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

74577 CVN 2006

Plaintiff represented by: Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, by Shayna E. Sacks, Esq., 150 Herricks Road, Mineola, NY 11501, Tel: 516-741-4799.

Defendant represented by: Law Offices of Karen C. Dodson, by Jerry Marti, Esq., 485 Lexington Avenue, 7th Floor, New York, NY 10017, Tel: 917-778-6509.

Shlomo S. Hagler, J.

In these two actions to recover first-party no-fault benefits, defendant Travelers Insurance Company (“Travelers” or “defendant”) makes two virtually identical motions for orders pursuant to CPLR § 3212 granting it summary judgment dismissing the complaints. Plaintiff Ray Presutto, L.M.T., P.C. (“Presutto” or “plaintiff”) opposes the motions. Both motions are consolidated herein for disposition.

Background

Miguel A. Villatoro (“Villatoro” or “assignor”) allegedly suffered personal injuries as a result of a motor vehicle accident on September 2, 2002. Villatoro allegedly assigned to Presutto his right to recover benefits from Travelers for health care services rendered to him. Presutto allegedly provided treatment to Villatoro for the periods of May 1, 2003 through May 28, 2003 ($61.60), May 27, 2003 through June 12, 2003 ($61.60), and June 28, 2003 through July 3, 2002 ($61.60).

Presutto allegedly mailed Travelers claim forms or bills in the aggregated amount of $184.80. At Travelers’ request, on January 29, 2003, Dr. Lawrence B. Miller, D.O., a board certified orthopedic surgeon, conducted an Independent Medical Examination (IME”) of Villatoro. Dr. Miller conducted various objective tests on Villatoro and concluded in his affirmed report dated January 29, 2003, that “orthopedic treatment is not indicated or warranted at this time, including physiotherapy or any other type of rehabilitative therapy/treatment. Furthermore, diagnostic testing, [*2]surgical intervention , household help, durable medical equipment or special transportation services are not medically necessary.” (Exhibit “C” to the Motions.) On August 18, 2003, Travelers denied all claims based on Dr. Miller’s IME and report dated January 29, 2003. (Exhibit “D” to the Motions.)

As a result of defendant failing to pay first-part no-fault benefits, plaintiff commenced these two actions by service and filing of a summons and complaint. (Exhibit”A” to the Motions.) Defendant interposed answers to the complaints. (Exhibit “A” to the Motions.)

Summary Judgment

The movant has the initial burden of proving entitlement to summary judgment. Winegrad v N.Y.U. Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985). Once such proof has been offered , in order to defend the summary judgment motion, the opposing party must “show facts sufficient to require a trial of any issue of fact.” CPLR § 3212; Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595 (1980); Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 416 NYS2d 790 (1970); Friedman v Chemical Construction Corp., 43 NY2d 260, 401 NYS2d 176 (1977); and Spearmon v Times Square Stores Corp., 96 AD2d 552, 465 NYS2d 230 (2d Dept 1983). “It is incumbent upon a [party] who opposes a motion for summary judgment to assemble, lay bare and reveal his proofs, in order to show that the matters set up in [its pleading] are real and are capable of being established upon a trial.” Spearmon v Times Square Stores Corp., 96 AD2d at 553, 465 NYS2d at 232 (quoting DiSabato v Soffes, 9 AD2d 297, 301, 193 NYS2d 184, 189 [1st Dept 1959]). If the opposing party fails to submit evidentiary facts to controvert the facts set forth in the movant’s papers, the movant’s facts may be deemed admitted and summary judgment granted since no triable issue of fact exists. Kuehne & Nagel, Inc. F. W. Baiden, 36 NY2d 539, 369 NYS2d 667 (1975).

Proof of Mailing

There are three distinct methods to demonstrate proof of mailing. The first and simplest method is to provide an affidavit from an individual with personal knowledge of the actual mailing. The second is where an acknowledgment by the adverse party that it received the subject document serves as an admission. A.B. Medical Services a/a/o German v New York Central Mutual Fire Ins. Co., 3 Misc 3d 136(A), 787 NYS2d 675(Table) (App Term, 2d & 11th Jud Dists 2004); Fair Price Medical Supply Corp. a/a/o Graham v Elrac Inc., 12 Misc 3d 119, 820 NYS2d 679 (App Term, 2d & 11th Jud Dists 2006). The third and most common method is where the party provides proof of a standard office procedure, which ensures that documents are properly addressed and mailed. Pardo v Central Cooperative Insurance Company, 223 AD2d 832, 636 NYS2d 184 (3d Dept 1996). The first and second methods are straight-forward. However, the third method is vexing as there is a dearth of authority that addresses the specific requirements to adequately set forth a standard office practice and procedure.

The courts discuss the sufficiency of proof of mailing in several contexts. These include cancellation notices sent by insurers to insureds, and denials of claims or requests for verification by insurers to healthcare providers. The standard of proof necessary to establish that a proper mailing was executed appears to be the same for each of these circumstances. See, e.g., Contemp. Med. Diag. & Treatment, P.C., a/a/o Boone and Villafane v Government Employees Ins. Co., 6 Misc 3d 137(A), 899 NYS2d 344 (App Term, 2d & 11th Jud Dists 2005) (holding that standard of proof [*3]for mailing of verification requests are the same as for denial of claims, as per Hospital for Joint Diseases v Nationwide Mutual Ins. Co., 284 AD2d 374, 726 NYS2d 443 [2d Dept 2001], and insurance cancellation notices, as per Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 776 [2d Dept 2001]). “Generally, proof of proper mailing gives rise to a presumption that the item was received by the addressee.” Residential Holding Corp., 286 AD2d at 680, 729 NYS2d at 778. However, “in order for the presumption [of mailing] to arise, office practice must be geared so as to ensure the likelihood that a notice . . . is always properly addressed and mailed.” Nassau Ins. Co. v. Murray, 46 NY2d 828, 830, 414 NYS2d 117, 118 (1978).

To establish proof of mailing, an affidavit should detail standard office policies and procedures regarding the processing of claims and it must also contain a statement of the affiant’s personal knowledge that those policies and procedures have been followed in the instant case. See Contemp. Med. Diag. & Treatment, P.C., a/a/o Boone and Villafane v Government Employees Ins. Co., supra . However, in Delta Diagnostic Radiology, P.C. a/a/o Philogene v Chubb Group of Ins., 17 Misc 3d 16, 18 (App Term 2d & 11th Jud Dists, 2007), the Appellate Term clarified its prior ruling in Contemp. Med. Diag. & Treatment, P.C., supra , as follows:

We note that our prior holding in Contemp. Med. Diag. & Treatment, P.C. v. Government Empls. Ins. Co., 6 Misc 3d 137(A), 2005 NY Slip Op. 50254[U], 2005 WL 494360 [App. Term, 2d & 11th Jud. Dists.] should not be interpreted as requiring that an affidavit of mailing must state either that it was the affiant’s duty to ensure compliance with the insurer’s standard office practice or procedure with regard to mailing or that the affiant possessed personal knowledge of such compliance. Rather, as the Appellate Division has repeatedly noted, it is sufficient for the affiant to set forth that he or she possessed personal knowledge that the mailing occurred or describe the standard office practice or procedure used to ensure that items were properly addressed and mailed (see e.g. New York & Presbyt. Hosp. V. Allstate Ins. Co., 29 AD3d 547, 814 NYS2d, 687 [2006]; Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 776, supra ; Hospital for Joint Diseases v. Nationwide Mut. Ins. Co., 284 AD2d 374, 726 N.Y.S. 443 [2001]).

(Emphasis Added).

Furthermore, there should be “testimony about office procedures relating to the delivery of mail to the post office, whether a practice existed of comparing the names on the mailing list with the names and addresses on the envelopes for accuracy, or whether anyone routinely checked that the total number of envelopes matched the number of names on the mailing list.” Matter of Lumbermens Mutual Casualty Co. (Collins), 135 AD2d 373, 375, 521 NYS2d 432, 434 (1st Dept 1987). By inference, the affiant should state the following necessary details to show office practice and procedure including: (1) whether anyone complied a list of intended recipients; (2) whether anyone checked that a corresponding envelope containing a verification request or a denial of claim form was properly addressed for each recipient; and (3) whether anyone established a procedure for affixing the appropriate postage and delivering the mail to the post office. The failure to properly allege some of the above details have resulted in courts holding that the showing was insufficient because the affiant’s affidavit was conclusory. New York and Presbyterian Hospital, a/a/o Udland v Allstate Ins. Co., 29 AD3d 547, 814 NYS2d 687 (2d Dept 2006).

While plaintiff challenges the adequacy of the proof of mailings, defendant’s director of [*4]operations at its centralized mail facility located in Norcross, Georgia (“Data Service Center”), Stephen H. Howard, has provided a sufficient description of Travelers’ standard office practice or procedure used to ensure the denials were properly addressed and mailed as detailed below:

7.For the Court’s present purposes, the operation commences when a TRAVELERS employee completes an NF-10 denial, a verification request, or a delay letter from his or her desk top computer terminal, and executes the send and archive option provided. That action will cause the document to be electronically transmitted to the Data Service Center in Norcross. Following that transmission, and on that date, the document is printed. It is then mailed as indicated below.

8.Any document electronically forwarded is batched, printed, and then mailed on the day after it is transmitted. In other words, documents which are electronically transmitted are accumulated, processed and produced in the same out put job. An out put job number is assigned and utilized for tracking purposes, as further described hereafter.

9.Once transmitted, the documents are electronically batched and printed. When the documents are printed, they contain encoded information which identifies the particular batch they were processed in. The documents are electronically counted so that the numbers can be justified against the expected number of documents which are to be contained in any particular batch. When the numbers are reconciled, a notation is made on a tracking sheet for the batch. This tracking sheet is utilized at each stage of the mailing process, further described below, so as to ensure that the mailing, in fact, occurs.

10.Once printed and batched, the documents are placed into a machine designed to fold the documents and insert them into a window envelope where the address of the recipient is shown. The envelope is sealed, completing this part of the process. The machine counts the number of documents and envelopes processed. When the batch has been completed, the actual number is justified against the expected number, and the tracking sheet is documented. The control therefore establishes that all mail in a particular batch has gone through this step in the process. As a further control, a visual inspection is performed to ensure that the address of the recipient appears visible in the envelope window.

11.Once the above step is completed, the batch is brought to another machine. This machine weighs the envelope and places the appropriate amount of postage in accordance with size and weight. This machine also performs an electrical count of the items to be mailed, and the number is justified, against the expected count. The tracking sheet is duly noted for that batch of mail.

