[*1]

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

APPEARANCES OF COUNSEL

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

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

Fernando Tapia, J.

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

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

I. Factual Background

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

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

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

A. Brief Discussion on the Small Claims Part

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

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

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

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

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

1. Legislative History and Intent of Article 18-A

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

IV. Conclusion

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

Footnotes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Civil Court of the City of New York, Richmond County

23541/08

Kim Dollard, J.

This is an action by the plaintiff medical provider, to recover no-fault benefits for medical services provided to Orlando Lainez-Rodriguez, plaintiff’s assignor, arising from an automobile accident that occurred on June 16, 2008.

A trial was held before the undersigned on December 15, 2009. The parties had stipulated that the plaintiff established its prima facie case by having submitted the claims in dispute to the defendant, and that the defendant mailed timely denials of the claims. The only issue before the court was the question of medical necessity of the medical services provided to the assignor.

Defendant presented two witnesses in support of their case. Dr. Jonathan Lown was called to testify on the issue of medical necessity. His testimony was based upon the findings of Dr. Harold A. Schechter who performed a peer review of this case and prepared peer review reports. Defendant also called Karen Waldenheimer, a representative of Progressive Insurance Company. The purpose of Ms. Waldenheimer’s testimony was to lay a foundation for the peer review reports, and to admit the peer review reports into evidence.

Plaintiff objected to admission of the of the peer review reports into evidence through Ms. Waldenheimer’s testimony. Plaintiff further objected to the testimony of Dr. Lown on the grounds that defendant did not comply with CPLR 3101(d). The court heard the testimony of both witnesses, and reserved decision on the issues raised by plaintiff. Both sides submitted briefs to the court as to the admissibility of the peer review reports and the testimony of Dr. Lown.

CPLR 3101(d) – EXPERT TESTIMONY

CPLR 3101(d)(1)(i) states: “Upon request, each party shall identify each person whom the party expects to call as an expert witness at trial and shall disclose in reasonable detail the subject matter on which each expert witness is expected to testify, the substance of the facts and opinions on which each expert is expected to testify, the qualifications of each expert witness and a summary of the grounds for each expert’s opinion.”

Plaintiff claims that the disclosure notice provided by defendant is insufficient and vague, and therefore Dr. Lown should not have been permitted to testify and at trial and his testimony should be stricken.

Defendant, at the outset, states that plaintiff never requested any expert witness

disclosure, rendering its objection to the disclosure notice improper. The disclosure notice was given to plaintiff by defendant on its own volition. Further, defendant maintains that the disclosure notice is in full compliance with the statute. Additionally, defendant states that plaintiff neither objected to the Notice of Trial filed with the court, wherein defendant indicated that discovery was complete, nor did plaintiff make a motion to vacate the Notice of Trial.

The Expert Disclosure states in relevant part, “1. Defendant intends to call Jonathan Lown, MD,… to testify on Dr. Harold A. Schechter’s peer review report; see copies of Dr. Schechter’s peer reviews and Dr. Lown’s CV annexed hereto.”

A determination regarding whether to preclude a party from introducing the testimony of an expert witness at trial based on the party’s failure to comply with CPLR 3101(d)(1)(i) is left to the sound discretion of the court. (see Hubbard v Platzer, 260 AD2d 605; Lyall v City of New York, 228 AD2d 566; McGlauflin v. Wadhwa 265 AD2d 534). In the case at bar, the expert witness disclosure statement is not so inadequate or inconsistent with the expert’s testimony as to have been misleading, or to have resulted in prejudice or surprise. (see Gagliardotto v. Huntington Hosp., 25 AD3d 758, 759; Andaloro v. Town of Ramapo, 242 AD2d 354, 355; Rabinowitz v. Elimian, 55 AD3d 813, 814). Accordingly, preclusion is not warranted herein. (see Rowan v. Cross County Ski & Skate, Inc., 42 AD3d 563; Young v. Long Is. Univ., 297 AD2d 320; Abramson v. Pick Quick Foods, Inc., 56 AD3d 702, 703). The court will not strike Dr. Lown’s testimony upon these grounds.

ADMISSIBILITY OF PEER REVIEW REPORTS

AS A BUSINESS RECORD UNDER CPLR 4518(a)

CPLR 4518(a) permits the introduction of a business record as an exception to the hearsay rule. Pursuant to Rule 4518(a), “Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter….” To admit a record under the CPLR 4518(a) business records exception for the truth of its contents, the four foundational elements must be satisfied. It must be shown that the [*3]document or record was made in the regular course of business; that it was the regular course of such business to make the record; that the record was made at the time of the act or occurrence recorded or within a reasonable time thereafter, and that the person who made the record had actual knowledge of the event recorded or received the information from someone within the business who had actual knowledge and was under a business duty to report the event to the maker of the record or if the statement of an outsider within the business record satisfies an independent hearsay exception. (see Alexander Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C4518:1). To make this showing requires testimony from a sponsoring witness, someone from within the particular business such as the author, a records custodian or other employee who can testify as to the nature of the record keeping practices of the business (see Alexander Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C4518:2; Prince, Richardson on Evidence, § 8-306 [Farrell 11th Ed.] ); Kaiser v. Metropolitan Transit Authority, 170 Misc 2d 321, 323).

As a rule, “the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records” (Standard Textile Co. v National Equip. Rental, 80 AD2d 911).Defendant contends that Karen Waldenheimer, as a representative of Progressive Insurance Company, is competent to lay a foundation for the admission of Dr. Schechter’s peer review reports on the basis that she worked with and was familiar with peer review reports and that defendant relies upon peer review reports in making its determinations regarding the medical necessity of services rendered. Essentially, defendant is claiming that the peer review reports are business records of defendant. Defendant relies primarily upon the holding in People v. Cratsley, 86 NY2d81 wherein the court held that

The testimony of a mentally retarded rape victim’s counselor established the requisite foundation under the business records exception to the hearsay rule (CPLR 4518) for the admission of an IQ test report, prepared by a psychologist at the time of the victim’s admission to a sheltered workshop that provided opportunity and support for adults who are mentally retarded….Through the counselor’s testimony, the People established that the report was prepared for the workshop and in conformity with its procedures. That the psychologist was not himself a workshop employee does not, under these facts, defeat admission, because he was acting on behalf of the workshop and in accordance with its requirements when he prepared the report. Although the counselor could not relate the psychologist’s specific recordmaking practices, she was able to state that the report conformed with the statutory and regulatory requirements with which she was familiar. Coupled with her testimony that no client was accepted into the workshop program without such a report, and that the reports were routinely relied on by the workshop in making determinations regarding its clients, the evidence was sufficient to establish that the report, prepared at the time the examination was conducted, [*4]was made in the regular course of business and that it was the regular course of business te prepare such reports.

While it is true that Dr. Schechter may have been acting on behalf of defendant, his peer review reports may not be accepted into evidence through Ms. Waldenheimer. The court in Cratsley, supra made it clear that the admission of the report in that case was permissible under the facts presented in that case. The facts herein do not justify the same conclusion.

Additionally, as plaintiff points out, Dr. Schechter is not an employee of Progressive Insurance Company and was hired by a third party to prepare the reports. Further, Ms. Waldenheimer did not testify that she was familiar with Dr. Schecter’s business practices or exactly when Dr. Schecter prepared the reports.

The peer review reports are not accepted into evidence.

TESTIMONY OF DR. LOWN

The final issue before this court is the admissibility of Dr. Lown’s testimony notwithstanding that the peer reports are not in evidence. Dr. Lown was qualified as an expert, and presented his opinion testimony as an expert. Further, he was subject to full cross-examination.

“It is well settled that, to be admissible, opinion evidence must be based upon one of

the following: first, personal knowledge of the facts upon which the opinion rests: second,

where the expert does not have personal knowledge of the facts upon which the opinion rests, the opinion may be based upon facts and materials in evidence, real or testimonial; third, material not in evidence provided that the out-of-court material is derived from a witness subject to full cross-examination; and fourth, material not in evidence provided the out-of-court material is of the kind accepted by the profession as a basis in forming an opinion and the out-of-court material is accompanied by evidence establishing its reliability.” (Wagman v Bradshaw at 292AD2d84, 86-87; Velen Medical Supply Inc. v. Travelers Ins. Co. 20 Misc 3d 781,783).

The identical issue was presented to the court in SK Medical Services, P.C. v. New York Central Mutual Fire Insurance Co., 12 Misc 3d 686. Similarly, in that no-fault case, the doctor who prepared the peer review report was not available to testify on the issue of medical necessity of services rendered to plaintiff’s assignor. Defendant presented another doctor to testify to the same facts and opinions that were set forth in the peer review doctor’s report. The court held, that there was no legitimate basis to preclude the doctor from testifying. “Each of defendant’s denials of claim, which asserted lack of medical necessity as a defense, was timely issued (Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]), contained the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664), and, with [*5]the inclusion of the peer review report upon which it was based, promptly apprise[d] the claimant[s] with a high degree of specificity of the ground . . . on which [it was] predicated’ (General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864; see also, Nyack Hosp., 11 AD3d at 664; Keith v Liberty Mut. Fire Ins. Co., 118 AD2d 151, 153). Defendant therefore preserved its right to defend the claims at trial on the ground of lack of medical necessity for the reasons stated in the peer review reports.”SK Medical Services, P.C. v. New York Cent. Mut. Fire Ins. Co., supra.

