Civil Court of the City of New York, Richmond County

11704/07

Counsel for Defendant:

Gregory J. Guido, Esq.

SHORT & BILLY, P.C.

217 Broadway, Suite 511

New York, NY 10007

212-732-3320

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.

Plaintiff Jin Huo Lac (“plaintiff” or “Lac”), a medical service provider, commenced this

action, pursuant to the No-Fault Law, to recover payments from defendant American Transit Insurance Company (“defendant”) for services plaintiff rendered to its assignor Maria Acosta (“assignor” or “Acosta”) as a result of the injuries that she sustained in an automobile accident. .

Defendant moves to dismiss the action on the ground that the assignor is entitled to Workers Compensation because she was attached to a taxi corp/ car service base as an employee and that the Workers Compensation Board (“Board”) has primary jurisdiction over issues of coverage. Defendant had previously denied plaintiff’s claim based upon the aforementioned reason (See Explanation of Benefits and NF 10 form attached as Exhibit 6 to defendant’s motion.) Defendant asserts that this court therefore lacks jurisdiction to hear the complaint pursuant to 11 NYCRR § 65-3.16(a)(9), Section 142 (7) of the Workers Compensation Law and precedent. Defendant also seeks to amend its answer to include the affirmative defense that this court lacks subject matter jurisdiction.

Plaintiff asserts that “a no-fault insurer asserting a defense that Workers Compensation is primary would need to 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 that the assignor was employed at the time of the accident. To this end, plaintiff contends that the police accident report, which states that the TLC license plate on the car Acosta was driving is registered, is inadmissable as rank hearsay since there is no proof that the officer saw the accident. Even assuming, arguendo, that the report is admissible, plaintiff contends that defendant still has failed to establish that the assignor was “working” at the time of the accident; i.e. that the accident occurred during the course of employment.

Plaintiff and defendant stipulated at oral argument that the main issue before the court [*2]was whether the Workers Compensation Board has primary jurisdiction over the factual question of whether plaintiff’s assignor was acting within the scope of her employment at the time of the accident. An ancillary but determinative issue is whether the police accident report, which sheds light upon the issue of the assignor’s employment, is admissible.

In support of its position, defendant asserts that the assignor was the driver of a livery vehicle, license number T455140C , registered in New York State and insured by American Transit Insurance Company. In its reply papers defendant avers that the aforementioned license plate was authorized by the Taxi & Limousine Commission “which reasonably infers that the vehicle is a taxi or for-hire”. Defendant further avers that the police accident report and defendant’s review reveals that the vehicle operated by Acosta was registered and insured by Katt Corporation which defendant summarily asserts is a taxi/limousine service.

The police accident report (exhibit 7) does not have the two boxes – “not investigated at scene” and “accident reconstructed” on the first line checked off. Therefore, the police officer who filled out this form presumably observed the results of the accident. The accident report also sets forth that the car is registered to the Katt Corporation and lists the insurance policy number. The accident report checks off that a duplicate copy must be sent to the NYC Taxi & Limousine Commission.

The only document that relates to plaintiff’s employment, or lack thereof, is the NF-3 – “Verification of Treatment by Attending Physician or other provider of Health Service” (Exhibit 2 to defendant’s moving papers) which was presumably filled out by plaintiff Lac. Question number 4 – Occupation – is filled out as not applicable and question number 10 – “is condition due to injury arising out of patient’s employment?” is answered as “No” . The NF-3 is not signed but notes that the signature is on file.

Pursuant to Insurance Law §5102 (b), “first party benefits” means payments to reimburse a person for basic economic loss due to personal injury arising out of use or operation of a motor vehicle, less (2) “Amounts recoverable on account of such injury under…Workers’ Compensation benefits, or disability benefits under article nine of the Workers’ Compensation Law. 11 NYCRR 65-3.16(a)(9) provides that pursuant to Insurance Law, §5102 (b), “when the applicant is entitled to Workers’ Compensation benefits due to the same accident, the Workers’ Compensation carrier shall be the sole source of reimbursement for medical expenses.”

Similarly, Workers’ Compensation Law, §142 (7) provides that “(w)here there has been a motor vehicle accident which caused personal injury and there is a dispute as to whether the injury occurred in the course of employment, the Workers’ Compensation Board shall…hold an expedited hearing on…whether the accident occurred within the course of employment”

The courts have consistently ruled that the Legislature has vested “primary jurisdiction” in the Workers’ Compensation Board over the issue of the availability of coverage under the Workers’ Compensation Law, and that the plaintiff has “no choice but to litigate this issue before the Board”. Liss v. Trans Auto Systems, Inc., 68 NY2d 15, 21 (1986); Alvarez v. Empire Mut’l [*3]Ins. Co., 171 AD2d 262, 268 (1st Dept. 1991); Diane Becker v. Clarkstown Cent. Sch. Dist., 157 AD2d 641 (2d Dept. 1990); Lenox Hill Radiology v. American Transit Ins. Co., 2008 NY Slip Op. 50330U, 18 Misc 3d 1136A, 239 N.Y.L.J. 46 (Civil Ct., NY Co. 2008). See, Mattaldi v. Beth Israel Medical Center, 297 AD2d 234 (1st Dept. 2002)(threshold issue of whether the plaintiff was in the course of her employment must first be determined by the Board.

Where a case is likely to fall within the exclusive jurisdiction of the Board, the plaintiff bears the burden of pleading and proving the absence of compensation. The plaintiff must demonstrate either that 1) no compensation policy covering the plaintiff was in existence, or 2) that plaintiff was not an employee of the defendant, or 3) that the injury did not arise out of and in the course of plaintiff’s employment. O’Rourke v Long, 41 NY2d 219, 225 (1976); Weber v. State of New York, 104 Misc 2d 947 (Court of Claims, 1980).

“Where the availability of Workmen’s Compensation hinges upon the resolution of questions of fact or upon mixed questions of fact and law, the plaintiff may not choose the courts as the forum for the resolution of such questions.” O’Rourke v Long , 41 NY2d 219, 228 (1976). On the other hand, the presence or absence of insurance coverage for a particular employee is a question of law to which the court retains jurisdiction. Id. at 225. Likewise, where the determination of the employment status of an injured party involves a pure matter of law, such as statutory construction, the court retains jurisdiction. Id. at 224. See, Jean-Paul Fouchecouort v. Metropolitan Opera Assn, 537 F. Supp. 2d 629 (S.D.NY)(court determined that plaintiff, an opera singer, fell within the statutory definition of an employee and that plaintiff was therefore barred by the exclusive remedies provisions of the Workers Compensation Law from bringing suit before court).

Pared to its minimum, the procedural implications of O’Rourke are that “where the trial court can resolve the limited issues of employment status or the existence of a compensation policy in a reasonable summary fashion, it should do so. Conversely, where determination of an issue, such as whether the accident arose out of plaintiff’s employment, is likely to require extensive fact finding similar to a plenary trial, the court should, in the exercise of sound discretion, defer to the Board.” Weber v. State of New York, 104 Misc 2d 947 (Court of Claims, 1980). Then, the Board must be given an opportunity to find plaintiff’s injuries the result of a compensable accident; this claim being a jurisdictional predicate to a civil action. Liss, supra at 21; O’Rourke, supra at 226.

Plaintiff contends that before a defendant insurance company can argue that the Board has primary jurisdiction, it must establish, as a threshold matter, that the claimant was employed at the time of the underlying motor vehicle accident, citing Global Liberty Ins. Co. v. Abdelhaq, 36 AD3d 909 ( 2d Dept. 2007). It also asserts that it is impossible for defendant to establish employment since the one document that might shed light on the assignor’s employment – the police accident report – is rank hearsay.

The Second Department’s decision in Global Liberty is quite cryptic but does not appear [*4]in any way to diminish the force of the aforementioned precedent.^[FN1] At issue in Global was whether the court should permanently stay an arbitration proceeding over a claim for No-Fault benefits on the grounds that the insured was entitled to Workers Compensation benefits. The petitioner insurance company claimed that the insured’s “base affiliation” with a cab service obligated the latter to secure Workers Compensation for the insured. The court refused to issue a stay on the grounds that the petitioner insurance company “failed to submit evidence that Kenmore was the insured’s employer at the time of the accident.” In fact, the petitioner alleged that the insured violated his insurance contract by failing to notify petitioner that “he left his base affiliation with Kenmore”.

The most that can be garnered from Global is that when the only proof submitted is that the insured had some how ceased his relationship with the cab company, hence negating any implication that there was an employment relationship, the court need not relinquish jurisdiction to the Board. In the instant matter, on the other hand, there is conflicting evidence as to whether any employment relationship existed : the NF-3 seems to negate the existence of an employment relationship whereas the police accident report seems to confirm it. The issue thus presented is whether the police accident report constitutes admissible evidence and, if so, does it constitute sufficient evidence to raise a complicated factual question on employment so as to warrant the intercession of the Workers Compensation Board.

In Lenox Hill Radiology, supra , the court addressed the quantum of proof necessary for the court to decline jurisdiction in favor of the Workers Compensation Board. The defendant insurance company relied upon two documents in support of its position that the assignor was employed at the time of the accident. The first was an application for No-Fault benefits (N-F 2), filled out on behalf of the assignor and signed by the assignor. The question on this form inquiring whether the assignor was in the course of his employment at the time of the accident was answered yes. The second document was the MV -104 police accident report filled out by an officer which stated that the assignor ‘s vehicle was a taxi.

As to admissibility, the court found both documents to come within the business exception to hearsay. The police accident report could be considered “under the business record exception …to the extent it was based upon the personal observations of the police officer present at the scene and under a business duty to make it” Id. citing Westchester Medical Ctr v. State Farm Mut. Ins. Co., 44 AD3d 750, 753 ( 2d Dept. 2007). Since neither the box “not investigated at the scene” nor “accident reconstruction” were checked off, the court concluded that the officer’s notation that the assignor’s vehicle was a “taxi” was “necessarily based on his observation at the scene of the accident”. The same conclusion could also be drawn from the [*5]police report in the instant matter.^[FN2]

After citing the aforementioned precedent for the proposition that Worker’s Compensation is primary, the Lenox court stated that the “defendant must show only 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. Id. citing A.B. Medical Serv. PLLC v. American Transit Ins. Co., 8 Misc 3d 127A, 801 NYS2d 776 [App. Term 2d Dept. 2005). The court found that the NF-2 stating that the assignor was employed at the time of the accident, and the observation of the police officer that the vehicle was a taxi, was sufficient for defendant to meet its burden. The court also noted that the plaintiff had failed to tender any evidence about the assignor’s employment status.

Conversely, in A.B. Medical, supra , the court found that the insurance company had failed to establish the defense’s “potential merit” so as to warrant the Workers Compensation Board’s review of the facts. As against plaintiff’ s proof – the assignor’s sworn statement that he was not working when the accident occurred and the purported employer’ s sworn statement that the assignor was not working – the insurance company interposed only a claim adjuster’s statement that claimant was eligible for Workers Compensation, based upon an employer’s unsworn statement dated 18 months before the accident, and a police accident report that the court would not consider since it was offered for the first time in defendant’s reply papers. The court therefore concluded that the defendant’s claim that the assignor acted in the course of his employment at the time of the accident was “mere speculation” and failed to establish any issues of fact regarding Worker’s Compensation coverage that must be resolved by the Board.

In all cited cases but one ^[FN3] the courts have found primary jurisdiction to rest with the Board only where the movant has presented evidence about the employment relationship above and beyond a police accident report, i.e. the “right of control, method of payment, furnishing of material and nature of work, which are traditionally considered in determining whether an employment relationship existed”. Arvatz v. Empire Mutual Ins. Co, supra , 171 AD2d at 267. See, Juan Lapont v. Savvas Cab Corp., 244 AD2d 208 (1st Dept. 1997) (sufficient facts presented to demonstrate potential merit of Workers Compensation defense: plaintiff’s supervisor gave him work assignments and distributed his wages; supervisor also provided affidavit stating that he and plaintiff were both employees at defendant cab corporation and that defendant maintained a Workers Compensation insurance policy for its employees ); Hammer Associates, Inc v. Delmy Productions, Inc., 118 AD2d 441 (1st Dept. 1986) ( plaintiff entered into a written contract for a stipulated sum for a term certain and the time and place where he would work was determined by defendants leading to court’s conclusion that plaintiff was an employee “as a [*6]matter of law” ); Weber v. State, supra (claimant’s decedent employed by the State as a custodian, the policy of compensation insurance covering claimant was procured by state and was in full force and effect at time of accident, and claimant’ s demise arose out of and in course of employment); Lenox Hill Radiology, supra (police accident report and application for no-fault benefits (N-F 2)..