12.The mailings in any particular batch are then brought to a sorting machine. The sorting machine separates the individual envelopes in accordance with U.S. Postal guidelines, based upon zip code, for the purposes of facilitating proper and efficient mailings. The pieces going through this aspect of the process are again counted for the purposes of a final justification of the numbers. The sorted and justified mail is then placed into sealed containers and then placed into U.S. Postal Services designated containers. The containers are then delivered to a secure loading [*5]facility where they are picked up by U.S. Postal employees.

13.The final sorting area described above, as well as all other stations, are visually inspected throughout the day to be certain that no mail escaped the vigorous justification processes.

14.The Court is further advised that if at any point during the above described justification processes there is an indication of a missing piece of mail, the process is traced backward until the individual piece of mail is found. In the event a missing piece of mail is not found, an investigation takes place which includes a review of each piece of mail in the entire batch to determine if the particular missing mail can be identified, reprinted, and the batch then processed to completion. In the event identification of the missing piece of mail cannot be made with certainty, the entire batch will be reprinted and reprocessed in accordance with the procedures previously described.

15.Given the above, I can state with a reasonable degree of certainty that the documents described in the accompanying affidavit of Kelly A. Stotz, which had been mailed through the Norcross Data Service Center, were in fact processed in accordance with the procedures described above, and mailed to the identified recipient on the day after the date which appears on the denial and/or delay later.

(Affidavit of Stephen Howard in support of the Motions, sworn to on July 12, 2001, at ¶¶ 7-15).

Medical Necessity

Courts have held that plaintiffs need not demonstrate medical necessity as part of their prima facie case. Dermatossian v New York City Transit Authority, 67 NY2d 219, 224, 501 NYS2d 784, 787 (1986) (“A claimant to receive payment need only file a proof of claim’ . . . and the insurers are obligated to honor it promptly or suffer the statutory penalties . . .”); A.B. Medical Services PPLC a/a/o Sokol v Geico Ins., 2 Misc 3d 26, 27, 773 NYS2d 773, 774 (App Term 2d Dept 2003) (“We have rejected arguments that no-fault benefits claimant is obligated to prove the treatment’s medical necessity, at the claim stage or in support of its motion for summary judgment in a subsequent action on the claim . . .” [citations omitted]). The insurer may raise the defense that a claimed procedure was not medically necessary with a timely denial pursuant to the 30-day rule. Presbyterian Hospital in the City of New York v Maryland Casualty Co., 90 NY2d 274, 282, 660 NYS2d 536, 539-540 (1997). If there is an untimely disclaimer or denial in derogation of the 30-day rule, the insurer’s lack of medical necessity defense is precluded. Id.; Amaze Medical Supply Inc. a/a/o Darlington v Allstate Ins. Co., 2 Misc 3d 134(A), 784 NYS2d 918 (Table) (App Term 2d & 11th Jud Dists 2004).

Furthermore, in support of, or in opposition to, a summary judgment motion or at trial, the defense that the claim was not medically necessary must be supported by sufficient factual evidence or proof and it cannot simply be conclusory. Amaze Medical Supply Inc. a/a/o Bermudez v Eagle Ins. Co., 2 Misc 3d 128(A), 784 NYS2d 918 (Table) (App Term 2d & 11th Jud Dists, December 24, 2003). For instance, a recent Appellate Term decision citing Amaze Medical Supply Inc. a/a/o Bermudez v Eagle Ins. Co., held that where the defendant’s peer review report was sufficient to establish that the services were not medically necessary and the plaintiff failed to come forward with [*6]proof creating an issue of fact requiring a trial, the defendant was entitled to summary judgment dismissing the complaint. Boai Zhong Yi Acupuncture Services, P.C. a/a/o Pistsov v Progressive Casualty Ins. Co., NYLJ, June 6, 2007, p. 30, col. 2 (App Term 2d & 11th Jud Dists). See also Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986).

In this case, Dr. Miller’s orthopedic evaluation and affirmed peer review report on January 29, 2003, based on objective testing, were sufficient to demonstrate that plaintiff’s services rendered to Villatoro were not medically necessary. In response to Dr. Miller’s specifically detailed affirmed peer review report, plaintiff merely submits a terse affidavit from Ray Presutto, a licensed massage therapist, averring that “my office rendered reasonable and necessary medical services to plaintiff’s assignor(s) that were casually related and resulting from said accident.” (Affidavit of Ray Presutto in opposition to the Motions, sworn to on September 18, 2007.) This allegation is conclusory and insufficient as proof in admissible form to create a triable issue of fact requiring a trial as per Boai Zhong Yi Acupuncture Services, P.C. v. Progressive Co., supra .

Conclusion

Both of defendant’s motions for summary judgment dismissing the complaints are granted. The clerk is directed to enter a judgment dismissing both complaints.

The foregoing constitutes the decision and order of this Court. Courtesy copies of this decision and order have been mailed to counsel for the parties.

Dated:New York, New York

October 29, 2007Hon. Shlomo S. Hagler, J.C.C.

Civil Court of the City of New York, Queens County

11430-2004

For the Plaintiff:

The Law Offices of Eva Gaspari PLLC

By Eva Gaspari, Esq.

2300 West 7th Street

Brooklyn, New York 11223

Tel: (718) 266-3009

For the Defendant:

Freiberg & Peck, LLP

By Yilo J. Kang, Esq.

49 West 37th Street, 9th Floor

New York, New York 10018

Tel:(212) 252 -9550

Charles S. Lopresto, J.

The plaintiff’s assignor, Cheryl Brown, was allegedly injured in a motor vehicle accident on January 7, 2003 while driving a vehicle she rented from Budget Rent A Car (hereafter Budget). At the time, Ms. Brown had an insurance policy with Progressive Insurance Company, which covered another vehicle which was not involved in the accident. Ms. Brown received medical equipment for treatment of injuries arising from the motor vehicle accident. The [*2]plaintiff, Ave T MPC, Corp., submitted two separate claims to the defendant, Progressive Insurance Company (hereafter Progressive), for the equipment dispensed on February 6, 2003 and February 22, 2003, in the amounts of $79.99 and $888.00, respectively. The two claims came to a total of $967.99, which, together with interest, costs and attorney fees, reflects the amount sought to be recovered in this case. The plaintiff is now seeking benefits under Ms. Brown’s insurance policy with Progressive for the accident which occurred while she was driving the Budget Rent A Car. Defendant contends that Ms. Brown is not an eligible person for insurance under the policy as she was driving a vehicle other than the vehicle insured by Progressive and thus was not covered.

A trial regarding this matter was held on July 23, 2007. At trial, the parties stipulated that the plaintiff had timely and properly submitted claims for no-fault benefits with respect to the medical equipment at issue to Progressive Insurance Company on behalf of the plaintiff. Given the stipulation of these facts, the plaintiff rested its case. The parties further stipulated that the defendant’s answer would be amended to contain the defense that the event or loss was not covered by the policy of insurance issued by the defendant and the defendant abandoned it’s defense that the claims in dispute had been denied based upon a failure of Ms. Brown to abide by and cooperate in accordance with the terms of the insurance policy. The parties stipulated that the sole issue for the court to determine was if there was a lack of coverage.

The defendant called Tammy Reichel, a senior litigation specialist employed by the defendant, whose responsibilities consisted of reviewing claims which were in litigation. Ms. Reichel testified that Cheryl Brown did have an insurance policy with Progressive Insurance in effect on the date of the accident. The claims presently in dispute had been denied based upon a failure to cooperate as per the terms of the policy. After the claims were received, the defendant repeatedly requested that Ms. Brown cooperate with the coverage investigation and submit to the taking of a recorded statement or otherwise contact the defendant. Various follow up letters were sent to Ms. Brown seeking information with respect to coverage. After receipt of the bills in question from the plaintiff, the defendant advised the plaintiff via a verification request that the benefits were delayed pending the claimant’s cooperation with their requests. After numerous attempts to obtain the recorded statement, the defendant denied the claims in dispute based upon the claimant’s breach of her insurance policy’s cooperation clause for failure to submit to a recorded statement request. While the instant lawsuit was pending, Ms. Reichel testified that the defendant, Progressive, received information from which she identified as an “ISO run” from an ISO computer data base. Ms. Reichel stated that all insurance companies are under a duty to provide information to this data base and she routinely relies upon information obtained from this data base and fully incorporates said information into her records made in the regular course of the defendant’s business. Said information indicated that Budget Rent A Car had received a claim from Ms. Brown for the same accident. Thereafter, a telephone conversation between Allison Saronui of Progressive Insurance Company and Trisha Hopfauf from the Budget Claims Department took place. A fax was sent from Ms. Hopfauf to Ms. Saronui on August 24th, 2007 memorializing this conversation which stated, inter alia, that “Budget was primary for PIP on this loss since this was a NY accident.”. Said fax also contained information acknowledging receipt of a medical bill for Ms. Brown on August 11th, 2003 for services rendered January 10th,2003 to March 13th, 2003, which was denied by Budget on the basis that her claim was untimely. Based upon such information and a police report indicating that the vehicle insured by [*3]the defendant and owned by Ms. Brown was not the vehicle involved in the accident, Ms. Reichel testified that she had a “founded belief” that Progressive was not the carrier liable for the accident and that this accident was not “covered” by the terms of the Progressive policy since the claimant was covered by a policy of insurance other than the one issued by the defendant.

CONCLUSIONS OF LAW

1. Has the defendant established that the loss was not a covered accident?

Generally, an insured who seeks to recover for a loss under an insurance policy has the burden of proving that the loss occurred and that the loss was a covered incident under the terms of the policy. Gongolewski v. Travelers Ins. Co., 252 AD2d 569[2nd Dept 1998], quoting Vasile v. Hartford Acc. & Indem.Co., 213 AD2d 541[ 2nd Dept. 1995]. However, in an action for first-party no fault benefits, which is the case at bar, a provider’s proof of timely submission of a properly completed claim form makes out a prima facie case and there is a presumption of medical necessity. See, Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128 [ App Term 2d & 11th Jud Dists ]; see also, A.B. Med. Servs. PLLC v. Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term 2d & 11th Jud Dists 2004]. Adopting the Appellate Term’s concept in the related area of medical necessity, it should therefore follow that there is also a presumption of coverage which attaches to the claim form.

