive arguments and will now address the procedural issues attendant to this matter. Despite the defendant’s characterization of the motion as one for in limine relief, the court finds that the application amounts to a motion for summary judgment. Essentially, the defendant alleged that there were no issues of fact based upon its contention that AR Medical Rehabilitation is a Mallela corporation and its true owners, the Polacks, are unauthorized to collect no fault benefits under New York law. The underlying policy of requiring that a summary judgment motion be made within a certain period of time is to prevent the practice of delaying such motions until the eve of trial (Pallotta v Saltru Associates Joint Venture, NY, 32 Misc 3d 1208(A) [Sup Ct, Kings County 2011] citing Miceli v State Farm Mutual Automobile Ins. Co., 3 NY3d 725, 726 [2004]). For that reason, inter alia, the Appellate Division Second Department has held that a motion in limine is an inappropriate substitute for a motion for summary judgment (In re Singer, 99 AD3d 802, 803 [2d Dept 2012]; Brewi-Bijoux v City of New York, 73 AD3d 1112, 1113 [2d Dept 2010] quoting Rondout Elec. v Dover Union Free School Dist., 304 AD2d 808, 810-811 [2d Dept 2003]). Furthermore, an in limine motion is generally made [*4]within the context of a jury trial to protect against the prejudice that could result if a jury hears inadmissible, irrelevant, or inflammatory evidence (Matter of PCK Dev. Co., LLC v Assessor of Town of Ulster, 43 AD3d 539 [3d Dept 2007], and State of New York v Metz, 241 AD2d 192, 198 [1st Dept 1998]; Caster v Increda-Meal, Inc., 238 AD2d 917, 918 [4th Dept 1997], see also 4 NY Prac., Com. Litig. in New York State Courts § 38:1-8 [3d Ed.]). In a bench trial, as is the case here, there is little use for that safeguard because the trier of fact would be exposed to the objectionable evidence whether such evidence is couched in an application for in limine relief or presented via documentary or testimonial evidence at trial. Indeed, the Court of Appeals has held that a Judge is uniquely capable of distinguishing the issues and making an objective determination based upon appropriate legal criteria, despite awareness of facts which cannot properly be relied upon in making decisions (People v Moreno, 70 NY2d 403, 406 [1987]).

Based upon the preceding analyses, the defendant’s motion in limine is denied.

The court will now address whether the plaintiff proffered sufficient evidence to meet its prima facie burden. Under New York No Fault law, a plaintiff establishes its prima facie case by demonstrating that it submitted a claim form to the defendant insurer, tendering proof of the fact and amount of the loss sustained, and that payment of no-fault benefits is overdue (Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]). It is well settled that the plaintiff provider must call a witness at trial that can lay the proper foundation for admission of its claim forms into evidence under the business record exception to the hearsay rule (see CPLR 4518; Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 55 AD3d 664 [2d Dept 2008]; Bajaj v General Assur. Co., 18 Misc 3d 25, 28-29 [App Term, 2d & 11th Jud. Dists 2007]).

The court finds that Dr. Rozenberg’s testimony was insufficient to lay the foundation necessary to establish that plaintiff’s billing documents are business records. Dr. Rozenberg indicated that although Kevi Management Company (“Kevi”) was located in the same building, it was a separate entity that handled all of the collection and billing tasks for AR Medical Rehabilitation (71, 81-82). Dr. Rozenberg stated that Kevi employees generated the bills and that he would sign or stamp them, but the witness failed to adequately describe the procedure that Kevi employees followed when creating bills (tr 25-26, 71). The doctor testified that after receiving the signed or stamped bill, a Kevi employee (1) inserted bills in an envelope, (2) placed the envelopes in a plastic bag, (3) delivered the entire package to the post office for mailing, then (4) recorded the mailing of each bill in a notebook that was kept in the office (tr 24, 28).

Additionally, the doctor’s testimony was laden with inconsistencies. Dr. Rozenberg initially stated that he and the owner of the Kevi Company established the billing procedures together, but he later admitted on cross-examination that he provided no input on the process (tr 72-73). The doctor testified that he personally checked claim forms for accuracy before signing or stamping them, and he averred that there were no deviations from that practice (tr 20, 33). However, on voir dire, the witness conceded that there were exceptions to that rule when presented with a bill that was neither signed nor stamped by him (tr at 68). Dr. Rozenberg attempted to mitigate the discrepant testimony by explaining that he signed or stamped only the bills generated from services he provided and the chiropractor, physical therapist, acupuncturist, and orthopedic surgeon were responsible for signing or stamping their own bills (tr 69, 74-75). Dr. Rozenberg acknowledged that he did not check the other specialists’ bills and even answered in the affirmative when asked whether he was only concerned about his own bills (tr at 74). The doctor testified that he supervised the billing process but later acknowledged that the Kevi Company employed its own supervisors (tr at 35). At one point, Dr. Rozenberg even delineated his umbrella of responsibility from that of the billers by stating [*5]that he was responsible for ensuring the bills were correct, while Kevi employees were responsible for mailing the bills within the requisite period of time (tr at 82).

Based upon the inconsistencies and gaps in Dr. Rozenberg’s testimony and the plaintiff’s failure to produce a witness from the Kevi Company, the court finds that plaintiff failed to lay the proper foundation for admission of the documents in evidence under the business record exception to the hearsay rule (see CPLR 4518[a]; compare Art of Healing Medicine, P.C. v Travelers Home and Marine Ins. Co., 55 AD3d 644 [2d Dept 2008] and Viviane Etienne Medical Care, P.C., 31 Misc 3d 21 [2d 11 13 Jud Dists 2011] with Andrew Carothers, M.D., P.C. v Geico Indemnity Co., 79 AD3d 864 [2d Dept 2010]. Consequently, the court hereby rescinds its decision to admit plaintiff’s bills into evidence as business records on the day of trial.

Even if the documents were allowed in evidence, they would be accorded little, if any, weight, because plaintiff failed to proffer sufficient evidence to demonstrate that Dr. Rozenberg actually checked the bills for accuracy. The claim forms at issue in this case contain charges for services that run the gamut, including office visits, supplies, therapeutic exercises, and range of motion tests. Dr. Rozenberg did not testify that he provided those services, and there is conflicting testimony as to whether he supervised, signed, stamped, or checked the accuracy of bills from services rendered by other professionals in the office.

Accordingly, the court awards a verdict in favor of the defendant.

This constitutes the Decision and Order of the court.

March 27, 2013_____________________________

HON. INGRID JOSEPH

Acting Supreme Court Justice

Civil Court of the City of New York, Richmond County

6352/11

Law Office of Jennifer M. Cassandra (plaintiff)

24 Shepard Avenue

Staten Island, NY 10314

Law Office of Teresa M. Spina (defendant)

170 Froehlich Farm Boulevard

Woodbury, NY 11747

Philip S. Straniere, J.

Do something special

Anything special

And you’ll get better because

You gotta get gimmick

If you want to get applause.^[FN1]

[*2]Plaintiff, Forest Rehabilitation Medicine PC (Forest) assignee of John Russo (Russo), commenced this action against the defendant, GEICO Insurance Company (GEICO), alleging that the defendant failed to pay for first party medical benefit services rendered to Russo as required by the New York State No-Fault Insurance Law [Article 51 New York State Insurance Law]. A trial was held on January 29, 2013. Both sides were represented by counsel.

The parties stipulated that the plaintiff had timely submitted the billings in question and that the defendant had timely denied payment based on “lack of medical necessity.” The services in question are high frequency pulsed electromagnetic stimulation treatments performed by plaintiff using a TMR 1200 machine manufactured by Scientific Imaginetics. TMR stands for “therapeutic magnetic resonance” and is a method of providing high frequency electromagnetic stimulation on patients in order to facilitate pain relief. As explained by plaintiff’s witness, John D’Angelo, MD, the process has nothing to do with MRI’s-magnetic resonance imaging.

Plaintiff bills $800.00 for each of these TMR treatments and recommends for most patients a series of four to five treatment sessions with a maximum of ten to twelve sessions. Plaintiff is seeking to be paid $4,000.00 for five treatments given to Russo on December 8, 10, 13, 15, & 17, 2010.