The Appellate Term in both the First and Second Departments has also addressed the issue before the court. In Home Care Ortho. Med. Supply, Inc. v. American Mfrs. Mut. Ins. Co., 14 Misc 3d 139(A), an action to recover assigned, first party no-fault benefits, plaintiff moved to preclude defendant’s expert’s testimony on the ground that the expert did not personally undertake the peer review underlying defendant’s denial of the two claims at issue. The court held “This was error, since the expert would be subject to full cross-examination and his testimony as to lack of medical necessity would be limited to the basis for denial set forth in the original peer review report” (see generally General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864; Home Care Ortho. Med. Supply, Inc. v. American Mfrs. Mut. Ins. Co. 14 Misc 3d 139(A)).

The same conclusion was reached in Bronx Expert Radiology, P.C. v. New York Cent. Mut. Fire Ins. Co., 24 Misc 3d 134(A); see also Dilon Medical Supply Corp. v. New York Cent. Mut. Ins. Co. 18 Misc 3d 128(A) where the Appellate Term, Second Department held that “Defendant, having preserved the defense of lack of medical necessity by timely denying the claims based upon peer reviews (see New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832), the issue before the court was whether the rationale for the conclusion in the peer review reports, upon which defendant’s denial of claim forms was based, was correct. Since defendant sought to call a medical expert witness who was available for cross-examination, and his testimony as to the lack of medical necessity of plaintiff’s services would be limited to the basis for the denials as set forth in

the original peer review reports, the expert witness should have been permitted to testify. (see Spruce Med. Diagnostic, P.C. v Lumbermen’s Mut. Cas. Co., 15 Misc 3d 143(A); Home Care Ortho. Med. Supply, Inc. v American Mfrs. Mut. Ins. Co., 14 Misc 3d 139(A)). In the instant case, the peer review reports had been provided to plaintiff prior to trial. In fact, a review of the court file reveals a summary judgment motion that had been filed by plaintiff, although subsequently withdrawn, which included a copy of the peer review reports. Additionally, the peer review reports were attached to the CPLR 3101(d) Expert Disclosure notice. Plaintiff was well apprised of defendant’s position regarding lack of medical necessity. Dr. Lown’s testimony and opinion, based upon the findings in the peer review reports is admissible and accepted by this court.

Accordingly, upon due consideration of all the testimony and documentary evidence before the court, the court finds as follows:

The medical expert who testified in this matter is wholly credible, and the defendant [*6]has proven a prima facie case that the services provided to the assignor were not medically necessary herein. Plaintiff has failed to overcome this and has failed to put forth any expert testimony in rebuttal. (see Be Well Medical Supply, Inc. v. New York Central Mutual Fire Insurance Mutual Fire Insurance Co., 18 Misc 3d 139 (A))

Accordingly, judgment for the defendant. Case dismissed.

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

Dated: March 15, 2010

KIM DOLLARD

Judge, Civil Court

ASN by__________ in Court

[*1]

Civil Court of the City of New York, Richmond County, March 5, 2010

APPEARANCES OF COUNSEL

Short & Billy, P.C., New York City, for defendant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff.

{**29 Misc 3d at 187} OPINION OF THE COURT

Katherine A. Levine, J.

During oral argument, the parties stipulated that the only issue before the court was whether 11 NYCRR 65-3.6 (b) requires the insurer to notify the injured party when it sends the follow-up verification request to the plaintiff provider. This court has already determined and reiterates herein that the injured party need not be notified. (See Cambridge Med., P.C. v Nationwide Prop. & Cas. Ins. Co., Civ Ct, Richmond County, Feb. 22, 2010, index No. 4561/08.)

Pursuant to Insurance Law § 5106 (a) and 11 NYCRR 65-3.8, 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 or it will be precluded from offering any defenses at trial. (Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889, 889-890 [2d Dept 2007]; see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997].) An insurer may toll the 30-day period by properly requesting additional verification within 15 days from the receipt of the no-fault insurance claim forms (NF-3 or claim form). (Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723 [Civ Ct, Queens County 2004]; 11 NYCRR 65-3.5 [b].) If the

“requested verification[ ] has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, or by mail. At the same time the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” (11 NYCRR 65-3.6 [b] [emphasis added]; see Pine Hollow Med., P.C. v Global Liberty Ins. Co. of N.Y., 25 Misc 3d 244 [Civ Ct, Richmond County 2009].)

If the insurer does not receive the verification request after its follow-up request is sent, its time to pay or deny the claim is tolled pending submission of the requested information. “A claim need not be paid or denied until all demanded verification is provided.” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; Westchester County Med.{**29 Misc 3d at 188} Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554 [2d Dept 1999].) The insurer must pay or deny the claim within 30 days after it receives verification of all relevant information it requested pursuant to its original request for additional information. (11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1]; Westchester County Med. Ctr., supra.)

The clear language of 11 NYCRR 65-3.6 (b) does not even mention the term “applicant” within the context of its requirement that the insurer follow up with the party from whom the verification was requested. Rather, the term “applicant” is only utilized within the context of the further obligation of the insurer to inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.

Plaintiff interprets the term “applicant” of 11 NYCRR 65-3.6 (b) to mean that the insurer must inform the assignor and the assignor’s attorney of the reasons why the claim is delayed at the same time the defendant requests a follow-up verification from the provider, since the defendant failed to notify the assignor and the assignor’s attorney, hence negating its motion for summary judgment. The defendant counters that upon the assignment of no-fault [*2]benefits, the medical provider steps into the shoes of its assignor and assumes all of his rights and obligations, thereby becoming the applicant within the meaning of 11 NYCRR 65-3.6 (b). Moreover, defendant argues that the plaintiff provider’s attorney’s letter directing the defendant to send all correspondence, including payment and verification requests to the provider’s attorney’s office or to “face unnecessary litigation,” placed the defendant on notice that the provider’s law firm was acting as the agent for the bills at issue.

In East Acupuncture, P.C. v Allstate Ins. Co. (61 AD3d 202 [2d Dept 2009]), the Second Department recognized that the no-fault regulations do not specifically define the term “applicant,” which generically refers to both the provider/assignee and injured persons in various no-fault sections. In Doshi Diagnostic Imaging Servs. v State Farm Ins. Co. (16 Misc 3d 42 [App Term, 9th & 10th Jud Dists 2007]), the Appellate Term interpreted the term “applicant” as used in 11 NYCRR 65-3.6 (b), to apply to an MRI facility which was the medical services provider/assignee. Accordingly, the plain meaning of 11 NYCRR 65-3.6 (b) refers to any entity, whether an injured person or a provider/assignee, who submits a claim or applies to an insurance{**29 Misc 3d at 189} company for no-fault benefits. (East Acupuncture, P.C., 61 AD3d at 210, citing Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577 [1998].)

Furthermore, the objective behind the aforementioned law is the efficient and speedy processing of the no-fault claims. It therefore begs all reason to require an insurer to seek verification from a party who has divested his interest in no-fault benefits by assigning his rights to his provider. (Mia Acupuncture, P.C. v Mercury Ins. Co., 26 Misc 3d 39 [App Term, 2d, 11th & 13th Jud Dists 2009] [assignment of no-fault benefits divests eligible injured persons of their interest in no-fault benefits and makes them nonparties to actions commenced by their assignees].) The letter mailed by the plaintiff provider’s attorney to the defendant, directing that all correspondence, including payment and verification requests, be mailed to the plaintiff provider’s attorney clearly placed the defendant on notice that the provider’s law firm was acting as the agent for receipt of all correspondence concerning the bills at issue. (See Lenox Hill Radiology & MIA P.C. v Global Liberty Ins., 20 Misc 3d 434 [Civ Ct, NY County 2008].)

The court therefore deems the provider to be the applicant in the instant matter. Since the plaintiff did not provide the verification sought by the defendant, the 30-day period in which the defendant had to either pay or deny the claim did not begin to run and the instant case is premature. (Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [1999].)

Accordingly, the defendant’s motion is granted.

[*1]

Civil Court of the City of New York, Richmond County, February 5, 2010

APPEARANCES OF COUNSEL

Law Office of Robert P. Tusa, Brooklyn, for defendant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff.

{**27 Misc 3d at 699} OPINION OF THE COURT

Katherine A. Levine, J.

The novel issue presented is what type of proof a defendant insurance company must present at trial in order to prevail on its defense that the injury billed for by a plaintiff medical service provider was not medically ascertainable within a year. Both parties concede that in order for this defense to be even raised, the insurance company must issue a timely denial.

This action was commenced by plaintiff AP Orthopedics & Rehabilitation, P.C. (AP Orthopedics) to obtain payment from defendant Allstate Ins. Co. (defendant or Allstate) for medical services it provided to its assignor Nelson Hernandez (assignor) in the form of arthroscopic surgery of the shoulder on October 11, 2006. Allstate received the bill on June 14, 2007 and timely denied it within 30 days on the grounds that the injury to the assignor’s shoulder was not ascertainable within one year of the accident.

Defendant presented the testimony of its claims examiner Nicholas D’Ermilo (claims examiner or D’Ermilo) to prove its defense. D’Ermilo testified that he had been employed by [*2]Allstate for over 27 years in its no-fault department and was a unit supervisor in no-fault in 1999 when Allstate first received claims from the assignor. He testified, that within one year of the accident, which occurred on February 14, 1999, Allstate received a number of bills from various medical providers other than plaintiff regarding the assignor and denied many bills (defendant’s exhibits A, D). He testified that defendant also received claims in 1999 from Flatbush Diagnostic for physical therapy on, and treatment of the assignor’s ankle, which it timely paid. Defendant also paid claims in 1999 from Alpha Chiro for chiropractic treatment it provided to the assignor’s cervical and lumbar spine.