In this case, it was stipulated by the parties that the plaintiff had timely and properly submitted claims for no-fault benefits, which established plaintiff’s prima facie case thus establishing a presumption of coverage. A.B.Medical Services, PLLC v. State Farm Mutual Automobile Ins. Company, 7 Misc 3d 822; New York Massage Therapy v. State Farm Mutual Ins. Co. ,14 Misc 3d 1231 (A). Once the plaintiff makes a prima facie showing, the burden of explanation or of “going forward with the case” falls upon the defendant to show a lack of coverage. Mount Sinai Hosp. V. Triboro Coach Inc., 263 AD2d 11. The satisfaction of this burden would permit the defendant to disprove the presumption of coverage. Palmier v. United States Fidelity and Guaranty Company, 135 AD2d 1057 (3rd Dept. 1987).

In the case at bar, the defendant contends that this burden has been satisfied in that it has established that the defendant had a “founded belief” that the loss in question was not covered by the policy of insurance. In Central Gen. Hosp. V. Chubb Group of Ins.Cos., 90 NY2d 195, the Court of Appeals held that ” an insurer… may assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident”. This case dealt with an insurers failure to reject a claim to recover no-fault benefits within the 30 day period prescribed by statute and regulations and held that the insurer would not be precluded from disclaiming when the defense is lack of coverage. The “fact or founded belief” standard discussed in Chubb, which is often used in “staged accident” cases, is inapplicable in this case. The facts in this case are distinguishable from a “staged accident” case. There has been no contention that the accident did not occur; that it was part of a fraudulent scheme or was an intentional act and thus not a covered incident under the policy. It is uncontroverted that a policy of insurance existed in this case which was issued to Ms. Brown by Progressive. Either the accident in question was covered or it was not. A contracting party to an insurance agreement should not be relieved of it’s duties of performance under the contract because a party “believes” [*4]that performance is not required whether that belief is founded or not if in fact performance is required. In order for the court to determine the issue, it is crucial and essential for the court to know what are the terms of coverage contained within the policy. The defendant did not introduce a copy of the policy of insurance that is in dispute. The defendant merely introduced the declarations page of the claimant’s insurance policy indicating that the car involved in the accident that the claimant was driving was not listed as a car insured by the defendant. In this case the defendant has failed to meet it’s burden to show that the policy of insurance issued to Ms. Brown did not cover the loss at issue. The policy may have contained a clause which covered the use of a rental vehicle as a temporary substitute for the insured’s vehicle while being repaired. See, SZ Medical, PC. V. Lancer Ins. Co.. 7 Misc 3d 86. Absent the actual production of the insurance policy the court can only guess and surmise at the terms and conditions therein. This court is well aware of the exclusions set forth in 11 NYCRR§ 65-1.1, in particular, exclusion C which states PIP coverage does not apply to “the named insured or relative occupying … a motor vehicle other than the insured vehicle”. However, said exclusions do not negate the responsibility of the insurance company to produce said policy at trial. Therefore, it is the holding of this court that the insurance company must introduce the policy at trial in order to demonstrate that the loss in question fell outside the terms of the insured’s policy of coverage in order to satisfy it’s burden.

2. Should have defendant submitted the matter to arbitration?

Notwithstanding the foregoing, the case at bar concerns a priority of payment issue. If a priority of payment issue arises as provided in NYCRR section 65-3.2; it is not considered a coverage question and must be submitted to mandatory arbitration. Section 5105 (b) of the Insurance Law establishes mandatory arbitration procedures promulgated by the Superintendent of Insurance for the resolution of disputes arising between insurers concerning their responsibility for the payment of first- party benefits. See Matter of Pacific Ins. Co. V State Farm Mut. Auto. Ins. Co.,150 AD2d 455[ Second Dept.1989]. In Matter of Pacific, thecourt dealt with issues similar to the facts presented in this case. The court held that ” (t)he Supreme Court erred in ruling that the present issue falls outside the jurisdiction of Insurance Law § 5105 and that it is, therefore not subject to mandatory arbitration, contrary to the clear mandate of 11 NYCRR 65.15 (j) (2), which provides that If a dispute regarding priority of payment arises among insurers who otherwise are liable for the payment of first-party benefits, then the first party to whom notice of claim is given… shall be responsible for payment… Any such dispute shall be resolved in accordance with the arbitration procedures established pursuant to section 5105 of the Insurance Law (section 65.10 of this Part)’. In addition, 11 NYCRR 65.10 (a) (5) provides in pertinent part that any controversy between insurers involving the responsibility or obligation to pay first-party benefits (i.e., priority of payment or sources of payment as provided in section 65.15[j] of this Part) is not considered a coverage question and must be submitted to mandatory arbitration under this section'”. In this case, the defendant refused to pay Ms. Brown’s claims when they were first presented with them. That refusal raised a question as to “priority of payments” between the defendant and Budget, which issue must be determined and submitted to mandatory arbitration pursuant to Insurance Law § 5105 and 11 NYCRR 65.10 (a) (5). The record reveals that Progressive received bills from the plaintiff prior to any claim made with [*5]Budget . This raises a dispute of priority of payments as between insurers which must be submitted for resolution by mandatory arbitration and this

court is without jurisdiction. SZ Medical, P.C v. Lancer Insurance Company, 7 Misc 3d 86. Accordingly, the complaint is dismissed.

____________________________

DATE:_______________Hon Charles S. Lopresto

Civil Court of the City of New York, Kings County

97323/04

Lila P. Gold, J.

This Order to Show Cause was brought by the defendant in Special 1 in order to clarify the Court’s Decision and Order dated May 16, 2006 granting Plaintiff’s motion for summary judgment.

The Decision and Order dated May 16, 2006 granted judgment for Plaintiff in the amount of $1714.00 plus statutory interest, attorneys’ fees and costs/fees of $65.00.

Defendant made payment to Plaintiff upon receipt of the Order in the amount of $2,460.16 and $557.03. Plaintiff claims that approximately $450.00 of the judgement amount has not been paid. The discrepancy in the amount due to Plaintiff is the based upon the date from which interest, and attorneys’ fees thereon, begin to accrue. It is Defendant’s position that interest should be calculated from the filing of the summons. Plaintiff’s contends that interest should be calculated from thirty (30) days after Defendant received Plaintiff’s bills for no-fault benefits.

This court is asked to determine at what point interest begins to accrue on an untimely denial and/or improper denial under the no-fault regulations. It is plaintiff’s contention that interest on untimely and/or improper denials received by an assignee/medical provider should begin to accrue 30 days after an insurer receives a proper proof of claim. Defendant argues that interest should not accrue until the no-fault claimant requests arbitration or institutes a lawsuit. Plaintiff and Defendant both presented a civil court decision, East Acupuncture, P.C. v. Allstate Ins. Co., 2005 NY Slip Op 25242, 2 (NY Misc. 2005), which was directly on point regarding this issue. Plaintiff based their position on the holding in East Acupuncture, P.C. (Id.) that interest is to accrue from the thirtieth day after submission of a bill if the Defendant issues a late or improper denial. Defendant’s papers respectfully submitted that the court in East Acupuncture, P.C. erred in its decision.

Subsequent to Defendant’s filing of the Order to Show Cause, the Appellate Term of the Supreme Court for the 2nd and 11th Districts reversed the order of the J. Matos entered June 28, 2005. East Acupuncture, P.C. v. Allstate Ins. Co., 2007 NY Slip Op 27109 (NY Misc. 2007). In this decision, the Appellate Term concluded that “the regulations, read as a whole in accordance with the rules of construction, the deference to be accorded the Superintendent’s assertion of intent, and the undesirable consequences of exempting assignees from the limitation imposed by 11 NYCRR 65-3.9 (c), lead to the conclusion that the reference to “applicant” in 11 NYCRR 65-[*2]3.9 (c) includes an eligible injured person’s assignee.” East Acupuncture, P.C. (Id.) Therefore, concluding that interest does not begin to accrue on an untimely denial and/or improper denial under the no-fault regulations until the no-fault claimant requests arbitration or institutes a lawsuit.

Based upon the foregoing, interest did not begin to accrue on this claim until the filing of the summons.

Accordingly, Defendant’s Order to Show Cause is hereby granted. Marshal’s Notice of Levy and Sale is vacated, Defendant has satisfied the underlying order in this matter dated May 16, 2006.

This opinion constitutes the decision of the Court. A copy of this decision will be mailed to the parties.

Dated:May 30, 2007

____________________________

Lila P. Gold, J.C.C.

Civil Court of the City of New York, Bronx County

79629/02

Nelida Malave-Gonzalez, J.

Plaintiff commenced this action to recover no-fault first party benefits for unpaid medical services provided to Fabio Vargas in the amount of $2, 498.38. In support of its prima facie case, plaintiff submitted a Notice to Admit. Neither plaintiff nor defendant presented any witnesses.

To establish a prima facie case for first party no-fault benefits, proof of a properly submitted statutory claim form or its substantial equivalent is sufficient. The burden then shifts to the defendant to establish the lack of medical necessity. 11 NYCRR §§ 65.3.4(c), 65-3.8(c), CPLR § 5106.The issue before this Court is whether the submission of a Notice to Admit is sufficient to establish a prima facie case to recover no-fault first party benefits for unpaid medical services.

A Notice to Admit is ” . . . a written request for admission . . . of the genuineness of any papers or documents described in and served with the request, or of the truth of any matters of fact set forth in the request, as to which the party requesting the admission reasonably believes there can be no substantial dispute at the trial and which are within the knowledge of such other party or can be ascertained by him upon reasonable inquiry. C.P.L.R. § 3123. Failure to timely respond to a Notice to Admit, either by denial or detailed reason as to why a denial or admission is not possible, shall result in those items requested deemed admitted. However, a Notice to Admit may not be used to elicit an admission of fundamental and material issues or ultimate facts. Meadowbrook-Richman, Inc. V. Cicchiello, (1st Dept. 2000); PDG Psychological, P.C. v. State Farm Ins. Co., 12 Misc 3d 1183(a)(2006).

The issue before the bench is considerably new. A cursory search of New York cases reveals no “on point” appellate decisions which would bind this Court. As such, an analysis of both arguments is worthwhile.

As defined above, a Notice to Admit may be used to settle any fact that is not at issue. A Notice to Admit should not contain any questions that would require that the opposing party concede any material facts. It is for this reason that failure to respond to a notice to admit is deemed as an admission. Conversely, if Notice to Admit is permitted as the sole evidence to [*2]establish a prima facie case, logical reasoning would follow that there was no material issues presented at trial and thus no prima facie case made.

One cannot deem any failure to respond to a Notice to Admit as an admission to a material fact. To allow such would spawn an abuse of this disclosure device and contradict the purpose of the Notice to Admit. Further, it would prevent attorneys from regarding their ethical duty to actively participate in the litigation of each case as well as timely responding to documents submitted by opposing counsel.