Based on the aforementioned precedent and the evidence presented, this court concludes that the defendant has failed to show 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. Its motion for summary judgment to dismiss the complaint is denied.

Defendant’s motion to amend its answer to include an affirmative defense based upon this court’s lack of subject matter jurisdiction is granted. Leave to amend pleadings should be freely given (CPLR §3025[b]), and, in the absence of surprise or prejudice, it is an abuse of discretion as a matter of law for a trial court to deny leave to amend an answer during a trial. McCaskey, Davies & Assocs. v. N.Y.C. Health & Hops. Corp., 59 NY2d 755, 757 (1983); Smith v. Pizza Hut of America, Inc., 289 AD2d 48 , 50 (1st Dept. 2001). Plaintiff does not even assert, in its cross motion for summary judgment, that it will be prejudiced.

While the court, as set forth above, has serious doubts about the viability of defendant’s argument that this court lacks subject matter jurisdiction, both parties will have an opportunity, at trial, to present their positions as to whether, as a matter of law, there is Workers Compensation insurance coverage for the assignor and whether the assignor falls within the statutory definition of an employee under the Workers Compensation Law. This court reserves a decision on whether plaintiff has proven its prima facie case until trial.

The foregoing constitutes the decision and order of the court.

Dated:June 12, 2008

Staten Island, NYHon. Katherine A. Levine

Judge, Civil Court

Appearances

Counsel for Defendant:

Gregory J. Guido, Esq.

SHORT & BILLY, P.C.

217 Broadway, Suite 511

New York, NY 10007

212-732-3320

Counsel for Plaintiff: [*7]

Joaquin J. Lopez, Esq.

Baker, Sanders, Barshay, Grossman,

Fass, Muhlstock & Neuwirth

150 Herricks Road

Mineola, NY 11501

516-741-4799

Footnotes

Footnote 1:There are no cases which, to this court’s knowledge, have followed Global whichprobably accounts for plaintiff’s citation solely to Global.

Footnote 2: The only difference is that here, there is no notation that the vehicle was a taxi. The officer identified the make of the vehicle as a Lincoln.

Footnote 3: Attached to defendant’s papers is the case of Precision Diagnostic Imaging v. American Transit Ins. Co., 054411 CV 2003 (Civil Ct., NY Co. 5/16/05).

Civil Court of the City of New York, New York County

2765/08

For plaintiffs:

Edward Shapiro. P.C.

Wantagh, NY

For defendant:

McDonnell and Adels, P.C.

Garden City, NY

Arlene P. Bluth, J.

Upon the foregoing cited papers and after argument, defendant moves for summary judgment pursuant to CPLR §3212 dismissing the complaint or, in the alternative, for an order pursuant to CPLR 3124 compelling plaintiffs to respond to its discovery demands on Mallella issues. For the following reasons, the branch of the motion for summary judgment is denied and the branch of the motion compelling discovery is granted to the extent set forth below.

In this action, plaintiffs seek to recover first-party No-Fault benefits in the amount of $3,937.33, plus statutory, interest, costs, and attorneys’ fees, for medical services allegedly rendered to their assignor, Marie Boucicaut, following an alleged automobile [*2]accident on April 4, 2003.

Summary Judgment

Defendant contends that the underlying incident was an intentionally caused loss which is not covered by defendant’s insurance policy and seeks summary judgment dismissing the complaint. In support thereof, defendant submits the affidavit of Christopher Howard, an investigator in its Special Investigation Unit who was personally involved in the investigation. Mr. Howard sets forth detailed results of his investigation, all of which certainly tend to show that the underlying incident was staged, and thus not covered by the policy. In opposition, the plaintiff has failed to contradict any of Mr. Howard’s sworn statements or any of the voluminous documents annexed thereto.

Although there are many cases where a court has found that the investigator’s affidavit either is or is not sufficient to defeat a plaintiff’s motion for summary judgment, defendant has failed to cite a single case where summary judgment was granted to a defendant based upon a lack of coverage/staged accident defense supported by an investigator’s affidavit. From the uncontradicted, overwhelming circumstantial evidence in this record, this Court believes that if there were cases where summary judgment could be granted to the defendant, this would be one of those cases; the only evidence more convincing than the circumstantial evidence presented here would be if the driver and passengers admitted under oath that they fabricated their stories and withdrew their claims with prejudice. Unfortunately, this Court is constrained to deny defendant’s motion for summary judgment because it appears that summary judgment is simply unavailable to a defendant denying a claim on the grounds that it involved a staged accident.

Indeed, even when the defendant’s testimony is sufficient to convince the Appellate Term that the defendant’s refusal to pay the claim was based upon its founded belief that the injuries did not arise out of an insured incident, such a finding is only sufficient to create an issue of fact; it is not a basis for granting summary judgment. The Appellate Term, Second Department has spoken on this point in A.M. Medical Services, P.C. v. Nationwide Mut. Ins. Co., 12 Misc 3d 143(A), 824 NYS2d 760 (App Term 2d Dept 2006). There, even though the evidence was compelling in defendant’s favor, that is, the driver and passenger admitted under oath that they faked the accident and withdrew their claims with prejudice, the Appellate Term reversed the trial court’s grant of summary judgment to the defendant.

In A.M. Medical Services, the EUO transcripts showed that when the assignor and [*3]driver were confronted with suspicious facts about their multiple “accidents,” they withdrew their claims with prejudice. The Appellate Term held:

[N]evertheless, the foregoing facts were sufficient to demonstrate that defendant’s refusal to pay the claim was based upon a “founded belief that the alleged injur[ies] do[ ] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; GPM Chiropractic, P.C. v State Farm Mut. Ins. Co., 7 Misc 3d 138[A], 2005 NY Slip Op 50861[U] [App Term, 2d & 11th Jud Dists] ). This presented an issue of fact as to whether there was a lack of coverage. Consequently, plaintiff’s motion for summary judgment was properly denied and defendant’s cross motion for summary judgment should have been denied.

Even when the court found the defendant’s evidence convincing and that it was absolutely right to deny the claim based upon a founded belief of a staged accident, the Appellate Term still reversed trial court’s grant of summary judgment on those grounds.

But the Appellate Term’s decision does not stop there. The Court sua sponte ordered a sanctions hearing against the plaintiff’s attorney, and criticized him for pursuing an appeal frivolously:

Despite being advised of [the evidence of withdrawals], and being provided with background information which led to the “withdrawals,” plaintiff’s counsel submitted a reply affirmation wherein he continued to seek summary judgment in favor of his client, After having been unsuccessful [below], and despite being faced with the facts which clearly support a founded belief of fraud, plaintiff’s counsel took an appeal…

Therefore, the Appellate Term refused to affirm summary judgment even though it clearly thought that the plaintiff should not have pursued its claim when faced with the same evidence. If the Appellate Term thought the evidence of a staged accident was strong enough to consider sanctions against the plaintiff’s attorney for pursuing the claim but still refused to grant summary judgment to the defendant, then the only explanation is that there is a per se rule against summary judgment dismissing a claim based on staged accident. Absent a contrary decision in this Department, this Court, following A.M. Medical Services, denies defendant’s motion for summary judgment. Mountain View Coach Lines v Storms, 102 AD2d 663, 664, 476 NYS2d 918 (2d Dept 1984); People v Brisotti, 169 Misc 2d 672, 673, 652 NYS2d 206, 207 (App Term 1st Dept 1966); 545 West Co. v Schachter, 16 Misc 3d 431, 837 NYS2d 549 (Civ Ct, NY Cty, 2007).

Compelling Discovery

Defendant also seeks the alternative relief, pursuant to CPLR 3124, of an order compelling plaintiffs to respond to defendant’s discovery demands. Nowhere in the seven pages of opposition does plaintiff oppose this relief, nor have either of the plaintiffs ever moved for a protective order. The outstanding discovery includes a notice to take the depositions of Deepak Sachdev, M.D., Stella Ilyaev, M.D., Sanford Yu, L.Ac. and Karen Cinquemandi, D.C. Defendant has set forth uncontradicted documentary evidence that Dr. Sachdev is listed the owner of close to a dozen medical facilities, and has also annexed documents showing that he been arrested for selling prescriptions from one of his facilities in the Bronx as part of a multi-million dollar medicaid fraud ring. (His case is currently pending). The defendant has annexed proof that Dr. Sachdev is also listed on at least two of the bills sued upon herein as the employee of plaintiff Right Care Medical who actually performed the medical services for the assignor.

Plaintiff chose to bring this action, and civil litigants are obligated to abide by the CPLR. According to the CPLR, the defendant has the right to depose the plaintiff. Here, Dr. Sachdev, as the owner of the facility and the practitioner who actually rendered the services, must appear for his deposition. Furthermore, he must bring with him to the deposition the documents he may need to refer to in answering the questions relating to plaintiff’s corporate structure; if he does not bring the documents and he cannot answer the questions, then defendant may bring on a motion for further relief. In addition to the plethora of uncontradicted reasons submitted by the defendant tending to show that plaintiffs may be fraudulently incorporated and thus not entitled to insurance payment, the Court notes that Dr. Sachdev may be unaware of his corporation’s billing practices inasmuch as the bills annexed to the defendant’s motion show the each NF3 for services allegedly provided by Dr. Sachdev state that Dr. Sachdev is a “nerologist;” he is no more a “nerologist” than his counsel is an “attor-knee.” A person who worked so hard to become a neurologist would know how to spell it.

Accordingly, defendant’s motion to compel discovery is granted to the extent of ordering the deposition of Deepak Sachdev, M.D. on or before August 1, 2008 at the offices of defendant’s attorneys. The Court is allowing the deposition outside New York City because it appears that Dr. Sachdev resides in Franklin Square, Nassau County, where defendant’s offices are located. If Dr. Sachdev shows proof (which proof must be shown before July 1, 2008) that he does not reside in Nassau County, then the deposition will be held at the Courthouse, 111 Centre Street, New York, New York on or before August 1, 2008 or at another location within New York City, agreeable to the parties. If Dr. Sachdev fails to appear for the Court-ordered deposition, then the plaintiff Right Care [*4]Medical, P.C. will be precluded from offering any evidence at the trial or upon a motion for summary judgment.

With respect to plaintiff AA Acupuncture Services, P.C., defendant has not shown that Dr. Sachdev is involved in that professional corporation and has not submitted any bills relating thereto. Although the documents annexed to defendant’s papers show that Mr. Yu is a principal in AA Acupuncture Service, P.C., there are no allegations that his corporation may be fraudulently incorporated, nor are there bills to show he performed any of the services billed for herein. In addition, there are no specifics alleged regarding the other two individuals listed in the deposition notice, Stella Ilyaev, M.D. and Karen Cinquemandi, D.C. Accordingly, this Court does not have a basis to order any other depositions at this time.

This is the Decision and Order of the Court.

Dated: May 30, 2008

New York, New York

Arlene P. Bluth

Judge, Civil Court

Civil Court of the City of New York, Richmond County

11810/07

Counsel for Plaintiff:

Law Offices of Emilia I. Rutigliano

2503 65th Street

Brooklyn, NY 11204

718-382-1266

Counsel for Defendant:

Jean Kang, Esq.

Jaffe & Koumourdas, LLP

40 Wall Street, 12th Floor

New York, NY 10005

212-809-7800

Katherine A. Levine, J.

Plaintiff Park Slope Medical and Surgical Supply, Inc.(“plaintiff” or “Park Slope”) brought this action to recover the sum of $817.25 with statutory interest, attorney fees, and costs for medical equipment it provided to its assignor Alicia Marsh (“Marsh”). Park Slope moves for summary judgment on the grounds that it has demonstrated a prima facie case of entitlement to payment for the medical supplies it furnished to Marsh. Defendant cross moves for summary judgment and to dismiss this action on the grounds that Park Slope failed to comply with the two verification requests it mailed on January 18, 2007 and February 17, 2007 wherein it requested the NF-3s, assignment of benefits and the initial narrative report from the referring physician.

Country-Wide states that its request for copies of the NF-3 and assignment of benefits are still outstanding and that it therefore was not required to pay the claim. The complaint should thus be dismissed because this action was prematurely filed.

Park Slope does not dispute defendant’s assertion that it never provided the above requested information, but asserts as justification that the second verification request was improper because it was made on the 30th day after the first request for verification. Plaintiff argues that Insurance Regulation 11 NYCRR Section 65-3.6 (b) bars the insurance carrier from issuing a second verification request until thirty days have elapsed from the time it made its first verification request, during which time it has received no response to its request.

