Civil Court of the City of New York, Richmond County

42103/04

Katherine A. Levine, J.

This case raises again the issue of what type of evidence a defendant insurance company must present, in support of its claim that a medical service provider is fraudulently incorporated, to warrant an order from the court directing extensive discovery or EBT’s. .

Plaintiff Lenox Neuropsychiatry Medical (“Lenox” or “plaintiff”) commenced this action against defendant pursuant to Insurance Law § 5106 (a) to recover $ 3,888.79 in unpaid bills for acupuncture services rendered to its assignor Leon Murray (“Murray”). The defendant, State Farm Insurance Co., (“State Farm” or “defendant”) alleges that plaintiff is fraudulently incorporated in violation of 11 NYCRR § 65.3.16(a)(12) and moves to dismiss plaintiff’s complaint, with prejudice, for plaintiff’s failure to provide complete and meaningful responses to defendant’s discovery demands. In the alternative, defendant moves to compel plaintiff to fully comply with plaintiff’s discovery demands and to produce plaintiff’s purported owner, Dr. Azim Etemadi (“Etemadi”) for an EBT, pursuant to CPLR §3124. In support of its motion, defendant presents an affirmation from its attorney chronicling the web of fraud allegedly surrounding plaintiff and a number of other medical providers as well as an affidavit from one Dr. Ahmed Halima (“Halima”), a doctor who has worked for a number of medical providers, that purportedly implicates Etemadi in this fraudulent scheme.

Plaintiff opposes the motion, stating that defendant is not entitled to extensive discovery or to take an EBT since it has failed to provide any coherent evidence to support its allegation that plaintiff is fraudulently incorporated. Accordingly, plaintiff moves this court for a protective order pursuant to CPLR §3103(a).Plaintiff also alleges that the defendant’s motion is defective since it failed to annex a denial of claim to its motion.

Article 31 of the CPLR governs discovery actions and its disclosure provisions do not [*2]condition discovery upon a showing of “good cause.”The guiding principle behind Article 31 of the CPLR is that there should be “full disclosure of all matter material and necessary in the prosecution and defense of an action” (CPLR §3101 (a)). The words “material and necessary” are to be interpreted liberally and the test is “one of usefulness and reason” to assist in the preparation for trial by sharpening the issues. Cambridge Medical v. Nationwide Prop. & Cas. Ins. Co., 19 Misc 3d 1110A, 859 NYS2d 901(Civil Ct., Richmond Co. 2008), citing Carothers v. Insurance Companies et al, 13 Misc 3d 970, 973 (Civil Ct., Richmond Co. 2006). Although the bar against which to measure whether the defendant has shown that its discovery requests are warranted on the issue of fraudulent incorporation is quite low, Bay Plaza Chiropractic v. State Farm Mutual Automobile Ins. Co., 2008 NY Slip Op 51925U, 21 Misc 3d 1102A (Civil Ct., Richmond Co.2008), citing Carothers, supra , unsupported conclusions and “suspicions” as well as “unsubstantiated hypotheses and suppositions” are nevertheless insufficient to raise a triable issue of fact pertaining to the assignor’s alleged fraud. A.B. Medical Services PLLC v Eagle Ins. Co., 3 Misc 3d 8, 10 (App. Term, 2d Dept. 2003).

Insurers have the burden to come forward with proof in admissible form to establish the factual basis of their allegations. Mt. Sinai Hospital v Triboro Coach Inc., 263 AD2d 11, 20 (2d Dept 1999). In fact, in Mallela, the Court of Appeals specifically permitted insurers to “look beyond the face of licensing documents to identify willful and material failure to abide by state and local law,” State Farm Mutual Automobile Insurance Co., Appellant, v. Mallela et al., 4 NY3d 313, 321 [3d Dept 2005], in assessing whether to withhold reimbursement of no-fault claims to medical corporations they believe to be fraudulently incorporated. Id., see, One Beacon Ins. Co. v. Midland Medical Care, 54 AD3d 738, (2d Dept 2008).

In Bay Plaza v. State Farm, this court addressed the issue of what constitutes a sufficient showing for purposes of allowing defendant additional discovery into plaintiff’s matters to determine if it is fraudulently incorporated. There, the defendant submitted an affidavit from its Special Investigations Unit (“SIU”) investigator with personal knowledge of the investigation as well as other documentation which included clearly marked insurance claim forms evidencing duplicative claims and even of more importance, affirmation from defendant’s attorney, explaining the logical connection between the plaintiff and fraud. Accordingly, this court found that defendant has articulated a “founded belief” that plaintiff is actually controlled by a non-licensed professional and made allegations sufficient to raise an issue of fact as to whether plaintiff was fraudulently incorporated.

In contrast, here, the defendant has submitted unsubstantiated hypotheses and suppositions and has not articulated a founded belief that Lenox is fraudulently incorporated so as to warrant the extensive discovery it is seeking. Defendant attempts to question whether Dr. Etemadi is the true owner of Lenox by weaving an intricate pattern of alleged fraud premised upon the fact that defendant received bills from Dr. Etemadi for services he allegedly rendered while working at different medical providers. Since Lenox, as well as the other medical [*3]providers from whom Dr. Etemadi submitted. bills use the same billing companies, and since two of these billing companies have the same address and phone numbers,” a hallmark of improperly owned PCs” is present (affirmation of Joseph A. Schwarzenberg , Esq, “attorney’s affirmation, ¶¶ 7-9 ). Defendant then asserts that Dr. Etemadi also renders services for another entity, “Livingston Medical,” which along with its purported owner have been implicated in “doc in the box activity” (attorney affirmation, ¶13, 14) because the U.S. Attorney indicted an attorney who was associated with Livingston and other medical clinics, with “participating in a conspiracy to commit health care and insurance fraud related to automobile accidents “(attorney affirmation, ¶¶ 13-16). However, even this assertion does not implicate Livingston per se much less Lenox or Dr. Etemadi.

Finally, defendant refers to an affidavit of Dr. Halima that has no caption or index number, and is dated 2006, which laboriously details clinics which are purportedly owned and controlled by individuals who are not doctors. It is salient to note that Dr. Halima never implicates Lenox is this scheme and only refers to once to a Dr. Atamedi, which defendant’s attorney argues in reality is Etemadi. Defendant also attempts to implicate Etemadi because one medical facility he worked for lists a service of process contact name that sounds similar to a name of individual Halima claims is implicated in fraud.

The court finds this alleged web of fraud to be beyond the six degrees of separation that could conceivably connect these various medical providers to one another ^[FN1].The court first takes issue with defendant’s claim that Dr. Etemadi is synonymous with the Dr. Atamedi mentioned in Halima’s affidavit. Furthermore, the court can give little credence to Dr. Halima’s affidavit since it apparently was borrowed from some unknown and unrelated case and does not even mention Lenox Neuropsychiatry! Second, while defendant has made a valiant attempt to implicate Lenox and Neuropsychiatry with numerous billing companies and one other medical provider which somehow may be implicated in a fraudulent scheme by virtue of the acts of an attorney, there simply is no direct or indirect connection between Lenox or Etemadi and actual or attempted fraud.

Given the above, this court does not find defendant has articulated a “founded belief” that plaintiff is actually controlled by a non-licensed professional so as to warrant a broad based trial on fraud or to warrant extensive discovery on fraudulent incorporation. In fact, defendant’s attempts to link plaintiff to fraudulent incorporation are too convoluted as to even provide guidance as to what reasonable discovery would be warranted. However, although not specifically articulated by defendant, this court is curious as to why Dr. Etemadi would render services for a number of medical clinics if he is in fact the owner of Lenox, which would [*4]theoretically require him to devote his time and energy to overseeing the operation of Lenox. As such, this court finds that it is material and necessary for defendant to conduct a limited EBT of Etemadi to ascertain the extent of his work with clinics separate and apart of Lenox, whether any of these clinics have actually been found by a court to have been fraudulently incorporated, and the extent of his knowledge as to the actual operations of these other clinics.

In light of the above, the motion is denied except for the limited EBT that will be allowed of Dr. Etemadi. The court directs defendant to notice Etemadi for an EBT within the next twenty days of receipt of this decision and that the EBT be conducted within the next 45 days.

The foregoing constitutes the decision and order of the court.

Dated:January 29, 2009

Staten Island, NYHON. KATHERINE A. LEVINE

Judge, Civil Court

ASN by ________ on ____________.

___

Footnotes

Footnote 1:Six degrees of separation is the theory that anyone on the planet can be connected to each other through a chain of acquaintances that has no more than five intermediaries. The theory was first proposed in 1929 by the Hungarian writer Frigyes Karinthy in a short story called “Chains”.

[*1]

Civil Court of the City of New York, Richmond County, December 31, 2008

APPEARANCES OF COUNSEL

Emilia I. Rutigliano, Brooklyn, for plaintiff. James F. Sullivan, New York City, for defendant.

{**23 Misc 3d at 240} OPINION OF THE COURT

Katherine A. Levine, J.

{**23 Misc 3d at 241}Plaintiff, Yklik Medical Supply, Inc., a medical supply provider, brings this action pursuant to Insurance Law § 5106 (a) to recover $317 in unpaid bills for medical equipment it provided to its assignor Tammy Agosto, with statutory interest and attorney fees. Yklik moves for summary judgment based upon a claimed prima facie showing that its bills were properly submitted and that the defendant Allstate Insurance Company failed to pay or deny the claim within 30 days. Plaintiff also asserts that defendant’s denial was untimely.