On June 14, 2007, defendant received a bill for arthroscopic surgery of the assignor’s shoulder which was performed on October 11, 2006. D’Ermilo’s review of the file revealed that, between 2000 through June 2007, Allstate did not receive any further bills from physicians or providers pertaining to the assignor.{**27 Misc 3d at 700} His review of the file also revealed that the assignor’s shoulder had never been treated within one year of the accident, that no X rays or MRIs or CAT scans were taken of the shoulder, and there had been no chiropractic care of the shoulder. Nor was there any indication that the assignor would require future treatment of the shoulder.

On cross-examination, the claims examiner admitted that his testimony was based upon his review of the electronic files and that Allstate had closed the physical file on the assignor back in December 1999. His testimony was based solely upon the denials that Allstate had issued and which had been stored in Allstate’s computer system; Allstate no longer had access to the assignor’s application for benefits (NF-2) back in 1999. He did not know whether any chiropractic or physical therapy notes had been submitted to Allstate back in 1999 or what the chiropractor’s diagnosis had been.

At the close of the defendant’s case, plaintiff argued that defendant had the burden of proving, by the preponderance of the evidence, that the 2007 claim for arthroscopic surgery was not related to the accident. Plaintiff contended that it was impossible for defendant to meet this burden as the claims examiner was not a doctor, and that pursuant to Mount Sinai Hosp. v Triboro Coach (263 AD2d 11 [2d Dept 1999]), the issue of lack of causation could only be established through the testimony of an expert witness. Defendant countered that since there was no dispute that between 2000 and 2007 the assignor had not presented any bills for treatment, and that the 1999 to 2000 bills were solely for the cervical/lumbar spine and the ankle, defendant had met the burden of proving that the injury to the assignor’s shoulder was not ascertainable within one year of the accident.

Insurance Law § 5102 (a) (1) provides, in pertinent part, that an insurer must pay all necessary medical expenses of its insured without limitation as to time “provided that within one year after the date of the accident causing the injury it is ascertainable that further expenses may be incurred as a result of the injury.” (Emphasis added.) The implementing regulations (11 NYCRR 65-1.1 [d] [Sec I, Medical Expense]) further provide that “medical expenses will not be subject to a time limitation, provided that, within one year after the date of the accident, it is ascertainable that further medical expenses may be [*3]sustained as a result of the injury.”

The scant case law interpreting this provision has held that “an injury is not ascertainable if no evidence of it is submitted{**27 Misc 3d at 701} to the insurer within a year of the accident.” (Stanavich v General Acc. Ins. Co. of Am., 229 AD2d 872, 873 [3d Dept 1996].) For example, if an insured submitted expenses for a cervical injury and then three years later submitted expenses for a knee injury, the latter would not be ascertainable within the meaning of section 5102. On the other hand, if the subsequent treatment was for cervical injury, “that injury would be ascertainable since expenses for treatment for that injury had been submitted to the insurer within the one-year period.” (229 AD3d at 873.)

In Hospital for Joint Diseases v Allstate Ins. Co. (21 AD3d 348 [2d Dept 2005]), the Appellate Division, Second Department, further spelled out how this defense could be raised, albeit through a motion for summary judgment. After a plaintiff made out a prima facie case, the defendant had to raise a triable issue of fact as to whether the medical expenses submitted beyond a year after the accident “were for injuries for which expenses for treatment had not been submitted to it within one year of [his] accident.” (Id. at 349, quoting Stanavich at 873; see 11 NYCRR former 65.15 [new regulation § 65-1.1].) The court also held that the defendant’s failure to assert this statutory-exclusion defense within 30 days of the receipt of the no-fault claim constituted a waiver. (Id., citing Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 286 [1997]; see also Matter of Fields [Allstate], AAA case No. 4120070557, Mar. 20, 2008 [failure to submit any evidence which indicated that the applicant would in fact require further treatment after a gap of almost five years]; Ops Gen Counsel NY Ins Dept No. 08-04-16 [Apr. 2008]; see also Barki v Employers Mut. Liab. Ins. Co. of Wis., 87 Misc 2d 912, 913 [Kingston City Ct 1976] [burden is upon plaintiff to prove the fact of “ascertainability” within one year of the accident].)

Thus, according to Stanavich and its progeny, it would appear that as long as the insurance company can prove that it received no claims for a shoulder injury within one year of the accident, it would prevail on its defense that a claim submitted for a shoulder injury some seven years after the accident was not ascertainable within one year of the accident. However, plaintiff contends that only a medical expert can establish that a claim for a new type of injury was not ascertainable, from the medical claims previously supplied, within a year of the date of the injury. Plaintiff is, in essence, contending that it is entitled to a presumption of medical necessity, regardless of the time frame in which it submits a claim, and that defendant can only rebut{**27 Misc 3d at 702} this presumption by establishing a lack of medical necessity through an expert.^[FN*] [*4]

Under the No-Fault Law, individuals are entitled to be compensated for “basic economic loss” resulting from injuries caused by the operation of a motor vehicle. (Insurance Law § 5101 et seq.) “Basic economic loss” is defined to include “[a]ll necessary expenses” incurred for medical services “all without limitation as to time, provided that within one year after the date of the accident . . . it is ascertainable that further expenses may be incurred as a result of the injury.” (Insurance Law § 5102 [a] [1]; 11 NYCRR 65-1.1; see Precision Diagnostic Imaging, P.C. v Travelers Ins. Co., 8 Misc 3d 435, 438 [Civ Ct, NY County 2005].)

A presumption of medical necessity attaches to a timely submitted no-fault claim. (All County Open MRI & Diagn. Radiology P.C. v Travelers Ins. Co., 11 Misc 3d 131[A], 2006 NY Slip Op 50318[U] [App Term, 9th & 10th Jud Dists 2006].) The burden then shifts to the defendant to rebut the presumption of medical necessity. (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18 [App Term, 2d Dept 2004]; A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50 [App Term, 2d & 11th Jud Dists 2005]; A Plus Med., P.C. v Government Empls. Ins. Co., 21 Misc 3d 799 [Civ Ct, Kings County 2008].)

However, the term “provided that” constitutes a proviso to this section of the No-Fault Law. According to the general rules for statutory construction, the words “provided, however,” are deemed to denote the expression of a limitation or exception. (Matter of Livingston, 14 AD2d 264, 265 [1st Dept 1961].) “It is the province of a proviso to restrain the enacting clause, to take something back from the power first declared, to except something which would otherwise have been within it, or in some measure to modify the enacting clause.” (Id., quoting McKinney’s Cons Laws of NY, Book 1, Statutes § 212.) Thus, a proviso is ” ‘a condition, qualification, or limitation,’ a clause ‘to modify the operation of that part of the statute.’ ” (Ferrer v{**27 Misc 3d at 703} State of New York, 136 Misc 2d 218, 221 [Ct Cl 1987], quoting Webster’s Third New International Dictionary 1827 [unabridged 1993 ed]; Statutes § 212; see County of Erie v City of Buffalo, 4 NY2d 96, 103-104 [1958].)

The term “provided that within one year after the date of the accident . . . it is ascertainable that further expenses may be incurred as a result of the injury” thus serves as an exception or limitation to the presumption of medical necessity that generally attaches to claims that are submitted within one year of the accident. In other words, as long as the insurer can establish that it timely denied the claim and that no claims were presented to it within one year of the accident that were for injuries that were subsequently submitted outside of the one-year period, the insurer will prevail.

This construction comports both with explicit language of the proviso and with the legislative purpose behind the enactment of the No-Fault Law. The governing rule of statutory construction is that when the statutory “language is clear and unambiguous, it should be [*5]construed so as to give effect to the plain meaning of [the] words” used. (People ex rel. Harris v Sullivan, 74 NY2d 305, 309 [1989], citing Doctors Council v New York City Employees’ Retirement Sys., 71 NY2d 669, 675 [1988].) Furthermore, it is a general rule of construction that “omissions in a statute, where the act is clear and explicit in its language, cannot be supplied by construction.” (Eastern Paralyzed Veterans Assn. v Metropolitan Transp. Auth., 79 AD2d 516, 517 [1st Dept 1980]; Statutes §§ 75, 363.) Thus, a court cannot insert words into a statute that are not there and cannot read into a statute a provision which the Legislature did not see fit to enact. (People v Harris Corp., 123 Misc 2d 989, 995 [Clinton County Ct 1984].)

The proviso requires that within one year of the accident, it is ascertainable that further expenses may be incurred. Ascertainable has a clear and unambiguous meaning: “to find out or learn with certainty,” to discover. (Webster’s New Collegiate Dictionary.) The clause does not require that it be medically ascertainable that further expenses be incurred. Thus, if within a year it is not clear with certainty or discoverable that further expenses may be incurred, the insurer is under no obligation to pay for services rendered way after a year has expired. This determination can be made by a claims examiner who reviews records submitted or denials made on claims within the first year of the accident.