Pursuant to Insurance Law § 5106(a) and 11 NYCRR 65-3.5, an insurer is required to [*2]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. Mt Sinai Hosp. v. Chubb Group of Ins. Cos., 43 AD3d 889-90 (2d Dept. 2007). See, Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 278 (1997). An insurer may toll the 30 day period by properly requesting verification within 15 days from the receipt of the bill (11 NYCRR 65.15(d)); Psych. & Massage Therapy Assoc., PLLC v. Progressive Casualty Ins. Co., 5 Misc 3d 723 (Civ Ct, Queens Co., 2004). If the “requested verification has not been supplied to the insurer 30 calendar days after the original receipt, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested….” 11 NYCRR Section 65-3.6(b). “A claim need not be paid or denied until all demanded verification is provided” New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 569, 570 (2d Dept. 2004). See Insurance Law § 5106(a); 11 NYCRR 65-3.5(c), 65-3.8(a)(1).

As is typical in the area of No-Fault Law, two diametrically opposed decisions have been rendered by the Civil Court on this issue – whether the insurer must wait until thirty days have lapsed before sending its follow-up request or be precluded from offering defenses at trial. In Psych. & Massage Therapy, supra ^[FN1] Judge Agate determined that neither case law nor statutory language required the insurer to wait thirty days before it could submit a follow-up request or be precluded from offering any defenses at trial. Id at 724. Interpreting the predecessor to Regulation 11 NYCRR § 65-3.6 (b) ^[FN2] , the court stated that “(w)hile the regulations require an insurer to submit a follow-up request within 30 days from the date of submission of the request, it does not mandate that the insurer wait 30 days before sending a follow up request. Instead, this time frame is a limit to the amount of time an insurer may wait before sending a follow up request.” Id at 724-25. The court then found that:

penalizing defendant for sending a follow-up request 25 days after its initial request is inconsistent with the goals of the No-Fault Law. The purpose of the No-Fault Law is to allow swift compensation for qualified injured persons from the insurance companies. (citation omitted). The regulations require insurers to act quickly in evaluating insured claims and to avoid prejudicial delays (citation omitted). The verification requirement exists in order for insurers to have their opportunity to promptly investigate and respond to legitimate claims, not to delay payment (citation omitted).

Psych. & Massage Therapy Assoc., PLLC, supra , p.725.

The court further noted that plaintiff’s attempt to penalize defendant for being too prompt [*3]would be totally inconsistent with defendant’s duties under the No-Fault Law to promptly respond to the insured’s claims. Id at 726.Defendant would suffer undue prejudice if a verification request was found improper as it would have to pay for a claim for which it complied with the regulations. Moreover, defendant’s early follow-up verification request did not prejudice plaintiff in any manner, as plaintiff was not under any time restraint to respond to defendant’s verification. Id. On appeal, the Appellate Term stated, without any elaboration, that: “despite defendant’s untimely denial of plaintiff’s claim for the sum of $ 1,360.48, defendant was not precluded from asserting the defense of lack of coverage” Psych. & Massage Therapy Assoc., PLLC v. Progressive Cas. Ins. Co., 2006 NY Slip Op 51351U, 12 Misc 3d 140A, 824 NYS2d 766 (App. Term, 2d Dept. 2006).

In Seaside Medical P.C. v. State Farm Mutual, 12 Misc 3d 1127, 819 NYS2d 819(Civil Ct. Richmond Cty 2006), on the other hand, Judge Sweeney credited the plaintiff’s argument that the toll to the defendant insurer’s time to pay or deny the claim was eviscerated when the defendant sent out the second verification request only 28 days after the first verification request had been mailed. After citing to a number of cases which were not on “all fours” with the instant matter because the defendants in those cases did not do any follow up after the plaintiff had failed to comply with the first verification request, Judge Sweeney noted that here the defendant did follow up but not within the 10 day period specified in 11 NYCRR 65-3.6(b). While the defendant acted “diligently,” it did not strictly adhere to the language of the regulation which was fatal since “No -Fault Regulations are in derogation of the common law and must be strictly construed.” 12 Misc 3d at 1130 citing Presbyterian Hosp. in NY. v. Aetna Cas. & Sur. Co., 233 AD2d 431, 432 (2d Dept. 1996) lv. den.. 90 NY2d 802(1997). Since defendant did not comply with the clear language of 11 NYCRR 65-3.6(b) requiring it to follow up with the plaintiff for the verification at least once during the 10 day period specified in the regulation, Judge Sweeney found that the toll “occasioned by defendant’s initial requests for verification dissipated ab initio.” Id at 1131.

While both civil courts correctly noted that no other court has directly dealt with this precise issue, the Second Department found, without any explanation, that the 30 day period in which an insurer must pay or deny a claim is tolled where there was an outstanding follow up verification request that was sent before the 30 day waiting period expired. At issue in New York & Presbyterian Hospital v. American Transit Ins. Co., 287 AD2d 699 (2d Dept. 2001) was the form of the verification letters sent by the defendant insurer, as opposed to the timeliness of the verification requests. The lower court granted summary judgment to the respondent medical provider because the defendant insurer’s request for additional information was not made on the forms prescribed by 11 NYCRR 65.15. In reversing the lower court’s grant of summary judgment, the Second Department stated that if the requested information is not received within 30 days, the insurer must send a follow up letter within 10 days thereafter. The court commented that the defendant insurer had timely requested additional verification of the claim from respondent on October 5, 1999 and when such verification was not received within 30 days, it sent a timely follow up letter dated November 1, 1999 (approximately 27 days after the first request).

In the instant matter, the follow up verification request was sent on the 30th day after the original request for verification was sent. As set forth above, Regulation 11 NYCRR 65-3.6(b) [*4]states: “if any 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…” Does the wording of this statute mandate that the insurer wait until the 31st day before he sends the follow up request or may he send it on the 30th day? The language of NYCRR 65-3.6(b), which must be strictly construed, does not answer this question as neatly as was the case in Sea Side Medical (28 days after the initial request) or Psych. & Massage Therapy (25 days after the initial request).

Where the literal meaning of the statute is unclear, the courts may look to the legislative history of the statute or regulation, as the primary consideration of the court is to ascertain and give effect to the intention of the Legislature. Statutes, §92; Dodge v. Bd. of Educ. Schodack C.S.D., 167 Misc 2d 186 (Sup. Ct. Albany Co. 1996). In construing a statute, a court must look to its “spirit and purpose, and objectives of the enactors must be kept in mind.” Western Regional Off-Track Betting Corp. v. SEIU, 115 Misc 2d 124, 127 (Sup. Ct. Erie Co. 1982). Thus, in construing a law , a court ” will sometimes be guided more by its purpose than its phraseology, whereby a statute is not to be read with a literalness that destroys the meaning, intention, purpose or beneficial end for which the statute has been designed.” Statewide Roofing v. Eastern Suffolk Bd. of Coop. Educ. Servs., 173 Misc 2d 514 (NY Sup. Ct. 1997). See generally, McKinney’s Cons Laws of NY, Book 1, Statutes §96.

It is imperative in ruling upon No Fault insurance matters not to lose sight of the fundamental goal of the regulatory scheme, which is “designed to promote prompt payment of legitimate claims.” Nyack Hosp. v. General Motors Acceptance Corp., 8 NY3d 294, 300 (2007). As the Court of Appeals noted in Medical Society of State v. Serio, 100 NY2d 854 (2003), the most significant changes made by the Superintendent of Insurance, in adopting revised Regulation 68 (repealing and replacing the prior 11 NYCRR part 65), was a reduction in the time frames applicable to the filing of notices and proofs of claim—a consequence of the Superintendent’s determination that much of the abuse was associated with the lengthy time frames within which claims could be presented to insurers . The Superintendent also concluded that the shorter time frames would better effectuate the legislative purpose of providing prompt compensation “as the loss is incurred, while reducing rampant abuse” 100 NY2d, supra at 862.

Accordingly, a court must interpret and apply the No-Fault Regulations in a manner leading to the prompt payment of valid, documented claims. In light of the aforesaid principles of statutory construction and the purpose behind the No-Fault Regulations, this Court finds that defendant’s sending the follow up verification request on the 30th day after the original request for verification was timely and in accordance with the regulations. Since Country-Wide has established that the verification request in this action was unsatisfied, its time period to pay or deny the claim has not elapsed. See Vista Surgical Supplies, Inc. v. General Assurance Co., 12 Misc 3d 129(A), 819 NYS2d 214 (App Term, 2nd & 11th Jud Dists, 2006). Therefore, this action is premature and must be dismissed Doshi Diagnostic Imaging Services v. State Farm Insurance Co., 16 Misc 3d 42 (App Term, 2nd Dept., 2007).

Accordingly, defendant’s motion to dismiss the complaint is granted in its entirety and plaintiff’s motion for summary judgment is denied.

This constitutes the decision and order of the court.

Date: May 27, 2008

____________________________________

Hon. Katherine A. Levine

Judge, Civil Court

Staten Island, NY

Appearances

Footnotes

Footnote 1: The only difference between the instant matter and Psych & Massage Therapy, supra is that in the latter case the second verification request was sent 25 rather than 30 days after the submission of the first verification request.

Footnote 2:The pertinent regulation in effect for policies renewed prior to April 5, 2002 was 11 NYCRR 65.15(e)(2).

[*1]

Civil Court of the City of New York, Kings County, May 27, 2008

APPEARANCES OF COUNSEL

Edward Shapiro, P.C., Wantagh, for plaintiff. Freiberg & Peck, P.C., New York City, for defendant.

{**20 Misc 3d at 554} OPINION OF THE COURT

Peter P. Sweeney, J.

{**20 Misc 3d at 555}In this action to recover assigned first-party no-fault benefits, on January 31, 2008 the parties agreed to a trial on stipulated facts and to the admission into evidence of various exhibits. The question presented is whether the failure of plaintiff’s assignor to appear for an examination under oath (EUO) constituted a valid basis for denial of the claim. For the reasons that follow, the court answers this question in the negative.

Factual Background

Plaintiff All-Boro Medical Supplies, Inc. submitted a claim to defendant Progressive Northeastern Insurance Company for first-party no-fault benefits in the amount of $442.50 for durable medical equipment that it had provided to its assignor, Tony Stringer. Defendant received the claim on February 14, 2005. The motor vehicle accident in which Mr. Stringer was allegedly injured occurred on January 5, 2005.

On January 28, 2005, before it received the claim, defendant had sent Mr. Stringer a letter directing him to appear for an EUO on April 21, 2005. Mr. Stringer failed to appear for the EUO on that date. On April 22, 2005 defendant sent a second letter to Mr. Stringer, rescheduling the EUO for May 3, 2005. Again, Mr. Stringer failed to appear. On May 18, 2005 defendant denied the claim on the ground that Mr. Stringer failed to appear for the EUO.

Discussion

As a condition to coverage under the revised Personal Injury Protection Endorsement, which is required to be included in automobile insurance policies issued or renewed after April 5, 2002, “the eligible injured person . . . shall . . . as may reasonably be required submit to examinations under oath by any person named by the [insurer] and subscribe the same” (Insurance Department Regulations [11 NYCRR] § 65-1.1 [d] [Sec I, Conditions, Proof of Claim (b)]). Inasmuch as the policy period for newly issued and renewed automobile insurance policies is one year (Insurance Law § 3425 [a] [8]), it can be assumed that the automobile insurance policy applicable in this case contained the endorsement since the underlying motor vehicle accident occurred after April 2003 (see Eagle Chiropractic, P.C. v Chubb Indem. Ins. Co., 19 Misc 3d 129[A], 2008 NY Slip Op 50525[U] [App Term, 9th & 10th Jud Dists 2008]).

Another condition to coverage under the endorsement is that an “eligible injured person shall submit to medical examination{**20 Misc 3d at 556} by physicians selected by, or acceptable to, the [insurer], when, and as often as, the [insurer] may reasonably require” (11 NYCRR 65-1.1 [d] [Sec I, Conditions, Proof of Claim]). In Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co. (35 AD3d 720, 721 [2d Dept 2006]), the Court interpreted this language to mean that an insurer may require an eligible injured person to appear for a medical examination either “before the claim form is submitted or after the claim form is submitted.” The court stated that such interpretation furthers “the policies underlying no-fault insurance, including, inter alia, the expeditious processing of claims” (35 AD3d at 722 [citations omitted]). There is no reason to apply a different rule to EUOs.