Recently, in Fair Price Medical Supply v. St. Paul Travelers Ins. Co., 2007 NY Slip Op. 27173, the Appellate Division, First Department affirmed a case where interrogatories were admitted to prove plaintiff’s prima facie case. Specifically, to establish that in response to the interrogatories, defendant admitted that it received the no-fault claims and made partial payment on the claims. The case at bar is distinguishable from Fair Price Medical Supply for many reasons. Although both discovery devices, the Interrogatory and a Notice of Admit function quite differently.^[FN1] First, an Interrogatory must be given under oath, where as a Notice to Admit need not be. Further, an Interrogatory may be used to unearth any relevant subject. However, as defined above, a Notice to Admit may not be used to seek answers to material issues to be resolved at trial. Sagiv v. Gamache, 26 AD3d 368 (2nd Dept. 2006).The instant case is further distinguished from Fair Price Medical Supply because that defendant responded to the Interrogatories. The Appellate Division found it contradictory that the defendant now claims that plaintiff’s did not submit proof that the claims were mailed, received or overdue although these issues were admitted under oath in response to the interrogatory. That is not the case here.

Plaintiff’s Notice to Admit requested the following admissions:

1. That the bill(s) attached to the Summons and Complaint was received by the defendant.

2. That said bill(s) was received on or before 12-01-2002.

3. That defendant did not mail a denial of claim form NF-10 to the plaintiff within thirtydays of receipt of said bill.

4. That defendant did not issue any requests for verification to the plaintiff.

5. That the occurrence of the underlying accident is not disputed.

6. That the assignor’s involvement in said accident is not disputed.

7. That there was a policy of insurance in effect covering the accident of 12/21/01.

8. That the injuries claimed were causally related to the motor vehicle accident.

9. That RJ Medical, P.C. is properly licensed in the State of New York.

10. That the assignor complied with all notice requirements.

11. That plaintiff complied with all notice requirements.

12. That the bill submitted was in accordance with the New York State WorkersCompensation Fee Schedule.

Plaintiff did not submit bills or any other documents to this Court to support the Notice to Admit. Defendant did not respond to the Notice to Admit and alleged at trial, that the plaintiff never submitted the requisite bills or forms with the Notice to Admit. Nor were said bills or [*3]forms previously provided. Defendant’s failure to respond to the Notice to Admit would deem the question of whether the bills were previously submitted as an admission and thus conceded at trial. Although technically correct, the requested admissions go to the heart of the matter. The requested admissions are of material issue at the trial. A no-fault first party benefits case requires only that the requisite bills, forms and substantially equivalent documents be admitted to prove a prima facie case. If admitted to by default during discovery, which is what happens when no response to the Notice to Admit is effectuated, it alleviates the plaintiff any burden of moving forward on its prima facie case. Thus, resulting in the plaintiff having established absolutely no material issue at trial upon which this court could hang the proverbial hat.

The plaintiff did not provide any additional evidence at trial and thus is unable to prove through admissible evidence that payment was not made on a timely submitted claim. As such, plaintiff’s action is dismissed.

The foregoing constitutes the Decision and Order of the Court.

Dated:______________________________________________

Hon. Nelida Malave-Gonzalez, J.C.C.

Footnotes

Footnote 1: CPLR 3130(1).

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

64123/05

For plaintiffs:

Christopher McCollum, Esq.

Law Offices of Christopher McCollum

57 W. 57th St., Suite 502

New York, NY 10019

917-407-5690

For defendant:

Allison B. Frischling, Esq.

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, NY 11747

631-390-0010

Barbara Jaffe, J.

By notice of motion dated January 25, 2007, defendant moves for an order granting it leave to renew and reargue my decision and order of December 6, 2006 granting summary judgment to plaintiffs on their claims for unpaid no-fault insurance benefits, statutory interest, and attorney fees. For the following reasons, the motion is denied.

I. PRIOR DECISION

In granting plaintiffs summary judgment, I held that they had established, prima facie, that their office manager had personally mailed the pertinent no-fault claim forms to defendant and that defendant had failed to deny plaintiffs’ claims timely. Defendant raised no objection to plaintiffs’ prima facie case.

In holding that defendant had failed to establish good cause for seeking discovery relating [*2]to its defenses and plaintiffs’ corporate structure, I found that: 1) in light of plaintiffs’ counsel’s affirmation that plaintiff Devonshire Surgical Facility (Devonshire) was officially converted from a general partnership into a limited liability corporation and notwithstanding the absence of its name from lists maintained on the websites of the New York State Education Department’s Office of Professions and the New York Department of State Division of Corporations, defendant failed to demonstrate sufficiently that at the time the healthcare services were rendered, Devonshire was fraudulently incorporated; 2) defendant failed to demonstrate sufficiently that the revocation of Allen Chamberlin’s license to practice medicine based on conduct he engaged in during 1998 constitutes good cause to believe that his facility, defendant Carnegie Hill Orthopedic Services (Carnegie Hill), was fraudulently incorporated in 2001 when the services in issue were rendered; 3) because the revocation of Chamberlin’s license was based on his excessive and unnecessary treatments and fraudulent billing for services never provided, which are forms of provider fraud, and absent any indication that defendant had interposed a timely denial based on those defenses, plaintiffs are not precluded from seeking reimbursement; and 4) defendant failed to interpose in its answer any contention that an independent contractor had provided the services at issue and that Chamberlin had violated the prohibition against self-referral.

II. RE-ARGUMENT

A motion for leave to reargue “shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion.” (CPLR 2221[d][2]).

A. Defendant’s discovery demands relating to Carnegie Hill’s corporate structure

1. Contentions

Defendant argues that there exists good cause for discovery relating to Carnegie Hill’s corporate structure, again relying solely on the 2005 administrative finding that Chamberlin engaged in fraudulent billing and fraudulent and excessive medical practices in 1998 as evidence that he engaged in those practices in 2001. As Chamberlin’s license was revoked based on conduct he engaged in during 1998, defendant argues, his license must be deemed revoked as of 2001, and if Chamberlin was not authorized to practice medicine in 2001, then Carnegie Hill had issued him shares in violation of Business Corporation Law (BCL) § 1507(a) and was thus fraudulently incorporated in 2001. (Affirmation of Alison B. Frischling, Esq., dated Jan. 25, 2007 [Frischling Aff.]). Defendant thus attempts to avoid preclusion of a defense based on provider fraud by characterizing it as one sounding in fraudulent incorporation.

In opposition, plaintiffs observe that I had rejected the same argument in my December 2006 decision. (Affirmation of Christopher McCollum, Esq., dated Mar. 12, 2007 [McCollum Aff]).

2. Analysis

Pursuant to 11 NYCRR 65-3.16 (a) (12), effective April 4, 2002, unlicensed or fraudulently licensed healthcare providers are ineligible to receive reimbursement for no-fault medical services provided by them. In affirming the dismissal of an insurer’s causes of action for fraud and unjust enrichment, the Court of Appeals held in State Farm Mut. Auto. Ins. Co. v Mallela, that no such causes of action lie for payments made by insurers before April 4, 2002. (4 [*3]NY3d 313, 322 [2005]). The Court also observed that insurers may withhold payment for medical services provided by enterprises incorporated in violation of BCL §§ 1507 and 1508 and Education Law § 6507(4)(c). Pursuant to BCL §1507, a professional service corporation may issue shares only to those individuals who are authorized by law to practice the profession which the corporation is authorized to practice.

Here, it is undisputed that Chamberlin was authorized by law to practice medicine when Carnegie Hill was organized. And, although Chamberlin’s license has now been revoked and he must now disassociate himself from Carnegie Hill (BCL § 1509 [if shareholder of professional service corporation becomes legally disqualified to practice his profession, he must sever all employment with and financial interests in corporation]), absent any indication that the revocation is retroactive or that any of the governing statutes, regulations, or case law requires that lawfully issued shares be invalidated retroactively, there is no basis for finding that Carnegie Hill was fraudulently incorporated when formed merely because Chamberlin’s license was revoked thereafter. (See CKC Chiro. v Republic Western Inc. Co., 5 Misc 3d 492 [Civ Ct, Kings County 2004] [provider may be reimbursed for services rendered when she was properly licensed or registered, even if she subsequently became unlicensed or unregistered]).

I also observe that the conduct underlying the revocation of Chamberlin’s license relates to defenses which, if this action arose in the Second Department, are precluded if not timely denied. (Careplus Med. Supply Inc. v State-Wide Ins. Co., 11 Misc 3d 29 [App Term, 2d & 11th Jud Dists 2005] [fraudulent billing or performance of excessive or unnecessary medical treatment are forms of provider fraud]; Fair Price Med. Supply Corp. v Travelers Indemn. Co., 9 Misc 3d 76 [App Term, 2d Dept 2005] [defense based on fraudulent scheme to obtain no-fault benefits precluded due to untimely denial]; Ocean Diagnostic Imaging, PC v Utica Mutual Ins. Co., 9 Misc 3d 138[A], 2005 NY Slip Op 51745[U], *1 [App Term, 9th & 10th Jud Dists 2005] [alleged irregularities in the treatment and billing process did not support defense that survived preclusion]). Although no appellate court in the First Department has addressed the issue of whether a defense based on services billed but never rendered is subject to preclusion for untimely denial, and a judge in the Eastern District of New York disagrees with the Appellate Term’s decision in Fair Price, 9 Misc 3d 76, that a defense based on services billed but not rendered is subject to preclusion (Allstate Ins. Co. v Valley Physical Med. & Rehab., P.C., 475 F Supp2d 213 [US Dist Ct, EDNY 2007]), here, defendant did not even allege that plaintiffs billed for services that were not rendered.

In any event, evidence that Chamberlin fraudulently or excessively billed or unnecessarily treated patients in 1998 is inadmissible to prove that he engaged in such conduct in 2001. (Prince, Richardson on Evidence § 4-517 [11th Ed Farrell]; see Matter of Brandon, 55 NY2d 206 [1982]; Hand v Stanper Food Corp., 224 AD2d 584 [2d Dept 1996] [evidence that defendant’s principal broke two signs in front of defendant’s premises over five-year period prior to alleged accident, without more, insufficient to support inference that he broke sign at issue]; Kelly v Ryder Truck Rental, Inc., 14 Misc 3d 127[A], 2006 NY Slip Op 52467[U] [App Term 1st Dept 2006] [evidence of prior accident inadmissible to support inference of fraud absent any claim that prior accident was staged]; Maraziti v Weber, 185 Misc 2d 624 [Sup Ct, Dutchess County 2000] [motion in limine granted as to prior findings of Department of Health]). If Carnegie Hill excessively billed for its services or billed for services never rendered, defendant would have had [*4]the means of proving it without relying on inadmissible evidence of a disposition to engage in fraud. Rather, it seeks to rely solely on inadmissible evidence of prior misconduct.