Moreover, this interpretation comports with the goal behind the No-Fault Law—to promote the “prompt payment of legitimate{**27 Misc 3d at 704} claims” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 300 [2007]), and the prompt resolution of injury claims. (Pommells v Perez, 4 NY3d 566 [2005]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 285 [1997] [“(t)he tradeoff of the no-fault reform still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leashed contestable period and process designed to avoid prejudice and red-tape dilatory practices”]; All Health Med. Care v Government Empls. Ins. Co., 2 Misc 3d 907, 910 [Civ Ct, Queens County 2004].) The regulations require insurers to act quickly in evaluating insureds’ claims and to avoid prejudicial delays. (Dermatossian v New York City Tr. Auth., 67 NY2d 219, 225 [1986]; Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723, 725 [Civ Ct, Queens County 2004].) Accordingly, it is the court’s duty to interpret and apply the no-fault regulations in a consistent manner leading to the prompt payment of valid, documented claims. (Marigliano v New York Cent. Mut. Fire Ins. Co., 15 Misc 3d 766, 774 [Civ Ct, NY County 2007].)

To hold otherwise, and require an insurance company to present a medical expert to validate a claims examiner’s testimony that the assignor failed to file any claims relating to the shoulder within a year of the accident, would run contra to the intent of the legislation and stymie the insurer’s expeditious processing of claims. It would force insurers to dwell on every claim they received to ascertain what claims for possible new injuries might be sent by the assignor more than a year after the assignor submitted his initial claims. The insurers would be foreclosed from closing any cases for fear that they might need a medical expert, some seven years after the accident, to pour over notes from doctors that were submitted within the initial year of the accident to opine as to whether the claim for new injuries was ascertainable within one year of the accident. [*6]

In light of the above, defendant has proved its defense. Since plaintiff offered no evidence to rebut defendant’s proof that the injury for the shoulder was not readily ascertainable within one year of the accident, judgment is rendered for defendant and the case is dismissed.

Footnotes

Footnote *: Plaintiff’s reliance on Mount Sinai Hosp. v Triboro Coach (263 AD2d 11 [1999]) is misplaced since Mount Sinai did not involve a determination as to whether a claim for a new injury, presented more than a year after the accident, was ascertainable, from the records presented, within a year. Rather, it involved the purely medical determination as to whether an injury was entirely preexisting (i.e., not covered under the insurance agreement) or was in whole or part caused by an insured accident, which would require a review of medical facts. (263 AD2d at 18.)

Civil Court of the City of New York, Kings County

034843/08

Sylvain Jakobavics, Esq.

Attorney for Plaintiff

2630 Ocean Avenue

Suite A-3

Brooklyn, NY 11229

718.332.0577

James Hiebler & Assoc.

Attorney for Defendant

20 Main Street

Hempstead, NY 11550

516.564.8000

Johnny L. Baynes, J.

Plaintiff in this application for first party no-fault benefits pursuant to Insurance Law § 5106[a], See also, Mary Immaculate Hospital. v. Allstate Ins. Co., 5 AD3d 742 [2004], moves for summary judgment in the amount of $729.71 for medical services rendered.

A party moving for summary judgment must show, by evidence in admissible form, that there are no material issues of fact in controversy and that they are entitled to judgment as a [*2]matter of law. Once that showing is made, the burden shifts to the opponent of the motion for summary judgment to come forward with proof in admissible form that there are material issues of fact in controversy which require a trial. Alvarez v. Prospect Hospital, 68 NY2d320 (1986); Winegrad v. New York University Medical Center, 64 NY2d 851(1985).

In the instant matter, plaintiff has shown, by admissible evidence, that it was assigned the instant claim and submitted same to defendant and that said claim was not paid within thirty days of its receipt by defendant. The Affidavit of Alla Noginsky, the owner of plaintiff facility, is detailed, clear and sets forth with specificity the basis for her knowledge of the procedures with respect to the instant claim, the manner of gathering and recording the billing information and the specifics as to the mailing of the bill and NF-3 claim form to the defendant.

Moreover, the Affidavit of Donna King, defendant’s employee, a no fault examiner, acknowledges that the NF-10 submitted with the defendant’s motion papers is correct. That NF-10 denial of claim form states clearly that the denial was not issued with respect to the bills, received “11/26/06-2/16/07”, until April 10, 2007, in clear violation of the requirement of Insurance Law § 5106[a] that the denial be issued within thirty (30) days of their receipt by defendant.

The NF-10 describes the basis for the denial as follows:

AS PER CARRIER’S INVESTIGATION A PORTION OF

YOUR BILL WILL NOT BE HONORED ACCORDING TO

THE CLAIMANT’S RECORDED STATEMENT THE

ACUPUNCTURE SESSIONS LASTED15 MINUTES.

CARRIER WAS BILLED AN ADDITIONAL 15 MINUTES

WITH NEEDLE REINSURCION [sic] WHICH WAS NOT

RENDERED. AS PER DENIAL OF 12/11/06 NO FURTHER

TREATMENT WILL BE HONORED. CONSULTANT

REPORT PREVIOUSLY SENT.

Defendant’s excuse for the delay in denying the claim is that there was a “pending fraud investigation”. There is no indication that any verification request was ever sent to plaintiff after defendant received the bills. Such a request would have served to toll the time to deny the claim. Moreover, the report of Special Investigations Unit [hereinafter “SIU”] Investigator, Charles Rorke, is unsworn and not in admissible form as required by CPLR § 3212. However, even if it were admissible, Mr. Rorke concluded that “there is no evidence that [the accident forming the basis of the claim] was caused or staged”.

Defendant correctly states that “a no fault insurer is not precluded from asserting a defense of fraud, despite the insurer’s untimely denial of the claim”. Central Gen. Hosp v. Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Matter of Progressive Northwestern Ins Co. V Van Dina, 282 Ad2d 269 [2d Dept 2001]. However, no such tolling provision applies with respect to provider fraud, which seemingly forms the basis for defendant’s denial. Fair Price Medical Supply Corp v. Travelers Indemnity Co., 10 NY3d 556, 860 NYS2d 471 [2008]. [*3]

Defendant urges that the Court find there is an issue of fact as to fraud and set the matter down for trial on that issue. The Court declines to do so. Even if there were admissible evidence of provider fraud, as set forth above, such evidence would not excuse defendant’s untimely denial of the within claims.

The Court finds that plaintiff has met its prima facie burden of proving mailing. Defendant is, however, unable to prove timely denial.

Wherefore, the Clerk of Court is directed to enter judgment in favor of plaintiff in the sum of $729.71, together with statutory costs, interest and attorneys fees.

The foregoing Constitutes the Decision and Order of the Court.

Dated: January 22, 2010

____________________________________

JOHNNY L. BAYNES, JCC

Civil Court of the City of New York, Richmond County

19752/07

Defendant:

Law Offices of Teresa M. Spina

GEICO Insurance Co.

170 Froehlich Farm Blvd

Woodbury NY 11797

(516) 496-5822

Plaintiff:

Joseph Sporacio, P.C., Attorney for Plaintiff

2555 Richmond Avenue

Staten Island, NY 10314

(718) 966-0055

Katherine A. Levine, J.

The primary issue presented at trial was whether plaintiff Healthcare Associates in Medicine (“plaintiff” or “Health Care”) violated the revised Mandatory Personal Injury Protection Endorsement (“Endorsement”or “PIP”) contained in the revised No-Fault Regulations – 11 NYCRR 65 – 1.1 – by failing to submit its proof of claim for services to defendant Geico Insurance (“defendant” or “Geico”) within 45 days from the date services were rendered. Since the two aforementioned cases presented the same issue, they were consolidated for trial. [*2]

Defendant moved for a directed verdict after plaintiff presented the testimony of Ms. Sparta, its collection account representative. Defendant contended that Sparta failed to establish that either of the assignor’s bills were sent within 45 days since she admitted on cross that she did not know whether or when the bills were actually sent out. She did not generate the bill and did not see the representative responsible for billing GEICO either generate the bills or mail them or give them to the postal clerk. Rather, it is her responsibility to supervise the assigned representatives, including “Mary Ann” who was responsible for GEICO billing. Mary Ann was supposed to take the information from the patient and generate a bill after the patient was seen and send out the bill was supposed to generate a visit for the day, attach it to the bill and send it out. She “hopes and assumes” that Maryann took the bill and put it into the mail room.

Due to the computer program utilized by plaintiff, she cannot print out a hard copy of the bill for the first date of service of a particular assignor since each time a new bill is generated the computer overrides the original bill that was created. Therefore the dates on the claim forms submitted by plaintiff (plaintiff’s “1” and “3”) are not the dates for the first bills that were generated for the assignors but rather the dates for the last bills that were generated. There is no proof of mailing for the bills containing the original dates of service and nothing on the bills that would show that they were mailed. However, the computer also prints out a claims history report ( plaintiff’s “2” and “4”) which chronologically lists from the bottom upwards the dates that the bills were generated. Sparta claims that based upon the claims history forms, the bill for the first date of service on Varallo- April 7, 2006 – was generated on April 12, 2006 and that the girls should have mailed the bill out that day. With respect to assignor Galanti, the bill for the first date of service on May 16, 2006 was generated was May 17, 2006.

Due to the alleged deficiency in Sparta’s testimony as well as deficiencies in the documentary evidence, GEICO contends that it is not necessary for it to present its own witness to establish its receipt of the bills or its generation of timely denials. Despite this contention, Geico asserts in its brief that it received the bill for the date of service of April 7, 2006 (Varallo) on June 26, 2006 and timely denied the bill on June June 29, 2006. Geico also asserts that it received the bill for the date of service of May 16, 2006 (Galanti) on July 7, 2006 and timely denied it on July 20, 2006. However, these are merely assertions; Geico did not place its denials in evidence.