The court thus finds that defendant acted within its rights under the endorsement in scheduling an EUO of Mr. Stringer before it had received the claim. Indeed, had the defendant not received the claim form on February 14, 2005, Mr. Stringer’s failure to appear for the EUO would have constituted a valid ground for denying the claim “retroactively to the date of loss” (35 AD3d at 722). While this court agrees that when an EUO is requested as additional verification of a claim, the insurer is required to schedule the EUO within the same time period as medical examinations, to wit, within 30 calendar days from the date of receipt of the prescribed verification form (see All-Boro Med. Supplies, Inc. v Progressive Northeastern Ins. Co., 17 Misc 3d 950, 952 [Civ Ct, Kings County 2007, Edwards, J.]; see also S & M Supply v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 130[A], 2004 NY Slip Op 50693[U] [App Term, 9th & 10th Jud Dists 2004]), there is no such requirement for the scheduling of preclaim EUOs.

While defendant acted within its rights under the endorsement in scheduling Mr. Stringer for a preclaim EUO for April 21, 2005, once defendant received the claim from the plaintiff, the defendant was required to adhere to the statutory and regulatory scheme for the processing of no-fault claims. Thus, defendant was required to pay or deny the claim within 30 calendar days of its receipt (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]) or request additional verification of the claim (11 NYCRR 65-3.5). Generally, a request for additional verification of a claim must be made within 15 business days of receipt of one of the prescribed verification forms (see 11 NYCRR 65-3.5 [b]). Where an insurer makes a{**20 Misc 3d at 557} timely and proper request for additional verification, the 30-day period in which it has to either pay or deny a claim does not begin to run until all demanded verification has been provided (11 NYCRR 65-3.8 [a] [1]).

Here, while defendant had already scheduled Mr. Stringer’s EUO for April 21, 2005 before it had received the claim, if defendant insisted upon conducting the EUO before deciding whether to pay or deny the claim, it had no choice but to reschedule the EUO to a date within 30 calendar days from February 14, 2005, the date it received the claim (see All-Boro Med. Supplies, Inc., supra; S & M Supply, supra). As a matter of law, by failing to reschedule the EUO, defendant could not assert Mr. Stringer’s failure to appear for the EUO as its basis to deny the claim (see King’s Med. Supply Inc. v Kemper Auto & Home Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50450[U] [App Term, 2d & 11th Jud Dists 2005]; Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 10 Misc 3d 145[A], 2006 NY Slip Op 50140[U] [App Term, 2d & 11th Jud Dists 2006]).

Since plaintiff established its entitlement to judgment as a matter of law by demonstrating that the necessary billing documents were mailed to and received by the defendant and that payment of the no-fault benefits was overdue (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2d Dept 2004]; New York & Presbyt. Hosp. v Countrywide Ins. Co., 44 AD3d 729, 730 [2d Dept 2007]) and defendant has failed to establish a viable defense to the action, it is hereby ordered that judgment be entered in favor of the plaintiff in the amount of $442.50, together with interest and attorneys fees pursuant to Insurance Law § 5106 and regulations promulgated thereunder, plus costs and disbursements.

[*1]

Civil Court of the City of New York, New York County, May 21, 2008

APPEARANCES OF COUNSEL

Barry & Associates, LLC, Plainview, for defendant. Baker, Sanders, Barshy, Grossman, Fass, Muhlstock & Neuwirth, Mineola, for plaintiff.

{**20 Misc 3d at 434} OPINION OF THE COURT

Arlene P. Bluth, J.

{**20 Misc 3d at 435}Defendant’s motion for summary judgment is granted and the complaint is dismissed.

Plaintiff commenced the instant action to recover first-party no-fault benefits in the amount of $2,670.39, plus statutory interest, costs and attorneys’ fees, for three MRI studies it allegedly conducted for its assignor, Nila Sokol. Two were allegedly performed on June 7, 2007 for which plaintiff billed defendant $879.72 and $912, and a third on June 12, 2007 for $878.67.

Plaintiff’s attorneys submitted each bill to defendant with a form cover letter on the attorneys’ letterhead. In that letter, the attorneys introduce themselves and state no less than three times that defendant was to deal with the attorneys from then on. (“Accordingly, please forward all future correspondence to our attention . . . Please make this payment payable to the above-referenced provider, C/O this office . . . All correspondence including payment, EOB’s, verification requests, etc. must be mailed directly to this office. Failure to do so may result in unnecessary litigation.”) The clear import of this repetitive direction—to be followed under threat of “unnecessary litigation”—is that plaintiff’s attorneys are its agents for all purposes related to the bill, and defendant must deal directly with plaintiff’s attorneys. In addition, the end of the letter contains the representation that any enclosed bills, forms, “doctor’s reports, notes and narratives were prepared solely by the above-referenced provider.” Clearly, then, the plaintiff did not submit any documents from the referring physician; there was no MRI referral form or prescription submitted with any of the bills.

The defendant’s claims examiner, Cinnamon Houston, states that defendant received the first bill (for $879.72) on June 26, 2007 and timely sent a verification request on July 10, 2007. That request was sent directly to the plaintiff’s attorneys and requested two items: a letter of medical necessity from the referring physician and a claim form with a valid provider’s signature. There can be no dispute that plaintiff’s attorneys received this request because they responded thereto by letter dated July 17, 2007. Their response, even though titled “Verification Compliance,” completely ignored the bona fide request. Instead, it said, in essence, “whatever we gave you was good enough and this provider is not giving you anything else. If you need something from someone else, go ask them. Now pay the bill.” In addition, the attorneys state: “Any further requests to this provider are deemed unnecessary and in violation{**20 Misc 3d at 436} of 11 NYCRR 65-3.2 (c).” This section states an insurer should “not demand verification of facts unless there are good reasons to do so.” (Id.) Nevertheless, Ms. Houston sent a follow-up request to plaintiff’s attorneys on August 13, 2007.

Defendant received the second bill (for $912) with the same form cover letter on June 27, 2007, and it sent a request for verification, seeking the same information as sought for the other MRI taken the same date, to plaintiff’s attorneys on July 10, 2007. There can be no dispute that plaintiff’s attorneys received this request, because they responded thereto by letter dated July 17, 2007. Their response was the same form letter referred to above, and Ms. Houston sent a follow-up request on August 10, 2007.

When defendant received the third bill, Ms. Houston timely sent a verification request. This time, plaintiff’s attorneys did not send a response and Ms. Houston sent a follow-up request on August 10, 2007.

In order to prevail on its motion for summary judgment, the movant must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence, eliminating all material issues of fact. (Alvarez v Prospect Hosp., 68 NY2d 320 [1986].) Once the movant demonstrates entitlement to judgment, the burden shifts to the opponent to rebut that prima facie showing. (Bethlehem Steel Corp. v Solow, 51 NY2d 870, 872 [1980].) In opposing such a motion, the party must lay bare its evidentiary proof. Conclusory allegations are insufficient to defeat the motion; the opponent must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact. (Zuckerman v City of New York, 49 NY2d 557, 562 [1980].)

In deciding the motion, the court must draw all reasonable inferences in favor of the nonmoving party and must not decide credibility issues. (Dauman Displays v Masturzo, 168 AD2d 204 [1st Dept 1990], lv dismissed 77 NY2d 939 [1991].) As summary judgment is a drastic remedy which deprives a party of being heard, it should not be granted where there is any doubt as to the existence of a triable issue of fact (Chemical Bank v West 95th St. Dev. Corp., 161 AD2d 218 [1st Dept 1990]), or where the issue is even arguable or debatable (Stone v Goodson, 8 NY2d 8 [1960]).

The court finds Ms. Houston’s affidavit explaining preparation of the verification requests and the mailing procedures with respect to all of the verification requests (the initial three{**20 Misc 3d at 437} and the follow-up requests) sufficient to prove timely and proper mailings. Ms. Houston stated that she personally prepared each mailing, put each in the envelope, checked that it was properly addressed, and put it in her outgoing mail bin. She also stated that the regular office practice is that the mail person comes by at approximately 3:45 p.m. each afternoon, collects and stamps the mail, and then delivers it to the post office that day.

Although plaintiff’s opposition correctly notes that Ms. Houston did not swear that it was her duty to ensure compliance with defendant’s mailing procedures and that she did not herself drop it in the mailbox, it is enough that “the defendant submitted admissible evidence in the form of an affidavit of an employee with knowledge of the defendant’s standard office practices or procedures designed to ensure that items were properly addressed and mailed” (St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 1124 [2d Dept 2008], citing New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2d Dept 2006], Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374 [2d Dept 2001], Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2d Dept 2001], and Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d Dept 2007]). Ms. Houston’s detailed affidavit fulfills this requirement.

The verification requests were sent to the plaintiff’s law firm. A letter properly mailed is presumed to have been received. (News Syndicate Co. v Gatti Paper Stock Corp., 256 NY 211 [1931].) Although an associate of that law firm submitted an affirmation in opposition to this motion, no attempt to rebut the presumption was made; conspicuously absent from that affirmation is a simple denial of receipt of the requests for verification. In opposing a motion for summary judgment, the nonmoving party must lay bare all of the facts at its disposal regarding the issues raised in the motion. (Zuckerman v City of New York, 49 NY2d 557, 562 [1980].) It is no excuse that the opponent could have submitted such evidence but did not because the opponent believed that the movant’s papers were insufficient. (Mgrditchian v Donato, 141 AD2d 513 [2d Dept 1988].) The affirmant in opposition was in the position to, but did not even attempt to, rebut the presumption that plaintiff’s law firm received the requests for verification shortly after Ms. Houston stated that they were mailed. Therefore, there is no question of fact as to proper mailing of the verification requests.

Having determined that defendant proved its timely and proper mailing of the requests for verification, the court turns{**20 Misc 3d at 438} to the other bases for plaintiff’s opposition. Plaintiff claims that defendant failed to present a “good reason” why further verification was necessary; this court disagrees. This court does not believe that it is unreasonable to ask for a letter of medical necessity before a carrier pays more than $2,500 for three MRIs conducted during the course of one week, approximately six weeks after an alleged accident. Defendant is not required to provide a blank checkbook to plaintiff. Rather, defendant is entitled to find out whether and why each MRI was prescribed; in other words, the carrier is entitled to inquire as to the medical necessity before it pays the bills.

Plaintiff also claims defendant violated 11 NYCRR 65-3.6 (b), which provides:

“(b) Verification requests. At a minimum, if any 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.”

Plaintiff argues that because defendant did not send the follow-up verification requests both to it and to its attorneys, the requests are defective. This argument lacks merit.

Because the attorney’s cover letter clearly put defendant on notice that the law firm was the agent for the medical provider for all purposes with respect to the bill submitted, sending the verification request to the attorneys was the same as sending the request to the principal. As recently stated in Bauer v CS-Graces, LLC (48 AD3d 922, 924 [3d Dept 2008]): “The law is well settled that, unless obtained confidentially, ‘ “knowledge acquired by an agent acting within the scope of his [or her] agency is imputed to his [or her] principal and the latter is bound by such knowledge” ‘ (Skiff-Murray v Murray, 17 AD3d 807, 809-810 [2005], quoting Center v Hampton Affiliates, 66 NY2d 782, 784 [1985]; see Farr v Newman, 14 NY2d 183, 187 [1964]).”

Accordingly, defendant’s notice to the law firm-agent was notice to the principal-provider as a matter of law. Under the circumstances{**20 Misc 3d at 439} presented here, there was no need for the insurer to send another copy to the principal.

In addition, in interpreting 11 NYCRR 65-3.6 (b), courts have found that the additional notification to the applicant and its attorney is required when the verification is requested from a third party, not when, as here, the verification is requested from the applicant. “Where verification is sought from a party other than the applicant, the applicant is entitled to be timely informed of the nature of the verification sought and from whom it is requested when, after an initial verification request remains unsatisfied, a follow-up request is necessary” (Doshi Diagnostic Imaging Servs. v State Farm Ins. Co., 16 Misc 3d 42, 44 [App Term, 2d Dept 2007]). This court notes that this very plaintiff advanced the same arguments—that the second verification request was defective because the insurer did not send an additional notification to the attorney’s client-principal—in Lenox Hill Radiology & MIA, P.C. (Dejesus) v Progressive Cas. Ins. (Civ Ct, NY County, 2008, index No. 31019/07); there, albeit after trial, Judge Jeffrey Oing also found the argument to be without merit.

Because plaintiff failed to respond to defendant’s valid and proper verification requests, the 30-day period within which defendant had to either pay or deny the claim did not begin to run. Therefore, plaintiff’s claims for no-fault benefits are not overdue, this action is premature and must be dismissed. (See Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534-535 [2d Dept 2004]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2d Dept 2002].)