The treatments were submitted to GEICO under Code 64999 which is used for an “unlisted neurological procedure.” Apparently if plaintiff had submitted the treatments under a standard recognized electro-stimulation code, plaintiff would have been paid. However, under the standard code carriers are required to make payment at a rate substantially less than that for Code 64999.

Plaintiff apparently taking a cue from Miss Mazeppa, Electra & Tessie Tura of “Gypsy” fame who sang the above cited lyrics, has found “something special” in using the TMR 1200, a relatively unique pain management modality for the treatment of pain by the use of high frequency electromagnetically produced waves. Plaintiff testified that there are only about fifty such machines in use in the United States and the TMR 1200 device costs about $150,000.00. Although there are other similar devices available, plaintiff is using the [*3]TMR 1200 which is manufactured by Scientific Imaginetics.^[FN2]

When first confronted with the name of the machine the court pondered if a TMR 1200 was either a type of racing car, an alumni group from Ten Mile River Scout Camp, or the machine Marvin the Martian used to try to eliminate the Earth from blocking his view of Venus.^[FN3] Plaintiff quickly dispelled any of these misconceptions and while testifying on rebuttal described the science of the machine and how it was designed to be part of a comprehensive pain management program.

Defendant’s denial of the claim was based on a “Peer Review” conducted by Edward Weiland, MD, on January 11, 2011 in which Weiland concluded that the clinical status of Russo did not warrant “multiple therapeutic magnetic resonance high frequency electromagnetic post therapy treatments” and that the procedure “would not have accelerated claimant’s clinical recovery” from an accident on October 22, 2010.

On the trial date, Dr. Weiland was unavailable to testify and the defendant called Mitchell Weisman, MD as its “re-peer doctor” and expert witness testifying as to the lack of the medical necessity of the procedures rendered by plaintiff after having reviewed the same records as Weiland as well as Weiland’s report. It was stipulated that Weisman was an expert in the area of physical medicine and rehabilitation and that he could testify as the “Re-Peer Review” doctor.

Weisman agreed with Weiland’s conclusion that the procedure was not medically necessary. However, as an expert witness, Weisman opined that “TMR” and similar procedures are not generally accepted in the medical community as a valid treatment option. He stated that the normal electrical stimulation used in physical therapy is all that [*4]is required and that TMR and other high frequency based modalities are neither needed nor has it been established that they provide any benefit.

There are a few problems with defendant’s case. First, no where in his peer review does Weiland state that the TMR procedures were “not medically necessary.” He concludes that “medical justification has not been established.” The standard to be applied is lack of “medical necessity,” the term”medical justification” is not necessarily the same thing and does not meet the statutory/regulatory standard for evaluating the appropriateness of a treatment.

Second, although he recites the American Medical Association definition of “medical necessity” he fails to apply that definition to the specific facts of this claim.

Third, unlike Weisman who testified that TMR is not accepted in the medical community as a form of treatment, Weiland never addresses that issue, and implies that had there been some other documentation presented to him to review, he might have concluded that the procedures were necessary and that TMR is an appropriate treatment. Weiland justified his conclusion on the fact that there was no clinical basis for these treatments and that the customary modalities used in physical therapy should be sufficient to treat Russo.

The conclusions expressed by Weisman at trial cannot be accepted as they are beyond the scope of the Weiland Peer Review. Because Weiland never specifically found a “lack of medical necessity,” Weisman cannot amend that peer review to reach the conclusion that lack of medical necessity is the appropriate finding and thereby correct the deficiencies in the initial peer review report to which plaintiff was expected to respond at the trial..

Further, Weisman based his conclusion primarily on his assertion that TMR and similar treatments are not accepted in the medical community. It seems his opinion was secondarily, if at all, based on a lack of clinical findings to necessitate such treatments. Therefore, Weisman failed to reach his conclusion based on the same criteria used by Weiland. Weisman was in effect raising a new and different reason for denying payment, that is, the plaintiff’s seeking payment for a procedure not accepted in the medical community for the purpose used by the plaintiff. In general, plaintiffs are required only to rebut in litigation the grounds set forth in the denial by the carrier and not be surprised at trial by new grounds for rejecting payment of a claim.

The above being said these facts do create the interesting issue of whether the court can deny coverage and dismiss plaintiff’s cause of action based on the reasoning stated by the defendant’s expert at trial when the expert is testifying as to matters not used by the defendant to initially decline paying the claim. Weisman was qualified as an expert witness in the area of physical medicine and rehabilitation. The function of an “expert” is to provide the trier of fact with information that would be beyond the knowledge of the general public. Applying this standard, it would seem that the court could accept the [*5]expert’s testimony as to whether TMR is an accepted treatment protocol recognized in the medical community, especially when the expert is subject to cross-examination by plaintiff’s counsel; the plaintiff was present in court for the expert’s testimony; was called as a rebuttal witness and given the opportunity to challenge the conclusions of defendant’s expert.

What is also causing the court to question the appropriateness of the TMR 1200 electromagnetic therapy procedure is the apparent lack of any studies to show that the high frequency pulsed electromagnetic stimulation has any benefit to a patient such as Russo or that it is accepted in the medical community. The fact that plaintiff testified that there are only fifty machines in the United States would tend to support a conclusion either that the therapy is a new and emerging one as postulated by plaintiff and that he is on the cutting edge and ahead of the community curve, or that it is not accepted in the medical community and considered experimental at best, as advocated by the defendant.

The website of Scientific Imaginetics, the manufacturer of the TMR 1200 warns that “TMR is intended for temporary symptomatic relief of chronic intractable pain”it goes on to list as one of its nine “Warnings” that “the TMR has no proven curative value.” In the area “Contraindications” the manufacturer warns, “Never use the device when pain syndromes are undiagnosed until the etiology is established.” This contraindication is of particular interest because other than X-rays, taken in the emergency room on the date of the accident, there appears to have been no diagnostic or objective tests conducted on Russo so as to determine the cause of his pain. Linking it to a car accident, does not necessarily mean the etiology has been established.

In fact, Johns Hopkins Medicine/Johns Hopkins Healthcare in a report dated 3/15/12 instituted a policy that “High Frequency Pulsed Electromagnetic Stimulation (also known as therapeutic magnetic resonance)’ would not be authorized for “Treatment of soft tissue injuries.” A similar conclusion was reached by Aetna in a report dated 4/27/12. Although both of these reports are generated by insurance companies, no report contradicting these findings was produced by plaintiff^[FN4].

In order for a medical device such as the TMR 1200 to be “approved” for use by the Food and Drug Administration(FDA) the plaintiff must establish that:

there exists valid scientific evidence…which is sufficient to determine the

effectiveness of a device and from which it can fairly and responsibly be concluded by qualified experts that the device will have the effect it purports or is represented to have under the conditions of use prescribed, recommended or suggested in labeling the device [21 USCA §360c(a)(3)(B)(I)(ii)].

The FDA requires the person seeking approval of the device to provide adequate, well-controlled investigations which includes clinical investigations by qualified experts [*6]possessing scientific training and experience who could conclude that the device will have the effect it purports to have when used as directed [21 USCA §355(d)]. A device can be denied approval if the studies were not designed well, not quantifiable, and not otherwise conducted under applicable and essential principles of adequate, well-controlled clinical investigations [United States v An Article of Device…Diapulse, 768 F2d 826, 831 (1985)].

Plaintiff herein has failed to establish that the TMR 1200 is in fact FDA approved nor has plaintiff provided any independent studies to establish that this treatment modality is accepted in the medical community for the purposes for which plaintiff is using the device.However, the mere fact that the FDA has approved a device or procedure does not mean that the process is covered by insurance or Medicare [Svidler v US Dept of Health & Human Services, 2004 WL 2005781; Diapulse Corporation of America v Sebelius, 2010 WL 1037250 (EDNY)].

A similar issue as is presented in this litigation was before the United States District Court, Eastern District of New York, regarding whether the use of a device manufactured by Diapulse for treatment of persons by electromagnetic therapy would be covered under Medicare Part B [Diapulse Corporation of America v Sebelius, supra]. In regard to Medicare payments, the current status of such reimbursement requests is to be determined on a case by case basis. Medicare will not cover the electromagnetic therapy device but will cover the service provided by a physician or other medical clinician, thereby not allowing at home treatment. In this no-fault case the issue is not reimbursement for an “at home” device, it is for a physician provided service in the physicians office, which if a Medicare claim might be considered for payment.