Curiously, Geico does not dispute that plaintiff’s witness “adequately testified that she had personal knowledge of the mailing procedures sufficient to raise a presumption that the bill(s) were mailed to Defendant.” Therefore defendant does not dispute that but for the 45 day issue, plaintiff would have proven its prima facie case. Rather defendant challenges plaintiff’s ability, on its prima facie case, to submit both testimony and evidentiary documentation to establish that the bills were mailed within the mandatory statutory time period of 45 days. In essence Geico contends that it would be redundant and a waste of time for it to have to place its claims examiner on the stand to establish that the bill was mailed and received beyond the 45 [*3]days since plaintiff would not be able, based upon Sparta’s testimony in plaintiff’s case, to rebut its testimony and documentary evidence.

Pursuant to the revised insurance regulation, all automobile insurance policies issued or renewed after April 5, 2002, are required to include a revised Mandatory Personal Injury Protection Endorsement (“Endorsement”) which reduces the time within which claims are to be submitted from 180 days (11 N.Y.C.R.R. 65.12 [e] (“old regulations)) to 45 days (11 N.Y.C.R.R. § 65-1.1 [b] (“new regulations.”)). See, Mtr. Of Medical Society of the State of NY v. Serio, 298 AD2d 255 (1st Dept. 2002); Eagle Chiropractic P.C., v. Chubb Indemnity Ins. Co., 19 Misc 3d 129A, 859 NYS2d 902 (App. Term, 2d Dept. 2008); S & M Supply v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 130(A), 791 NYS2d 873 (App Term, 9th & 10th Jud Dists 2004). 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 Medical P.C. v. Country-Wide Ins. Co., 12 Misc 3d 52, 55 (App. Term., 2nd & 11th Jud. Dists. 2006), citing Informal Opinion, New York State Insurance Department, June 30, 2003.

Insurance Law § 3425 (a) (8) sets forth that the policy period for newly issued and renewed automobile insurance policies is one year. See also Rosner v Metropolitan Prop. & Liab. Ins. Co., 96 NY2d 475 (2001). The latest date of expiration for an automobile insurance policy which contained the prior version of the Endorsement would be April 2003. S & M Supply v State Farm Mut. Auto. Ins. Co., supra . When an automobile policy is issued after that date, the defendant insurer need not prove that the policy at issued contained such an endorsement, “(s)ince an automobile insurance policy which contained the prior version of the Endorsement would have expired no later than in April 2003 (see Insurance Law § 3425 [a][8]), the automobile insurance policy applicable to the claims at issue in the instant case was required to contain the current Endorsement which sets forth the 45-day time limit for the submission of claims (Insurance Department Regulations [11 N.Y.C.R.R.] § 65-1.1 [b]”. Eagle Chiropractic, supra . See also, Lenox Hill Radiology and MIA, P.C. v. Regina Alsis, 2009 NY Slip Op. 51966U, 2009 NY Misc. LEXIS 2471 (Civil Ct., Bronx Co. 2009).

Although a health care provider is required to submit its proof of claim within 45 days after the services were rendered, an insurer is precluded from asserting the defense of a provider’s untimely submission of claim if it does not issue a timely denial of claim. Rockman v. Clarendon Nat. Ins. Co., supra , citing Mid Atlantic Medical P.C. v. Travelers Indemnity Co., 12 Misc 3d 147(A), 824 NYS2d 769 (App. Term, 1st Dept. 2006). Pursuant 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. Presbyterian Hosp. v. Md. Cas. Co., 90 NY2d 274, 278 (1997), citing Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g] [3]). See, Bayside Rehab & Physical Therapy P.C. v. GEICO, 24 Misc 3d 542 (Civil Ct., Richmond CO. 2009). [*4]

Thus, in Montefiore Med. Ctr. v. NY Cent. Mut. Fire Ins. Co., 9 AD3d 354 ( 2d Dept. 2004), the court found that despite the fact that the medical service provider had submitted a proof of claim that was incomplete and untimely, the plaintiffs demonstrated a prima facie showing of entitlement to judgment as a matter of law with evidence that their claims were neither denied nor paid within the requisite time period NYCRR 651.1(d) ( new regulation). St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d 718 (2d Dept. 1994).However, since the defendant offered sufficient evidence to raise a triable issue of fact whether as to whether the plaintiff’s claim was denied as untimely, summary judgment should not have been granted to the plaintiff. See also, Delta Diagnostic Radiology, P.C. v. MVAIC, 2007 NY Slip Op 52143U, 17 Misc 3d 1125A (Civil Ct., Kings Co. 2007) (parties stipulated at outset of trial that plaintiff’s bills were submitted beyond 45 days after services were rendered, the defendant submitted a timely denial, and the plaintiff’s prima facie case was established).

GEICO submits that it need not present a witness to establish that it timely denied the bills because plaintiff failed, in its prima facie case, to establish that it mailed the bills within the statutory 45 day period and failed to present any testimony as whether it had a reasonable justification for the delay in mailing the bills. However, since GEICO concedes that plaintiff made out its prima facie case of generating and then mailing a bill, GEICO cannot then attack the validity of the very bills it concedes were properly mailed and generated by arguing that they do not contain proof that they were mailed within 45 days. The fact that a plaintiff’s bill may ultimately be deemed to be untimely does not create an obligation upon the plaintiff, in the first instance, to prove timeliness as part of its prima facie. Rather, precedent requires that an insurance company establish the untimeliness of the bills by putting in its timely denials which contain the dates that the bills were received. GEICO may be able to prevail if the documents it puts into evidence substantiate its assertions, in its brief, that it received both claims beyond the 45 day manage.

As such, defendant’s motion for judgment as a matter of law and for the dismissal of the case is denied. The parties shall contact the court within 20 days of receipt of this decision to set a trial date if they cannot resolve these two cases based upon the afore stated decision. A trial shall be held to give GEICO an opportunity to present its defense.

The foregoing constitutes the Decision and Order of the Court.

Dated: January 6, 2010______________________________

Hon. Katherine A. Levine

Judge, Civil Court

ASN by _______on___________ [*5]

A P P E A R A N C E S

Civil Court of the City of New York, Kings County

97213/2007

Plaintiff’s Counsel:

Law Offices of Melissa Betancourt

155 Kings Highway, 3rd Floor

Brooklyn NY 11223

Tel.: (718)336-8076

Defendant’s Counsel

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, NY 11747

Tel.: (631) 390-0011

Peter P. Sweeney, J.

In this action to recover assigned first-party no-fault benefits, both the plaintiff and defendant move for summary judgment.

Plaintiff established its prima facie entitlement to summary judgment by proving the submission of statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]). The burden then shifted to defendant to raise a triable issue of fact ( see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986] ).

In opposition to the motion and in support of its cross-motion, defendant demonstrated that after receiving the claims for assigned first-party no-fault benefits, it timely requested additional verification of the claims by sending a letter to plaintiff’s assignor on August 21, 2006, directing her to appear for an independent medical examination (IME) on a September 6, 2006. When she failed to appear for the examination, defendant sent her a second letter on September 7th, rescheduling the examination for September 20, 2006. Defendant’s submissions sufficiently demonstrated that the scheduling letters were mailed to plaintiff’s assignor on the above dates and [*2]that plaintiff’s assignor failed to appear for the examinations.

It is well settled that an insurer is required to pay or deny a claim for no-fault benefits within 30 days after the claimant provides proof of the claim (see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 278 [1997]) and that its failure to do so will preclude it from raising most defenses to the claim (see Presbyterian Hosp. in City of NY, supra, 90 NY2d at 282). An insurer may extend the 30 day period in which it has to pay or deny a claim by making a request for additional verification of the claim “within 15 business days of receipt [of one] of the prescribed verification forms” (11 NYCRR 65-3.5[b]; see also Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2nd Dept 2005]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2nd Dept 2002]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 700 [2nd Dept 2001]). If the verification is not provided 30 calendar days after the original request, “[a]t a minimum … the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, or by mail” (11 NYCRR 65-3.6[b]). An insurer does not have to pay or deny a claim until it has received verification of all of the relevant information requested (see e.g. Montefiore Med. Ctr. v Gov’t Empls. Ins. Co., 34 AD3d 771 [2d Dept 2006]; see also Mount Sinai Hosp. v Allstate Ins. Co., 25 AD3d 673, 674 [2d Dept 2006]).

At oral argument, plaintiff’s counsel maintained, inter alia, that since defendant did not strictly comply with the time limitations set forth in 11 NYCRR 65.15[e][2], it lost the toll of the 30-day rule to pay or deny the claim. Plaintiff’s counsel pointed out that the second IME letter was mailed only 17 days after the first. She maintained that pursuant to 11 NYCRR 65.15[e][2], defendant was required to wait a full 30 days after the initial mailing of the IME request before mailing out the second request. The Court finds plaintiff’s argument to be unavailing.