Defendant Allstate Insurance Company opposes the motion, asserting that plaintiff has failed to establish a prima facie case since the affidavit of plaintiff’s billing manager is not based on his personal knowledge of the plaintiff’s office practices and billing procedures. Of greater import, Allstate contends that since plaintiff’s claims were in excess of the fee schedule contained in the Workers’ Compensation Law, and since defendant made a partial payment to plaintiff, a triable issue of fact exists as to whether defendant paid the appropriate amount for medical services, hence mandating a denial of summary judgment.

A medical provider must limit its charges to those permitted by approved fee schedules (Insurance Law § 5108 [a]; 11 NYCRR 68.0 [f]) “which protects a patient from erosion of available benefits by inflated charges.” (Complete Orthopedic Supplies, Inc. v State Farm Ins. Co., 16 Misc 3d 996, 1005 n 13 [Civ Ct, Queens County 2007], citing Ops Gen Counsel NY Ins Dept No. 04-06-11 [June 2004].) The fees for services and procedures are governed by the workers’ compensation fee schedule (11 NYCRR 68.1) and durable medical goods fees are governed by the New York Medicaid fee schedule (11 NYCRR Appendix 17-C part F) (collectively referred to as fee schedule).

Ordinarily, a fee schedule dispute raises a triable issue of fact, hence defeating a plaintiff’s motion for summary judgment. (Complete Orthopedic Supplies at 1005.) However, plaintiff contends that defendant is barred from even raising the defense that the bills exceeded the fee schedule or partial payment of the claim because defendant failed to submit a timely denial. In its papers in opposition, defendant summarily asserts that it issued a timely denial. However, during oral argument, defendant asserted that since it paid the bills in accordance with the fee schedule, and since plaintiff is not entitled to be compensated in excess of the fee schedule, that it need not file a timely denial or any denial.

It is clear that plaintiff has established its prima facie case. The affidavit of plaintiff’s billing manager exhaustively details{**23 Misc 3d at 242} the record keeping procedures of the business, and clearly sets forth the procedures for the creation and retention of bills, of which he has personal knowledge. (See Manhattan Med. Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 1144[A], 2008 NY Slip Op 51844[U], *1 [Civ Ct, Richmond County 2008], citing Second Med., P.C. v Auto One Ins. Co., 20 Misc 3d 291, 294-295 [Civ Ct, Kings County 2008].) The affidavit further details that the bills at issue were made and kept in the ordinary course of business at the time the services were rendered and sets forth the precise mailing procedure that was followed. Moreover, the billing manager personally packaged, sealed, applied postage to and mailed the bill and supplies.

The burden then shifts to the defendant in a no-fault case to show a triable issue of fact. (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986].) To defeat an award of summary judgment to plaintiff, defendant must provide proof, in evidentiary form, that it either paid or denied the claim within 30 days of receipt or that it asserts a nonprecludable defense. (Carle Place Chiropractic v New York Cent. Mut. Fire Ins. Co., 19 Misc 3d 1139[A], 2008 NY Slip Op 51065[U] [Nassau Dist Ct 2008]; see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997].)

Pursuant to Insurance Law § 5106 (a) and 11 NYCRR 65-3.5, 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 (preclusion rule). (Park Slope Med. & Surgical Supply, Inc. v Country-Wide Ins. Co., 19 Misc 3d 1138[A], 2008 NY Slip Op 51063[U], *2 [Civ Ct, Richmond County 2008], citing Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889, 889-890 [2d Dept 2007]; Presbyterian Hosp., 90 NY2d at 278.)

As recently summarized by this court in Manhattan Med. (supra), the Court of Appeals has reaffirmed that there is only one narrow exception to the preclusion rule—where an insurance company raises the defense of lack of coverage. (See Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 563-564 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317-318 [2007].) In those cases the insurer who fails to issue a timely denial is not precluded from later raising this defense because “the insurance policy does not contemplate coverage in the first instance, and requiring payment{**23 Misc 3d at 243} of a claim upon failure to timely disclaim would create coverage where it never existed.” (Hospital for Joint Diseases at 318.)

Thus, the “key issue” in every case is whether the “facts fit within the narrow no-coverage exception to the preclusion rule” (10 NY3d at 564). A court, in determining whether a specific defense is precluded under the 30-day rule or falls within the exception, must assess whether the defense is more like a “normal exception” from coverage such as a policy exclusion or a lack of coverage in the first instance, i.e., a defense “implicat[ing] a coverage matter.” (10 NY3d at 565.)

The typical defenses that fall within the rubric of lack of coverage are that of a staged automobile accident (Fair Price Med. Supply Corp. v Travelers Indem. Co., 42 AD3d 277, 284 [2d Dept 2007]; Matter of Liberty Mut. Ins. Co. v Goddard, 29 AD3d 698, 699 [2d Dept 2006]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92, 94 [App Term, 2d Dept 2004]); where the claimant’s injuries arose out of a prior work-related accident rather than a car accident (Chubb, 90 NY2d 195 [1997]); or where the insurance company has articulated a founded belief that the plaintiff is fraudulently incorporated (Bay Plaza Chiropractic, P.C. v State Farm Mut. Auto. Ins. Co., 21 Misc 3d 1102[A], 2008 NY Slip Op 51925[U] [Civ Ct, Richmond County 2008]; Matter of Andrew Carothers, M.D., P.C. v Insurance Cos. Represented by Bruno, Gerbino & Soriano LLP, 13 Misc 3d 970 [Civ Ct, Richmond County 2006]).

A medical provider must limit its charges to those permitted by approved fee schedules (Insurance Law § 5108 [a]; 11 NYCRR 68.0 [f]) “which protects a patient from erosion of available benefits by inflated charges.” (Complete Orthopedic Supplies, Inc. v State Farm Ins. Co., 16 Misc 3d 996, 1005 [2007], citing Ops Gen Counsel NY Ins Dept No. 04-06-11 [June 2004].) The fees for services and procedures are governed by the workers’ compensation fee schedule (11 NYCRR 68.1) and durable medical goods fees are governed by the New York Medicaid fee schedule (11 NYCRR Appendix 17-C part F). 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 schedules’ fee (11 NYCRR 68.4; Complete Orthopedic Supplies, 16 Misc 3d at 1005). However, before this defense can be invoked an insurer must prove a timely denial.{**23 Misc 3d at 244}

In Fair Price (10 NY3d 556 [2008]), the Court distinguished the defense that the assignor never received the medical supplies from the plaintiff from the defense raised by the insurance company in Chubb (supra)—that the claimant’s injuries arose out of a prior related accident rather than a car accident. Only the latter—”a lack of coverage” defense—fell outside the preclusion rule since if in fact the injuries were unrelated to the accident, the treatment would not have been covered by the automobile liability policy in the first instance. (10 NY3d at 564, quoting Chubb at 199.) The defense that the billed-for services were never rendered, on the other hand, was more akin to a normal exception from coverage, like the defense of billing for unnecessary procedures found by the Chubb court to fall within the preclusion rule. (10 NY3d at 564, citing Chubb, 90 NY2d at 199 [overbilling does not ordinarily implicate a coverage matter].) This is so because in both situations there was [*2]an actual accident and an actual injury, where “coverage legitimately came into existence.” (Id. at 565, quoting Fair Price, 42 AD3d at 285.)

The same reasoning applies to the defense that the claims were in excess of a fee schedule. The parties do not dispute that the assignor is entitled to no-fault insurance benefits. There was an actual accident where the assignor sustained real injuries; the assignor was covered by defendant under an actual insurance policy; and the assignor was prescribed medical equipment which Yklik provided and for which the insurer was billed. Thus, an insurer can only preserve a fee schedule defense by first complying with the 30-day rule and issuing a timely denial. (Complete Orthopedic Supplies at 1005; Jamil M. Abraham M.D. P.C. v Country-Wide Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50388[U], *2 [App Term, 2d Dept 2004] [“by virtue of a timely claims denial an insurer is entitled” to raise a fee schedule defense and establish that charges exceeded those permitted by law]; see Forrest Chen Acupuncture Servs., P.C. v GEICO Ins. Co., 54 AD3d 996 [2d Dept 2008].)

In light of these opinions, it is clear that the defenses of fee schedule noncompliance and partial payment made in accordance with the fee schedule are precluded if defendant fails to disclaim coverage in timely a manner pursuant to the no-fault regulations. Here, the denial annexed to plaintiff’s papers as exhibit 3 reveals that defendant received the claims on July 10, 2007 and mailed the denial on September 4, 2007, waiting approximately{**23 Misc 3d at 245} 56 days to send out its denial. By failing to timely submit its denial, defendant is precluded from raising the defense of noncompliance with the fee schedule and summary judgment is granted to plaintiff.

[*1]

Civil Court of the City of New York, Kings County, October 31, 2008

APPEARANCES OF COUNSEL

McDonnell & Associates for defendant. Gary Tsirelman, Brooklyn, for plaintiff.

{**22 Misc 3d at 979} OPINION OF THE COURT

Alice Fisher Rubin, J.

Plaintiff commenced this action against the defendant to recover first-party no-fault benefits pursuant to section 5102 (a) (1) of the Insurance Law and New York State Insurance Department Regulations (11 NYCRR) § 65-1.1 et seq. for medical services rendered.

Defendant moves for an order pursuant to CPLR 3212 granting summary judgment and dismissing plaintiff’s complaint on the grounds that the plaintiff’s assignor failed to appear for scheduled independent medical examinations (IMEs), or in the alternative, partial summary judgment on the grounds that the denials are timely. Plaintiff opposes the motion on the grounds that the defendant has failed to substantiate any defenses or establish that it properly denied plaintiff’s claims.