For a service or a device to be covered by Medicare, it must be not only be safe, but also must be demonstrated as effective and generally accepted in the medical community, and an appropriate treatment [Estate of Aitken v Shalala, 986 F.Supp.57, 59 (Dist. Mass. 1997)].

As there are no reported cases involving electromagnetic therapy involving no-fault insurance claims nor are there any specific to the TMR 1200, the court is forced to analogize from these federal court rulings regarding other electromagnetic therapy protocols. It also would not make sense for one-third party source (Medicare) recognize that TMR treatments are reimbursable while another third party source(no-fault insurance) would find the treatments not covered based on lack of acceptance in the medical community. Either the procedure is accepted or it is not.

In rebuttal the physician who performed the TMR treatments, D’Angelo, explained how the process works and the benefits of using high frequency pulsed electromagnetic therapy to ease a patient’s pain. One of the reasons he recommends this treatment is that he believes it provides pain relief without the use of medication. Conceptually most people would agree that the less medication a person takes the better off they will be. However, as laudable as that goal may be, plaintiff in his rebuttal failed to reference any independent studies that document any real benefit from the TMR procedure. In fact, plaintiff did not [*7]articulate as to why this is a better protocol than regular low frequency electric stimulation therapy.

Clearly on a cost basis analysis justifying TMR that is billed at $800.00 a treatment session against the relatively low cost of the standard widely accepted electrical stimulation, which plaintiff testified is about $17.95 per session, and which most physical medicine practitioners utilize, is a huge burden to overcome. If that figure is accurate, a patient could undergo 44 regular electrical stimulation treatments for the cost of one by plaintiff using the TMR 1200 ^[FN5]. In a political and economic climate where rising health care costs are a concern to everyone, to require an insurance carrier to pay for treatments which are not widely accepted in the medical community and for which alternative less costly treatments are available does not make sense. Of course, this case has arisen in the “No-Fault Zone” where often procedures which either are non-emergency in nature or are being begun well after the date of the accident, are routinely paid by carriers when pre-approval would be required for the same treatments under any other type of insurance coverage.

Plaintiff testified that he recommends this procedure for patients who are not responding to conservative treatments. He asserts he is not recommending these treatments to patients who have experienced benefits from a conservative treatment plan. Yet the documents submitted in support of payment contradict that statement and reveal he is rendering these treatments within a relatively short period of time after the accident, often before the success of a standard course of treatment could be evaluated. In this case the accident was on October 22, 2010 and the first TMR treatment was on December 8, 2010, less than seven weeks later. There is no question that the injury received was related to the accident. The issue is whether the TMR is even recognized in the medical community as treatment for the injuries of Russo.

In light of this, the peer review physician Weiland, was correct in stating that such treatments are not “justified”either because less costly accepted treatment options had not been exhausted or from a cost/benefit analysis. It does not appear that cost standing alone is one of the criteria available to a carrier to disallow payment of a claim.

The court is reminded that science and improvements in medicine and health only advance when individuals are willing to experiment and take a chance on implementing new ideas and procedures. History is replete with examples such as Galileo Galilei who advocated a heliocentric solar system rather than the accepted thinking of his time of a geocentric one and was forced to recant his theories under the penalty of death; Edward Jenner who successfully developed a small pox vaccine and had to convince the medical establishment of its preventative abilities; or Joseph Lister who challenged the then current methods for treatment of wounds and promoted the use of antiseptics, and had the medical community accepted his teachings, perhaps James Garfield would not have died of the gunshot wound he received from Charles Guiteau. [*8]

On the other hand history is full of examples of “cures” for just about everything that “ails you” and hawked at “patent medicine shows” throughout America from real life examples such as Lydia Pickham’s Herb Medicine, Fletcher’s Castoria, and Kickapoo Indian Sagwa. To fictional ones like Al Capp’s “Kickapoo Joy Juice” from “Li’l Abner”; Jackie Gleason’s “Mother Fletcher’s” line of products; and “Pirelli’s Miracle Elixir” from Stephen Sondheim’s “Sweeney Todd.”

Conclusion:

Plaintiff should be encouraged to seek to find new treatments to benefit his patients. As noted by George and Ira Gershwin in “They All Laughed ^[FN6]” many people have had to advocate ideas and products which people at that time questioned but turned out to be accepted as the norm.

They all laughed at Christopher Columbus

When he said the world was round

They all laughed when Edison recorded sound

They all laughed at Wilbur and his brother

When they said that man could fly

They told Marconi

Wireless was phony

It’s all the same old cry….

They all laughed at Rockefeller Center

Now they’re fighting to get in

They all laughed at Whitney and his cotton gin

They all laughed at Fulton and his steamboat

Hershey and his chocolate bar

Ford and his misery

Kept the laughers busy

That’s how people are….

Plaintiff may be on the cutting edge of a new therapy treatment for soft tissue injuries and if he firmly believes that the procedure benefits his patients, should continue to provide the services, track the results and use his findings to convince the medical community of the benefits of electromagnetic therapy for persons with complaints similar to Russo’s.

Unfortunately, there is no evidence that high frequency electromagnetic therapy has been widely accepted in the medical community for the treatment of soft tissue injuries such as suffered by Russo in this accident. [*9]

Based on the fact that the defendant’s expert opined that the procedure is not accepted and that the plaintiff heard that testimony and had the opportunity to rebut it with evidence that it was accepted but failed to do so, the court must deny the claim for reimbursement.

In the event that the plaintiff can refute this presumption of nonacceptance with some independent recognized tests, the court will consider revisiting the issue in this or in another of the many open lawsuits for similar relief plaintiff has pending in this court.

Judgment for defendant. Plaintiff has failed to rebut defendant’s defense. Plaintiff’s cause of action is dismissed.

Exhibits, if any, will be available at the office of the clerk of the court thirty days after receipt of a copy of this decision.

The foregoing constitutes the decision and order of the court.

Dated:February 27, 2013

Staten Island, NYHON. PHILIP S. STRANIERE

Judge, Civil Court

ASN byon

Footnotes

Footnote 1:A rearrangement of the order of the lyrics to “You Gotta Have A Gimmick” from “Gypsy” Music by Jule Styne, Lyrics by Stephen Sondheim.

Footnote 2: Not to be confused with the TMR 1200 made by Patz and described as a vertical food mixer.

Footnote 3: Marvin actually used an Illudium Q-36 Explosive Space Modulator.

Footnote 4:It should be noted that the Aetna report does cite some studies where high-frequency pulsed electromagnetic stimulation has shown some benefits in wound healing and treatment of ulcers, Aetna denies coverage for all uses. Johns Hopkins recognizes for treatment of certain types of ulcers and certain wound therapies. Neither of them recognize it as beneficial for soft tissue injuries.

Footnote 5:By charging $800.00 for each treatment, plaintiff will recoup the cost of the TMR 1200 machine with 187.5 treatment sessions. Were plaintiff to have billed the service under standard electro-stimulation codes at $17.95 the machine would not be paid for until 8357 sessions had been completed.

Footnote 6:Written for the film “Shall We Dance” and sung by Fred Astaire.

[*1]

Civil Court of the City of New York, Queens County, February 25, 2013

APPEARANCES OF COUNSEL

Israel, Israel & Purdy, LLP, Great Neck (Justin Skaferowsky of counsel), for plaintiff. Peter C. Merani, P.C., New York City (William Larkin of counsel), for defendant.

{**40 Misc 3d at 350} OPINION OF THE COURT

Carmen R. Velasquez, J.

This is an action by the plaintiff to recover statutory interest and attorney fees on no-fault insurance claims that were overdue when they were paid by the defendant. The plaintiff has submitted proof that, on the dates indicated, the following four claims were mailed to the defendant:

1. March 10, 2009—$71.49 for services rendered to Ana Oneal [*2]

2. June 11, 2009—$1,392.52 for services rendered to Salvadore Rivera

3. June 25, 2009—$107.64 for services rendered to Salvadore Rivera

4. June 25, 2009—$186.80 for services rendered to Salvadore Rivera.

The claims were each paid as follows:

claim 1 was paid by draft dated June 1, 2009 for $71.49

claim 2 was paid by draft dated July 29, 2009 for $1,392.52

claim 3 was paid by draft dated August 16, 2009 for $107.64

claim 4 was paid by draft dated August 10, 2009 for $103.95.