In Infinity Health Products, Ltd. v Eveready Ins. Co., 67 AD3d 862, 2009 NY Slip Op 08585 [2d Dept ]), the Court recently held that it “[i]t would be inequitable to award summary judgment to the plaintiff, which ignored two verification requests, merely because the defendant, slightly prematurely, sent its second verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent” (2009 NY Slip Op 08585 at 2 [citations omitted]) The Court reasoned that “it would be incongruous to conclude that the insurance regulation regarding follow-up verification, or any other statute or rule, warrants a result which would, in effect, penalize an insurer who diligently attempts to obtain the information necessary to make a determination of a claim, and concomitantly, rewards a plaintiff who makes no attempt to even comply with the insurer’s requests…. and [that] [s]uch a result is not contemplated by the no-fault law’ or its regulations, which should be interpreted to promote the expeditious handling of verification requests and prompt claim resolution” (Id.).

The Court held that “inasmuch as the plaintiff did not respond to either of the verification requests, the 30-day period within which the defendant was required to pay or deny the claim did not commence to run . . . and that . . . plaintiff’s action [was therefore] premature” (Id.). The [*3]Court further held that “plaintiff was not entitled to summary judgment on the complaint, and the defendant’s cross motion for summary judgment dismissing the complaint should have been granted . . .without prejudice to commencement of a new action” (Id. [citations omitted]).

In this Court’s view, the holding in Infinity Health Products, Ltd. requires dismissal of the within action, without prejudice to its recommencement. Here, as in Infinity Health Products, Ltd., it would be inequitable to award summary judgment to the plaintiff, whose assignor ignored two verification requests, merely because the defendant did not strictly adhere to the time frames set forth in 11 NYCRR 65-3.6[b] for mailing out second requests for additional verification of a claim . It would be incongruous to conclude that 11 NYCRR 65-3.6[b] mandates a result that would penalize the defendant for its diligent attempts to obtain additional verification of the claims and reward plaintiff whose assignor ignored the requests.

This court recognizes that this case is not on all fours with Infinity Health Products, Ltd.. In Infinity Health Products, Ltd., the defendant sent its second written verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent. Here, the second written verification request was sent out 13 days before the expiration of the 30 day period referred to in 11 NYCRR 65-3.6[b]. Under the facts and circumstances of this case, however, this distinction does not warrant a contrary result.

When plaintiff’s assignor failed to appear for the IME on September 6, 2009, the re-scheduling letter was mailed to her on the following day. Unlike in Infinity Health Products, Ltd., once plaintiff’s assignor failed to appear for the IME, there is no legitimate reason why defendant should have waited a full 30 days from the mailing of the first letter to mail out the re-scheduling letter. Indeed, had defendant waited a full 30 days, it would have had acted in contravention of one of the primary policies underlying the “no-fault law”; which is “to promote the expeditious handling of verification requests and prompt claim resolution” (Infinity Health Products, Ltd., supra, 67 AD3d 862, 2009 NY Slip Op 08585 at 2). Further, the Court notes that when plaintiff’s assignor failed to appear for the re-scheduled IME, 30 days had elapsed from the time that the first scheduling letter had been sent to her.

Based on the foregoing, it is hereby

ORDERED that Plaintiff’s motion for summary Judgment is DENIED; and it is further

ORDERED that defendant’s cross-motion for summary judgment dismissing the complaint is GRANTED to the extent that plaintiff’s complaint is DISMISSED without prejudice to the commencement of a new action.

This constitutes the decision and order of the court.

[*4]Dated: January 6, 2010__________________________

PETER P. SWEENEY

Civil Court Judge

Civil Court of the City of New York, Richmond County

13134/07

Counsel for Plaintiff:

Joseph Sparacio

2555 Richmond Avenue

Staten Island, New York 10314

(718) 966-0055

Counsel for Defendant:

Diamond, Rutman, Costello & Si

291 Broadway, Suite 1100

New York, New York 10007

(212) 267-4731

Katherine A. Levine, J.

This case calls upon the court to again examine whether an expert witness called by a defendant insurance company may rely upon medical records, prepared by an entity other than the plaintiff medical service provider, to formulate an opinion as to the medical necessity of services provided by the plaintiff.

Plaintiff Popular Imaging, P.C., (“plaintiff” or “Popular Imaging”), a medical service provider, seeks to recover r payments from defendant State Farm Insurance Co. (“defendant” or “State Farm”) for an MRI of the lumbar spine that it provided to the assignor Belquis Perez (“assignor” or “Perez”) as a result of the injuries that she sustained in an automobile accident. Defendant claims that the services were medically unnecessary. At the trial, the parties stipulated to plaintiff’s prima facie case and to defendant’s timely denial of the claim. Therefore, the only issue before the court was whether the medical services provided was medically necessary. [*2]

Dr .James B. Sarno (“Dr. Sarno”), who is a board certified neurosurgeon, prepared a peer review report and testified that the MRI performed on the assignor’s lumbar spine was medically unnecessary. At the outset of Dr. Sarno’s testimony, plaintiff refused to stipulate into evidence the peer review report prepared by and medical records reviewed by Dr. Sarno, contending that this court should not consider Dr. Sarno’s opinion since it was based upon medical records and reports that were not in evidence and for which no evidence was submitted as to their reliability. pursuant to the leading case of Wagman v. Bradshaw, 292 AD2d 84 ( 2d Dpt 2002). The court reserved decision on this objection to Dr. Sarno’s testimony.

Dr. Sarno’s testimony referred, for the most part, to the records and reports of Dr. Noel Fleisher, a board certified neurologist, who was the assignor’s treating physician and who referred the assignor to the plaintiff for an MRI. On August 23, 2002, Dr. Fleisher issued a report as to the results of his neurological consultation with the assignor some two weeks after the accident. He set forth as his impressions post concussion syndrome, traumatic cervical radiculopathy, traumatic lumbar radiculopathy, and myofacial pain syndrome. He indicated that he would consider a MRI scan and/or EMG studies. He listed the prognosis as guarded. Dr. Sarno also listed on his peer review the March 7, 2003 letter from plaintiff to Dr. Fleisher explaining the results of the MRI of the lumbar spine.The peer review report also lists a number of other reports, letters or diagnosis from other entities that were independent of both Dr. Fleisher and plaintiff (“independent reports’) such as New York Neurology, P.C.; Central Park Physical Medicine and Rehabilitation, etc.

It is well settled that when records are prepared by a plaintiff medical service provider’s own principal, who treated the claimant and conducted the tests in questions, a plaintiff cannot viably argue that a defendant’s expert opinion “was not derived from a professional reliable source or to otherwise challenge the reliability of its own medical records and reports which were used as proof of its claim”. Andrew Carothers, M.D. (Martinez) v. GEICO, 2008 NY Slip Op 50456U, 18 Misc 3d 1147A (Civil Ct., Kings Co. 2008);. See, Cross Continental Medical v. Allstate, 13 Misc 3d 10 (App. Term 1st Dept. 2006).

In Velen Medical Supply Inc. V. Travelers Ins. Co., 20 Misc 3d 781 (Civil Ct., Queens Co. 2008), the court extended this ruling to permit testimony by a defendant’s expert based upon medical records and reports prepared by entities other than the plaintiff. The court first found that the records at issue fell within the fourth category of admissible opinion evidence set forth in the leading case of Wagman v. Bradshaw. 292 AD2d 84, 86-87 ( 2d Dept. 2002) : “material not in evidence provided the out- of-court material is accompanied by evidence establishing its reliability.” The court then cited to Hambsch v. N.Y.C. Transit Auth., 63 NY2d 723, 726 (1884) where the Court of Appeals held that an expert “may rely on out-of-court material if it is of a kind accepted in the profession as reliable in forming a professional opinion’ or if it comes from a witness subject to full cross examination.'”.

As to the Wagman issue, the Velen court found that in the context of no-fault, a plaintiff could not challenge the reliability of the assignors’ medical records and reports, even if those [*3]reports were not prepared by the plaintiff, if they were provided by plaintiff in response to defendant’s verification requests and were affirmatively relied upon by plaintiff as proof of claim. 20 Misc 3d at 784.See, Home Care Ortho. Med. Supply Inc., v. American MFRS. Mut. Ins. Co., 2007 NY Slip Op 50302[U] , 14 Misc 3d 139A (App. Term,1st Dept. 2007). Subsequently, Judge Sweeney extended this reasoning to the situation where the plaintiff’s assignor, rather than the plaintiff, provided the medical records to the defendant in response to a verification request. See, Primary Psychiatric Health, P.C., v. State Farm Mutual, 2007 NY Slip Op 50583U, 15 Misc 3d 1111A (Civil Ct., Kings Co. 2007). In fact, the Appellate Term has recently ruled that a defendant’s expert may not be precluded from testifying even though his opinion was based upon medical records prepared by physicians other than the plaintiff relating to treatment provided to the assignor. Bronx Expert Radiology v. NY Central Mutual, 2009 NY Slip Op 514575U, 2009 NY Misc. LEXIS 1796 ( App. Term, 1st Dept. 2009).

Here, the assignor’s physician, Dr. Fleisher , recommended that a MRI be performed; this is confirmed by Dr. Fleisher’s records. Dr. Sarno testified that in formulating an opinion he relied primarily upon Dr. Fleisher’s August 23, 2002 report of his neurological consultation with the assignor^[FN1] and Dr. Fleisher’s EMG/NCV testing of September 13, 2002. Since plaintiff performed the MRI based upon the records and referral from the assignor’s treating physician, who apparently deemed the test to be medically necessary, and since plaintiff sent the results and explanation of the MRI back to Fleisher, plaintiff cannot now be heard to challenge the reliability and authenticity of Dr. Fleisher’s records.