After careful review of the moving papers, supporting documents and opposition thereto, the court finds as follows:

Defendant argues that the assignor, Jose Lora, failed to appear for scheduled independent [*2]medical examinations, which is a condition precedent to coverage under the insurance policy and no-fault regulations. In support of its argument, defendant annexes as exhibit “I” to its moving papers a copy of the insurance policy. The policy states in part: “3. Medical Reports. The insured shall submit to physical examinations by physicians we select when and as often as we may reasonably require.” (Emphasis added.)

Plaintiff argues that the policy requires the assignor, Jose Lora, to appear before a physician, which pursuant to Education Law, article 131, § 6522 is defined as “[o]nly a person licensed or otherwise authorized under the article shall practice medicine.” Therefore, the defendant’s insurance policy, which plaintiff reads to be clear and unambiguous, requires that the assignor submit to an examination by a physician only, and not any other health care provider. Plaintiff contends that as a result of the IME being scheduled before a psychologist, as opposed{**22 Misc 3d at 980} to a physician, the assignor was not required to attend, and no condition precedent was violated. Plaintiff further argues that any ambiguity with the use of the term “physician” must be construed against the insurer, the drafter of the policy.

The argument raised by plaintiff appears to be one of first impression. This court has researched the issue, having read and written many no-fault decisions, and did not find a case addressing the issue of whether a policy which states “physician” means that any other health care provider is excluded, and only a physician can conduct the independent medical examination of an eligible injured person (EIP).

This court answers in the negative.

In the case before this court, the insurance company sent verification requesting that the injured party appear before an independent psychologist. The court finds that although the policy states physician, the term itself is not ambiguous where it would or should allow the EIP to circumvent the requirement of an independent examination, to determine whether the services rendered were medically necessary. The assignor was seen by a psychologist and therefore, there is no reason why a verification which requests that he appear before an independent psychologist, should not be held as a valid request when the policy states “physician.”

The general provisions of Workers’ Compensation Rules and Regulations (12 NYCRR) § 300.2 (b) (5), which address independent medical examination, examiners, and entities, sets forth the following: “Section 300.2 . . . (5) “Independent medical examiner means a physician, surgeon, podiatrist, chiropractor or psychologist who is authorized to conduct independent medical examinations as defined in paragraph (4) of this subdivision.”

The fee schedules are determined by the Workers’ Compensation Law, and the services rendered by a provider are determined under the New York no-fault fee schedule. The workers’ compensation fee schedules were adopted by the Superintendent of Insurance for use by those [*3]making and processing claims for no-fault benefits.

If there is an issue as to the fees charged by the provider, which in this case is a psychologist, a hearing would be necessary to determine how much should have been billed. The court would look to the workers’ compensation fee schedule, and the fees applicable to a psychologist, not a physician.{**22 Misc 3d at 981} Therefore, this court finds that the EIP, Jose Lora, was required to appear for the scheduled IME.

In addition, this court finds plaintiff’s argument that Dr. Yakov Burstein is not qualified to state whether EIP, Jose Lora, appeared for an IME without merit. The suggestion that a doctor is unaware of or unqualified to assert which patient or patients are scheduled to appear at a scheduled date and or time in his office, because he is without “personal knowledge,” is presumptuous.

Next, this court will address the issue of the timeliness of the verification.

The claim for no-fault benefits begins when an injured party provides notice to the insurer within 30 days after the date of the accident. (See 11 NYCRR 65-2.4 [b].) The injured party is required to submit an application for no-fault benefits, and the written proof of claim is submitted within 45 days after the date services are rendered.

Within 10 business days after receipt of the completed no-fault application, the insurer must forward verification forms for health care or hospital treatment to the injured party or that party’s assignee. After receipt of the completed verification, the insurer may seek additional verification or further proof of claim from the injured party or that party’s assignee within 15 business days thereof. (See 11 NYCRR 65-3.5 [b].) For example, the insurer may seek an independent medical examination of the injured party which must be held within 30 calendar days from receipt of the initial verification form.

In the case at bar, the defendant states that it received the claim for no-fault benefits in the amount of $1,061.63 on December 29, 2005, and an additional claim for $120 on January 9, 2006. On February 17, 2006 the defendant sent a notice to the injured party scheduling an independent medical examination for March 1, 2006. A second notice rescheduling the IME was sent on March 29, 2006 which scheduled the IME for April 10, 2006.

Plaintiff argues that the defendant’s request for verification was untimely, and therefore the statutory prescribed 30-day period within which to issue a denial of the submitted claims was not tolled, and thus the defense of failure to attend an IME has been waived. In response to plaintiff’s argument that the insurer was required to request a verification within 15 days, the defendant argues that the amendment to the statute states as follows:{**22 Misc 3d at 982} “If the additional verification [*4]required by the insurer is a medical examination, the insurer shall schedule the examination to be held within 30 calendar days from the date of receipt of the prescribed verification forms.” (11 NYCRR 65-3.5 [d].)

The time in which an insurer has to pay or deny a claim is extended only upon a proper request for verification pursuant to 11 NYCRR 65-3.5 (a). Since the defendant did not serve its verification request within 10 business days after receipt of the plaintiff’s completed application for no-fault benefits, the 30-day payment or denial period was not tolled. The initial verification request comes before the additional verification request for an independent medical examination. Section 65-3.5 (d) clearly states an IME is a request for “additional verification.” The insurer’s requests for independent medical examinations in connection with a health care provider’s claim for first-party no-fault benefits, made as an initial verification request, rather than an additional verification request, did not extend the time in which to issue a denial of the claims. Consequently, the defendant is precluded from raising the defense of lack of medical necessity, and/or failure to attend a scheduled IME.

Accordingly, defendant’s motion for summary judgment is denied, and the court finds that summary judgment is warranted in favor of plaintiff in the amount of $1,181.63 (the amount of the two claims), with statutory interest, costs and attorney’s fees.

[*1]

Civil Court of the City of New York, Kings County, November 5, 2008

APPEARANCES OF COUNSEL

Bruno Gerbino & Soriano, LLP, Melville, for defendant. Gary Tsirelman P.C., Brooklyn, for plaintiff.

{**22 Misc 3d at 724} OPINION OF THE COURT

George J. Silver, J.

In this action to recover first-party no-fault benefits, interest and attorney’s fees pursuant to New York’s Insurance Law and no-fault regulations, defendant Utica Mutual Insurance Company moves, pursuant to CPLR 3212, for an order granting it summary judgment dismissing plaintiff Allstate Social Work and Psychological Services, PLLC’s complaint on the ground that plaintiff’s assignors failed to appear for properly scheduled independent medical examinations (hereinafter IMEs) and examinations under oath (hereinafter EUOs) and thus failed to comply with conditions precedent of the insurance policy.

Chad LaPlate, defendant’s no-fault specialist, avers that defendant’s Special Investigative Unit (hereinafter SIU) investigated the motor vehicle accident that allegedly occurred on May 23, 2003 and which gave rise to the instant claims. As a result of that investigation, defendant’s SIU determined that the alleged loss was the result of an intentional act and that material misrepresentations had been made in the presentation of the claims. Defendant thereafter assigned the claims to Hudson Valley Medical Consultants (hereinafter HVMC) for the scheduling of IMEs of plaintiff’s assignors. Jennifer Harvey, an employee of HVMC, avers that HVMC is an entity that is involved in the scheduling of IMEs on behalf of insurance companies. According to Ms. Harvey, HVMC acts as an intermediary between the insurance company and the examining physician, dentist or psychologist by scheduling IME appointments and then securing the IME report from the examining doctor. Ms. Harvey avers that the psychological IMEs of the assignors were scheduled with Moses Weksler, Ph.D., for August 27, 2003. The letters scheduling the IMEs were prepared and signed by Ms. Harvey and mailed on August 15, 2003. Ms. Harvey states that it is HVMC’s procedure to have an employee prepare and print the IME scheduling letter and the address label for each scheduled IME. The employee ensures that the address label is correct, places the scheduling letter in the envelope, affixes the address label to the envelope and applies the proper postage. The envelopes containing the scheduling letters are placed in an official postal repository on a daily basis. Helen Sickler, the office manager for Moses Weksler, Ph.D., states in her affidavit that neither assignor appeared at Dr. Weksler’s Brooklyn office on August 27, 2003 and that the assignors’ nonappearances were reported to HVMC. On August 28, 2007, Ms. Harvey{**22 Misc 3d at 725} scheduled a second IME for both assignors to be held on September 11, 2003, again at Dr. Weksler’s Brooklyn office. According to Ms. Sickler, both assignors again failed to appear at Dr. Weksler’s office. On October 9, 2003 defendant issued two denials, one for each assignor, denying plaintiff’s claims due to the failure of the assignors to appear for the two scheduled psychological IMEs.

Defendant thereafter retained the law firm of Bruno, Gerbino & Soriano, LLP to schedule and conduct EUOs of defendant’s insured, the driver of the motor vehicle and the assignors. According to defendant’s attorney, EUOs were duly scheduled for October 7, 2003, October 10, 2003, October 28, 2003 and December 23, 2003. The assignors failed to attend the EUOs and on January 29, 2004 defendant issued a second set of denials based upon the assignors’ nonappearances.

In opposition, plaintiff argues that defendant has failed to establish that the assignors violated the policy conditions by failing to appear for the psychological IMEs because, under the express unambiguous terms of the insurance contract, the assignors were only obligated to submit to a medical examination by a physician. Plaintiff contends that licensed psychologists like Dr. Weksler are not physicians as the term is defined by the Education Law, therefore the assignors’ failure to appear for the scheduled IMEs was not a violation of the insurance policy and defendant’s denial of plaintiff’s claims was improper. Plaintiff raises no issue as to the sufficiency of defendant’s proof that the IME request letters were mailed by HVMC in accordance with a standard office practice and procedure and in accordance with the time periods delineated in the no-fault regulations. Nor does plaintiff challenge the sufficiency of defendant’s proof of the assignors’ nonappearances at the IMEs.