“Pursuant to Insurance Law § 5106 (a) and 11 NYCRR 65-3.5, insurers are required either to pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date the applicant supplies proof of claim” (New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492, 493 [2006], citing Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997], rearg denied 90 NY2d 937 [1997]; also see New York & Presbyt. Hosp. v Travelers Prop. Cas. Ins. Co., 37 AD3d 683 [2007]). Based on the proof submitted by the plaintiff on this motion, the claims in this action were paid more than 30 days after they were mailed and received by the defendant. Therefore, the payments of the no-fault benefits made by the defendant were overdue (NYU-Hospital for Joint Diseases v Esurance Ins. Co., 84 AD3d 1190, 1191 [2011], citing St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; Westchester Med. Ctr. v State Farm Mut. Auto. Ins. Co., 44 AD3d 750, 752 [2007]; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]).

“An insurer’s failure to pay or deny a claim within 30 days carries substantial consequences. By statute, overdue payments earn monthly interest at a rate of two percent and entitle a claimant to reasonable{**40 Misc 3d at 351} attorneys’ fees incurred in securing payment of a valid claim (see Insurance Law § 5106 [a])” (Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317-318 [2007]; Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d at 278).

Insurance Law § 5106 (a) provides as follows:

“Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied. All overdue payments shall bear interest at the rate of two percent per month. If a valid claim or portion was overdue, the claimant shall also be entitled to recover his attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated by the superintendent in regulations.”

11 NYCRR 65-3.9 (a), applicable to interest on overdue payments, provides as follows:

“All overdue mandatory and additional personal injury protection benefits due an applicant or assignee shall bear interest at a rate of two percent per month, calculated on a pro-rata basis using a 30-day month. When payment is made on an overdue claim, any interest calculated to be due in an amount exceeding $5 shall be paid to the applicant or the applicant’s assignee without demand therefor.”

11 NYCRR 65-3.10 (a), applicable to attorney fees, provides as follows:

“An applicant or an assignee shall be entitled to recover their attorney’s fees, for services necessarily performed in connection with securing payment, if a valid claim or portion thereof was denied or overdue. If such a claim was initially denied and subsequently paid by the insurer, the attorney’s fee shall be $80. If such a claim was overdue but not denied, the attorney’s fee shall be equal to 20 percent of the amount of the first-party benefits and any additional first-party benefits plus interest payable pursuant to section 65-3.9 of this Subpart, subject to a{**40 Misc 3d at 352} maximum fee of $60.”

The overdue interest on plaintiff’s claims for $71.49, $107.64, $103.95 was less than five dollars and was not paid by the defendant. The overdue interest on the claim for $1,392.52, which exceeded five dollars, was also not paid. Demands for payment of the overdue interest and attorney fees were mailed to the defendant shortly after the claim payments were received, as indicated in plaintiff’s opposing papers. This action to recover the overdue interest and attorney fees was then commenced by the filing of the summons and complaint on November 5, 2009 and personal service upon the defendant on November 10, 2009.^[FN*]

Defendant’s claim that overdue interest is to be calculated on a 30-day-month basis, and not on a daily basis, has no merit. The Court of Appeals in Presbyterian Hosp. v Maryland Cas. Co. (90 NY2d at 278) stated that

“[p]ursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, an insurer is required to either pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim (see, Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g] [3]). Failure to pay benefits within the 30-day requirement renders benefits ‘overdue,’ and all overdue payments bear interest at a rate of 2% per month (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [h]). Additionally, a claimant is entitled to recover attorney’s fees where a ‘valid claim or portion’ was denied or overdue (Insurance Law § 5106 [a]; 11 NYCRR 65.15 [i]).”

This language makes it clear that overdue interest applies to “all overdue payments.” Moreover, the instruction in 11 NYCRR 65-3.9 (a) that interest is to be “calculated on a pro-rata basis using a 30-day month” explains the manner of determining the daily rate of interest based on a monthly interest rate of two percent per month, rather than restricting collection to a monthly amount. The statute, [*3]regulations and case law confirm that overdue interest is a payment to be imposed on a daily basis, with attorney fees, when a claim for no-fault benefits is{**40 Misc 3d at 353} not paid within 30 days of submission of the claim (see New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d at 494; Hempstead Gen. Hosp. v Insurance Co. of N. Am., 208 AD2d 501 [1994]; Corona Hgts. Med., P.C. v Liberty Mut. Ins. Co., 32 Misc 3d 8 [2011]).

On this motion and cross motion, as well as other motions that are pending, the issue is whether the plaintiff is entitled to recover overdue interest when it does not exceed the sum of five dollars indicated in 11 NYCRR 65-3.9 (a). The defendant contends that the regulation limits overdue interest to an amount exceeding five dollars that is to be paid, without demand, upon payment of the overdue claim. The plaintiff claims that the regulation does not preclude the applicant from demanding overdue interest below five dollars. There are prior orders in Civil Court, Queens County, that have decided this issue in cases involving different parties. These orders, some of which are signed by this court, have held that collection of overdue interest of less than five dollars is not precluded by regulation 11 NYCRR 65-3.9 (a).

According to the Governor’s Memorandum approving the no-fault system, its primary aims “were to ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003]). The Superintendent of Insurance was given the responsibility for administering the Insurance Law “with the power to fill in the interstices in the legislative product by prescribing rules and regulations consistent with the enabling legislation” (Matter of Nicholas v Kahn, 47 NY2d 24, 31 [1979]). As a result, the Court of Appeals has long held that the Superintendent’s “interpretation, if not irrational or unreasonable, will be upheld in deference to his special competence and expertise with respect to the insurance industry, unless it runs counter to the clear wording of a statutory provision” (LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217, 223 [2009], citing Matter of New York Pub. Interest Research Group v New York State Dept. of Ins., 66 NY2d 444, 448 [1985]). However, “courts are not required to embrace a regulatory construction that conflicts with the plain meaning of the promulgated language” (Matter of Visiting Nurse Serv. of N.Y. Home Care v New York State Dept. of Health, 5 NY3d 499, 506 [2005], citing 427 W. 51st St. Owners Corp. v Div. of Hous.{**40 Misc 3d at 354} & Community Renewal, 3 NY3d 337, 342 [2004]; also see Kurcsics v Merchants Mut. Ins. Co. 49 NY2d 451, 459 [1980]; East Acupuncture, P.C. v Allstate Ins. Co., 61 AD3d 202, 209 [2009]). Legislative intent is the great and controlling principle in statutory construction and the proper judicial function is to discern and apply the will of the legislature (Mowczan v Bacon, 92 NY2d 281, 285 [1998]; Matter of Scotto v Dinkins, 85 NY2d 209, 214 [1995]; Matter of Sutka v Conners, 73 NY2d 395, 403 [1989]).

“The interest which accrues on overdue no-fault benefits at a rate of two percent per month is a statutory penalty designed to encourage prompt adjustments of claims and inflict a punitive economic sanction on those insurers who do not comply” (East Acupuncture, P.C. v Allstate Ins. Co., 61 AD3d at 210 [citations omitted]). The construction of 11 NYCRR 65-3.9 (a), that is advocated by the defendant, would preclude overdue interest of less than five dollars. This would conflict with the statutory language of Insurance Law § 5106 (a) which imposes interest on “[a]ll overdue payments.” The change would also tend to increase the delay in compensating low cost medical benefits that accumulate minimal overdue interest. Such a construction of the statute [*4]conflicts with its primary aims and violates the legislative intent.

The legislature was entitled to enact a limitation on the overdue interest in Insurance Law § 5601 (a), as it did by expressly eliminating interest of “less then two dollars” in Insurance Law § 3224-a (c) (1). However, the legislature did not exempt the overdue interest of less than five dollars, that is sought by the defendant. The Superintendent of Insurance also did not preclude the collection of overdue interest that is less than five dollars, if it is demanded. This court will not now prevent the collection of such interest.

Accordingly, the plaintiff’s motion for summary judgment is granted and the plaintiff is awarded judgment, pursuant to Insurance Law § 5106 (a), for the overdue interest and attorney fees alleged in the complaint. The defendant’s cross motion to dismiss the action is denied.