For the foregoing reasons, defendant’s motion for summary judgment is granted and plaintiff’s complaint is hereby dismissed.

[*1]

Civil Court of the City of New York, Kings County, May 2, 2008

APPEARANCES OF COUNSEL

Rossillo & Licata, P.C., Westbury (John J. Rossillo of counsel), for defendant. Law Offices of Bruce Newborough, P.C., Brooklyn (Damin J. Toell of counsel), for plaintiff.

{**20 Misc 3d at 292} OPINION OF THE COURT

Peter P. Sweeney, J.

Plaintiff Second Medical, P.C., as assignee of Marvin Calender, commenced this action to recover assigned first-party no-fault benefits. The trial of the action took place on December 20, 2007. The only witness to testify was Inga Lev, the president of Maugust, Inc., the company that does plaintiff’s medical billing.

The issue presented is whether Ms. Lev’s testimony was sufficient to establish the admissibility of the underlying no-fault claim form, which incorporated information contained in medical records which were neither offered nor admitted in evidence and which were never shown to be admissible under any hearsay exception. The court answers this question in the negative.

Factual Background

Ms. Lev testified that once a week, someone from plaintiff’s office would deliver to her a number of patient files. Each file contained one or more medical reports which described the [*2]nature of the services that plaintiff purportedly provided to a particular patient. Each file also contained an executed assignment of benefits form and information identifying the insurer who was responsible for payment of first-party no-fault benefits.

Either Ms. Lev or one of her coworkers would prepare no-fault claim forms based upon the information contained on the documents contained in patient files and mail the claim forms to the insurers responsible for payment of the first-party no-fault benefits along with an executed assignment. Ms. Lev gave no testimony concerning the practices and procedures that plaintiff utilized in creating the documents contained in the patient files.

Ms. Lev testified that she prepared the no-fault claim form in this action pursuant to the above procedures and mailed it to the defendant with an executed assignment on November 20, 2002. She testified that as of the date of trial, the first-party no-fault benefits due and owing were not paid. In its denial of claim form, which was received in evidence, defendant acknowledged receiving the claim form on November 25, 2002. When plaintiff’s counsel offered the claim form in evidence, defendant’s counsel objected arguing that Ms. Lev failed to lay a proper foundation for its admission as a business record pursuant to CPLR 4518 (a).

Relying primarily on Pine Hollow Med., P.C. v Progressive Cas. Ins. Co. (13 Misc 3d 131[A], 2006 NY Slip Op 51870[U]{**20 Misc 3d at 293} [App Term, 2d & 11th Jud Dists 2006]), plaintiff’s counsel argued that since Ms. Lev established plaintiff had a business duty to Maugust to deliver the patient files and that Maugust routinely relied on the medical reports and other documents contained in the files and fully incorporated them into no-fault claim forms which it created in the regular course of its business, a proper foundation for the admission of the claim form as a business record was laid.

The court reserved decision on defendant’s objection. The parties thereafter submitted memorandums of law in support of their respective positions. For the reasons stated below, the court now sustains defendant’s objection.

Legal Analysis

A plaintiff provider establishes a prima facie entitlement to judgment as a matter of law “by submitting evidentiary proof that the prescribed statutory billing form had been mailed and received, and that payment of no-fault benefits was overdue” (Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2004]). It is now clear that this language should not be interpreted as dispensing with the requirement that the provider tender evidentiary proof of the transaction sued upon “in admissible form” (Bajaj v General Assur., 18 Misc 3d 25, 27-28 [App Term, 2d & 11th Jud Dists 2007]). Thus, to prevail in an action to recover first-party no-fault benefits, the provider must proffer evidence in admissible form establishing the facts asserted in the underlying no-fault claim form (see Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44, 47 [App Term, 2d & 11th Jud Dists 2006] [“(t)o the extent defendant issued denial of claim forms (NF-10s) or admitted receipt of plaintiff’s claim forms, such admissions 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”]; see also Bajaj, supra; 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 attempted to prove the facts asserted in the claim form by offering it as a [*3]business record pursuant to CPLR 4518 (a). CPLR 4518 (a), which sets forth the criteria for admission under what is commonly referred to as the business record exception to the hearsay rule, provides:

“Any writing or record, whether in the form of an{**20 Misc 3d at 294} 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.”

The three foundation requirements of CPLR 4518 (a) are

“first, the record must be made in the regular course of business—reflecting a routine, regularly conducted business activity, needed and relied on in the performance of the functions of the business. Second, it must be the regular course of business to make the record—in other words, the record was made pursuant to established procedures for the routine, habitual, systematic making of such a record. Finally, the record must have been made at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter, assuring that the recollection is fairly accurate and the entries routinely made” (People v Cratsley, 86 NY2d 81, 89 [1995], citing People v Kennedy, 68 NY2d 569, 579-580 [1986]).

It is well settled that in order to lay these foundational requirements, the proponent of the record must call as a witness someone with knowledge of the maker’s business practices and procedures (see e.g. Blair v Martin’s, 78 AD2d 895 [2d Dept 1980]; Sabatino v Turf House, 76 AD2d 945, 946 [3d Dept 1980]; see also Hefte v Bellin, 137 AD2d 406, 408 [1st Dept 1988]). The witness need not have made the record or even be familiar with the record (Faust v New York City Tr. Auth., 4 Misc 3d 89, 91 [App Term, 2d & 11 Jud Dists 2004]). It is not even required that the witness be a current or former employee of the business that created the record (see e.g. People v Cratsley, 86 NY2d 81 [1995]; People v Meekins, 34 AD3d 843, 845 [2d Dept 2006]; People v DiSalvo, 284 AD2d 547 [2d Dept 2001]; Plymouth Rock Fuel Corp. v Leucadia, Inc., 117 AD2d 727 [2d Dept 1986]; William Conover, Inc. v Waldorf, 251 AD2d 727 [3d Dept 1998]). However, unless the witness demonstrates some familiarity with the particular record keeping procedures of the business that created the record “such that he [can] state that the record he received was made in the regular course of [that] business, that{**20 Misc 3d at 295} it was in the regular course of [that] business to make the record and that it was made contemporaneously with [the events recorded in the record]” the record is inadmissible (People v Surdis, 275 AD2d 553, 554 [3d Dept 2000]).

Here, Ms. Lev did not demonstrate any familiarity with plaintiff’s business practices and procedures. Accordingly, she did not establish that the documents contained in Mr. Calender’s patient file were business records within the meaning of CPLR 4518 (a). Further, she did not establish the admissibility of the file documents under any other hearsay exception. Since all the documents contained in Mr. Calender’s patient file constituted inadmissible hearsay, it necessarily follows that the no-fault claim form, which incorporated these records, is also hearsay. [*4]

Plaintiff’s reliance on Pine Hollow Med., P.C. is misplaced. In Pine Hollow Med., P.C., the court stated that

“it is well-settled that where an entity ‘routinely relies upon the business records of another entity in the performance of its own business’ . . . , and ‘fully incorporate[s]’ said information into records made in the regular course of its business . . . , the subsequent record is admissible notwithstanding that the preparer lacked personal knowledge of the information’s accuracy” (13 Misc 3d 131[A], 2006 NY Slip Op 51870[U], *1-2 [2006] [citations omitted and emphasis added]).

While this is a true statement of law, it was never demonstrated in this case that the documents contained in the patient files which Ms. Lev and her coworkers routinely relied upon and fully incorporated into the no-fault claim forms qualified as business records within the meaning of CPLR 4518 (a). The root of plaintiff’s argument appears to be that the term “business records” as used in Pine Hollow Med., P.C. means any records, including records that may constitute hearsay. The premise of plaintiff’s argument is without logic or support and is belied by the cases cited in Pine Hollow Med., P.C.

In all the cases cited in Pine Hollow Med., P.C., where documents were admitted in evidence through the testimony of a witness who was neither a current nor former employee of the person or entity that created the documents, the witness had demonstrated his or her familiarity with the business practices and procedures pursuant to which the documents were created. These witnesses were therefore able to qualify the documents{**20 Misc 3d at 296} as business records. In People v Cratsley, the foundation witness testified that the IQ test report that was admitted in evidence was prepared by an independent psychologist as an initial evaluation of a client, that it was conducted in accordance with her employer’s requirements and on her employer’s behalf, that the report was prepared at the time the examination took place and that the examination was conducted to fulfil certain statutory and regulatory requirements with which she was familiar (86 NY2d at 88). In People v DiSalvo, the foundation witness testified that he was familiar with the specific business practices and procedures of the dump site facility that created the records which the court admitted in evidence (284 AD2d at 548-549). In Plymouth Rock Fuel Corp. v Leucadia, Inc., the foundation witness testified that the fuel oil delivery tickets that were admitted as evidence were prepared by contract drivers that were hired by his company who had a business duty to record certain information on the tickets, including the amount, location and date of fuel delivered (117 AD2d at 728).

Here, plaintiff laid absolutely no foundation for the admission of the documents contained in Mr. Calender’s patient file. To accept plaintiff’s interpretation of Pine Hollow Med., P.C., this court would have to conclude that these documents were admissible notwithstanding that plaintiff had never demonstrated that the informant had personal knowledge of the acts, events and occurrences that the records document and was under a business duty to report them to the entrant. This court would also have to conclude that it was not necessary for the plaintiff to demonstrate that it was within the scope of the entrant’s business duty to record the acts, transactions and occurrences and that each participant in the chain producing the records, from the initial declarant to the final entrant, was acting within the course of regular business or that the declarations contained in the records were admissible through some other hearsay exception. As stated by the Court of Appeals in Matter of Leon RR (48 NY2d 117, 122-123 [1979]): [*5]

“To constitute a business record exception to the hearsay rule, the proponent of the record must first demonstrate that it was within the scope of the entrant’s business duty to record the act, transaction or occurrence sought to be admitted. But this satisfies only half the test. In addition, each participant in the chain producing the record, from the initial declarant to the final entrant, must be acting{**20 Misc 3d at 297} within the course of regular business conduct or the declaration must meet the test of some other hearsay exception (Johnson v Lutz, 253 NY 124, 128; Toll v State of New York, 32 AD2d 47, 50). Thus, not only must the entrant be under a business duty to record the event, but the informant must be under a contemporaneous business duty to report the occurrence to the entrant as well (Richardson, Evidence [10th ed-Prince], § 299). The reason underlying the business records exception fails and, hence, the statement is inadmissible hearsay if any of the participants in the chain is acting outside the scope of a business duty (Johnson v Lutz, supra) . . .

“Unless some other hearsay exception is available (Toll v State of New York, supra), admission may only be granted where it is demonstrated that the informant has personal knowledge of the act, event or condition and he is under a business duty to report it to the entrant (Johnson v Lutz, supra; cf. Model Code of Evidence rule 514).”

In sum, since the documents contained in Mr. Calender’s patient file constituted hearsay, the no-fault claim form which was based on the information contained in these documents is also hearsay. Hearsay cannot be transformed into nonhearsay simply because a business routinely relies upon it and integrates it into its own records.

Inasmuch as plaintiff did not proffer evidence in admissible form establishing the facts asserted in the claim form, plaintiff did not make out a prima facie case.

Accordingly, it is hereby ordered that judgment be entered in favor of the defendant dismissing plaintiff’s complaint.

Civil Court of the City of New York, Kings County

4490/06

Noach Dear, J.

Plaintiff All-Boro Medical Supplies, Inc. commenced this action to recover assigned first-party no-fault benefits in the amount of $822.00 for medical supplies that it provided to its assignor, Ramel King, who was purportedly injured in an automobile accident on January 30, 2005.

On February 13, 2008, the parties agreed to a trial based on stipulated facts. While there are no questions of facts requiring resolution, the matter presents an interesting question of law; whether plaintiff’s failure to submit a prescribed NF-3 claim form in response to defendant’s requests for additional verification of the claim tolled the 30 day period in which defendant had to pay or deny the claim? For the following reasons, the court answers this question in the affirmative.

Underlying Facts:

Following the accident, plaintiff provided Mr. King with various assistive medical equipment which included a heating lamp with infrared element, a massager for reduction of muscle spasm and a TENS unit. On February 16, 2005, Mr. King assigned his rights to collect first-party no-fault benefits for the equipment to the plaintiff. On May 6, 2005, Edward Shapiro, Esq., plaintiff’s counsel, submitted a claim for the first-party no-fault benefits to defendant. After receiving the claim, defendant served upon the plaintiff a request for additional verification of the claim demanding that plaintiff submit a prescribed NF-3 claim form. When plaintiff failed to comply with the request, defendant made a follow-up request. The parties have stipulated that the initial and follow-up request were made in accordance with protocols for requesting additional verification set forth in the no-fault regulations.