As to the requirement that the material be generally accepted in the profession as reliable and there be evidence establishing its reliability, Dr. Sarno testified that these are the types of reports that a doctor would review to offer an opinion on the necessity of a lumbar MRI. Dr. Sarno uses other doctors’ reports in formulating a medical opinion about his own patients and that it is a generally accepted standard in the medical profession to form an opinion based in part on other doctors reports. He testified that he takes these reports at face value. Dr. Sarno’s testimony is consistent with set precedent that a physician’s office records are admissible as evidence at trial to the extent they are germane to diagnosis and treatment. Hazel Bruce Bishop v. Jafar, 302 AD2d 345 (2d Dept. 2003). Furthermore, an expert is entitled to rely upon facts set forth in medical records so long as he did not base his opinions upon the conclusions contained in the records. Meagan Murray v. Weisenfeld 37 AD3d 432, 434 (2d Dept. 2007); Bruce Bishop v. Jafar, supra. [*4]

Dr. Sarno then testified that it is generally accepted medical procedure to send a patient for a lumbar MRI where there is actual evidence of radiculopathy, irregularities in the neurological exam or failure to respond to conservative treatment. None of these factors were present in the documents reviewed by Dr. Sarno so as to justify the medical necessity of the lumbar MRI. On cross examination. Dr. Sarno reiterated that there were no actual neurological findings in the lower extremities to support a finding of radiculopathy He also testified that no EMG/NCV studies were even performed in the lumbar area of the body. Plaintiff presented no evidence or testimony in this matter, choosing instead to rely upon the aforementioned argument concerning the ability of Dr. Sarno to render an opinion and its cross examination of Dr. Sarno. Plaintiff has failed to refute the expert testimony and opinion and failed to produce evidence to rebut the lack of medical necessity for the lumbar MRI. As such, judgment is rendered in favor of defendant

.

Dated: November 5, 2009

KATHERINE A. LEVINE

JUDGE, CIVIL COURT

Footnotes

Footnote 1:(Since Dr. Sarno relied for the most part upon Dr. Fleisher’s records, it is not necessary for this court to render an opinion about the admissibility of the panoply of reports from other doctors that were reviewed by Dr. Sarno and which accompanied his peer review report. However, it appears that these reports were provided to Sarno by DND – a third party- who apparently received all the records from plaintiff as a result of defendant’s verification request (defendant’s 2). As such, in accordance with the aforementioned precedent, Dr. Sarno could also properly rely upon these records in formulating an opinion.

Civ Ct, Richmond County

Index No.: 21379/07

Counsel for Defendant:

Gina M. DiGaudio, Esq.

GULLO & ASSOCIATES, LLP

520 86TH Street

Brooklyn, New York 11209

718-238-9555

Counsel for Plaintiff:

Joaquin J. Lopez, Esq.

BAKER, SANDERS, BARSHAY, GROSSMAN, FASS, MUHLSTOCK & NEUWIRTH

150 Herricks Road

Mineola, NY 11501

516-741-4799

Katherine A. Levine, J.

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

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

Plaintiff Administrative Assets (“plaintiff” or “Assets”), a medical service provider, commenced this action, pursuant to the No-Fault Law, to recover payments from defendant Zurich American Transit Insurance Company (“defendant” or “Zurich”) for services plaintiff rendered to its assignor Frank Saccente (“assignor” or “Saccente”) as a result of the injuries that he sustained in an automobile accident.

Defendant moves to dismiss the action on the ground that the assignor is entitled to Workers Compensation because the assignor was an employee who was injured on the job while working, thus granting the Workers Compensation Board (“Board”) primary jurisdiction over issues of coverage. In support of its motion, defendant presented the affidavit of its no fault specialist – Mr. Herbert – who, in a conclusory fashion, described how defendant ” obtained documents from the Workers’ Compensation Board which revealed that the assignor was injured in the course of employment.” Specifically, attached to his affidavit is an “Employer’s Report of Work-Related

Accident”(“Employer’s Report”) filled out by a third party – the assignor’s employer.

Plaintiff asserts that a no-fault insurer asserting a defense that workers compensation is primary must establish, as a threshold matter, that the claimant was employed at the time of the underlying motor vehicle accident. Plaintiff asserts that defendant failed to submit any admissible evidence on this point that the claims specialist’s affidavit is insufficient to lay a foundation to admit a hearsay document (the Employer’s Report) into evidence. Specifically, under Dan Medical P.C. v. NY Central Mutual Fire, Ins.,14 Misc 3d 44 (App. Term, 2d Dept. 2006), the claims specialist failed to demonstrate that he possessed sufficient personal knowledge of defendant’s business offices practices and procedures so as to lay the foundation for the [*2]admission of the assignor’s Employer’s Report.

The Court finds that the Employer’s Report is inadmissable, since defendant has failed to lay a foundation establishing that this Report, which was prepared by a third party – the assignor’s employer – is a business record of defendant. As such, the information contained in the report is inadmissable hearsay.

In the leading case of People v. Kennedy, 68 NY2d 569 (1986), the Court addressed several issues relating to the hearsay exception to business records contained in CPLR 4518(a). This provision provides that “[t]he term business includes a business, profession, occupation and calling of every kind.” The business records exception “grew out of considerations of necessity and trustworthiness – the necessity for alternatives to permit large and small business to prove debts by their records of account, and the unusual degree of trustworthiness and reliability of such records owing to the fact that they were kept regularly, systematically, routinely and contemporaneously.” Id at 579 citing 5 Wigmore, Evidence, §§ 1421-22, 1546. “The essence of the business records exception …is that records systematically made for the conduct of a business …are inherently highly trustworthy because they are routine reflections of day-to-day operations and because the entrant’s obligation is to have them truthful and accurate for purposes of the conduct of the enterprise.” 68 NY2d at 579.

The foundation requirements of CPLR 4518, which incorporate these common law precepts,

mandate that the proponent establish that the writing was made in the regular course of business, i.e. that the writing reflects a routine, regularly conducted business activity; that it was the regular course of business to make the writing; and that the writing was made at or about the time of the transaction; and that the writing was made at or about the time of the transaction.” Id at 580. See, Lenox Hill Radiology P.C. (Sardar) v. American Transit Ins CO., 2008 NY Slip Op. 50330U, 18 Misc 3d 1136A (Civil Ct., NY Co. 2008). In Aram Barbikian v. Nikki Midtown LLC, 60 AD3d 470, 471-72 (1st Dept. 2009), for example, the court held that the bookkeeper’s affidavit did not lay the foundation

necessary for the admissibility of purported employment records and a computer printout submitted to show where the employees were on the date of the attack. The bookkeeper did not state that she was in charge of employment or employment records or otherwise have firsthand knowledge of the plaintiff.

Similarly, here, the affidavit of John Herbert does not specify defendant’s regular business procedures for obtaining information regarding an assignor’s employment status vis a vis workers compensation, and defendant clearly does not have personal knowledge much less any knowledge as to how the third party – the assignor’s employer – filled out the Employer’s [*3]Report or submitted it to the Workers Compensation Board. The affidavit is silent as to whether either it was either defendant’s or the third party employer’s business duty to record the act, transaction or occurrence sought to be admitted.

As such, the third party report may not be considered in this summary judgment motion and the defendant therefore cannot show, in its papers that there is potential merit’ to its claim that [the assignor] was employed at the time of the accident so as to trigger a determination by the Workers’ Compensation Board. Lenox Hill Radiology, supra citing A.B. Medical Serv. PLLC v. American Transit Ins. Co., 8 Misc 3d 127A, 801 NYS2d 776 (App. Term, 2d Dept. 2005 ). In light of the inadmissibility of this record, this court finds that defendant has not submitted sufficient evidence that the assignor was employed at the time of the accident, that workers compensation is primary, and that the issue of coverage must first be presented to the Workers Compensation Board. See, Arvatz v.v. Empire Mut. Ins. Co., 171 AD2d 262, 268 (1st Dept. 1991); Lenox Hill Radiology, supra .

As defendant’s motion for summary judgment is denied, this case shall proceed to trial.

The foregoing constitutes the decision and order of the court.

Dated:October 1, 2009

Staten Island, NYHON. KATHERINE A. LEVINE

Judge, Civil Court

ASN by _______ on ____________

A P P E A R A N C E S

Counsel for Defendant:

Gina M. DiGaudio, Esq.

GULLO & ASSOCIATES, LLP

520 86TH Street

Brooklyn, New York 11209

718-238-9555

Counsel for Plaintiff:

Joaquin J. Lopez, Esq.

BAKER, SANDERS, BARSHAY, GROSSMAN, FASS, MUHLSTOCK & NEUWIRTH

150 Herricks Road

Mineola, NY 11501

516-741-4799

[*1]

Civil Court of the City of New York, Kings County, September 22, 2009

APPEARANCES OF COUNSEL

Melissa Betancourt, Brooklyn, for plaintiff. Law Office of Teresa Spina, Woodbury, for defendant.

{**25 Misc 3d at 1099} OPINION OF THE COURT

Lisa S. Ottley, J.

Plaintiff commenced this action against the defendant to recover first-party no-fault benefits pursuant to section 5106 of the Insurance Law and Regulations of the New York State Insurance Department (11 NYCRR) § 65-1.1 et seq., for medical services rendered. Plaintiff is seeking judgment in the amount of $796.46, which represents two bills in the amounts of $16.46 and $780.