Footnotes

Footnote *: The defendant’s answer in this action was interposed by the office of Robert P. Tusa. However, Peter C. Merani, whose office submitted the cross motion and reply affidavit on this motion, is listed on the court records as the attorney for the defendant in this action. Therefore, it is appropriate for the court to consider these papers, despite plaintiff’s claim that Peter C. Merani is not the defendant’s attorney of record.

Civil Court of the City of New York, Kings County

99743/09

Attorneys for Plaintiff QUALITY PSYCHOLOGICAL SERVICES

Law Offices of Melissa Betancourt

155 Kings Highway, 3rd Floor

Brooklyn, NY 11223

Attorneys for Defendant HARTFORD INSURANCE COMPANY

Iseman, Cunningham, Riester & Hyde, LLP

2649 South Road, Suite 230

Poughkeepsie, NY 12601

Harriet Thompson, J.

Motion Cal No.Motion Seq. #

Papers Submitted to Special Term

on2/15/12,

DECISION/ORDER

Recitation, as required by CPLR §2219 (a), of the papers

considered in the review of this Motion

PapersNumbered

Notice of Motion ………………………………. ..1-2; 3-4

Order to Show Cause and Affidavits Annexed _____________

Answering Affidavits .._____5_____

Replying Affidavits ._____6________

Exhibits _____________

Other …………………………………………………._____________

PROCEDURAL HISTORYThis Civil Court action was commenced in or about September 21, 2009, by the service of [*2]a Summons and Endorsed Complaint to recover first-party No-Fault benefits as a result of alleged injuries arising out of an automobile accident which occurred on July 25, 2008. In or about November 17, 2009, the Defendant interposed a Verified Answer which contained various applicable and inapplicable affirmative defenses.

The Defendant moves this Court for summary judgment pursuant to CPLR §3212 by Notice of Motion returnable on August 16, 2011 on the grounds that the Plaintiff failed to submit to two properly scheduled Examinations Under Oath (hereinafter “EUO”), a condition precedent to insurance coverage and a violation of the Insurance regulations, precluding recovery of the medical claim. On the return date, the attorneys, by written agreement, adjourned the motion to February 15, 2012 for the parties to engage in motion practice.

The Plaintiff, in opposition, attacks the admissibility and credibility of the Defendant’s affidavits. The Plaintiff seeks to persuade this court that the certificate of conformity affirmed by ALAN CHANDLER, ESQ. does not contain the language “under the penalties of perjury” pursuant to CPLR §2106 and therefore, is inadmissible. The Plaintiff also argues that the out-of-state affidavit of NANCY ALPIZAR is missing a certificate of conformity altogether and is void as a matter of law. Additionally, Plaintiff argues that the affidavits do not establish proper and timely mailing of the EUO notices and denials since it contains various factual discrepancies. The Plaintiff also argues that the Defendant failed to establish that EUO requests were properly mailed since the certified mail return receipts are absent from the motion; the Defendant failed to schedule the EUO’s in the county where the Plaintiff resides and therefore, it is palpably improper; and the Defendant failed to properly rebut the prima facie case of the Plaintiff and accordingly, the Plaintiff is entitled to judgment as a matter of law.

In reply, and in further support of the Defendant’s motion for summary judgment, the Defendant challenges the Plaintiff’s argument that the certificate of conformity of ALAN CHANDLER, ESQ. is defective for failure to swear “under the penalties of perjury” pursuant to CPLR §2106 and asserts that the certificates of conformity for the out-of-state affidavits are proper. The Defendant further reiterates that the affidavits of the Defendant’s Claims Representative and the Defendant’s Mailing Courier Representative are sufficient to establish the timely mailing of EUO letters and denials of the claim (NF-10) and lastly, argues that the request for a specific witness affiliated with the Plaintiff (Dr. Herbert Fischer, Ph. D., the treating physician) to appear for the EUO outside of the Plaintiff’s county was waived due the lack of any objections to the requests.

The Plaintiff, by Notice of Cross Motion, returnable on February 15, 2012, also seeks summary judgment. The Plaintiff contends that it has established its prima facie case through the submission of the proper proof of claim in the form of a health care services application (NF-3) that was properly generated and timely mailed to the Defendant in the ordinary course of business, the claim was received by the Defendant and the Defendant failed to make payment within thirty (30) days of receipt as required by No-Fault Insurance Law and regulations or to take any action to properly toll the time constraints imposed by 11 NYCCRR §65.

Both parties appeared by their attorneys and after oral argument, this Court reserved decision for a final disposition. [*3]

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The following facts are uncontroverted. Justas Kalvaitis was treated by the above named Plaintiff for alleged injuries between August 26, 2008 and September 29, 2008 for the total sum of $1,341.14. The bills for the above services were received by the Defendant on September 29, 2008.

In order to establish its prima facie case, the Plaintiff must prove that the proper notice of claim for the medical services provided to the assignor was mailed to the Defendant and received by the Defendant, and that payment of the No-Fault benefits were neither paid or denied within thirty (30) days of receipt. Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742, 774 NYS2d 564 (2nd Dept., 2004) [plaintiff hospital made a prima facie showing of their entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue]; see also Westchester Med. Center v. Liberty Mutual Ins. Co., 40 AD3d 981, 837 NYS2d 210 (2nd Dept.-, 2007); Insurance Law 5106(a).

The No-Fault Law requires the insurance carrier to either pay or deny the claim for No-Fault benefits within thirty (30) days from the date of receipt of the claim. Insurance Law, §5106(a); 11 NYCRR §65.15(g)(3). Within ten (10) business days after the receipt of the NF-2, the insurer must send verification forms to the insured or the provider. In the regulations, after receipt of the completed verification, the insurer may seek “additional verification” or further proof of claim from the insured or assignee within fifteen (15) days thereof. 11 NYCRR 65§ 3.5(b). The insurer may seek additional verification in the form of an independent medical examination (IME) within thirty (30) days from the date of the initial medical bills (11 NYCRR65.3.5(d)), or as in this case, if the insurer requires an EUO of the insured or provider to establish such proof of claim, the EUO must be based upon “the application of objective standards so that there is specific objective justification supporting the use of such examination”. Such standards are subject to review by the Insurance Department. 11 NYCRR §65-3.5(e). The regulations direct that the insured or provider be informed that the use of either the IME or EUO by the insurer require the insurer to reimburse the affected party for “any loss of earnings and reasonable transportation expenses.”

If any additional verification has not been provided to the insurer within 30 calendar days after the original request, the insurer shall, within ten (10) calendar days, “follow-up” with the noncompliant party by either telephone call or by mail. 11 NYCRR § 65.3.6 (b). At that time, the insurer must notify the claimant or their representative of the basis for the delay of the claim by “identifying, in writing, the missing verification and the party from whom it was requested.”

The prescribed thirty (30) day time line to pay or deny a claim is tolled until the insurer has received proper verification of all relevant information requested of the injured party or provider. 11 NYCRR 65.15(d), (g), (7); St. Vincent Hospital of Richmond v American Tr. Ins. Co., 299 AD2d 338, 750 NYS2d 98 (NY A.D., 2002). The burden does not shift to the insurer to pay or deny the claim until the required party has complied with the verification request.

Of course, in reality, the insurer does not always act timely. In this judicial department, the Appellate Division in Keith v. Liberty Mutual Fire Ins. Co., 118 AD2d 151, 503 NYS2d 441 (1986) determined that 11 NYCRR 65.3.8(j), which describes the process of deviation from the rules which [*4]reduces the thirty calendar days for regulatory noncompliance, that “[a]lthough the clock does not begin to run on the thirty-day calendar requirement until the insurer receives all of the necessary verification … the insurer’s lack of diligence in obtaining the verification may reduce the thirty-day period even before verification is obtained. In that case, the insurer was four business days late in requesting the verification and thus, the insurer’s thirty-day calendar days to pay or deny the claim must be reduced by four days, leaving 26 days.”

According to Judge Hagler, in Inwood Hill Med v. Allstate, 3 Misc 3d 1110 (A), 787 NYS2d 678 (NY Civ. Ct., 2004), a thorough and excellent analysis of the No-Fault regulations, the thirty (30) day rule does not apply to requests for additional verification within the prescribed time frame and this court concurs. He states that “the inconsistency may be resolved by stating that the insurer’s time is not reduced where it sought the additional verification request late but within the prescribed thirty calendar days (i.e. more than fifteen business days and up to twenty-nine days which would not effectively reduce the thirty days to zero). Where the insurer either seeks additional verification requests or even provides a time to respond outside the thirty calendar days, the proverbial clock has run and there is no need to resort to the 11 NYCRR 65-3.8(j) counting requirement. A contrary interpretation of the regulation would run counter to the clear wording of Insurance law §5106(a) providing for the strict 30-day rule. See Karciscs v. Merchants Mutual Ins. Co., 49 NY2d 451, 426 NYS2d 454 (N.Y, 1980).”