While plaintiff has not yet provided defendant with a NF-3 claim form, plaintiff submitted other materials as proof of claim, including letters of medical necessity from Alex Khait, D.C. and Alexander Rozenberg, M.D., which indicate that Mr. King was diagnosed as suffering from unspecified neuralgia, radiculitis and lumbosacral and cervical injuries as a result of the accident.

COMMENTS:

It is well settled that 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 (Insurance Law § 5106(a); 11 NYCRR 65-3.5; see also Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d 274, 278, 660 NYS2d 536, 683 NE2d 1 [19970 ). An insurer’s failure to pay a no-fault claim within 30-day renders no-fault benefits overdue ( see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1] ).

The 30-day period may be extended if the insurer demands additional verification of the claim ( see 11 NYCRR 65.15[d][1],[e]; New York & Presbyt. Hosp. v. Allstate Ins. Co., 30 AD3d 492, 493, 819 NYS2d 268 [2nd Dep’t 2006]; New York & Presbyt. Hosp. v. Progressive Cas. Ins. Co., 5 AD3d 568, 569, 774 NYS2d 72 [2nd Dep’t 2004] ). If requested verification is not supplied to the insurer within 30 days from the insurer’s initial request, the insurer is required to issue a follow- up request in accordance with 11 NYCRR 65.15 [e][2] ( see New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d 583, 584, 744 NYS2d 201 [2nd Dep’t 2002] ). Parenthetically, “[a] claim need not be paid or denied until all demanded verification is provided” ( New York & Presbyt. Hosp. v. Progressive Cas. Ins. Co., supra at 570, 774 NYS2d 72, see Insurance Law § 5106[a]; 11 NYCRR 65-3.5[c], 65-3.8[a][1]; New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., supra at 584, 744 NYS2d 201; Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554, 692 NYS2d 665 [2nd Dep’t 1999] ). Further, when a medical provider fails to provide properly requested verification of a claim, the 30-day period in which to pay or deny the claim does not begin to run, and any claim for payment by the provider is premature (New York & Presbyt. Hosp. v. Progressive Cas. Ins. Co., supra at 570, 774 NYS2d 72).

The parties have stipulated that plaintiff submitted the claim on May 6, 2005 and that defendant’s requests for a prescribed NF-3 claim form were made in accordance with the protocols for requesting additional verification of a claim. The parties have also stipulated that to date, plaintiff has not provided a prescribed NF-3 claim form which is also know as a verification of treatment by attending physician or other provider of health service form. The required contents of this form is contained in Appendix 13 of the Ch. III, Subch. B, Pt. 65 of Insurance Department Regulations.

Plaintiff maintained at trial that defendant was required to “accept proof of claim submitted on a form other than a prescribed form if it contains substantially the same information as the prescribed form” (Insurance Department Regulation 11 N.Y.C.R.R. § 65-3.5[f] ). Plaintiff further maintained that the various materials it provided to the defendant in connection with the claim met this requirement. Plaintiff argued that since defendant did not pay or deny the claim within 30 days of receipt of these materials, no-fault benefits are overdue.

Defendant maintained that 11 N.Y.C.R.R. § 65-3.5[f] gave it the unconditional right to request the submission of a prescribed NF-3 claim from as additional verification of the claim and that since plaintiff has yet to provide one, the 30 day period in which it has to pay or deny the claim continues to be tolled.

The question of law presented turns on how 11 N.Y.C.R.R. § 65-3.5(f) should be interpreted. 11 N.Y.C.R.R. § 65-3.5(f) provides:

An insurer must accept proof of claim submitted on a form other than a prescribed form if it contains substantially the same information as the prescribed form. An insurer, however, may require the submission of the prescribed application for motor vehicle no-fault benefits, the [*3]prescribed verification of treatment by attending physician or other provider of health service, and the prescribed hospital facility form.

“[T]he starting point in any case of interpretation must always be the language itself, giving effect to the plain meaning thereof” (Majewski v. Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583, 673 NYS2d 966, 696 NE2d 978 [1998] ). Further, “meaning and effect should be given to all language of a statute * * *. Words are not to be rejected as superfluous where it is practicable to give each a distinct and separate meaning” (Cohen v. Lord, Day & Lord , 75 NY2d 95, 100, 551 NYS2d 157, 550 NE2d 410 [1989] ; see also, McKinney’s Cons. Laws of NY, Book 1, Statutes § 231, at 390). “Generally, the same canons of construction are applicable to legislation and administrative regulations” (Garzilli v. Mills, 250 AD2d 131, 137, 681 NYS2d 176, 179 [3rd Dep’t 1998] ).

Applying these principles, 11 N.Y.C.R.R. § 65-3.5(f) should be interpreted as giving insurers the right to request the submission of one of the prescribed forms referred to in the regulation as additional verification of a claim, even where materials were submitted as proof of claim that contained substantially the same information that a prescribed form requires. This interpretation gives meaning and effect to all the language in 11 N.Y.C.R.R. § 65-3.5(f). If the court were to adapt plaintiff’s urged construction, the court would in effect be rejecting as superfluous the entire second sentence of 11 N.Y.C.R.R. § 65-3.5(f) which unequivocally states that insurers may require the submission of a prescribed form. Further, it is not impracticable to give the first and second sentence of the regulation distinct and separate meanings. The first sentence can be viewed as controlling what insurers must accept as proof of claim but not as a limitation on what they may seek as additional verification of a claim. The second statement can be viewed clear direction that a request for a prescribed form is a valid request for additional verification.

This result also comports with those reported cases which have addressed an insurer’s entitlement to the submission of a prescribed no-fault forms as additional verification of a claim (see First Help Acupuncture, P.C. v. Progressive Northeastern Ins. Co.,15 Misc 3d 144(A), 2007 NY Slip Op. 51167(U) [App Term, 2d & 11th Jud Dists] (proof of insurer’s timely denial of claim on the ground that on the ground “a prescribed authorization or assignment of benefits was not submitted and/or was not properly executed” raised triable issue of fact as to plaintiff’s entitlement to summary judgment); Metroscan Medical Diagnostics, P.C. v. Progressive Casualty Insurance Co., 15 Misc 3d 126 (A), 2007 NY Slip Op. 50500 (U) [App. Term, 9th & 10th Jud Dists] (30 day period tolled where plaintiff’s failed to provide assignment of benefits in the form required by the No Fault regulations]; see also Doshi Diagnostic Imaging Services v. Progressive Insurance Co., 12 Misc 3d 144 (A), 2006 NY Slip Op. 51430 (U) [App. Term, 9th & 10thth Jud Dists] ).

Based on the preceding analysis, this Court determines that defendant has demonstrated that the 30 day period in which it had to pay or deny the claim was tolled by its request for a prescribed NF-3 form. Hence, plaintiff has failed to establish that payment of no-fault benefits is overdue.

Accordingly, it is hereby

ORDERED that judgment be entered in defendant’s favor dismissing the claim as premature (New York Hospital Medical Center of Queens v. Country-wide Insurance Co., 295 [*4]AD2d 583 [2d Dept., 2002] ).

This constitutes the Decision and Order of the Court.

Dated: April 11, 2008_____________________________

Noach Dear

Civil Court Judge

Civil Court of the City of New York, Richmond County

025762/06

Counsel for Plaintiff:

Colleen Terry, Esq.

Baker, Sanders Barshay, Grossman, Fass, Muhlstock

& Neuwirth

150 Herricks Road

Mineola, NY 11501

516-741-4799

Counsel for Defendant:

Lindsay Alexander, Esq.

Epstein & McDonald

One Whitehall Street, 13th Floor

New York, NY 10004-2109

212-248-9100

Katherine A. Levine, J.

Defendant Nationwide Property and Casualty (“defendant”) moves to dismiss plaintiff Cambridge Medical, P.C. A/A/O Richard Edwards ( “plaintiff”) complaint for failure to comply with defendant’s Demand for a Verified Bill of Particulars and Combined Demand Request pursuant to C.P.L.R § 3126. Defendant alleges that because plaintiff failed to respond to it’s discovery request, defendant would be severely prejudiced at trial. In the alternative, defendant requests that the court grant summary judgment because the institution of the lawsuit is premature as plaintiff failed to comply with its verification requests.

In its verification requests, defendant’s claims department asked for certain information: the certificate of incorporation, the SS4 (application of federal employer identification program), the IRS acknowledgment letter approving TIN and the completed W-9 form, the name, address, license, certification, etc. for each person connected with the treatment or testing of the assignor in the instant claim, and sale of shares of ownership. Although defendant does not so state, the aforementioned requests appear to give rise to a defense of fraudulent incorporation in violation of the truth seeking opportunity set forth in 11 N.Y.C.R.R. sec.65.3.16(a)(12).

In its Demand for a Verified Bill of Particulars, counsel for defendant seeks a plethora of documents including items which appear to be similar to those requested in the verification requests: the names, addresses and birth dates of all directors, officers, shareholders, employees and owners listed on the stock certificate for plaintiff’s facility at time services were rendered (1-5).

Plaintiff asserts that it provided discovery that was proper and that defendant is not entitled to further discovery since it is merely engaging in a fishing expedition that is prohibited by State Farm Insurance Co. v. Mallela, 4 NY3d 313 (2005) and the regulations. Plaintiff also argues that under the No-Fault Law, the need for disclosure “must be substantiated by the [*2]reasons for the denial contained in the NF-10 and not simply predicated upon a plethora of unreserved affirmative defenses inserted in the answer as an afterthought.” See Metropolitan Radiological Imaging v. State Farm Mutual Auto Ins. Co., 2005 Slip Op 25063 (NY Civil Ct. 2006). Finally, plaintiff asserts that the verification forms were not timely mailed and that the affidavits of mailing were inadmissible.

In Mallela, the Court of Appeals held that insurers may withhold payment for medical services provided by fraudulently licensed medical service corporations to whom patients, who are covered by no-fault insurance, have assigned their claims. Insurance Law §5102 requires no-fault carriers to reimburse patients or their medical provider assignees for “basic economic loss.” In order to combat incidences of fraud, the Superintendent of Insurance promulgated 11 N.Y.C.R.R. 65-3.16(a)(12), which excludes from the definition of basic economic loss payments made to unlicensed or fraudulently licensed providers, thus rendering them ineligible for reimbursement. 4 NY3d at 320. After finding this regulation valid, the Court held that carriers “may look beyond the face of licensing documents to identify wilful and material failure to abide by state and local law.” Id at 321. Addressing the defendants’ contention that the insurance companies would turn this “investigatory privilege into a vehicle for delay and recalcitrance,” the Court stated:

“The regulatory scheme …. does not permit abuse of the truth-seeking opportunity that 11 N.Y.C.R.R. sec. 65-3.16(a)(12) authorizes. Indeed, the Superintendent’s regulations themselves provide for agency oversight of carriers, and demand that carriers delay the payment of claims to pursue investigations solely for good cause. (See N.Y.C.R.R. sec 65-3.2(c). In the licensing context, carriers will be unable to show “good cause” unless they can demonstrate behavior tantamount to fraud. Technical violations will not do…We expect and the Legislature surely intended, vigorous enforcement by the Superintendent against any carrier that uses the licensing requirement regulation to withhold or obstruct reimbursement to non-fraudulently incorporated health care providers. “

4 NY3d at 322.

The issue presented by these motions is therefore whether the language contained in Mallela 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. Mallela does not squarely address this issue.

This court follows the reasoning of Judge Sweeney in Carothers v. Insurance Companies et al, 13 Misc 3d 970 (Civil Ct., Richmond Co. 2006) and adopts that court’s finding that “good cause” is not a mandatory requisite to ordering discovery. In Carothers, supra , Judge Sweeney first noted that the regulation interpreted by the Mallela court – 11 NYCRR 65-3.2

(c) – “demands that the carriers delay payment of claims to pursue investigations solely for good cause.” Insurers are prohibited from demanding “verification of facts unless there are good reasons to do so” and are required to request verification of facts “as expeditiously as [*3]possible.” Judge Sweeney then found that the “investigations the Court was discussing in Mallela are those 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.

However, Judge Sweeney then noted that the entire discussion of good cause in Mallela was non-binding dicta since the only question that the Mallela court agreed to answer upon certification was whether “a medical corporation that was fraudulently incorporated” was entitled to be reimbursed by insurers for medical services rendered by licensed medical practitioners” Id at 973 citing 4 NY3d at 320.