Plaintiff moves for an order granting summary judgment as a matter of law, on the grounds that assignor, Kiara Francisco, assigned her “no fault” benefits to plaintiff pursuant to the terms of the insurance policies sold by defendant, and the timely submission of invoices and/or bills to defendant in accordance with the New York State Insurance Law. Defendant opposes plaintiff’s motion and cross-moves for an order granting summary judgment on the grounds that the claims for no-fault benefits were timely denied based upon lack of medical necessity and fees charged in excess of the workers’ compensation fee schedule.

After careful review of the moving papers, supporting documentation and opposition thereto, the court finds as follows: [*2]

Pursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, within 30 days after a claimant submits proof of the facts and the amount of loss sustained, an insurer is required to either pay or deny a claim for insurance coverage of medical expenses arising from a motor vehicle accident. (See 11 NYCRR 65-3.8 [a] [1]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 200 [1997]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 16 [2d Dept 1999]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002].)

Based upon a review of the supplemental documents submitted by the plaintiff, the court finds that the plaintiff has{**25 Misc 3d at 1100} established its prima facie case as to the mailing of its claims for no-fault benefits. The plaintiff has annexed an affidavit of its billing manager, as well as proof of mailing. In addition, the court finds that the defendant has established its prima facie case as to the mailing of its timely denials. The affidavit of defendant’s claims representative, Leonard Delgiudice, sets forth the insurer’s standard office practice and procedure, which establishes a presumption of mailing. (See Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001].)

Plaintiff argues that defendant improperly denied one bill in the amount of $780, and partially paid the other bill, and that defendant improperly applied the fee schedule. Plaintiff further states that defendant’s moving papers were insufficient, because defendant failed to attach an affidavit explaining how the fee schedule is applied. Plaintiff also argues that defendant’s papers are defective because of the incorrect caption of the case and index number, as well as the fact that the affirmation of the attorney is signed by someone other than the affiant.

The court has thoroughly reviewed and considered the arguments of the parties’ attorneys. First, the court finds it necessary to address the plaintiff’s arguments concerning the defendant’s attorney’s affirmation. Although the attorney affirmation has the correct provider’s name, it has the incorrect index number, as well as the assignor name. In addition, the affirmation starts out with the name of Anthony N. Kobets, as the attorney affirming under the penalties of perjury, but the signature name is that of Kristie Hack, Esq.

As a result of the improper caption, index number and attorney signature the plaintiff argues the papers are defective. Therefore, the question is whether or not the defects as argued by plaintiff would warrant summary judgment being granted in favor of plaintiff on these grounds. This court answers in the negative. In all likelihood, the papers were used in a similar case, inasmuch as the improper caption has the same provider, and is a boilerplate attorney affirmation, and unfortunately was not reviewed with the sharpest of eyes, in order to pick up the typographical errors. The defects in an attorney affirmation should not warrant summary judgment being granted in favor of plaintiff. An affirmation of an attorney has no probative value. The affirmation itself, which is purported to be that of one person, but signed by another is worthless and a nullity. (See A.B. Med. Servs. v CNA Ins. Co., 2 Misc 3d 138[A], 2004 NY Slip Op 50265[U] [App Term, 2d & 11th Jud Dists 2004].){**25 Misc 3d at 1101} However, the defendant’s [*3]cross motion cannot and does not stand alone on an attorney affirmation. The supporting document to the cross motion must come from a person with actual knowledge of the facts to the case. The supporting affidavit to defendant’s cross motion which is of probative value is that of Leonard Delgiudice, an employee of GEICO. The court has, without giving consideration to the attorney affirmation, made its determination based upon the supporting affidavit of Mr. Delgiudice, and the annexed documents to the cross motion such as the peer review and denials. Thus, the court finds plaintiff’s arguments that the papers are defective to be without merit, in light of the fact that the motions can be decided without the attorney affirmation which is of no probative value.

It is well established that a medical provider must limit its charges to those permitted by approved fee schedules. (See Goldberg v Corcoran, 153 AD2d 113 [2d Dept 1989]; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43 [2d Dept 2004]; King’s Med. Supply v Allstate Ins. Co., 2 Misc 3d 127[A], 2003 NY Slip Op 51681[U] [App Term, 9th & 10th Jud Dists 2003].) The fees for services and procedures are governed by the workers’ compensation fee schedule insurance regulation (11 NYCRR 68.1) and durable medical goods fees are governed by the New York Medicaid fee schedule (11 NYCRR part 68). An insurer who raises this defense will prevail if it demonstrates that it was correct in its reading of the fee schedules unless the plaintiff shows that “an unusual procedure or unique circumstance justifies the necessity” for a charge above the scheduled fee. (11 NYCRR 68.4.)

An insurer can only preserve a fee schedule defense by first complying with the rule requiring the insurer to pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim. (See Jamil M. Abraham M.D. P.C. v Country-Wide Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50388[U] [2d & 11th Jud Dists 2004].)

The claim for $183 was partially paid by the insurer, in the amount of $167.04 leaving a balance of $16.46. As stated above, the claim was denied on two grounds: lack of medical necessity and fee schedule. The denial shows the reduction of the provider’s charge of $38.50 for the positioning cushion/pillow being reduced to $22.04, thereby leaving the balance of $16.46. Inasmuch as the defendant has failed to proffer sufficient evidence to establish as a matter of law that amounts charged in said claims were in excess of the amounts permitted by the fee{**25 Misc 3d at 1102} schedule, plaintiff is entitled to summary judgment on its claim for $16.46.

Defendant failed to proffer sufficient evidence to establish as a matter of law the amounts charged for said claims were in excess of the amounts permitted by the fee schedule. The affidavit of Leonard Delgiudice fails to address how the fees were applied, and how the charged amount by the provider was in excess of the fee schedule. (Rogy Med., P.C. v Mercury Cas. Co., 23 Misc 3d 132[A], 2009 NY Slip Op 50732[U] [App Term, 2d, 11th & 13th Jud Dists 2009].)

Next, this court will address the remaining bill in the amount of $780, which was denied in full. The provider’s claim for no-fault benefits in the amount of $780 was denied [*4]based upon lack of medical necessity. The explanation annexed to the denial, “attachment 1” of exhibit “C” to defendant’s cross motion, indicates that the denial is based upon an independent medical examination. There was a service for $630 and one for $150. The “EOB” (explanation of benefits) code is “SSS” and explained in the denial as “supplies have been found not to be medically necessary.”

Lack of medical necessity is a defense to an action for recovery of no-fault benefits, and may be asserted by the insurer provided that there has been a timely denial of the claim. (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 200 [1997].)

As stated above, the court finds that the defendant has established the timely mailing of its denial of plaintiff’s claims for no-fault benefits.

In opposition to defendant’s cross motion and in support of its motion for summary judgment plaintiff argues that defendant’s peer review is inadmissible because of the doctor’s stamped signature. Plaintiff contends that the peer review does not comply with CPLR 2106, due to defendant’s failure to submit proof that the doctor himself stamped his signature.

The Appellate Term has consistently held that a peer review report which bears an electronic stamp of the peer review signature is not in admissible form pursuant to CPLR 2106. (Radiology Today, P.C. v GEICO Ins. Co., 20 Misc 3d 70 [App Term, 2d Dept 2008]; Vista Surgical Supplies, Inc. v Travelers Ins. Co., 14 Misc 3d 128[A], 2006 NY Slip Op 52502[U] [App Term, 2d & 11th Jud Dists 2006].) However, in the case before{**25 Misc 3d at 1103} this court, the defendant has annexed as part of exhibit “D,” which is the peer review of Dr. Andrew R. Miller, an affirmation of Dr. Miller which states in paragraphs 4 and 5 thereof the following:

“4. I alone have the ability to apply the signature and no other individual, either under my employ or otherwise has the authority or ability to apply the signature.

“5. When my electronic signature is applied I am affirming, under the penalties of perjury, the truthfulness, accuracy and correctness of my report and will swear under oath, in a court of law or in arbitration, if asked to do so.”

It is this court’s opinion that the affirmation of Dr. Andrew Miller, which indicates that the peer review report has an electronic stamped facsimile of his signature that is in fact his and was applied by him and not by anyone else, is sufficient to establish that the signature has been acknowledged by Dr. Miller as his own. As such, the court deems the peer review to be in admissible form.

Therefore, inasmuch as the plaintiff has failed to raise an issue of fact to negate the peer review report of Dr. Andrew Miller, summary judgment should be granted in favor of the [*5]defendant. (See Crossbridge Diagnostic Radiology, P.C. v Progressive Ins. Co., 20 Misc 3d 143[A], 2008 NY Slip Op 51761[U] [App Term, 2d & 11th Jud Dists, 2008]; Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co., 19 Misc 3d 130[A], 2008 NY Slip Op 50535[U] [App Term, 2d & 11th Jud Dists 2008].)

Accordingly, plaintiff’s motion for summary judgment is denied in part and granted in part. The clerk of the court is hereby directed to enter judgment in favor of plaintiff and against defendant in the amount of $16.46, plus statutory cost, interest and attorneys fees.

Accordingly, plaintiff’s motion for summary judgment on its claim for $780 is hereby denied. Defendant’s cross motion is denied in part and granted in part, and the cause of action for no-fault benefits in the amount of $780 is dismissed.