As defendant failed to establish that it properly sought discovery from Carnegie Hill based on a non-precluded defense (A.B. Med. Svces., PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term, 2d & 11th Jud Dists 2006]), that it has good cause to believe that Carnegie Hill was fraudulently incorporated, and that Carnegie Hill was required to respond to defendant’s discovery requests on these issues (see A.B. Med. Svces., PLLC, 11 Misc 3d 71 [discovery demands relating to precluded defenses are “palpably improper” and plaintiff healthcare provider need not respond to them]; Devonshire Surgical Facility and Carnegie Hill Orthopedic Services v GEICO, NYLJ, Apr. 7, 2006, at 20, col 1 [Civ Ct, New York County] [defendant may not allege provider fraud if not asserted in denial]), it has failed to demonstrate that I overlooked or misapprehended any matter of fact or law in deciding the prior motion.

B. Defendant’s discovery demands relating to Devonshire’s corporate structure

Defendant claims that discovery relating to Devonshire’s corporate structure is warranted as it may reveal that Devonshire was not a properly licensed entity when the services in issue were rendered. It relies, as it did in its opposition to plaintiff’s motion for summary judgment, on the results of two website searches which do not list Devonshire as a professional medical corporation prior to 2006. (Frischling Aff.). Devonshire denies that defendant’s allegations against it, even if true, constitute a defense of fraudulent incorporation, and claims that a violation of the Business Corporation Law is curable and that Devonshire was and continues to be a properly licensed entity. (McCollum Aff.).

As Devonshire was not incorporated at the time the services in issue were rendered, Mallela, 4 NY3d 313, as well as Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 (1st Dept 2006), are inapposite absent any requirement that an entity offering professional services be incorporated. I observe that BCL §1503(a) merely permits one or more individuals authorized by law to render the same professional service to organize a professional service corporation.

I also observe that only business and not for profit corporations, limited partnerships, limited liability companies and limited liability partnerships, as well as other miscellaneous businesses, are listed on the New York Department of State’s Division of Corporation’s website; general partnerships, sole proprietorships, and limited liability partnerships are expressly excluded from it. Consequently, as the absence of Devonshire’s name from the website list prior to 2006 reflects only that Devonshire was not incorporated as a business or not for profit corporation, limited partnership, limited liability company, or limited liability partnership before that time, it is immaterial.

Pursuant to Education Law § 6507(4)(c), the New York State Education Department is required issue a certificate of authority to a qualified professional service organization organized pursuant to BCL § 1503. As Devonshire was not organized pursuant to BCL § 1503, Education Law § 6507(4)(c) is not applicable.

I also find that defendant’s conclusory allegations that an independent contractor provided the services in issue and that Chamberlin violated the prohibition against self-referral form no basis for discovery as defendant did not plead such defenses and did deny the claims based thereon. Defendant has thus failed to demonstrate good cause to assert, nor has it even argued, [*5]that at the time that Devonshire rendered the services at issue, it was owned, operated, controlled or otherwise involved with unlicensed individuals or entities.

Accordingly, plaintiffs were not required to respond to discovery demands on these issues.For all of these reasons, defendant has failed to establish good cause to believe that Devonshire was fraudulently incorporated before May 2006, and absent such good cause, defendant is not entitled to discovery on this issue. Consequently, defendant has failed to establish that I overlooked or misapprehended any matter of fact or law in deciding the prior motion.

C. Triable issues of fact

Defendant also includes in its motion for leave to reargue a claim that there exist triable issues of fact as to whether Devonshire was ever a properly licensed entity and whether Carnegie Hill improperly issued shares to Chamberlin. It argues, without any explanation, that Devonshire’s registration with the Department of State as a “domestic limited liability company” rather than “professional limited liability company” raises a triable issue as to whether it is a licensed provider. (Frischling Aff.).

I first observe that defendant’s opposition to plaintiff’s motion for summary judgment was based solely on plaintiffs’ failure to respond to its discovery demands. Consequently, these new arguments may not be considered. (CPLR 2221[d][1]; Mariani v Dyer, 193 AD2d 456 [1st Dept 1993] [motion to reargue not appropriate vehicle to assert arguments different from those asserted on original motion]). In any event, defendant cites no authority in support of its proposition that licensed health care providers must be registered only as professional limited liability companies.

I thus find that defendant failed to establish that I overlooked or misapprehended any of its evidence or relevant decisions in granting plaintiffs summary judgment on their claims. For all of these reasons, I adhere to my prior decision and deny defendant’s motion to reargue.

III. RENEWAL

A motion for leave to renew “shall be based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination, and shall contain reasonable justification for the failure to present such facts on the prior motion. (CPLR 2221[e][2], [3]).

A. Retroactivity of fraudulent incorporation regulation

In moving to renew, defendant relies on Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 (1st Dept 2006), for the proposition that a provider’s prior fraudulent conduct may be used to prove that the provider conducted itself similarly on a subsequent occasion. Counsel maintains that the First Department held that “a providers [sic] fraudulent conduct can be applied retroactively.” (Frischling Aff.). It maintains that the decision constitutes a change in law which would change my prior determination, and that the regulation applies to the period during which plaintiffs rendered the services in issue. It thus argues that as there is reason to believe, based on the subsequent revocation of Chamberlin’s license, that plaintiffs were fraudulently licensed or had engaged in fraudulent conduct when the services were rendered, plaintiffs may not be entitled to reimbursement for those services. (Id.).

The First Department recently applied Mallela to claims for services rendered prior to April 4, 2002, rejecting a provider’s argument that it was entitled to be reimbursed for claims [*6]relating to services rendered prior to the effective date of the regulation, reasoning that “[t]he very word reimbursement,’ used in the regulation, implies that the services had already been provided . . . [and that] it would be illogical to read [Mallela] as applying only to claims submitted on or after April 4, 2002.” (Belt Parkway, 33 AD3d 407). Thus, unlicensed and fraudulently licensed health care providers and those that are incorporated in violation of BCL

§§ 1507 and 1508 and Education Law § 6507(4)(c) are ineligible to be reimbursed even if their services were rendered prior to April 4, 2002.

While the court applied the regulation retroactively, it did not even address the issue raised by defendant, namely, whether a provider’s fraudulent conduct on one occasion may be utilized to prove that it engaged in fraudulent conduct on another occasion. As noted supra (II.A.2.), evidence of prior misconduct is generally inadmissible to prove later alleged misconduct.

Consequently, the decision in Belt Parkway does not change my determination that defendant failed to establish good cause to seek discovery concerning Carnegie Hill’s alleged fraudulent incorporation.

B. Plaintiffs’ prima facie case

Defendant maintains that recent decisions compel the finding that the affidavit supporting plaintiffs’ motion for summary judgment was insufficient to lay a foundation for the admission in evidence of plaintiffs’ business records or demonstrate that the claims were overdue. (Frischling Aff.). Plaintiffs argue that the supporting affidavit was based on their office manager’s personal knowledge of the contents of the mailings and the mailings themselves. (McCollum Aff.). In reply, defendant argues that the affidavit is insufficient as plaintiffs’ office manager fails to set forth her knowledge of plaintiffs’ business practices and procedures or any specifics concerning the claims at issue, such as the date of the accident, dates of service, and amounts in dispute. (Reply Affirmation of Allison B. Frischling, Esq., dated March 29, 2007 [Frischling Reply Aff.]).Here, plaintiffs’ officer manager swore that she had personal knowledge of the documents, that she personally verified that they were contained in the envelopes, that she mailed the envelopes, and that defendant neither paid nor denied the claims within thirty days. She also stated that she has been plaintiffs’ office manager for more than seven years, that one of her responsibilities is the supervision of all billing procedures and mailing of claim forms, and that based on her personal knowledge and review of the file, the claims forms annexed to the motion papers were made by plaintiffs’ employees who had the obligation to make the record in the regular course of business and who had the actual knowledge of the events recorded or received the information from someone within the business who had actual knowledge and was under a business duty to report the events to the maker of the records, and that the documents were made at the time of the transaction or occurrence or a reasonable time thereafter.

In Dan Medical, P.C. v NY Central Mutual Fire Ins. Co., 14 Misc 3d 44 (App Term, 2d Dept 2006), the plaintiff submitted the affidavit of its corporate officer stating that the documents attached to the plaintiff’s motion papers were its business records. The court held that the plaintiff “failed to demonstrate that the officer possessed sufficient personal knowledge of [its] office practices and procedures so as to lay a foundation for the admission of the annexed documents as business records.” (14 Misc 3d at 46).

Here, plaintiffs’ office manager had personal knowledge of plaintiffs’ business practices [*7]and procedures for creating the claims, as well as personal knowledge that the claims were mailed to defendant. Thus, her affidavit satisfies the requirements for admitting in evidence as business records the claims and annexed documents.

Moreover, plaintiffs’ office manager set forth in her affidavit the amounts plaintiffs billed defendant for the services at issue and the date on which she mailed the claims to defendant, and she states that defendant did not pay or timely deny the claims. She also refers to the claim forms and other documents annexed to plaintiffs’ papers which indicate the dates of service and types of services provided by plaintiffs.

In PDG Psych., P.C. v Ntl. Grange Mut. Ins. Co., 14 Misc 3d 136(A), 2007 NY Slip Op 50242(U) (App Term, 2d & 11th Jud Dists 2007), the court held that the plaintiff’s officers’ affidavit was too vague and conclusory to support plaintiffs’ prima facie case as the officer did not identify what services were rendered, when they were rendered, the amounts which were owed or the dates on which the claims were mailed, but only alleged that the bills were accurate and that proof of mailing was available for inspection.

Here, the affidavit references the annexed documents for which a sufficient evidentiary foundation was laid, thereby providing the specific details of the amounts billed, the dates of service and services rendered, and the date the claims were mailed. Consequently, the affidavit was sufficient to satisfy plaintiffs’ prima facie burden.

I thus find that as defendant failed to demonstrate that there has been any change in the law that would change the prior determination, leave to renew is denied.

IV. SHORT SERVICE

In its reply, defendant claims that plaintiffs did not serve their opposition to its motion by March 16, 2007, the date agreed to in the parties’ stipulation dated February 26, 2007. (Frischling Reply Aff.).