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”.^[FN1] Judge Sweeney found that the guiding principle behind article 31 of the CPLR was 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. 13 Misc 3d at 973 citing Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 (1968). See also, Midwood Acupuncture P.C. v. State Farm Mutual, 14 Misc 3d 131A, 836 NYS2d 486 ( App. Term, 2d Dept. 2007); Midborough Acupuncture P.C. v. State Farm Ins. Co., 13 Misc 3d 58 (App. Term, 2d Dept. 2006) (both applying the material and necessary standard).

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. Id at 975. See Lexington Acupuncture, P.C. v. State Farm Insurance Co., 12 Misc 3d 90, 820 NYS2d 385 ( App. Term, 2d Dept. 2006); A.B. Medical Services PLLC v. Prudential Propr. & Cas. Co., 11 Misc 3d 137[A], 816 NYS2d 693 (App. Term 2d & 11th Jud. Dists. 2006). See also, Midborough Acupuncture PC v. State Farm Ins Co. Supra 13 Misc 3d at 58 (defendant’s papers establish that defendant’s discovery requests concerning whether plaintiff was fraudulently incorporated are material and necessary).

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 consideration the “intrusiveness of the discovery device and the merits, or lack thereof, of the claim” 13 Misc 3d at 974 citing Greater NY Mutual Ins. Co. v. Lancer Ins. Co., 203 AD2d 515, 517 (2d Dept. 1994). Since the amounts in dispute in most no- fault claims are small, the court should not “hesitate to exercise its protective powers under CPLR §313(a) so as to curtail discovery where it may become an unreasonable annoyance and tend[s] to harass and overburden the other party”, Conrad v. Park, 204 AD2d 1011, 1012 ( 1994), or “to prevent the proverbial [*4]fishing expedition” Id citing Auerbach v. Klein, 30 AD3d 451, 452 (2d Dept. 2006); Lattire v. Smith, 304 AD2d 534, 536 (2d Dept. 2003). 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.

This court is not convinced that different standards should govern the verification requests made by an insurance company during its investigatory stage, as opposed to discovery requests made by counsel for an insurance company during litigation for Mallela type documents. As set forth above, the scope of verification requests was not at issue in Mallela. Application of a higher standard for verification requests does not make sense since an insurance company should be able to ascertain as expeditiously as possible whether a medical provider is fraudulently incorporated under the No- Fault Law. However, since the Court of Appeals did find that the regulations preclude insurance carriers from delaying payment of claims unless they can show “good cause,” which demands a demonstration of behavior tantamount to fraud, this court must abide by the distinction.

The verification request for corporate documents does not contain any assertion that plaintiff Cambridge Medical engaged in any behavior that would cause one to suspect that it has been fraudulently incorporated. (See Exhibit C annexed to motion). As such, plaintiff need not further respond to the verification requests and this court denies the motion for summary judgment.

Defendant also fails to offer any justification for its request for Mallela type documents in its subsequent discovery requests. Its answer is void of any affirmative defense that defendant has reason to believe that the plaintiff may be fraudulently incorporated. However, in light of the broad latitude afforded to the courts in this department to grant Mallela type discovery requests, this court, upon conducting a balancing test, directs that plaintiff produce: the names, addresses and birth dates of all directors, officers, shareholders and owners listed on the stock certificate for plaintiff’s facility at the times services were rendered. Pursuant to CPLR §3103 (a) , this court issues a protective order limiting discovery to the aforementioned items, as the remainder of the bill of particulars ask for information that is either within the defendant’s knowledge or is unduly burdensome, irrelevant or immaterial.

For the above reasons, defendant’s motions to dismiss and/or summary judgment are denied. Given this ruling, this court need not consider plaintiff’s allegations with regard to the admissibility of the verification forms. It does appear, however, that the affidavit of mailing does allege personal knowledge of the mailing procedures and hence comports with the instructions set forth in Delta Diagnostic Radiology, P.C. a/a/o Lidaine Philogene v. Chubb Group of Insurance,17Misc 3d 16 (2007)..

This constitutes the decision and order of the court.

Dated: March 21, 2008___________________________

Staten Island, NYHON. KATHERINE A. LEVINE

Judge, Civil Court

Appearances

Counsel for Plaintiff:

Colleen Terry, Esq.

Baker, Sanders Barshay, Grossman, Fass, Muhlstock

& Neuwirth

150 Herricks Road

Mineola, NY 11501

516-741-4799

Counsel for Defendant:

Lindsay Alexander, Esq.

Epstein & McDonald

One Whitehall Street, 13th Floor

New York, NY 10004-2109

212-248-9100

Footnotes

Footnote 1:In a footnote Judge Sweeney noted that although a showing of good cause is not a mandatory prerequisite to discovery, good cause is a factor that “might be considered” in determining the permissible scope of discovery

Civil Court of the City of New York, Queens County

37719 QCV2007

Attorneys for plaintiff:

Baker, Sanders, Barshay, Grossman, Fass,

Muhlstock & Neuwirth

150 Herricks Road

Mineola, NY 11501

( By: Todd Muhlstock, Esq.)

Attorneys for defendant:

Nicolini, Paradise, Ferretti & Sabella

114 Old Country Road, Ste. 500

Mineola, NY 11501

( By: Mitchell Lustig, Esq.)

William A. Viscovich, J.

Plaintiff health care provider brought the within No-Fault action against defendant insurer to recover for services rendered on August 15, 2002 to the insured, Jose Rodriguez, as assignor, relating to injuries allegedly arising out of a motor vehicle accident involving a vehicle owned and operated by Rodriguez on July 31, 2002. The parties stipulated as to the timely and proper submission by plaintiff to defendant of the underlying NF-3 proof of claim, that said claim is unpaid and as to the assignment of benefits from Rodriguez to plaintiff. Hence, plaintiff’s prima facie case was proven and the plaintiff rested.While acknowledging that there was no timely denial in this matter, defendant asserted the affirmative defense of lack of coverage, premised on its contention that the alleged loss did not arise out of a covered accident. Instead, the defendant premises its defense upon the argument that the accident in question was a [*2]staged, intentional collision. A staged, deliberate collision is not a covered accident under no-fault (see Liberty Mutual Insurance Company -v- Goddard, 29 AD 3rd 698 [ 2nd Dept. 2006]; Eagle Insurance Company -v- Davis, 22 AD 3rd 846 [ 2nd Dept. 2005]; State Farm Mutual Automobile Insurance Company -v- Laguerre, 305 AD 2nd 490 [ 2nd Dept. 2003]). Moreover, the Appellate Division, Second Department has held that the basic issue in such case is whether the loss arose from a deliberate occurrence outside the scope of coverage. (GEICO -v- Shaulskaya, 302 AD 2nd 522 [ 2nd Dept. 2003]; see also Fair Price Medical Supply v. Travelers Indemnity Company, 42 AD3rd 277 [ 2nd Dept. 2007]. As such, defendant would not be bound by the 30 day rule for issuance of denials normally mandated by Insurance Law § 5106(a) and the applicable No-fault regulations (Central General Hospital -v- Chubb Group of Insurance Companies, 90 NY 2nd 195 [1997]).

In support of its affirmative defense, the defendant called as witnesses both the assignor, Jose Rodriguez, and an investigator in its Special Investigations Unit.

The investigator testified that he had only reviewed this file for the first time a few weeks before the trial and, in fact, was not totally prepared to testify. In sum and substance, his investigation consisted of running a prior claim history on Mr. Rodriguez, but he could not recall the amount of dollars that Mr. Rodriguez had allegedly made claims for in the past. In addition, he testified that he himself had not made the final determination as to the possibility of fraud in this matter but instead a “committee” organized by the defendant had determined that it was not a meritorious claim.

Ironically, it was Mr. Rodriguez’s testimony itself that had the potential to prove that the accident in question had been staged. He not only testified as to the accident itself, but also as to both a previous and subsequent accident in which he was involved, occurring respectively on September 18, 2000 and August 5, 2002.

When defense counsel attempted to question Rodriguez as to the specifics of the treatment received from plaintiff provider following the underlying alleged accident of July 31, 2002, plaintiff objected, citing Fair Price, supra, arguing that evidence of non-treatment could not be used to prove a staged accident. This court reserved its decision on the objection and permitted Mr. Rodriguez to answer this line of questioning subject to a later ruling on the issue, which is the primary subject of this decision, along with other commentary.

Through the use of an official Spanish Court Interpreter, Mr. Rodriguez testified as to the accident, how it happened, where it happened and what he did thereafter, including seeking out medical attention. Perhaps because of the difficulties of translation or because of nervousness, the witness often appeared uncertain and confused about, or unable to recall, the exact date and place of his visits to the plaintiff. Mr. Rodriguez was clear about one thing, however- he never saw a nurse or doctor and never received any medical treatment whatsoever. All he could recall was going to a doctor’s office, having the staff fill out some forms based upon an accident report that he had provided to them and then leaving because he did not think the doctor would help him since he had no money. Mr. Rodriguez was adamant that he received no care or treatment and that all he did was go home and take some Advil.

As to the substance of the plaintiff’s objection to Mr. Rodriguez’s testimony regarding a lack of treatment, the court overrules plaintiff’s objection and allows the [*3]testimony as to non-treatment to be used by the defense. The Fair Price decision, according to the plaintiff, stands for the proposition that in a case where the fraud alleged by the defendant insurer pertains to the lack of services billed for (or more specifically in the Fair Price case- the failure to provide medical supplies billed for), such fraud is “not related to the existence of coverage in the first instance” ( 42 AD 3rd, at 284) and, thus, is not an affirmative Chubb defense.

This court, however, has no intention whatsoever of determining if plaintiff is entitled to recover no-fault benefits based on the extent to which the claimed medical services were actually provided. The court agrees with the plaintiff and recognizes that, pursuant to Fair Price, the extent to which the medical services billed for in this action were actually rendered is not the ultimate issue for the court to decide – to make it so would constitute a total disregard for the unequivocal appellate law that controls this issue. Moreover, as both parties have stipulated to plaintiff’s prima facie case, plaintiff has been deemed to have met its burden as to the medical necessity of the services rendered- which burden defendant has elected neither to rebut by way of any requisite timely denial nor by the specific affirmative defense asserted. As such, this court is bound by same, notwithstanding the assignor’s testimony which is extremely credible as to the possibility that the claimed services were never provided.

Unfortunately, the only issue which this court may address under Fair Price is whether there was a lack of coverage as contended by defendant on the basis that the alleged July 31, 2002 accident was ” staged”. Any testimony by Rodriguez regarding his treatment or lack thereof is being used by the court solely as evidence as to whether the loss in question resulted from an actual “covered” accident or arose from a staged collision. Any evidence that Mr. Rodriguez was not treated as claimed by the plaintiff provider or was treated to a lesser extent than claimed, has relevance only to the extent that common sense dictates that it is less likely that the participants in such a “staged” collision would actually receive treatment than in a true accident. It also follows that the alleged victim of a “staged” accident would be less likely to actually accept the risk of real injury arising from an unnecessary course of treatment (Keep in mind that this court does concede that a real injury may arise from a staged accident, but does not believe this to be the case herein).

Given the weakness of the SIU investigator’s testimony, however, the testimony of Mr. Rodriguez as to a lack of treatment alone is not enough for defendant to meet its burden in rebutting plaintiff’s prima facie case. As one court has noted, ” [W]hile some intentional collisions are the products of insurance fraud schemes, others are not. In all such cases, it is the deliberate, non-accidental character of the incident that makes it ineligible for No-Fault coverage.”(V.S. Medical Services, P.C. -v- Allstate Insurance Company,11 Misc 3rd 334, at 338 [ Civil Court, City of New York, Kings Co. 2006]; see, also Universal Open MRI of the Bronx ,P.C. -v- State Farm Mutual Automobile Insurance, 12 Misc 3rd 1151(A) [ Civil Court, City of New York, Kings Co. 2006]). Therefore, defendant’s burden of proof is a preponderance of the credible evidence, which has not been established.

What distresses the court is that while the defendant was not able to meet its burden of proof as to a “staged accident”, there was credible evidence of provider fraud. While a full trial on that issue may reveal that there was no fraud and that services were [*4]in fact rendered. the holding in Fair Price assures that neither the court nor the defendant are able to delve further into that issue. The end result is that this court is put in the potential position of having to make an award to a possibly unethical provider.