Plaintiff further contends that the EUO scheduling letters dated September 30, 2003, October 1, 2003 and October 13, 2003 are defective on their face because they failed to inform the assignors that they would be reimbursed for any loss of earnings or reasonable transportation expenses incurred in complying with the requests. Plaintiff also argues that the December 10, 2003 EUO scheduling letter is defective because the defendant improperly scheduled the EUOs to be held in Melville, New York, which plaintiff argues was not reasonably convenient to the assignors who reside in Brooklyn. In the alternative, plaintiff argues that if the language of the December 10, 2003 EUO scheduling letter is sufficient, the letter should{**22 Misc 3d at 726} be treated as a first request for additional verification. Since defendant failed to issue a follow-up request to the December 10, 2003 scheduling letter, plaintiff contends, defendant failed to comply with the follow-up verification requirements outlined in the regulations. Finally, plaintiff informs the court that it did not cross-move for summary judgment “due to insufficient time to file the motion”^[FN1] but nevertheless requests that the court search the record and grant summary judgment in its favor.

Defendant argues in reply that this court previously denied plaintiff’s motion for summary judgment. Defendant also concedes that Dr. Weksler is not a physician as defined by the Education Law but argues that the endorsement’s definition of “medical expense” includes all professional health services, not only medical services provided by physicians. Since the legislature included medical expenses for all professional health services as part of covered basic economic loss, defendant reasons, it also intended to permit any health care provider to perform IMEs.

Analysis

“Pursuant to Insurance Law § 5103 (d), the Legislature empowered the Superintendent of Insurance to promulgate regulations establishing minimum benefit standards for policies of insurance providing coverage for the payment of first-party benefits and to set standards for the payment of first-party benefits by self-insurers. Pursuant to this authority, the Superintendent promulgated Insurance Department Regulations (11 NYCRR) § 65-1.1, which sets forth the basic form of the ‘Mandatory Personal Injury Protection Endorsement’ which must be included in every owner’s policy of liability insurance issued on a motor vehicle in this state” (Alleviation Supplies Inc. v Enterprise Rent-A-Car, 12 Misc 3d 787, 790 [Civ Ct, Richmond County 2006]).

The mandatory personal injury protection endorsement (hereinafter endorsement) provides, in pertinent part, that the “eligible injured person shall submit to medical examination by physicians selected by, or acceptable to, the Company, when, and as often as, the Company may reasonably require” (11 NYCRR 65-1.1 [d] [Conditions] [Proof of Claim; Medical, Work Loss, and{**22 Misc 3d at 727} Other Necessary Expenses]).^[FN2] The appearance of the insured for IMEs at any time is a condition precedent to the insurer’s liability on the policy (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2d Dept 2006]). The term physician is not defined in the endorsement but the Education Law provides that “[o]nly a person licensed or otherwise authorized under this article shall practice medicine or use the title ‘physician’ ” (Education Law § 6522). Defendant concedes in its reply that a licensed psychologist such as Dr. Weksler is not a physician. The question then is may any health provider perform an IME of an eligible injured person or, as the endorsement appears to require, only a physician?

Though there appears to be no case law addressing the point, in an opinion letter dated March 12, 2004, the State Insurance Department answered the following question:

“When a No-Fault eligible person is being treated by a chiropractor and the person’s insurer has requested a medical examination (‘IME’) of that person in order to evaluate the medical necessity of the chiropractic services performed, must the medical examination be performed by a chiropractor, or may it be performed by a medical doctor?” (2004 Ops Gen Counsel NY Ins Dept No. 04-03-10.)

In holding that an “insurer’s medical examination of an eligible injured person to evaluate the medical necessity of health services provided by a chiropractor may be performed by a medical doctor, and need not be performed by a licensed chiropractor” (id.) the Insurance Department stated “[t]here is no requirement in the regulation that a claim denial must be based upon a medical examination conducted by a health provider of the same speciality area as the treating health provider” (id.). Implicit in the Insurance Department’s interpretation, which is entitled to great deference unless it is “irrational or unreasonable” (Matter of John Paterno, Inc. v Curiale, 88 NY2d 328, 333 [1996], quoting Matter of New York Pub. Interest Research Group v New York State Dept. of Ins., 66 NY2d 444, 448 [1985]; cf. Matter of Gaines v New York State Div. of Hous. & Community Renewal, 90 NY2d 545, 548-549 [1997]), is that an independent medical examination of an eligible injured person may be performed either by a physician, as the term is defined in the Education Law and used in the endorsement, or by any other{**22 Misc 3d at 728} licensed health provider selected by or acceptable to the insurer. It is for the court or an arbitrator to “consider the qualifications of the health provider performing the IME in determining the validity of a claim denial” (2004 Ops Gen Counsel NY Ins Dept No. 04-03-10). A contrary conclusion would frustrate the core objective of the no-fault scheme by limiting the universe of health providers who could perform IMEs, thereby delaying the processing of no-fault claims (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]).

The affidavits submitted by defendant are sufficient to establish that defendant’s initial IME requests, its follow-up IME requests and its denial of claim were mailed pursuant to a standard office practice and procedure, and that the assignors failed to appear for the IMEs (Quality Health Prods., P.C. v Progressive Ins. Co., 20 Misc 3d 143[A], 2008 NY Slip Op 51757[U] [App Term, 2d & 11th Jud Dists 2008]; Post Traumatic Med. Care, P.C. v Progressive Cas. Ins. Co., 21 Misc 3d 128[A], 2008 NY Slip Op 51954[U] [App Term, 2d & 11th Jud Dists 2008]). The court, therefore, need not address plaintiff’s arguments concerning the sufficiency of defendant’s EUO requests.

Accordingly, it is hereby ordered that defendant’s motion for summary judgment dismissing plaintiff’s complaint is granted.

Footnotes

Footnote 1: See attorney’s affirmation in opposition.

Footnote 2: Since the endorsement is promulgated by the Superintendent of Insurance, and is not drafted by the insurer, plaintiff’s argument that any ambiguity in the endorsement must be construed against the insurer is incorrect.

Civil Court of the City of New York, Richmond County

14725/07

Defendant: Moia A. Doherty, Esq.

50 Charles Lindbergh Boulevard, Suite 400

Uniondale, New York 11533-9850

Plaintiff:Bakers, Sanders, Barshay, Grossman,

Fass, Muhlstock & Neuwirth

150 Herricks Road

Mineola, New York 11501

Katherine A. Levine, J.

This case invokes the inverted trajectory that must be followed when an insurer raises the defense that a medical services provider has failed to timely submit its proof of claim.

Defendant Clarendon National Ins. Co., (“defendant” or “Clarendon”) moves for summary judgment against Plaintiff, Joseph Rockman LMT a/a/o Delilah Serrano (“plaintiff” or “Rockman”) on the grounds that plaintiff failed to timely submit written proof of claim within 180 days after the date medical services were rendered pursuant to 11 N.Y.C.R.R. 65.12 (“old

rules”) ^[FN1] or within 45 days after the services were rendered pursuant to 11 N.Y.C.R.R. 65-1.1 (“new rules”).^[FN2]Defendant alleges that the bills, dated 4/17/07, are for services rendered in [*2]October – November 2002 ; the bills are thus dated some four and a half years after the services were rendered. Specifically, defendant asserts that the first time it learned about this claim was when plaintiff served its law office with a summons and complaint dated August 16, 2007, which attached a chart referring to such bill dated 4/17/07, although no such bill was attached.

Defendant further avers that its law office received the actual bill, dated 4/17/07, when it received discovery in a related case involving the same medical provider on or about,

October 10, 2007. Defendant thereupon mailed its denial of the bill on, November 7, 2007 within 30 days of its receipt of the bill, thus preserving the defense of late submission.

Plaintiff offers no explanation as to why it has failed to present a health insurance claim form dated within 180 days of the dates of services in October – November 2002. Nor does it address how it came to pass that defendant was made aware of the claim’s existence through discovery in another matter. Rather, plaintiff cross-moves for summary judgment alleging that plaintiff made its prima facie case by setting forth that the bills were mailed and not paid or denied within thirty days. In support of its motion, plaintiff submits a generic affidavit from Dr. Joseph Rockman, dated December 10, 2007, which details in great detail the office’s practices and procedures for mailing out claims for service and then states that in accordance with that procedure, the “aforementioned bills, which are the subject of this lawsuit, were mailed to the defendant.” Accompanying this affidavit were Dr. Rockman’s notes of his treatment of the assignor during 2002-03 and the Health Insurance Claim form dated, 4/17/07, for services purportedly rendered in November 2002. Plaintiff fails to explain why the only health insurance

claim it can produce is dated April 17, 2007 and does not address how this particular claim form was formulated or mailed.

To grant summary judgment, “it must clearly appear that no material and triable issue of fact is presented” Forrest v. Jewish Guild for the Blind, 3 NY3d 295 (2004); Zuckerman v, City of New York, 49 NY2d 557 (1980). Once such proof has been offered, in order for the opposing party to defeat the motion for summary judgment, it must “show facts sufficient to require a trial of any issue of fact.” Inwood Hills Medical P.C. v. Bronx Neurodiagnostics P.C., 3 Misc 3d 1110A, 787 NYS2d 678 (Civil Ct., NY Co., 2004) quoting CLR 3212 (b). See, Alvarez v. Prospect Hospital, 68 NY2d 320 (1986). If the opposing party fails to submit evidentiary facts to controvert the fact in the movant’s papers, then summary judgment must be grated since there are not triable issues of fact. Inwood, supra . See, Kuehne & Nagel, Inc. v. F.W. Baiden, 36 [*3]NY2d 539 (1975).