While plaintiffs’ affidavit of service of the opposition papers reflects that the papers were served on March 19, 2007, defendant replied on the merits to the papers and alleges no prejudice. I thus find that it waived plaintiffs’ late service. (See Piquette v City of New York, 4 AD3d 402 [2d Dept 2004] [although motion made on insufficient notice, plaintiffs waived objection to it by opposing it on merits]; Adler v Gordon, 243 AD2d 365 [1st Dept 1997] [petitioner waived right to contest late service of motion by opposing it on merits]).

V. CONCLUSION

Accordingly, defendant’s motion for leave to reargue is granted and re-argument is denied, and defendant’s motion for leave to renew is denied. This constitutes the decision and order of the court.

_______________________________

Barbara Jaffe, JCC

DATED:May 21, 2007

New York, New York [*8]

[*1]

[*2]Civil Court of the City of New York, Queens County, May 14, 2007

APPEARANCES OF COUNSEL

Cohen & Jaffe, Lake Success (Richard S. Jaffe and Stefan Belinfanti of counsel), for plaintiff. Shapiro, Beilly, Rosenberg, Aronowitz, Levy & Fox, LLP, New York City (Shelly Hefefz of counsel), for defendant.

OPINION OF THE COURT

Diane A. Lebedeff, J.

Currently, torrents of no-fault litigation deluge New York courts and no-fault requests for accelerated judgment swell our motion calendars.^[FN1] Adding to the turmoil is that no-fault [*3]summary judgment motions pose undeniable difficulties, in large part, because traditional summary judgment formulations give poor guidance for their ready resolution.

Building a more workable approach to no-fault summary judgment motions requires recognition that the bulk of no-fault summary judgment issues are decided on the sufficiency of the papers and arguments of law regarding specific no-fault technicalities, as well as explicit identification of no-fault variations of traditional summary judgment precepts.^[FN2] Using that foundation, construction of a series of relevant inquiries produces the following four-step analysis for no-fault summary judgment motions: (1) a threshold review of the three requisite showings of a no-fault plaintiff’s prima facie case; (2) an assessment of the insurer’s tendered proof of issuance and service of its response, if any; (3) a regulatory compliance review of any properly served insurer response, weighing a response’s timeliness, form and substance; and (4), finally, a search for triable issues of fact in relation to any properly preserved, otherwise precludable defenses, as well as of defenses independent of the response process. This decision concentrates on these four areas of inquiry, with amplification and qualifications footnoted.

This same analysis is adaptable to identification of trial issues in no-fault cases and—by starting with the second step—to insurers’ motions and cross motions for summary judgment. In relation to the case before the court, the plaintiff’s motion and insurer’s cross motion for summary judgment are subjected to the above pattern of analysis and, near the end of this decision, special consideration is given to the fee schedule dispute posed.

Step 1: Plaintiff’s Prima Facie Threshold Review

As a matter of law, a no-fault plaintiff’s summary judgment showing is extremely limited [*4]and is free of the normal summary judgment obligation to rebut defenses.^[FN3] A no-fault plaintiff’s necessary prima facie showing consists of only three scant elements.

First, the claimant must present in its original motion papers the claim and assignment forms it submitted to the insurer (see, A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 127[A], 2005 NY Slip Op 50432[U] [App Term, 2d & 11th Jud Dists 2005] [as to claim form]; see, Inwood Hill Med. P.C. v Allstate Ins. Co., supra, 2004 NY Slip Op 50565[U], *7; T&G Med. Supplies, Inc. v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 1017[A], 2005 NY Slip Op 50636[U] [Civ Ct, NY County 2005]). Second, necessary to a proper evidentiary foundation for the forms and related documents, a supporting affidavit must establish the tendered records are part of plaintiff’s business records (see CPLR 4518 [a]; North Acupuncture, P.C. v State Farm Ins. Co., 14 Misc 3d 130[A], 2006 NY Slip Op 52523[U], *2 [App Term, 2d & 11th Jud Dists 2006]).^[FN4] Third, the no-fault plaintiff must prove that the claim and assignment forms were served upon the insurer.^[FN5] [*5]

The adequacy of plaintiff’s motion is tested by inspecting the plaintiff’s affidavits and exhibits for sufficiency. If these three elements are made out and stand unrefuted, a no-fault plaintiff is entitled to a determination that it has made out its prima facie case.^[FN6]

Step 2: Assessment of Proof of Issuance and Service of Insurer’s

Denial or Unsatisfied Request

Because no-fault plaintiffs’ summary judgment motion papers need not counter pleaded denials and affirmative defenses, insurers bear the entire burden of establishing the existence of cognizable defenses (see generally, Mitchell S. Lustig and Jill Lakin Schatz, Outside Counsel, Summary Judgment Motions: Defending No-Fault Insurer, NYLJ, Oct. 26, 2005, at 4, col 4). This second analytic stage reviews the insurer’s opposition papers to determine whether the insurer makes a threshold showing that it preserved a precludable defense or that unsatisfied verification requests exist.

Just as a plaintiff must do, and by reason of similar case law standards, the insurer must advance copies of all relevant communications, prove the service of each, and establish a [*6]business record foundation (see, Mitchell S. Lustig and Jill Lakin Schatz, Outside Counsel, Proper Proof of Mailing Under NY No-Fault Law, NYLJ, Oct. 2, 2006, at 4, col 4 [as to insurer’s proof of mailing]). If the insurer claims an unsatisfied request is outstanding, the insurer must submit a copy of the original request and a follow-up request, establish issuance and service of the requests, and supply evidence of the failure to respond or cooperate (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2006]; Psychological Practice, P.C. v State Farm Fire & Cas. Co., 16 Misc 3d 12, 13 [App Term, 2d Dept 2007] [general statement of affiant’s “personal knowledge” not sufficient factual support to establish failure to appear for examination]).^[FN7] However, if the insurer issued a denial while a verification request was outstanding, the request is deemed waived and is disregarded (King’s Med. Supply Inc. v Kemper Auto & Home Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50450[U], *2 [App Term, 2d & 11th Jud Dists 2005]).

Step 3: Regulatory Compliance Review of Timeliness and Form

of No-Fault Insurer’s Denial or Verification Requests

If the defendant does establish that it issued and served a denial or verification requests, each communication must be examined to determine if it serves as a proper defense by conforming in timing, form and substance with the requirements of the “Rube-Goldberg-like maze” of the No-Fault Law and the “thicket” of governing Insurance Department regulations (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., supra, 90 NY2d at 286, 280).^[FN8]

In relation to timeliness, the insurer must provide proof of “when the . . . [denial or] request . . . was mailed” (I & B Surgical Supply v New York Cent. Mut. Fire Ins. Co., 16 Misc 3d 4, 6 [App Term, 2d & 11th Jud Dists 2007]), and show mailing within the appropriate time period (see n 2). Typically, an insurer’s affidavit refers to the date of [*7]printing of the form and describes a procedure which assured a properly addressed envelope containing the form was mailed on that day or the next business day.

As to form and substance of a denial, a “proper denial of claim must include the information called for in the prescribed denial of claim form . . . and must ‘promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated’ ” and cannot be amended after the applicable time period has passed (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664 [2d Dept 2004], quoting General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979]). A denial is deficient if it is “factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law” (id. at 665, quoting Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d Dept 2004]).^[FN9]

In relation to the form of a verification request, it must “request . . . information . . . relative to . . . [the] claim” from the claimant or identify to the claimant the persons or entities asked to provide the information (Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [2d Dept 1999]; Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2d Dept 2005] [“delay” letter explaining investigation underway not a verification request]). Belated litigation objections that such requests are unclear are generally rejected (Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 [2d Dept 1999] [“Any confusion . . . as to what was being sought should have been addressed by further communication, not inaction”]; Metroscan Med. Diagnostics, P.C. v Progressive Cas. Ins. Co., 15 Misc 3d 126[A], 2007 NY Slip Op 50500[U], *2 [App Term, 9th & 10th Jud Dists] [fact of response showed request sufficiently clear]).

On these issues, the court reaches a straightforward determination of law unless some cognizable question of ambiguity is raised by a litigant (compare Foley Prods. v Singer Corp., 133 AD2d 531 [4th Dept 1987] [where no ambiguity in document, no deferral for factual exploration]). Dismissal on the ground of prematurity follows if proper unsatisfied outstanding verification requests are established. Where a proper and timely denial is found, the court proceeds to the next analytic step.

Step 4: Summary Judgment Evaluation of Properly Cognizable Defenses[*8]

Only at this final stage are typical summary judgment principles applied to those defenses found preserved and unprecluded, as well as to any independent defenses, with recognition that the defendant bears the burden on such defenses for reasons set forth above.^[FN10] Some defenses can be resolved as a matter of law and others on the basis of evidentiary standards appropriate to the nature of the case. In ruling on such motions, when appropriate, courts should preserve judicial resources and not shy away from granting partial relief as to predicate elements where the record does not support a full determination (CPLR 3212 [e], [g]).

The point upon which opposition papers frequently stumble is the failure to present evidentiary material in admissible form (New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512, 513 [2d Dept 2006]; CPLR 3212 [b]).^[FN11] However, because summary judgment may be defeated when the opponent raises a “significant doubt” regarding the existence of “a material, triable issue of fact,” an insurer may avail itself of the alternative of an opposition affidavit which[*9]“set[s] forth names of witnesses, the substance of their testimony, how it was known what their testimony would be, and how the witnesses acquired their knowledge” (Phillips v Kantor & Co., 31 NY2d 307, 311-312 [1972]).^[FN12]

With respect to fee schedule disputes, special treatment is appropriate once, as here, the insurer establishes a timely denial objecting that a charge was not a permissible scheduled fee.^[FN13] Where a fee for medical services or goods does not have a fixed value in the applicable fee schedule and no comparable charge is shown, it is typically found that the fee schedule dispute raises a triable issue (see, for example, A.B. Med. Servs., PLLC v American Tr. Ins. Co., 15 Misc 3d 132[A], 2007 NY Slip Op 50680[U] [App Term, 2d & 11th Jud Dists 2007]).

Conclusion and Application

In the captioned matter, plaintiff moves, and the insurer cross-moves, for summary judgment. The plaintiff has made out a prima facie case, with the insurer admitting receipt of the [*10]two subject claims (step 1); denials are shown to have been issued and served (step 2); the denials are proper in timeliness, form and substance, and preserved fee schedule objection (step 3); and the fee schedule disputes pose triable issues of fact (step 4).