An EUO permits the insurer to question the injured party or its assignee regarding the claim. As Judge Hirsh aptly stated in Dynamic Medical Imaging, P.C. v State Farm Mutual Auto Ins., 29 Misc 3d 278, 905 N.Y.S.2d 880 (Dis. Ct. Nassau) “while an EUO has been treated by the courts as a condition precedent to coverage, the no-fault regulations treat the EUO as a form of verification. Thus, where a carrier properly demands an EUO “…the verification is deemed to have been received by the insurer on the day the examination was performed. 11 NYCRR 65-3.8(a)(1).” In addition, it has been held that the appearance at a properly demanded EUO is a condition precedent to an insurance carrier’s liability to pay no-fault benefits (Five Boro Psychological Services, P.C. v. Progressive Northeastern Ins. Co., 27 Misc 3d 141(A), 91 NYS2d 692 (N.Y.Supp. App. Term, 2010)).

As the Defendant correctly states in the instant motion, all automobile insurance policies with No-Fault endorsements in our state contain the prescribed language of the Insurance Regulations. Specifically, 11 NYCRR 65-1.1 provides that “[u]pon request by the Company, the eligible injured person or that person’s assignee or representative shall:…(b) as may reasonably be required to submit to examination under oath by any person named by the Company and subscribe same…..”

Moreover, 11 NYCRR 65-3.5 (c) states that “[t]he insurer is entitled to received all items necessary to verify the claim directly from the parties from whom such verification was requested.” Lastly, as also correctly argued by the Defendant, 11 NYCRR-1 provides that “[n]o action shall lie against the Company, unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage.” After all, the goal of the insured or provider is to get paid and each must act in good faith and cooperate with the insurer to achieve that purpose. So even if the insured believes it can not or should not comply with the insured’s request, the insured has a duty to communicate with the insurer about that request. See Dilon Med. Supply Corp. v. Travelers Ins. Co., 7 Misc 3d 927, 796 NYS2d 872 (NY Civ Ct, Kings County, 2005). [*5]

The most significant substantive issue before this court is whether the affidavits of mailing meet the requirements of the No-Fault law to establish proper proof of mailing of the EUO notices and the denials. Surprisingly, there are a significant number of cases that tackle, what at first blush appears, seemingly a simple issue. It is essential that we examine the legal criteria adopted by the courts for establishing proper mailing.

The common law doctrine of presumption of regularity is still alive in New York State despite arguments to the contrary. Generally speaking, a letter or notice that is properly stamped, addressed and mailed is presumed to be received by the addressee. News Syndicate Co. v. Gatti Paper Stock Corp., 256 NY 211, 176 NE 169 (NY, 1931); New York New Jersey Products Dealers Coop v. Mocker, 59 AD2d 970, 399 NYS2d 280 (NY A.D., 3d Dept., 1977). A simple denial of receipt has been held insufficient to rebut this presumption. Countrywide Home Loans, Inc. v. Brown, 305 AD2d 626, 760 NYS2d 200 (NY AD2d Dept., 2003) . See also Precision Dev. V. Hartford Fire Ins. Co, 10 Misc 3d 1055(A), 809 NYS2d 483 (NY Sup., 2005) where the court precluded recovery on a payment bond issued by the Defendant based on the failure of the Plaintiff to comply with the notice requirements of the State Finance Law. The court would not allow the Plaintiff’s to rely on this common law presumption of regularity to prove receipt of the required notice based on the legislative mandate that the notice of claim by the contractor be made by personal delivery or by registered mail. Conversely, the No-Fault regulations, namely, 11 NYCRR 65-3.5(a) state that once the insurer receives the NF-2 application for benefits, the insurer “[s]hall forward to the parties those prescribed verification forms it will require prior to payment of the initial claim.” As Judge Tapia recently stated in Hastava & Aleman Assoc. P.C. v. State Farm Mut. Auto Ins. Co., 24 Misc 3d 1239(A), 899 NYS2d 59 (Civ. Ct., Bx Ct., 2009) “the regulation uses “forward” to describe the manner in which notification is to be effected. The only kink is determining what constitutes sufficient “notice” because the regulation does not specify the mailing procedure by which to notify the injured party.” In that case, the court determined that the mailing of a letter by certified mail, return receipt requested is entitled to the same presumption of receipt as regular first-class mail in the absence of the signed returned receipt”. Furthermore, “satisfying No-Fault policy conditions does not have to be compromised at the expense of challenging mailing procedures because proof of mailing of verification letters via regular USPS is enough to create a presumption of receipt. In addition, the use of certified mail does not create a more demanding presumption of mailing and receipt beyond that of a letter that was properly mailed. The regulations make no distinction between sending a letter via regular mail or via certified mail.”

The presumption of receipt 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. Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 776 (2001); Nassau Ins Co. v. Murray, 46 NY2d 828, 414 NYS2d 117 (1978); Matter of Francis v. Wing, 263 AD2d 432, 694 NYS2d 29 (NY A.D. 1st Dept., 1999); Azriliant v. Eagle Chase Assoc., 213 AD2d 573, 575, 624 NYS2d 238 (NY AD2d Dept., 1995); Phoenix Ins. Co v. Tasch, 306 AD2d 288, 762 NYS2d 99 (NY AD2d Dept., 2003); Matter of Colyar, 129 AD2d 946, 947, 515 NYS2d 330 (NY AD3d Dept., 1987). Therefore, affidavits that merely state that the bills were mailed within the statutory time period have been held insufficient to establish proof of actual mailing. Comprehensive Medical v. Lumbermens Mutual Ins. Co., 4 Misc 3d 133(A) (App. Term 9 & 10th Jud. Dists, 2004). [*6]

The burden is on the insurer to present an affidavit of an employee who personally mailed the verification/denial, or on the other hand, an affidavit of an employee with personal knowledge of the office’s mailing practices and procedures. Such individual must describe those practices or procedural in detail, explicitly denoting the manner in which she/he acquired the knowledge of such procedures or practices, and how a personal review of the file indicates that those procedures or practices were adhered to with respect to the processing of that particular claim (emphasis added).

By demonstrating its routine and reasonable office procedures, the Defendant meets its burden of proof that the notices were mailed to the plaintiff and were received. The burden then shifts to the plaintiff to rebut the presumption of receipt. Abuhamra v. New York Mut. Underwriters, 170 AD2d 1003, 566 NYS2d 156 (NY A.D. 4th Dept., 1991); Residential Holding Corp. v. Scottsdale Ins. Co., supra. It is worthy of repetition that the denial of receipt, standing alone, is insufficient to rebut the presumption. Indeed, “[i]n addition to a claim of no receipt, there must be a showing that the routine office practice was not followed or was so careless that it would be unreasonable to assume that the notice was mailed. Nassau Ins Co. v. Murray, 46 NY2d 828, 414 NYS2d 117 [1978]; See also Badio v. Liberty Mutual Fire Ins. Co., 12 AD23d 229, 785 NYS2d 52 (App. Div., 1st Dept., 2004).

Having discussed the frame work of the insurance law and regulations to lay the proper foundation for our analysis in the case at bar, the court makes the following findings of facts and conclusions of law.

The Plaintiff submitted a proof of claim in the form of a health care services application (NF-3) for reimbursement for health care services rendered to the assignor, JUSTAS KAVAITIS, in the amount of $1,341.14 for dates of services from 8/26/2008-9/16/2008.