Pursuant to Insurance Law §5106, a complete proof of claim is a prerequisite to receiving no-fault benefits. The old regulations required that written proof of claim must be submitted to the insurance company “as soon as reasonably practicable, but in no event later] than 180 days after the date services are rendered or 180 days after the date written notice was given to the [insurer].” (11 N.Y.C.R.R. 65.12) See, Montefiore Medical Center v. Mary Immaculate Hospital, 9 AD3d 354 (2d Dept. 2004). Within 30 days of receiving a claim, the insurer shall either pay or deny the claim in whole or in part (see 11 N.Y.C.R.R. 65.15 [g] [3]). This 30-day period may be extended by a timely demand by the insurance company for further verification of a claim (see 11 N.Y.C.R.R. 65.15 [d] [1]). A claim need not be paid or denied until all demanded verification is provided (see 11 N.Y.C.R.R. 65.15 [g] [1] [I] Id at 355 ; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553,(2d Dept. 1999). In the event an insurer fails to timely deny a claim or request verification from the hospital, the insurer is precluded from asserting that the claim was untimely or incomplete . Montefiore Medical Center,, supra at 355. See, Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 282,(1997); New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 (2002).

Although a health care provider is required to submit its proof of claim within 180 days after the services were rendered, ” an insurer is precluded from asserting the defense of a provider’s untimely submission of proof of claim if it does not issue a timely denial of claim.” Mid Atlantic Medical P.C. , v. Travelers Indemnity, Co., 12 Misc 3d 147A, 824 NYS2d 769 (App. Term, 1st Dept. 2006). See, New York & Presbyt. Hops. V. Eagle Ins. Co., 17 AD3d 646 (2d Dept. 2005); Montefiore Medical Ctr., supra

It is clear that defendant Clarendon may assert this defense since it timely denied the claim. Defendant submitted two affidavits from its claims representative averring that Clarendon never received any claim forms dated 2002 or 2003 for services rendered between, November 1- 15, 2002, and hence could not have denied such claim. Rather, defendant first became aware of the bills dated April 17, 2007 for services rendered back in 2002 when its attorneys were served with a summons and complaint, dated July 2007, in this matter. Annexed to the complaint was a chart referring to the assignor, listing the amount owed and the dates of service. The actual bills for these services were not

received by Clarendon until October 10, 2007, when the they were included as part of discovery in a related case sent to defendant’s attorneys. The affiant claims examiner then issued a denial on November 7, 2007, within 30 days of the bill’s receipt, and the denial was mailed on that same day in accordance with the standard office mailing procedures. .

Having properly asserted this defense, defendant is entitled to summary judgment unless [*4]plaintiff can raise a factual issue as to whether the aforementioned bills were in fact mailed on, December 14, 2002, as asserted by plaintiff. “Service of both the no-fault claim and assignment forms is established by an actual affidavit of mailing or by proof of an office practice and procedure followed . . . in the regular course of . . . business’… geared so as to ensure the likelihood that [the item] is always properly addressed and mailed Complete Orthopedic Supplies, Inc. v. State Farm Ins. Co., 16 Misc 3d 996, 999 (Civil Ct., Queens Co.. 2007) citing Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830(1978). . A post office receipt may supply additional “direct proof of actual mailing” (LMK Psychological Servs., P.C. v Liberty Mut. Ins. Co., 30 AD3d 727, 728, (3d Dept 2006) provided the evidence relates the receipt to an identified mailing (New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 548 (2d Dept 2006).Such proof may also include a medical services bill with a certified mail return receipt, (Hospital for Joint Diseases and Presbyterian Hosp. v. Travelers Property Casualty Ins. Co., 34 AD3d 352 (2d Dept. 2006); NY. & Presbyterian Hosp. V. Allstate Ins. Co., 30 AD3d 492 (2d Dept. 2006); and or a signed return receipt card which referenced the patient and forms and an affidavit of a third party biller (NY. & Presbyterian Hosp. v. Travelers Prop. Casualty Ins. Co., 37 A.D 3d 683 ( 2d Dept. 2007).

In the instant matter, plaintiff has failed to present evidentiary facts to controvert defendant’s denial based upon plaintiff’s untimely submission of the bills. No presumption of mailing was created because the affidavit of Dr. Rockman did not state that he actually mailed the particular claims at issue, and Dr. Rockman’s recital of his office practices did not establish, by admissible proof, that this procedure was in fact followed on, December 12, 2002. See, Multiquest PLLC v. Allstate Ins. Co., 10 Misc 3d 1069(A), .814 NYS2d 563 (Civil Ct., Queens Co. 2004)( affidavit of plaintiff s owner, in which he does not attest to personal knowledge of this claim but states that he is “fully familiar with all the policies, practices and procedures” of plaintiff, is insufficient to lay a foundation for the exhibits attached to the moving papers. “Significantly, plaintiff fails to establish the mailing of its claim to defendant, a necessary element of its prima facie case.”) (See Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 774 NYS2d 564 (2d Dept 2004); Residential Holding Corp , supra . Fatally missing from plaintiff’s papers is a copy of the medical claim dated in 2002 that was purportedly mailed on December 13, 2002.

Specifically, Dr. Rockman averred that it is his office’s customary practice that after the envelope containing the bill is delivered to the U.S post office, a photocopy of the bill and supporting documents are then placed in the appropriate patient file and a notation is made on the file confirming the date and amount of the bill and the date the bill was mailed. He then alleged that the bills which are subject of this lawsuit were mailed on 12/13/02. However, as set forth above, plaintiff has failed to produce the bill that was purportedly mailed in December 2002 or even the notation that was made on the file concerning the mailing, and none of the documents that plaintiff did produce in support of its motion contain any reference to a mailing in December 2002. In fact, the only bill that plaintiff did produce for the dates of

service in question is dated April 17, 2007, and plaintiff has offered no evidence concerning the mailing of the 2007 bill. As such, plaintiff has failed to produce any evidence that could be introduced at trial so as to defeat defendant’s motion for summary judgment.

Given the aforementioned reasoning, plaintiff’s cross-motion for summary judgment is denied. Along this line, it should be noted that plaintiff has failed to establish its prima facie right to judgment as it has failed to demonstrate its timely and proper submission of the claims in question See, Presbyterian Hospital, supra , 90 NY2d 274 (1997), Elmont Open MRI & Diagnostic Radiology v. Geico, 2008 NY Slip Op. 50113U, 18 Misc 3d 1117A (Dist. Ct., Nassau Co. 2008). As set forth above, plaintiff has failed to provide admissible proof of mailing of the purported bill dated December 2002. Furthermore, plaintiff has offered no evidence whatsoever to lay a foundation for the admission of the bill dated April 17, 2007. See, e.g. Complete Orthopedic Supplies v. State Farm Ins. Co., 16 Misc 3d 996 (Civil Ct. Queens Co. 2007). concerning the mailing of the bill dated April 17, 2007 that it has been able to produce.

In sum, defendant’s motion for summary judgment is granted and plaintiff’s cross-motion is denied.

The foregoing constitutes the Decision and Order of the Court .

Dated October 17, 2008______________________________

Hon. Katherine A. Levine

Judge, Civil Court

ASN by _______on___________

A P P E A R A N C E S

Defendant: Moia A. Doherty, Esq.

50 Charles Lindbergh Boulevard, Suite 400

Uniondale, New York 11533-9850

Plaintiff:Bakers, Sanders, Barshay, Grossman,

Fass, Muhlstock & Neuwirth

150 Herricks Road

Mineola, New York 11501

Footnotes

Footnote 1:Defendant originally contended that plaintiff failed to submit the claims with 45 days of the date of service but later amended its motion to claim Claim that plaintiff violated the 180 day rule provision under the old regulations.

Footnote 2: Insurance Department Regulation 11 N.Y.C.R.R. 65-3.3 and 65-2.4 shortened the time period filing no fault claims from 180 days to 45 days from the rendering of medical services. 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 to 45 days (11 N.Y.C.R.R.] § 65.12 [e], now Insurance Department Regulations [11 N.Y.C.R.R.] § 65-1.1 [b]. 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). 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 .

Civil Court of the City of New York, Kings County

105504/2004

Jaffe & Koumourdas

40 Wall Street -12th Floor

New York, NY 10005

Attorneys for Defendant

Moshe D. Fuld, P.C.

38 west 32nd Street -7th Floor

New York, NY 10001

Attorneys for Plaintiff

George J. Silver, J.

In this action to recover first-party no-fault benefits, interest and attorney’s fees pursuant to New York’s Insurance Law and no-fault regulations, defendant Country-Wide Insurance Company (hereinafter defendant) moves pursuant to CPLR § 5015 [a] [1] [2] and [3] for an order vacating the judgment entered against it.