As to the cross motion, the insurer does not establish a proper scheduled fee for the goods at issue and does not show a properly comparable fee. Although the insurer does establish that a verification request was unanswered, it presents no argument of law as to why such request should not be held waived by reason of the denial nor urge that the motion is premature because of outstanding discovery related to matters within the exclusive knowledge of the movant (CPLR 3212 [f]; 3101; Lexington Acupuncture, P.C. v State Farm Ins. Co., 12 Misc 3d 90 [App Term, 2d & 11th Jud Dists 2006]).

Based on the foregoing, the motion and cross motion are granted to the extent that it is determined that plaintiff has established its prima facie case and that triable issues of fact exist as to proper scheduled fees, and they are otherwise denied.

Footnotes

Footnote 1: “No-fault” litigation is brought by medical establishments pursuing insurers for payment of assigned economic loss claims of motor vehicle accident victims. Starting in 2002, a majority of no-fault claimants began to choose litigation over arbitration (Robert A. Stern, Take the Money and Run: The Fraud Crisis in New York’s No-Fault System, 75 NY St BJ 35, 35 [Oct. 2003] [“(b)etween 1999 and 2002, arbitrations and court actions reversed places in the volume of cases filed”]), and they continue to do so in increasing numbers. Statistics portray the consequences. In calendar year 2006 alone, the New York City Civil Court had approximately 100,000 new no-fault case filings, of which roughly 70,000 were filed in Queens County Civil Court. In Queens County Civil Court, on a typical 2007 court day, a trial judge may be assigned two to seven no-fault trials and, on the summary judgment no-fault motion calendar, 100 or so motions may appear; considering a larger time frame of the last six months of 2006 in that same court and all types of no-fault motions, a total of almost 11,000 no-fault motions were resolved on the no-fault motion calendars, with more than 3,000 cases marked disposed, primarily by and before this judge.

Footnote 2: The technical issues involve the no-fault system’s “tightly timed process of claim, disputation and payment” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 281 [1997]; Insurance Law § 5101 et seq.; 11 NYCRR 65-1.1 et seq.; see , last updated Feb. 2, 2007, for Insurance Department Web site links to the No-Fault Law, regulations, forms, opinion letters and frequently asked questions).

The process of claim submission and insurer response, and the computation of time periods, are well summarized elsewhere (see Inwood Hill Med. v Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 NY Slip Op 50565[U], *4-7 [Civ Ct, NY County 2004, Hagler, J.]; see also Metroscan Imaging v American Tr. Ins. Co., NYLJ, Dec. 10, 1999, at 27, col 5 [Civ Ct, NY County 1999, Karen Smith, J.] [addressing “old” regulations in effect prior to Apr. 5, 2002]). Briefly put, once a claim is submitted (11 NYCRR 65-3.11 [b]), payment is subject to the “30 day rule” (11 NYCRR 65-3.8 [a] [1]), with a default of timely payment entitling a claimant to sue for payment of an overdue claim (Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2d Dept 2004]). While a failure to issue a timely denial precludes an insurer from subsequent objection to the sufficiency or propriety of the claim form submitted (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., supra, 90 NY2d at 278), a timely denial preserves the stated objections for litigation. Unsatisfied insurer requests support dismissal of claims.

Footnote 3: A no-fault plaintiff’s substantive proof of its claim is the claim form (Insurance Law § 5106 [a] [claim form gives “proof of the fact and amount of loss sustained”]; 11 NYCRR 65-1.1 [d] [Sec I, Conditions, Proof of Claim] [claim form proves “particulars of the nature and extent of the injuries and (health benefits) received and contemplated”]; Dermatossian v New York City Tr. Auth., 67 NY2d 219, 224 [1986] [“to receive payment (a claimant) need only file a ‘proof of claim’ (which) the insurers are obliged to honor”]). The exemption from the normal summary judgment motion requirement that a movant “show that there is no defense to the cause of action” (CPLR 3212 [b]) arises because courts have perceived that the “clear legislative mandate to facilitate the prompt and efficient resolution of first-party no-fault claims” requires that a litigating no-fault claimant be subjected to “[no] greater burden of proof after the action is commenced than was necessary at the claim stage” (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], *3 [App Term, 2d & 11th Jud Dists 2003]; see Global Med. Equip., Inc. v Allstate Ins. Co., 15 Misc 3d 131[A], 2007 NY Slip Op 50675[U], *1 [App Term, 2d & 11th Jud Dists 2007] [plaintiff need not show denial untimely]).

Footnote 4: Such an affidavit must show the affiant “possessed sufficient personal knowledge of plaintiff’s office practices and procedures so as to lay a foundation for the admission of the . . . documents as business records” (Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44, 46 [App Term, 2d & 11th Jud Dists 2006] [affiant’s unelaborated description as “corporate officer” insufficient]; Vista Surgical Supplies, Inc. v Allstate Ins. Co., 15 Misc 3d 126[A], 2007 NY Slip Op 50502[U] [App Term, 9th & 10th Jud Dists 2007] [conclusory statement that documents were business records insufficient]; Pine Hollow Med., P.C. v Progressive Cas. Ins. Co., 13 Misc 3d 131[A], 2006 NY Slip Op 51870[U] [App Term, 2d & 11th Jud Dists 2006] [proper proffer by affidavit of employee of billing company]).

Footnote 5: Service of both the no-fault claim and assignment forms is established by an actual affidavit of mailing or by proof of “an office practice and procedure followed . . . in the regular course of . . . business . . . geared so as to ensure the likelihood that [the item] is always properly addressed and mailed” (Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830 [1978]). A post office receipt may supply additional “direct proof of actual mailing” (LMK Psychological Servs., P.C. v Liberty Mut. Ins. Co., 30 AD3d 727, 728 [3d Dept 2006]) provided evidence relates the receipt to an identified mailing (New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 548 [2d Dept 2006]). A conclusory affidavit of service is insufficient (A.B. Med. Servs. PLLC v Specialty Natl. Ins. Co., 11 Misc 3d 144[A], 2006 NY Slip Op 50810[U], *2 [App Term, 2d & 11th Jud Dists 2006] [finding deficient statement affiant “issued,” “billed out,” and “sent” claims]). A proper showing of mailing gives rise to a presumption of receipt and an insurer asserting it did not receive a claim bears a heavy burden to overcome that presumption (see, for example, Maldonado v Steiner, 10 Misc 3d 128[A], 2005 NY Slip Op 51905[U] [App Term, 2d & 11th Jud Dists 2005]).

A plaintiff may tender an insurer’s denial of claim form as an acknowledgment of receipt as its business record (see Medical Expertise v Trumbull Ins. Co., 196 Misc 2d 389, 390-394 [Civ Ct, Queens County 2003, Siegal, J.]; but see Midborough Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132[A], 2006 NY Slip Op 51879[U], *2 [App Term, 2d & 11th Jud Dists 2006] [such tender establishes no other element of plaintiff’s prima facie case]).

Footnote 6: Rarely, an estoppel or a triable issue of fact arises from an actual or possible error in a claim or assignment form (see Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], *4 [App Term, 2d & 11th Jud Dists 2003] [estoppel as to items not prescribed]; Amaze Med. Supply v Eagle Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50389[U] [App Term, 2d & 11th Jud Dists 2003] [same, items not delivered to assignor]; see generally, Resnick v Levine, 80 AD2d 699 [3d Dept 1981] [as to errors in business ledgers]; see, Damadian MRI in Garden City, P.C. v Windsor Group Ins., 2 Misc 3d 138[A], 2004 NY Slip Op 50266[U], *2 [App Term, 2d & 11th Jud Dists 2004] [“whether plaintiff is the same entity as the one named in the assignment” can be question of fact] [as to assignment]). Dismissal is warranted where the claim form discloses services were performed by an independent contractor, rather than by claimant (see Rockaway Blvd. Med. P.C. v Progressive Ins., 9 Misc 3d 52, 54 [App Term, 2d Dept 2005]).

Footnote 7: These requirements apply to verification requests, as well as requests for appearance at an examination under oath and independent medical examination. A failure to appear for a “preclaim” examination may be viewed as a lack of cooperation which defeats coverage (see Inwood Hill Med., P.C. v General Assur. Co., 10 Misc 3d 18 [App Term, 1st Dept 2005]), but a plaintiff may render the question a triable issue of fact by offering “a valid excuse for . . . [the] nonappearance [or demonstrate] that the . . . requests were unreasonable under the circumstances” (Amaze Med. Supply Inc. v General Assur. Co., 12 Misc 3d 127[A], 2006 NY Slip Op 50910[U], *1-2 [App Term, 2d & 11th Jud Dists 2006]).

Footnote 8: This review follows the pattern of CPLR 3212 (g) in that the court—”by examining the papers” and “interrogating counsel”—reaches a determination of operative legal facts “deemed established for all purposes in the action” which are “not in dispute or are incontrovertible,” often winnowed during oral argument. This process permits the trial court to comply with the mandatory obligation to take judicial notice of state agency regulations (CPLR 4511 [a]) and be alerted to new appellate decisions not covered in papers prepared over as long as a nine-month period (see Socrates Psychological Servs., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 642, 645 n 1 [Civ Ct, Queens County 2005]).

Footnote 9: Typical denials assert a defective assignment of benefits, belated filing of the claim, a lack of medical necessity (whether for the treatment or inflation in the quantum or cost of treatment), and that a charge exceeds permitted fee schedules. In many instances, a clear statement of the objection is sufficient, and even medical necessity denials need not set out a medical rationale (A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d 778 [2d Dept 2007], revg 12 Misc 3d 30 [App Term, 2d & 11th Jud Dists 2006]; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2d Dept 2007]; New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832 [2d Dept 2007]). A rejection for untimely filing must “advise claimants of their right to justify late submissions” or be “deemed ineffective” (Radiology Today, P.C. v Citiwide Auto Leasing Inc., 15 Misc 3d 92, 94 [App Term, 2d & 11th Jud Dists 2007]).

Footnote 10: There are roughly three classes of additional independent defenses. First, some center upon arguments “that the alleged injury does not arise out of an insured incident,” often by asserting a “staged accident” or an independent basis for the injury (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; see also 11 NYCRR 65-3.8 [e]; A.B. Med. Servs. PLLC v Commercial Mut. Ins. Co., 12 Misc 3d 8, 11 [App Term, 2d & 11th Jud Dists 2006] [assignee health care provider not an “innocent” third party and may be subject to retroactive cancellation of fraudulently procured policy]). Second, some urge a lack of eligibility to receive no-fault payments under no-fault or other rules applicable to the medical provider, the patient, or the insured (see, for example, State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 320 [2005] [improper professional corporation]). Third, albeit less commonly seen, traditional defenses exist, such as statutes of limitations, exhaustion of policy benefits, and the like.