The affidavit of STEVEN HAYDEN, an employee in the Special Investigation Unit since 1999 at Hartfort, informs the court that there was an ongoing investigation into the operation and management of the provider, QUALITY PSYCHOLOGICAL SERVICES, P.C., independent of this case. This case is yet another case that has delved into the operation and billing practices of the Plaintiff. The affidavit of STEVEN HAYDEN states that the Defendant commenced the investigation to verify bills submitted by the Plaintiff, [s]pecifically, Hartford initially questioned the fact that nearly all clinical findings of QUALITY PSYCHOLOGICAL SERVICES, P.C., were identical from patient to patient and the frequency and duration of their psychological testing and treatment appeared to be excessive. He further states that…”the bills and records…not only appeared to be boilerplate, but also incomplete and inaccurate information was provided”. Additionally, …in many records submitted…references were made to a patient’s age or sex, which was inconsistent with the other information submitted by the patient, including their no-fault application or personal identification (HAYDEN affidavit at ¶3 and ¶4). As significant, he affirmed that the Defendant “…learned that in a majority of instances these patients had not had psychological problems or complaints, yet the records submitted by QUALITY PSYCHOLOGICAL indicated otherwise and during the investigation…[he] learned that many patients actually never received treatment and/or testing billed by QUALITY PSYCHOLOGICAL to Hartford” ( HAYDEN affidavit at ¶5 and ¶6).

The court finds that the prior investigation and the investigation of this particular case produced ample evidence to warrant such a demand for the EUO and such demand was fair, [*7]reasonable and in accordance with the above insurance regulations. Based on the above findings, it is the opinion of this court that the Defendant properly sought the EUO of the treating physician, Herbert Fischer, Ph. D. to investigate the claim.The court also finds no impediment, statutorily or otherwise, for the insurer to demand the appearance of the treating physician of the Plaintiff corporation at the EUO particularly since the regulations provide that the insurer may insist on the appearance of “any person named by the Company”. 11 NYCRR 65-1.1. Moreover, since the treating physician is responsible for the actual treatment of the patient, such individual would have exclusive knowledge of the course of treatment of the assignor including but not limited to the patient’s logs, narrative reports, testing, diagnoses, prescriptions, file memoranda and the like. Although the Plaintiff argues that is was palpably improper for the Defendant to schedule the EUO outside of the county of the Plaintiff, this claim is without merit. Since the Plaintiff did not object, in writing or orally, to the EUO notice, the court finds that the Plaintiff waived any objection to the content and scope of the EUO request. Dilon Med. Supply Corp. v. Travelers Ins. Co., supra.

To establish its prima facie case, the Defendant relies on the affidavit of SARA LOMNICKY. SARA LOMNICKY, at the time of this claim, was a No-Fault Claims Specialist with the Defendant’s No-Fault Department located at 8 Farm Springs Road in Farmington, Connecticut. She states that she has knowledge of Defendant’s mailing procedures used in connection with written requests for EUO’s and/or the production of other documents, as well as the mailing of any denial of claim forms based upon her eight (8) years of employment experience at Hartford. She specifically states that “based on my personal knowledge of the preparation and mailing of the documents at issue in this matter under claim number YXHAF65085”, the EUO notices to the assignor were sent by certified mail (SARA LOMNICKY affidavit at ¶4). She explicitly describes the mailing procedures of the Defendant in paragraphs 15 (a)-(o). Based upon her knowledge of Defendant’s mailing practices and procedures and her review of the file in the instant matter, SARA LOMNICKY informs the court that the Defendant received the medical bills on September 29, 2008 and this fact is undisputed by the Plaintiff. The first EUO letter was mailed on October 3, 2008, within the prescribed fifteen (15) business days after the receipt of the claims, seeking an EUO on October 28, 2008. Then, when the Plaintiff failed to provide the documentary evidence demanded by the verification or appear for the EUO on October 28, 2008, the insurer on November 5, 2008, within ten (10) calendar days after that request, issued a “follow-up” notice for an EUO on November 26, 2008. The EUO request was in compliance with the insurance regulations by identifying the missing verification which the assignor was required to provide to comply with the insurance policy. The letter highlights that ” the policy of insurance under which [your] claim is made requires claimants to cooperate with our investigation, produce the demanded documents and [to] testify [at] an examination under oath. The EUO notice demands ten enumerated documents from ¶1- ¶10 which the Plaintiff was duty bound to produce at the EUO, since as stated above, the Plaintiff waived all objections.

On December 2, 2008, the Defendant issued a timely denial for payment of the health care services performed by the Plaintiff based on the grounds that the Plaintiff failed to appear at two scheduled EUO’s. The Defendant attaches the denial of claim form as Exhibit A-3 which explicitly states that “all benefits are denied for failure to cooperate in the claims investigation, policy condition violated and failure to appear for Examinations Under Oath on October 28, 2008 and November 26, 2008.” Furthermore, it also states that the insured or her representative did not [*8]comply with the insurance policy “without a reasonable excuse” and the insurer would reconsider its position should the assignor or representative provide a reasonable excuse for noncompliance. The Plaintiff has not offered any “reasonable excuse” for noncompliance with the insurance policy or the law.

The Defendant also proffers the affidavit of NANCY ALPIZER, a Supervisor with Pitney Bowes, to complete the practices and procedures of the Defendant insurer’s mailing procedures. She affirms that a courier from her company picks up the mail from the Defendant’s Farmington, Connecticut office every weekday at 3:00 p.m. and at 4:30 p.m. and delivers the mail to the US Post Office on that same day. All of the mail that is picked up on a particular day is delivered to the US Post Office on the same day. The court finds this affidavit reliable and is ample proof of the completion of the mailing practices and procedure of the Defendant particularly since Pitney Bowes is a nonparty witness that has no stake in this litigation notwithstanding the contractual relationship with the Defendant.

Lastly, the Defendant provides the affirmation of JOSHUA E. MACKEY, ESQ., the attorney responsible for conducting the proposed EUO of Herbert Fisher, Ph.D. JOSHUA E. MACKEY affirms he was present in his office prepared to take the EUO of the Plaintiff on both dates and no one affiliated with Plaintiff’s office appeared on either date. He also attests that the Plaintiff did not supply the various documents requested to verify the medical services, to wit: patient questionnaire, charts, handwritten notes, memoranda, any referrals, medical treatment, testing and examinations.

The above evidentiary proof submitted by the Defendant is sufficient to demonstrate timely and proper mailing of all EUO letters and the denials. By demonstrating its routine and reasonable office procedures, the Defendant meets its burden of proof that the notices were mailed to the Plaintiff and were received. The burden now shifts to the Plaintiff to rebut the presumption of receipt and to raise a triable issue of fact. Abuhamra v. New York Mut. Underwriters, supra; Residential Holding Corp. v. Scottsdale Ins. Co., supra. The opposition papers of the Plaintiff as well as the supporting attorney affirmation, party affidavit and documentary evidence annexed to the Plaintiff’s cross motion do not contain any factual claims that the EUO notices were not received and is devoid of any claim of any fatal defect(s) in their content; neither do they assert in any manner that the routine office practice was not followed or was so haphazard that it would be completely unreasonable to assume that the notice was mailed and received by the Plaintiff. Therefore, the Plaintiff having failed to meet its burden, this court finds that all of the notices and denials were timely received by the Plaintiff.

Although this irrefutable proof has been produced by the Defendant, the Plaintiff argues that the lack of the certified mail receipt is fatal to the Defendant’s case. This contention is without merit. The lack of the certified mail receipts is insignificant in this case. The certified mail receipts are superflorous and the court will not infer any negative inference from their absence; the Defendant, through irrefutable admissible evidence in the above affidavits and supporting documents, established proper and timely mailing of the EUO notices and the denials.