Procedural Background

This action was commenced by plaintiff Deajess Medical Imaging PC (hereinafter plaintiff) by service of a summons and complaint upon defendant on or about October 21, 2004. Defendant served its answer on November 16, 2004. On November 4, 2005 summary judgment was granted in plaintiff’s favor as to all of plaintiff’s claims and judgment was entered against defendant in the amount of $18,694.39 plus statutory interest and attorney’s fees. In granting plaintiff’s motion for summary judgment, the motion court held that plaintiff had established its prima facie entitlement to no-fault benefits and that defendant failed to submit “admissible proof of any issue of fact.” The motion court rejected defendant’s argument that plaintiff’s motion was premature because discovery was still outstanding and held that defendant failed to annex exhibits in proper form to establish that discovery demands were served and not complied with. Defendant moved to reargue plaintiff’s summary judgment motion and on July 10, 2006, the return date of defendant’s motion, the parties entered into a written stipulation of settlement. The stipulation resolved defendant’s motion to reargue as follows: “[p]laintiff agrees to vacate the judgment for assignor Trinece Summer, defendant agrees to pay the remaining claims as per the Court’s Order of November 4, 2005 within 30 days inclusive of interest up until the day of payment.” The stipulation, which was a clear and unambiguous statement of the parties’ intent, was properly signed by the attorneys of record who were acting in an adversarial relationship. [*2]The stipulation was not so-ordered by the Court. Defendant now moves to have the judgment entered against it pursuant to the November 4, 2005 order vacated on the ground that newly discovered evidence exists which “if introduced at trial would probably have produced a different result and which could not have been discovered in time to move for a new trial under section 4404” (CPLR § 5015 [a] [2]). The newly discovered evidence cited by defendant includes a federal case involving Robert Scott Schepp, M.D., New York State appellate case law involving the plaintiff, a news article from Law.com, as well as the Andrew Carothers, M.D., P.C. trial in the New York City Civil Court, Richmond County, all of which defendant argues establish that plaintiff is fraudulently incorporated. Defendant also agues that the judgment was the product of “fraud, misrepresentation, or other conduct of an adverse party” (CPLR § 5015 [a] [3]) and that there was no meeting of the minds when the parties entered into the written stipulation of settlement. Finally, defendant contends that this case is subject to a stay issued by the Supreme Court, Nassau County in a separate action in which plaintiff and defendant are both parties (hereinafter the Nassau County action).

In opposition plaintiff contends that stipulations of settlement are favored by the courts and should be vacated only upon a showing of that the settlement was the product of fraud, overreaching, mistake or duress and argues that defendant has failed to make such a showing. Plaintiff also contends that this action has not been stayed by Nassau County action.

Discussion

It is well settled that stipulations of settlement are judicially favored and should not be lightly set aside (Cooper v Hempstead Gen. Hosp., 2 AD3d 566 [2d Dept]). “This is all the more so in the case of open court’ stipulations within CPLR § 2104, where strict enforcement not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and integrity of the litigation process” (Hallock v State of New York, 64 NY2d 224, 230; 474 NE2d 1178; 485 NYS2d 510 [1984] [citations omitted]). Stipulations of settlement are independent contracts that are subject to the principles of contract law (Hannigan v Hannigan, 2008 NY Slip Op 3589 [2d Dept]) and “[o]nly where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation” (Hallock, 64 NY2d 224, 230). A “party seeking reformation of a contract by reason of a mistake must establish, with clear and convincing evidence, that the contract was executed under mutual mistake or a unilateral mistake induced by the other party’s fraudulent misrepresentation” (Moshe v Town of Ramapo, 2008 NY Slip Op 7238 [2d Dept] quoting Yu Han Young v Chiu, 49 AD3d 535, 536, 853 NYS2d 575 [2d Dept 2008]). “[E]ven a stipulation which was improvident will not be set aside unless it is manifestly unfair or unconscionable” (Cavalli v Cavalli, 226 AD2d 666, 667, 641 NYS2d 724 [2d Dept 1996]; see Wilutis v Wilutis, 184 AD2d 639, 640, 587 NYS2d 171 [2d Dept 1992]).

The only evidence offered by defendant in support of its claim that the settlement was procured through fraud or collusion are the conclusory allegations contained in the affirmations of defendant’s attorney. Bare, unsubstantiated allegations such as “[t]he purported judgment premised upon plaintiff’s misrepresentations”^[FN1] and “[p]laintiff obtained its judgment under false [*3]pretenses”^[FN2] and “[t]he judgment was obtained under collusion by the plaintiff and its attorney since plaintiff’s attorney was well aware of several litigations pending against their client based on their client’s corporate structure”^[FN3] are insufficient to vacate the stipulation as a product of collusion or fraud. Such speculation also fails to make the requisite showing to reform the stipulation on the ground that it was executed under a mutual or unilateral mistake (see M.S.B Dev. Co., Inc. v Lopes, 38 AD3d 723 [2d Dept 2007] [A party seeking reformation must show clearly that there has been a mistake] [emphasis added]). Moreover, defendant, a sophisticated insurer well-versed in no-fault litigation and represented by able and competent counsel at the time the stipulation was entered into, does not claim that the settlement was a product of duress or that its counsel lacked the authority to enter into the settlement.

Defendant’s claim that the stipulation of settlement should be vacated based upon newly discovered evidence of plaintiff’s allegedly fraudulent incorporation is also without merit.

Plaintiff and defendant entered into a second stipulation, so-ordered on March 26, 2007, in the Nassau County action in which defendant agreed that plaintiff’s right “to enforce voluntary settlements that have been entered into with any of the Insurers,” including defendant, would not be impaired. As a party to the Nassau County action defendant was certainly aware on March 26, 2007 that the plaintiff professional corporation may be fraudulently incorporated. Despite that awareness, defendant nevertheless agreed that plaintiff could freely enforce any and all voluntary settlements which plaintiff had previously entered into. This concession by defendant to plaintiff belies defendant’s argument that had it been aware of plaintiff’s allegedly fraudulent incorporation on July 10, 2006 it would not have entered into the stipulation at issue here. “Courts will not set aside a stipulation . . . simply because, in hindsight, a party decides that the agreement was improvident” (Town of Clarkstown v. M.R.O. Pump & Tank, Inc., 287 AD2d 497, 498, 731 NYS2d 231 [2d Dept 2001]). Therefore, because defendant has failed to meet any of the criteria necessary for the court to vacate the parties’ voluntary stipulation of settlement, defendant’s Order to Show Cause is denied in its entirety.

This constitutes the decision and order of the Court.

Dated: October 7, 2008

George J. Silver, J.C.C.

Jaffe & Koumourdas

40 Wall Street -12th Floor

New York, NY 10005

Attorneys for Defendant

Moshe D. Fuld, P.C.

38 west 32nd Street -7th Floor

New York, NY 10001

Attorneys for Plaintiff

Footnotes

Footnote 1: Defendant’sAffirmation in Support.

Footnote 2: Defendant’sAffirmation in Reply.

Footnote 3: Id.

Civil Court of the City of New York, Kings County

165871/2006

Counsel for Plaintiff:

Gary Tsirelman PC

55 Washington Street, Suite 606

Brooklyn, NY 11201

Tel.: (718) 438-1200

Counsel for Defendant:

Votto & Cassata, LLP

60 Bay Street, 3rd Floor

Staten Island, NY 10301

Tel.: (718) 720-2877

Peter P. Sweeney, J.

In this action pursuant to Insurance Law § 5101 et seq to recover assigned first-party no-fault benefits claimed to be due and owing under a policy of insurance issued by the defendant, defendant moves for summary judgment dismissing the action on the ground that plaintiff did not commence the action within the six-year statute of limitations contained in CPLR § 213[2]. Plaintiff cross-moves for summary judgment.

In support of its motion for summary judgment, defendant submitted admissible proof establishing that it received the underlying claim for first-party no-fault benefits on November 15, 2000, that it had issued a denial of the claim on November 29, 2000 on the ground that plaintiff’s assignor failed to attend an examination under oath (“EUO”) and that it had mailed a [*2]copy of the denial of claim to the plaintiff on the same day it was issued. Plaintiff commenced the action on December 1, 2006. Defendant argues that pursuant to CPLR § 213 [2], plaintiff was required to commence the action within six years from November 29, 2000 and that the commencement of the action on December 1, 2006 was untimely.

It is now fairly well settled that an action to recover assigned first-party no-fault benefits under a policy of insurance is fundamentally a breach of contract action subject to the six-year statute of limitations contained in CPLR §213[2] (see Mandarino v. Travelers Property Cas. Ins. Co., 37 AD3d 775, 831 NYS2d 452 [2nd Dep’t 2007]; Benson v. Boston Old Colony Ins. Co., 134 AD2d 214, 215, 521 NYS2d 14 [1st Dep’t1987], lv. denied 71 NY2d 801, 527 NYS2d 767, 522 NE2d 1065 [1988]; Travelers Indem. Co. of Connecticut v. Glenwood Medical, P.C., 48 AD3d 319, 319-320, 853 NYS2d 26, 26 [1st Dep’t 2008] ). The statute of limitations in a breach of contract action begins to run at the time the contract is breached, which in this case was when benefits become overdue (see Benson, 134 AD2d at 215; New Era Acupuncture, P.C. v. MVAIC, 18 Misc 3d 139(A), 2008 NY Slip Op. 50353(U) [App Term 2nd & 11 Jud Dists]. Benefits became overdue when the defendant failed to pay the claim within 30 days of November 15, 2000, when it received proof of the claim (see Insurance Law § 5106[a]; NYCRR § 65-3.8; Benson, 134 AD2d at 215; Micha v. Merchants Mutual Insurance Company, 94 AD2d 835, 463 NYS2d 110 [3rd Dep’t 1983] ). The commencement of the action on December 1, 2000 was therefore timely.