This is exactly the concern expressed by Justice Joseph Golia in his dissent in the Appellate Term rendering of Fair Price Medical Supply Corp. a/a/o Nivelo v. Travelers Indemnity Company, 9 Misc 3rd 76 [ App. Term, 2nd & 11th Jud. Dists. 2005], in which the majority decision was upheld by the Appellate Division in the Fair Price decision that controls herein. Like Justice Golia, this court is “under the firm and unshakable belief that neither the Legislature nor the Insurance Department ever intended for an insurance carrier, or anyone else for that matter, to be forced to pay for medical equipment [or in this case, medical treatment] that was never provided “(Fair Price, supra, dissent at 82). But, alas, that is the potential outcome all but acknowledged by both the Appellate Term and Appellate Division Fair Price holdings.

As such, this court, as constrained by higher authority, regretfully awards judgment to the plaintiff in the sum of $ 899.43, plus statutory interest, statutory attorneys fees, costs and disbursements.

The foregoing constitutes the decision and order of this court.

_____March 19, 2008___________________________________DateWilliam A. Viscovich

Judge, Civil Court

Civil Court of the City of New York, Richmond County

25573/06

Counsel for Plaintiff:

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock

& Neuwirth

150 Herricks Road

Mineola, NY 11501

516-741-2320

Counsel for Defendant:

Teresa M. Spina, Esq.

88 Froelich Farm Blvd.

Suite 202

Woodbury, NY 11797

516-682-7274

Katherine A. Levine, J.

Plaintiff Cambridge Medical P.C. (“plaintiff”), a medical services provider, seeks to recover $1,617.69 for the EMG/NCV it conducted upon the assignor Webster Simmons (“Simmons” or “claimant”) following injuries that the claimant sustained in an automobile accident. Defendant Government Employees Insurance Company (“defendant” or “Geico”) claims that the tests were medically unnecessary. At the trial held on January 23, 2008, the parties stipulated to plaintiff’s prima facie case and defendant’s timely denial of the claim. [*2]Therefore, the only issue presented to the court was whether the EMG/NCV conducted on October 5, 2006 was medically necessary.

The medical records put into evidence by plaintiff reveal that claimant had appeared before Dr. Anand, a doctor of physical medicine and rehabilitation associated with plaintiff, on both September 19 and October 5, 2006 wherein he presented both times with complaints of neck pain which radiated to the left arm, and numbness and tingling to the left arm. On both occasions Dr. Anand conducted a physiatrics examination of the cervical spine which revealed muscle spasm and associated tenderness to palpation, and a Spurling’s test which was positive on the left. He found the following impressions: cervical sprain/strain; neck and back pain, spasm and r/o cervical radiculopathy – a nerve root problem at the neck with pain going down the arm (Plaintiff s 2). On September 19th Dr. Anand did not recommend that the patient undergo an electro diagnostic evaluation in order to rule out radiculopathy and/or other peripheral nerve damage. However, if the patient’s condition failed to improve with conservative management, reevaluation would be considered. Since September 5, 2006 the claimant had been undergoing physical therapy five times a week consisting of massage, joint mobilization, therapeutic exercise, ultrasound, hot packs and electrical stimulation.

On October 5, 2006, however, Anand recommended that the claimant undergo an electro diagnostic evaluation, including an electromyography (“EMG”) and nerve conduction velocity (“NCV”) of the region and bilateral upper extremities in order to rule out radiculopathy and/or other peripheral nerve damage. The impression of the electro diagnostic study, conducted on October 5, 2006, revealed evidence of C5-C6 radiculopathy on the left and active denervation in the left C5-C6 innervated musculature and moderate carpal tunnel syndrome affecting sensory and motor components. Dr. Anand recommended continued chiropractic care for the involved spinal areas.

A presumption of medical necessity attaches to a defendant’s admission of the plaintiff’s timely submission of proper claim forms, and the burden then switches to the defendant to demonstrate the lack of medical necessity. Acupuncture Prime Care, P.C. v. State Farm Mutual Auto Ins., 2007 NY Slip Op. 52273U; 2007 NY Misc. LEXIS 7860 (Dist. Ct., Nassau Co. 12/3/2007);A.B. Medical Services, PLLC v. NY Central Mutual Fire Ins. Co., 7 Misc 3d 1018(A), 801 N.Y.S., 2d 229 (Civil Ct. Kings. Co. 2005); Citywide Social Work & Psychological Services v. Travelers Indemnity, 3 Misc 3d 608, 609 (Civil Ct., Kings Co. 2004). Defendant thus bears “both the burden of production and the burden of persuasion with respect to the medical necessity of the treatment or testing for which payment is sought.” See, Bajaj v. Progressive Ins. Co., 14 Misc 3d 1202(A) (N.Y.C. Civ. Ct. 2006). The quantum of proof necessary to meet defendant’s burden, at the bare minimum, is to “establish a factual basis and medical rationale for the lack of medical necessity of plaintiff’s services.” Id. See also, A.B. Medical Services, supra .

Defendant presented the testimony of Dr. Joseph C. Cole who is board certified in physical medicine and rehabilitation. Dr. Cole conducted a peer review by reviewing a number [*3]of medical records or reports as listed in his peer review letter (defendant’s 2). Dr. Cole first described the EMG test which consists of putting a subcutaneous electrode or needle into the skin and recording abnormal electrical activity of the muscles and nerves. The NCV consists of stimulating a part of the body to measure the distance and velocity.

Dr. Cole stated in his peer review letter that it was the “standard of care” to order electro diagnostic testing only when the results of such test would benefit the patient more so than a detailed history and physical exam would. He also testified that the American Association of Electro Diagnostic Medicine (“AAEM”) guidelines reflect that EMG/NCV testing should only be used as an extension of a detailed history and physical examination, and only when the “results of the test would be expected to affect treatment” (Tr, 5).

Dr. Cole opined that the EMG/NCV test was not medically necessary because based on his review of the records he could not discern, “regardless of the results of the test”, how the test would have benefitted the patient any more so than a detailed patient history and physical examination would have (Tr. 4).He found that the history and physical examination findings did not substantiate the performance of such tests and would not be necessary prior to the continuation of conservative physical therapy or chiropractic care. He also opined that a physical exam of the muscles to see if there were spasms and a neurological exam would have benefitted the claimant as much as the EMG/NCV.

Dr. Cole also disagreed with the use of EMG/NCV testing to rule out radiculopathy since its limitations in evaluating this condition were “well outlined in the literature”. He stated that the AAEM minimonograph No.32 ( not submitted into evidence) reflects that EMG/NCV testing is not “the test of choice” as a screening tool for radiculopathy since it can’t be used to exclude radiculopathy even if there is a finding of normal. Furthermore, “cervical radiculopathy is diagnosed everyday in medicine with an EMG”. (Tr. 7)

Dr. Cole also acknowledged that Dr. Anand did not initially request an electro diagnostic test as he wanted to see if the patient would improve with conservative care, i.e. physical therapy and chiropractic care. He also acknowledged that on October 5, 2006 the claimant still was complaining of pain to the arm, weakness at the biceps and neck pain with radiation ideation and that the Spurling test was positive. (Tr.10). Additionally, there was a decreased range of motion of the cervical spine between the two reports so that the patient had not improved at all.

Dr. Cole admitted that the function of an electro diagnostic exam was to localize nerve tensions as accurately as possible and that the EMG/NCV was the “gold standard” in that (Tr. 11). He also agreed that establishing a specific diagnosis is important in the effective management of an individual who presents with a complaint of lower back pain and that an individualized electro diagnostic study was an extension of a detailed history and physical exam and could be useful and important in the proper evaluation of an individual with back pain. He stated that an EMG/NCV could help localize nerve root lesions as could a physical examination. [*4]Dr. Cole agreed with the statement in a 1999 AAEM article – chapter 9 “Practice Parameters for Needle Electromyographic Evaluation” (plaintiff’s 3) which noted that “a needle EMG is widely regarded as the technique of choice in the diagnostic evaluation of cervical radiculopathy.” This article also stated that “(b)ased on a critical review of the literature, electro diagnostic evaluation is found to be moderately sensitive and highly specific in establishing a diagnosis of cervical radiculopathy.”

The court then asked what it believed to be the crux of the issue – why would an expert conclude that the electro diagnostic study would be of no benefit to the plaintiff when there had been no subsiding of the pain over time and why would the test not assist the doctors in diagnosing why the pain still existed (Tr. 16). Dr. Cole responded that as of September 19th the patient had been diagnosed with radiculopathy and that “this diagnosis is made everyday without EMG” and that in this case the EMG would not add to or enhance the care.” (Tr. 16). The doctor then confirmed that regardless of the results of the test, there would be no change in treatment (Tr. 17).

This court finds that the defendant’s proof fails to prima facie demonstrate the lack of medical necessity for the treatment in question. Fatally missing from the doctor’s testimony is any mention of the applicable generally accepted medical/professional standard and the plaintiff’s departure therefrom. In the leading case of Services v. Travelers Indemnity, Citywide Social Work & Psychological, 3 Misc 3d 608, 609 (Civil Ct., Kings Co. 2004), Justice Battaglia succinctly stated:

“A no-fault insurer defending a denial of first-party benefits on the ground that the billed-for-services were not medically necessary’ must at least show that the services were inconsistent with generally accepted medical/professional practice. The opinion of the insurers’s expert, standing alone, is insufficient to carry the burden of proving that the services were not medically necessary”.

See , Acupuncture Prime Care v. State Farm Mutual Auto, supra .A generally accepted medical/professional practice has been defined as “that range of practice that the professional will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling.” 3 Misc 3d at 616.; A.B. Medical Services , P.L.L.C., supra .

In order to find that a treatment or service is not medically necessary, the defendant must show by medical evidence “that the treatment or services would be ineffective or that the insurer’s preferred health care treatment or lack of treatment would lead to an equally good outcome.” Fifth Avenue Pain Control Center v. Allstate Insurance Co.,196 Misc 2d 801, 807-08 (Civil Ct. Queens Co. 2003). The insurer’s expert’s reliance solely on his peer review report will be insufficient to disprove medical necessity. Id, See, A.R. Medical Art, P.C. v. State Farm Mutual Auto, 11 Misc 3d 1075A, 815 NYS2d 493 (Civil Ct., Kings Co. 2006).

In fact, an AAEM publication issued one year after the AAEM minimonograph #

32 cited by Dr. Cole is diametrically opposed to Cole ‘s position that the electro diagnostic test is [*5]not medically necessary since it states that a ” (a) needle EMG is widely regarded as the technique of choice in the diagnostic evaluation of cervical radiculopathy.” Dr. Cole’s testimony that the test could serve no purpose is belied by the fact that the treating physician did initially recommend conservative management of the claimant’s condition by continuing with a regimen of physical therapy. The treating physician also performed physical exams on two occasions before ordering the test. It was only after the claimant’s injuries did not improve over a span of over a month that Dr. Anand recommended that the insured undergo electro diagnosis for the purpose of ruling out radiculopathy or other nerve damage. In fact, Dr. Cole admitted that an individualized electro diagnostic study was an extension of a detailed history and physical exam and that the symptoms that the insured was exhibiting could be indicative of conditions other than radiculopathy, for example, carpel tunnel syndrome.

In a case somewhat analogous to the instant matter, Dr. Cole offered similar testimony that the EMG/NCV test was not medically necessary since the patient was improving and the physical examination and history could readily determine that the assignor was suffering from radiculopathy, thus making the need for the testing redundant. A.R. Medical Art, P.C. v. State Farm Mutual, supra . There, as in the instant matter, the plaintiff offered no testimony to rebut Dr. Cole but rather the parties stipulated into evidence the letter of medical necessity for the NCV/EMG from a doctor employed by the assignee’s medical office. The court noted that the positions between the treating physician and Dr. Cole were contradictory and that the assignee’s doctor had used the electro diagnostic testing in light of the patient’s complaints to make an exact diagnosis, locate a possible lesion, determine the extent of injury and exclude possible conditions. The court ruled that: “in the face of a course of treatment that has not been shown to have no medical purpose or performed towards no medical objective, this Court is not prepared to second guess a treating doctor who decides that a medical test is necessary for his/her medical diagnosis and treatment.”

This ruling applies with even greater force here where there was no evidence that the insured was improving from the conservative treatment recommended by the treating physician. Furthermore, only after two physical exams did the treating physician order the test to rule out radiculopathy.

In summary, Dr. Cole’s testimony failed to demonstrate the lack of medical necessity and judgment is rendered accordingly in favor of the plaintiff.

The foregoing constitutes the decision and order of the court.

Dated:March 5, 2008

Staten Island, NYHon. Katherine A. Levine

Judge, Civil Court