Does the Plaintiff raise any issue of fact that would warrant the denial of summary judgment for the insured? The answer is in the negative. The Plaintiff’s papers do not raise any issue of fact; it contains only the affirmation of the attorney for the Plaintiff. As the Court of Appeals has firmly held an affidavit or affirmation from a party’s attorney who lacks personal knowledge of the facts [*9]is of no probative value and is insufficient to support an award of summary judgment; in our case, to defeat an award for summary judgment (see Zuckerman v. City of New York, 49 NY2d 557 [1980]; Amaze Med. Supply, Inc. v. Allstate Ins. Co., 3 Misc 3d 133(A), [App Term, 2nd & 11th Jud. Dists, 2004]; Wisnieski v. Kraft, 242 AD2d 290, 6691 NYS2d 46 [NY A.D., 2d Dept., 1997]; Lupinsky v. Windham Constr. Corp., 293 AD2d 317, 739 NYS2d 171 [NY A.D., 1st Dept., 2002]). Thus, even when the attorney has affirmed that a review of the file and records of his client is the basis of his knowledge, the Appellate Courts have consistently determined that it is insufficient to defeat a motion for summary judgment. (See Park Health Ctr. v. Green Bus Lines, Inc., App. Term., 2d & 11th Jus. Dists., 2002 NY Slip Op. 40029[U]) in which the court found that “[t]he defendant’s attorney submitted an opposing affirmation, based on his knowledge which was “obtained from a reading of the files,” wherein he alleged that the NF-2 form was not in the certified mailing and asserted that defendant first received a completed no-fault application on April 10, 1995, was insufficient to defeat summary judgment. In the absence of an affidavit from one with personal knowledge of the facts, the defendant’s attorney’s affirmation is insufficient to establish the existence of a triable issue of fact (Drug Guild Distribs. v 3-9 Drugs, 277 AD2d 197, 715 NYS2d 442 [NY AD2d Dept., 2000]). See also Drug Guild Distribs. v 3-9 Drugs, supra, where the Appellate Division held that “an affidavit of [the Defendant] president and an affirmation of counsel, that it never ordered or received these goods, and that the invoices, receipts, and account statement produced by the plaintiff were fraudulent” were insufficient to defeat summary judgment. ” The defendant’s conclusory denial of the transactions is insufficient to counter the facts established by the plaintiff’s documentary evidence”. See also Park Health Center v. Green Bus Lines, Inc., (2002 WL 416484, 2002 NY Slip Op. 40029(U).

Furthermore, the affidavit of VICTORIA SIMKINA, the Supervisor of Billing for QUALITY PSYCHOLOGICAL SERVICES, P.C., as described in the cross motion, was submitted only to attest to the mailing practices and procedure of her employer of the claim forms. Her affidavit and that of the attorney never rebuts the presumption of receipt of the EUO notices and denials. In fact, neither sworn statement allege that the EUO notices were not received and that the mailing practices and procedure was not properly implemented by the Defendant.

We the substantive issues established in this case, this court shall examine the alleged defects claimed by the Plaintiff in the Defendant’s papers. The Plaintiff asserts that the certificate of conformity by ALAN CHANDLER, ESQ. accompanying the affidavit of SARAH LOMINKY should be deemed fatally defective because it was not sworn to under the “penalties of perjury” pursuant to CPLR Rule §2106. The Plaintiff also argues that the affidavit of NANCY ALPIZER is void since it lacks a certificate of conformity altogether. This court has conducted substantial research involving this issue with our civil cases and found no statutory authority or case authority to support the proposition that the lack of the words “under penalty of perjury” makes the certificate of conformity inadmissible.

Rule §2106 provides in relevant part that “the statement of any attorney admitted to practice in the courts of the state,…authorized to practice law in the state, who is not a party to an action, when subscribed and affirmed by him to be true under the penalties of perjury, may be served or filed in the action in lieu of and with the same force and effect as an affidavit”. Plaintiff’s reliance on this provision is misplaced. This rule is limited to professionals licensed in our state and permits them [*10]to submit affirmations instead of affidavits.

The applicable section of the CPLR is §2309(a) and ( c). A certificate of conformity is an acknowledgment that a legal document conforms to the law of the place where it is taken. CPLR Section 2309(c) in conjunction with RPL Sections 299 and 311, allows an oath or an affirmation taken outside of the state administered by any person authorized to take acknowledgments of deeds under the real property law. CPLR Section 2309(c ) states that “an oath or affirmation taken without the state shall be treated as if taken within the state if it is accompanied by such certificate or certificates as would be required to entitle a deed acknowledged without the state to be recorded within the state if such deed had been acknowledged before the officer who administered the oath or affirmation.”

CPLR §2309 thus adopts the requirements of RPL§299 and §311, which govern acknowledgment of deeds and authentication of acknowledgments outside the state. RPL 299 (3) specifically designates a notary public as a person eligible to acknowledge deeds outside of the state of New York. RPL §311(5) describes the limitations for a certificate of authentication “…except as provided in this section, no certificate of authentication shall be required to entitle a conveyance to be read in evidence or recorded in this state when acknowledged or proved before any officer designated in section two hundred ninety-nine or in section three hundred one of this chapter to take such acknowledgment or proof.”

As Professor David I. Siegel states in NY Practice, (2d ed), this oath …as long as it is , it will be backed, at least theoretically, by the perjury penalties in the Penal Law, which defines “oath” to include “an affirmation and every other mood authorized by law of attesting” to what is said. This affirmation, by the way, is a form of oath, duly taken before one qualified to administer an oath, and should not be confused with the “affirmation” authorized by CPLR 2106.”

In this case, the statements of both witnesses were sworn to before a notary public and then subsequently, the attorney affirmed that the “oath” was performed in accordance with the laws of the state of Connecticut. The “affidavit of merit” for NANCY ALPIZAR is a certificate of conformity. The Court’s review of the content of the “affidavit of merit” reveal that it is a certificate of conformity; it was merely given the wrong title in the caption.

This court has also reviewed the case precedent cited by Hartford Insurance Company and is in accord. The absence of a proper certificate of conformity is not fatal to this motion but is “a mere defect in form which can be given nunc pro tunc effect once properly acknowledged.” (JP Morgan Chase Bank, N.A. v. S.I. Wood Furniture, 34 Misc 3d 1214(A), 946 NYS2d 67 [Sup. Ct, Kings County, 2012]); Hall v ELRAC, 79 AD3d 427, 913 NYS2d 37 [NY A.D. 1st Dept., 2010]; Betz v. Daniel Conti, Inc., 69 AD3d 545, 892 NYS2d 477 [NY AD2d Dept., 2010]; Matapos Tech. Ltd. v Compania Andina De Comercio Ltd., 68 AD3d 672 , 891 NYS2d 394 [NY A.D. 1st Dept., 2009]; Moccia v Carrier Car Rental, Inc. 40 AD3d 504, 837 NYS2d 67 [NY A.D. 1st Dept., 2007]; Smith v Allstate ins. Co., 38 AD3d 522, 832 NYS2d 587 [NY A.D. 2nd Dept., 2007]; Falah v Stop & Shop Cos. Inc., 41 AD3d 638, 838 NYS2d 639 [NY AD2d Dept., 2007)]; Sparaco v Sparaco, 309 AD2d 1029, 765 NYS2d 6683 [NY AD3d Dept., 2003]; Nandy v Albany Med. Ctr. Hosp., 155 AD2d 83, 548 NYS2d 98 [NY AD3d Dept., 1989]; see also Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, C2309:3 at 348). [*11]

As important, our courts, pursuant to CPLR §2001, have the authority, at any stage of an action, to permit a mistake, omission, defect or irregularity, to be corrected and disregarded, upon such terms as may be just if a substantial right of a party is not prejudiced.

In our case, the Plaintiff has not disputed the authenticity of the notary public or the substance of the certificate of conformity. The Plaintiff has also not made any allegations of any prejudice or undue hardship resulting from this defect and the record in this action does not support any finding of prejudice or hardship to the Plaintiff. As Judge Demarest so aptly stated in JP Morgan Chase N.A. v S.I. Wood Furniture Corp., supra, “inasmuch as the content of the documents submitted, as opposed to their form, is what is critical to the determination of this motion, [Plaintiff] cannot be permitted to seize upon any technical requirements of CPLR 2309(c) to create delay and avoid [dismissal]) see Falah, 41 AD3d at 639; Smith, 38 AD3d at 523; Nandy, 155 AD2d at 834). Consequently, this Court deems the two certificates of conformity executed by ALAN J. CHANDLER, ESQ. dated June 30, 2011 admissible and any defect therein disregarded.

The court has reviewed the other claims by the Plaintiff of alleged factual discrepancies’ and finds that they are without merit.

For all of the reasons described above, the Plaintiff’s motion for summary judgment is denied, the Defendant’s motion for summary judgment is granted and the complaint is dismissed with prejudice.

A courtesy copy of this decision and order shall be mailed by the court to both parties.

The Defendant shall submit a judgment of dismissal to the Clerk of the Court and upon issuance thereof, shall serve a copy of the judgment and this order and decision with notice of entry on the Plaintiff within 45 days thereafter.

This constitutes the decision and order of this court.

_________January 15, 2013____________________________________________________________

DateHON. HARRIET THOMPSON

Judge of the Civil Court