The fact that the defendant may have repudiated the contract on November 29, 2000 when it issued a denial of the claim and mailed a copy of the denial to the defendant does alter this result. Under the doctrine of anticipatory breach, where one party clearly and unequivocally repudiates his contractual obligations under a contract prior to the time performance is required, the non-repudiating party may deem the contract breached and immediately sue for damages (see American List Corp. v. U.S. News & World Report, 75 NY2d 38, 550 NYS2d 590, 549 NE2d 1161 [1989]; De Lorenzo v. Bac Agency Inc., 256 AD2d 906, 908, 681 NYS2d 846, 848 [3rd Dep’t 1998]; Long Is. R.R. Co. v. Northville Indus. Corp., 41 NY2d 455, 463, 393 NYS2d 925, 362 NE2d 558 [1977]).

While the plaintiff may have been entitled to bring the action under the doctrine of anticipatory breach when the defendant denied the claim, even though the 30 day period in which defendant had to pay the claim had yet to expire, plaintiff was well within its rights to elect to keep the contract in force and await the designated time for performance before bringing suit (Ga Nun v. Palmer, 202 NY 483, 493, 96 N.E. 99 [1911]; see also, Rachmani Corp. v. 9 East 96th Street Apartment Corp., 211 AD2d 262, 266, 629 NYS2d 382, 384 [1st Dep’t 1995] ). As the Court of Appeals wrote in Ga Nun: “The man who wrongfully renounces a contract into which he has deliberately entered cannot justly complain if he is immediately sued for a compensation in damages by the man whom he has injured; and it seems reasonable to allow an option to the injured party, either to sue immediately, or to wait until the time when the act was to be done, still holding it as prospectively binding for the exercise of this option, which may be advantageous to the innocent party, and cannot be prejudicial to the wrongdoer” (Ga Nun, 202 [*3]NY at 490-491, 96 N.E. at 101 – 102, citing Hochster v. De la Tour, 2 Ellis & Blackburn, 678). For the above reasons, defendant’s motion for summary judgment is DENIED.

Turning to plaintiff’s cross-motion for summary judgment, in Dan Medical, P.C. v. New York Cent. Mut. Fire Ins. Co.,14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006] ) the Appellate Term held that absent a sufficient foundation to demonstrate that the plaintiff’s claim forms constituted evidence in admissible form as business records, the “plaintiff failed to tender proof in evidentiary form to establish its prima facie case” (id. at 47). The Dan Medical Court further held that any admissions by the defendant regarding receipt of the plaintiff’s claim forms “did not concede the facts asserted in the claim forms and it remained plaintiff’s burden to proffer such evidence in admissible form, which it failed to do” (id.; see also Bajaj v. General Assur., 18 Misc 3d 25 [App Term, 2d & 11th Jud Dists 2007]; Midborough Acupuncture, P.C. v. New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132[A], 2006 NY Slip Op 51879[U] [App Term, 2d & 11th Jud Dists 2006] ).

Here, plaintiff’s submissions are devoid of any admissible proof, such as an affidavit from someone familiar with plaintiff’s business practices, establishing the admissibility of the claim form as a business record. Accordingly, plaintiff did not establish its prima facie case of entitlement to summary judgment notwithstanding defendant’s admission that it received the claim on November 15, 2000. Plaintiff’s failure to make out a prima facie case of entitlement to summary judgment mandates the denial of the motion regardless of the sufficiency of opposing papers (Winegrad v. New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 [1985] ).

For the above reasons, it is hereby

ORDERED that defendant’s motion for summary judgment and plaintiff’s cross-motion for summary judgment are DENIED.

This constitutes the decision and order of the court.

Date: October 7, 2008________________________________

Peter P. Sweeney

Civil Court Judge

[*1]

Civil Court of the City of New York, Kings County, September 25, 2008

APPEARANCES OF COUNSEL

Israel, Israel & Purdy, Great Neck (Jennifer Raheb of counsel), for plaintiff. Law Office of Teresa Spina, Woodbury (Victoria Thomas of counsel), for defendant.

{**21 Misc 3d at 799} OPINION OF THE COURT

Lila Gold, J.

{**21 Misc 3d at 800}In this action to recover first-party no-fault benefits in the amount of $878.67, for medical services rendered to its assignor, plaintiff and defendant stipulated to the proper and timely claim of the provider, thereby establishing a prima facie entitlement to payment. (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003].) The plaintiff and defendant further stipulated that the denial of benefits was timely and that the only issue for trial was medical necessity based on a peer review. The stipulation additionally provided that the peer review and underlying medical records were to be admitted into evidence. Thus, the burden shifted to defendant to prove lack of medical necessity.

Defendant called Dr. Drew Stein, the author of the peer review dated July 6, 2007, who testified that the MRI of the right shoulder was not medically necessary. On cross-examination, Dr. Stein was asked to describe the purpose of a peer review. Dr. Stein’s answer was “to confirm or deny a prognosis.” He then was asked whether an MRI in this particular case was necessary in order to rule out a muscular-skeletal injury vis-à-vis a nerve root injury, to which he answered in the affirmative. In fact, the MRI did show possible nerve impingement.

Dr. Stein, who has been practicing medicine for only four years, was never qualified as an expert by defendant. Nor was his expertise established.

To rebut defendant’s witness, plaintiff called Dr. David Finkelstein who was deemed an expert by the court, without objection, in the field of neurology. Dr. Finkelstein testified that, based on his review of the medical records and the patient’s complaint of pain radiating from the neck to the right shoulder area, an MRI would be helpful to determine which body part should be treated, i.e., the neck or shoulder. He also indicated, from the muscular tests which were performed, there were signs of neurological involvement in that area which an MRI would clarify.

Although it is not the court’s opinion that the services were medically necessary per se, once the plaintiff had established its prima facie case, the burden shifted to the defendant to present sufficient evidence to establish a defense based on the lack of medical necessity. The court finds that Dr. Stein’s testimony was insufficient to establish a defense based on the lack of medical necessity, and, therefore, the burden never shifted back to plaintiff. (West Tremont Med. Diagnostic, P.C. v GEICO Ins. Co., 13 Misc 3d 131[A], 2006 NY Slip Op 51871[U] [App Term, 2d &{**21 Misc 3d at 801} 11th Jud Dists 2006].) Thus, after hearing the evidence, and despite Dr. Finkelstein’s testimony, the court does not need to reach the issue of the sufficiency of plaintiff’s rebuttal. Rather, the court, as trier of the facts, is free to assess and reject the testimony as it sees fit and, therefore, finds that the evidence presented by defendant was insufficient to sustain its burden as to the issue of lack of medical necessity.

Wherefore, judgment is to be entered in favor of plaintiff as against defendant in the sum of $878.67, together with statutory interest and attorneys fees, plus costs and disbursements.

Civil Court of the City of New York, Richmond County

21281/07

Katherine A. Levine, J.

Defendant, State Farm Mutual Inc. Co., (“State Farm” or “defendant”) moves to dismiss plaintiff Bay Plaza Chiropractic’s (“Bay Plaza” or “plaintiff”) complaint, with prejudice, pursuant to CPLR 3126, for plaintiff’s failure to appear for an examination before trial (“EBT”) or to provide verified, complete and meaningful responses to defendant’s discovery demands. In the alternative, defendant moves to vacate plaintiffs’s Notice of Trial and compel plaintiff to fully comply with plaintiff’s discovery demands and to then produce plaintiff’s purported owner, Dr. Geraldine McGowan for an EBT. In support of its motion, defendant presents an affirmation from its attorney as well as an affidavit from an investigator in its Special Investigative Unit (“SIU”) and documentary evidence.

Defendant claims that plaintiff may be a fraudulently incorporated facility that is actually owned, operated, and controlled by unlicensed persons. It alleges it first became suspicious about plaintiff when it consistently submitted bills for chiropractic services purportedly rendered to patients who were receiving physical therapy treatments for the same condition, at the same location, and during the same time period. Defendant avers that because the plaintiff s bills are often submitted c/o HIJ Management (“HIJ”), using that entity’s address, and because HIJ management’s owner, Jesse Haber, often submits affidavits of mailing for Bay Plaza as the “biller of Bay Plaza,” in support of its motions for summary judgment, that the plaintiff is actually owned by Jesse Haber in violation of 11 NYCRR § 65.15 and Insurance Law sec. 5108. Defendant then asserts that since payments from insurance companies will not go to the purported owner of plaintiff – Dr. McGowan – but to Haber, there is a “clear issue as to who is actually receiving the plaintiff’s profits, and who is truly controlling the plaintiff’s finances” (Affirmation of Stuart Flamen, Esq., ¶9. )

Defendant further alleges that an EBT of the purported owner McGowan is warranted [*2]since she is listed as the executive not only of Sue Ellen Ginsberg, DO, PC, but of several other facilities connected to improper licensors. For example, defendant claims McGowan is affiliated with several entities owned or formerly owned by one Stanley Sonn who is being sued in federal court by another insurance company. Thus, an EBT is “the only way to uncover who really owns and controls the plaintiff provider” (Flamen affirmation, ¶16).

Defendant surmises that plaintiff can very well be engaging in the “doc-in-the -box” scheme whereby the plaintiff is actually owned and controlled by non-professionals which would negate plaintiff’s standing to collect non-fault benefits. In this scheme, the nominal owner – the physician- does not receive the profits which go to the lay persons who own the management company that actually runs facility (¶¶17). As such, defendant contends that it has set forth a reasonable basis of suspicion for fraud .

Plaintiff responds that it provided responses to the discovery requests and that the remaining requests are patently oppressive and should be stricken. Plaintiff also notes that the courts normally do not allow a secondary disclosure device (such as depositions) unless the first chosen devise does not adequately disclose all evidence material and is necessary to the prosecution or defense of the action. Plaintiff further counters that the discovery demands are not proper because defendant has not shown either “good cause” or a “founded belief” that the plaintiff is fraudulently incorporated and moves for a protective order. Plaintiff also alleges that the defendant’s motion is defective since it failed to submit an affidavit from an investigator with defendant’s Special Investigations Unit (“SIU”) and is based upon an affidavit made without personal knowledge, and thus is based only on conjecture, speculation and exaggeration.

This court has previously addressed the issue of whether the language contained in State Farm Insurance v. Mallela, 4 NY3d 313 (2005) requiring that a defendant insurer show “good cause” by demonstrating behavior on the plaintiff ‘s part ” tantamount to fraud,” applies to

discovery requests and or verification requests. See Cambridge Medical P.C. v. Nationwide Property & Casualty Ins. Co., 2008 NY Slip. Op. 50629U, 19 Misc 3d 1110A, 859 NYS2d 901 (Civil Ct. Richmond Co. 2008). There, this court adopted Judge Sweeney’s reasoning in Carothers v. Insurance Companies et al, 13 Misc 3d 970 (Civil Ct., Richmond Co. 2006) that “good cause” is not a mandatory requisite to ordering discovery, but only applies to”investigations conducted by insurers during the claims process in accordance with their entitlement under the regulatory scheme to seek verification of claims (11 NYCRR part 65) and not those conducted by litigants during the discovery process.” 13 Misc 3d at 972.

Article 31 of the CPLR governs discovery actions before the civil court, and its disclosure provisions simply do not condition discovery upon a showing of “good cause”. The guiding principle behind article 31 of the CPLR is that there should be “full disclosure of all matter material and necessary in the prosecution and defense of an action” (CPLR §3101 (a)). The words “material and necessary” are to be interpreted liberally and the test is “one of usefulness and reason” to assist in the preparation for trial by sharpening the issues. Cambridge Medical. Slip op. At 3 at citing Carothers, supra , 13 Misc 3d at 973. [*3]

Furthermore, since the “defense of fraudulent incorporation is a complete defense to a claim for no-fault benefits, one that is not subject to the rules of preclusion,” it appears that the bar against which to measure whether a defendant has shown that its discovery requests on the issue of fraudulent incorporation are “material and necessary” is quite low. Carothers, supra at 975. See, Lexington Acupuncture P.C., v. State Farm Insurance Co., 12 Misc 3d 90, (App Term 2d Dept. 2006). In fact, in Mallela, the Court of Appeals specifically permitted insurers to “look

beyond the face of licensing documents to identify willful and material failure to abide by state and local law,” 4 NY3d at 321, in assessing whether to withhold reimbursement of no -fault claims to medical corporations they believe to be fraudulently incorporated. See, One Beacon Ins. Co. V. Midland Medical Care, 2008 NY Slip. Op. 06813, 2008 WL 4166851 ( App. Div., 2d Dept. 2008).

This court first finds that defendant has articulated a”founded belief” that plaintiff is actually controlled by a non-licensed professional. Defendant has therefore made allegations sufficient to raise an issue of fact as to whether plaintiff is fraudulently incorporated. See, Tahir v. Progressive Casualty Ins. Co., 12 Misc 3d 657, 664 (Civil Ct., NY Co. 2006)(“fraudulent intent is rarely established by direct proof, but we nevertheless conclude that there are sufficient badges of fraud’ in this case from which such intention can be inferred”) “citing Spires v. Mihou, 13 AD3d 1056,57 (4th Dept. 2007)). In support of its founded belief, and contrary to plaintiff’s allegation, defendant did submit an affidavit from its SIU investigator who had personal knowledge of the investigation. In numerous cases, defendant insurers have been permitted to proceed to trial based upon affidavits of investigators employed by the insurance company’s Special Investigations Unit (“SIU”) who allege personal knowledge of the alleged fraud. See, American Honda Finance Corp. V Progressive Casualty Ins. Co., 290 AD2d 850 (3d Dept. 2002) (“at this preliminary stage of the proceeding, a question of fact is lurking as to whether Perez committed fraud or made other material representations such that policy exclusion would preclude recovery); Northern Medical v. State Farm Mutual Automobile I ns. Co., 2008 NY Slip Op. 50753U, 19 Misc 3d 1117A (Civil Ct., Queens Co., 2008).

It should also be noted that even if defendant had not submitted an affidavit from its SIU investigator, the affirmation from defendant’s attorney, along with the attached documentation, would have been sufficient for this court to order further discovery. Where defendants raise the defense of fraudulent incorporation, the courts have denied motions for summary judgment by plaintiffs, despite the defendant’s failure to present an affidavit based upon personal knowledge, where the opposition papers set forth that facts essential to justify opposition may exist but cannot then be stated.” Midwood Acupuncture P.C. v. State Farm Mutual Auto Ins. , 14 Misc 3d 131A, 836 NYS2d 486 (App. Term, 2d Dept. 2007); Lexington Acupuncture, P.C., v. State Farm Ins. Co., 12 Misc 3d 90, 92 (App. Term, 2d Dept. 2006). The courts have reasoned that plaintiff’s motion for summary judgment are premature pending the completion of discovery. Id.,

However, in the end, “the scope of discovery is not unlimited” and is left to the broad discretion of the trial court, which must assess the request on a case by case basis taking into [*4]consideration the “intrusiveness of the discovery device and the merits, or lack thereof, of the claim” Carothers, supra 13 Misc 3d at 974 citing Greater NY Mutual Ins. Co. v. Lancer Ins. Co., 203 AD2d 515, 517 (2d Dept. 1994). To this end, Judge Sweeney found that the primary tool to be used by the court to control and supervise the scope of discovery was the protective order pursuant to CPLR §3103(a). Id at 974. . See Cambridge Medical, supra .

In light of the above, defendant has shown that it is material and necessary to compel further discovery and to depose Dr. McGowan with regard to the issue of fraudulent incorporation, a defense which is not precluded. As such, the court directs plaintiff to produce Dr. McGowan for an EBT within 30 days after the completion of discovery upon renotice by defendant. The Court also directs plaintiff to comply with all discovery requests that deal with corporate structure or that directly pertain to the issue of fraudulent incorporation including, but not limited to certificates of incorporation, management agreements, and the names of plaintiff’s shareholders and that it specifically answer Interrogatories 6,7,8, 23, 25, 26, and combined demands 4, 5, 9.29, 30.

The court is not convinced, at this juncture, that defendant has made a strong showing that the production of McGowan’s personal income taxes are “indispensable to the claim and cannot be obtained from other sources” and therefore will not order disclosure of McGowan’s personal income taxes. See, Benfeld v. Fleming Properties, 44 AD3d 599,600 (2d Dept. 2007); Altidor v. State-wide Ins. Co., 22 AD3d 435 ( 2d Dept. 2005); Great Wall Acupuncture v. State Farm Mutual Ins. 2008 NY Slip Op. 51529U, 20 Misc 3d 136A (Sup. Ct., App. Term, Sept. Dept. 2008). The court also finds that many of the other interrogatories or combined demands requests information are already in defendant’s possession or that are irrelevant or unduly burdensome. Since this court has repeatedly indicated that the parties are to work out discovery disputes between themselves, it will not at this juncture strike any protective order as to the irrelevant discovery requests.

The court will not dismiss the complaint since plaintiff has responded to some of the discovery requests and has not engaged in conduct that is willful, contumacious or in bad faith, as required by CPLR 3126. See, AVA Acupuncture P.C. v. State Farm Mutual Ins. Co., 16 Misc 3d 138A, (App. Term 2d and 11th Jud. Dist. 2007).

The court directs plaintiff to respond to the applicable defendant’s discovery request within 45 days of this decision and that defendant renotice Dr. McGowan for an EBT within 30 days after it receives plaintiff’s responses to its discovery requests. Plaintiffs must produce Dr. McGowan for the EBT.

The foregoing constitutes the Decision and Order of the Court. [*5]

DATED: September 22, 2008

Hon. Katherine A. Levine

Judge, Civil Court

ASN byon

Civil Court of the City of New York, Kings County

143763/06

Sylvia G. Ash, J.

Plaintiff a health care service provider seeks to recover no-fault benefits for supplies furnished to its assignor. Defendant contends that Plaintiff’s claim is premature because Plaintiff failed to comply with an additional verification request. Plaintiff argues that it responded to Defendant’s verification request. Defendant argues that the response failed to fully comply with the request.

There is no dispute that Plaintiff responded to the additional verification request. There is also no dispute that upon receipt, Defendant did not request any further response from Plaintiff. The issue before the Court is whether Defendant was obligated to notify Plaintiff that its response to their additional verification request was insufficient and/or incomplete. In All Health Medical Care, P.C. v. Government Employees Insurance, 2 Misc 3d 907, the Court reasoned that while “… the regulations are silent as to what, if anything, the insurance company must do if it receives insufficient verification, that it is clear that the insurance company must affirmatively act once it receives a response to its verification request.” (see also Westchester County Medical Center v. NY Central Mutual Fire Ins Co., 262 AD2d 553).

In the case at Bar, once Plaintiff submitted its response to Defendant’s additional verification request, it was then incumbent on Defendant to inform Plaintiff that said response was insufficient and/or incomplete. Any confusion or disagreement on the part of the Defendant as to what was being sought should have been addressed by further communication, not inaction (see Westchester County Medical Center v. NY Central Mutual Fire Ins Co., supra). Neither party may ignore communications from the other without risking its chance to prevail in the matter (see All Health Medical Care, P.C. v. Government Employees Insurance Co., supra).

Accordingly, Plaintiff motion is hereby granted, judgment in favor of plaintiff for $2,118.33 plus interest , attorney’s fee, costs and disbursements. [*2]

This constitute the Decision and Order of the Court.

DATED: September 15, 2008______________________________

Sylvia G. Ash, J.C.C.