Footnote 11: Formal or substantive requirements apply to certain affidavits (Support Billing & Mgt. Co. v Allstate Ins. Co., 15 Misc 3d 126[A], 2007 NY Slip Op 50496[U], *1 [App Term, 2d & 11th Jud Dists 2007] [doctor must affix stamped facsimile signature (citing CPLR 2106)]; Bath Med. Supply, Inc. v Allstate Indem. Co., 13 Misc 3d 142[A], 2006 NY Slip Op 52273[U] [App Term, 2d & 11th Jud Dists 2006] [out-of-state affidavit needs certificate of conformity to comply with CPLR 2309 (c)]; see All County Open MRI & Diagnostic Radiology P.C. v Travelers Ins. Co., 11 Misc 3d 131[A], 2006 NY Slip Op 50318[U], *2 [App Term, 9th & 10th Jud Dists 2006] [“peer review . . . conclud(ing) that there was no medical necessity due to ‘the lack of sufficient information’ upon which the reviewer could make such determination” deficient, absent proof of verification request for such information]). Exhibits should also be in admissible form or their proffer limited to admissible portions (see, as to police reports, Johnson v Lutz, 253 NY 124 [1930]; 58 NY Jur 2d Evidence and Witnesses § 480 [police reports, generally]; § 503 [police report as to cause of accident or injury]). And, even though “admissions by a party of any fact material to the issue are always competent evidence against [that party], wherever, whenever or to whomsoever made” (Reed v McCord, 160 NY 330, 341 [1899]), some formal requirements may be applicable to assure accuracy (see R.M. Newell Co. v Rice, 236 AD2d 843, 844 [4th Dept 1997], lv denied 90 NY2d 807 [1997] [proffer of reporter-certified unsigned deposition transcript]).

Footnote 12: Such showing is distinguished from a simple offer of proof because its proponent should “demonstrate acceptable excuse for [its] failure to meet the requirement of tender in admissible form” (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; see, Ratut v Singh, 186 Misc 2d 350, 351 [Civ Ct, Kings County 2000], and Vincent C. Alexander, New York Practice, Opposing Summary Judgment With Hearsay, NYLJ, Mar. 15, 2004, at 3, col 1 [discussing cases]; see Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co., 6 Misc 3d 62, 65 [App Term, 2d & 11th Jud Dists 2004, Golia, J., dissenting]). This type of opposition is likely to be tendered when a defense is “that the alleged injury does not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., supra, 90 NY2d at 199), or an insurer urges “badges of fraud” are present (see Tahir v Progressive Cas. Ins. Co., 12 Misc 3d 657, 664 [Civ Ct, NY County 2006, Lebedeff, J.] [collecting cases in dicta]).

Footnote 13: A medical provider must limit its charges to those permitted by approved fee schedules (Insurance Law § 5108 [a]; 11 NYCRR 68.0 [f]), which protects a patient from erosion of available benefits by inflated charges (Ops Gen Counsel NY Ins Dept No. 04-06-11 [June 16, 2004]; see AIU Ins. Co. v Olmecs Med. Supply, Inc., 2005 WL 3710370, *1-4, 2005 US Dist LEXIS 29666, *4-13 [ED NY 2005] [scheme to highly inflate durable medical goods claims]). Fees for services and procedures are governed by the workers’ compensation fee schedule (11 NYCRR 68.1), and durable medical goods fees are governed by the New York Medicaid fee schedule (11 NYCRR part 68, Appendix 17C, part F [a]; , last updated May 1, 2007). An attorney’s affirmation can request judicial notice of a scheduled fee and submit the page of the fee schedule applicable to the fee on the date of service or sale.

If an insurer demonstrates it was correct in its reading of the fee schedules or its identification of comparable procedures, it is entitled to judgment (Forrest Chen Acupuncture Servs., P.C. v GEICO Ins. Co., 15 Misc 3d 137[A], 2007 NY Slip Op 50874[U] [App Term, 2d & 11th Jud Dists 2007]; Great Wall Acupuncture v GEICO Gen. Ins. Co., 16 Misc 3d 23 [App Term, 2d & 11th Jud Dists 2007] [acupuncturist’s fee properly set as equivalent to chiropractor performing acupuncture]), unless the claimant shows “an unusual procedure or unique circumstance justifies the necessity” for a charge above the scheduled fee (11 NYCRR 68.4).

Civil Court of the City of New York, Kings County

047582/06

Attorney for Plaintiff:

Ilona Finkelshteytn, Esq.

2503 65th Street

Brooklyn, New York 111204

Attorney for Defendant:

Jaffe & Nohavicka

40 Wall Street – 12th Floor

New York, NY 10005

Alice Fisher Rubin, J.

Plaintiff commenced this action against the defendant to recover first party no-fault benefits pursuant to CPLR 5106(a) of the Insurance Law and Regulation of the New York State Insurance Department (11 NYCRR Sect. 65-1.1 et. seq.), for medical services rendered.

Plaintiff moves for summary judgment as a matter of law on the grounds that the claimants assigned their “no fault” benefits to plaintiff pursuant to the terms of the insurance policies sold by defendant, and the timely submission of invoices and/or bills to defendant in accordance with the New York State Insurance Law, were not denied or paid within 30 days, pursuant to the New York State Insurance Law. Defendant cross-moves for summary judgment and opposes plaintiff’s motion on the grounds that the denial was timely and based upon the

revocation of the assignment by the assignor, Richard Proctor.

The rule governing summary judgment requires the proponent of a summary judgment motion to make a prima facie showing of entitlement to summary judgment as a matter of law, offering sufficient evidence to eliminate any material issues of fact from the case” (Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]; Tortello v. Carlin, 260 AD2d 201 [1st Dept., 1999]). The burden of proof, as well as persuasion rests with the proponent of the summary judgment motion. Once the burden is satisfied, the opponent of the motion must produce sufficient evidence, in admissible form, establishing the existence of a triable issue of fact. [*2]

Pursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, an insurer is required to either pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim. (See, Insurance Law 5106[a]; 11 NYCRR 65.15[h]). Failure to pay benefits within the 30-day requirement renders the benefits “overdue,” and all overdue payments bear interest at a rate of 2% per month. In addition, the claimant is entitled to recover attorney’s fees where a “valid claim or portion” was denied or overdue. See, Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274, 660 N.Y.S.2d 536 (1997).

A plaintiff ordinarily establishes the submission of the claim forms by demonstrating that proof of proper mailing, which gives rise to the presumption that the claim forms were received by the addressee. The presumption may be created either by proof of actual mailing or by proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed. See, Residential Holding Corp., v. Scottsdale Ins. Co., 286 AD2d 679 [2001].

The plaintiff has annexed the affidavit of Kristina Meledina, billing manager, of the assignee, which makes reference to the plaintiff’s standard office mailing practices and/or procedures. The affidavit is sufficient to establish plaintiff’s mailing of its claim forms.

In addition, the court finds that the plaintiff has established its prima facie case, inasmuch as the defendant’s denial of claim forms which are annexed to defendant’s opposition papers as Exhibit “A,” as well as plaintiff’s moving papers, establish the dates of defendant’s receipt of the claim forms. See, PDG Psychological, P.C., (Jones) v. Utica Mut. Ins. Co., 11 Misc 3d 128[A], 2006 NY Slip Op. 50246[U][AT 2nd & 11th Jud. Dists.].

Defendant opposes plaintiff’s motion and cross-moves for summary judgment on the grounds that the denial was timely, as well as the fact that the assignment was revoked by the assignor, Richard Proctor. In support of its cross-motion, the defendant annexes a copy of the letter it received from Richard Proctor, which indicates that he was in fact involved in a car accident on 6/4/05, that he was requesting to drop all claims and that he would be willing to be held responsible for all medical bills.

After careful consideration of the moving papers, supporting documents and opposition thereto, the court finds that plaintiff is entitled to summary judgment as a matter of law.

In order for a provider to receive direct payment from an insurer under the no-fault regulation, the claims must have been assigned to the provider pursuant to an assignment containing language required by the regulation (See, 11 NYCRR 65-3.11[b][2].).

Plaintiff has annexed a copy of assignment of benefits form, which was signed by the assignor, Richard Proctor on June 4, 2005. [See, Exhibit “1” to plaintiff’s moving papers]. The defendant does not argue the validity of the assignment of benefits form, and there is no indication that same was an issue which verification was requested. The applicable rules and regulations are as follows: [*3]

§65.3-11 – Direct Payments

(a) An insurer shall pay benefits for any element of loss, other than death benefits, directly to the applicant or, when appropriate, to the applicants parent or legal guardian or to any person legally responsible for necessities, or, upon assignment by the applicant or any of the aforementioned persons, shall pay benefits directly to providers of health care services as covered under section five thousand one hundred two (a)(1) of this article….Emphasis added.

(2)(d) If an assignment has been furnished an insurer, the assignor or legal representative of the assignor shall not unilaterally revoke the assignment after the services for which the assignment was originally executed were rendered. If the assignment is revoked for services not yet rendered, the assignor or leal representative shall provide written notification to the insurer that the assignee has been notified of the revocation.

The services rendered by plaintiff-provider were rendered on 6/17/05 and 6/27/05, all of which total $304.79. The assignor’s revocation letter which is addressed to defendant is dated 6/25/05. Section 65.3-11 states that the assignor may not unilaterally revoke the assignment after services for which the assignment was originally executed were rendered. Therefore, the assignor could not revoke the assignment as to those services rendered on or before 6/25/07. The regulation also states that if the assignment is revoked for services not yet rendered, the assignor or legal representative shall provide written notification to the insurer that the assignee has been notified of the revocation.

The defendant has not submitted to this court, and the record is void as to a letter from the assignor that the assignee was notified of the revocation. The letter which is annexed to defendant’s cross-motion is a letter which merely states that the assignor is “requesting to drop all claims.” The defendant’s proof is insufficient to establish its prima facie entitlement to summary judgment.

Accordingly, summary judgment is hereby awarded in favor of plaintiff and against defendant in the amount of $304.79, with interest at 2% per month from 7/22/05, costs and attorney’s fees. Defendant’s cross-motion is hereby denied.

This constitutes the order of this Court.

Court Attorney to notify.

Dated: Brooklyn, New York

March ______, 2007

______________________________

Alice Fisher Rubin, J.C.C. [*4]

Civil Court of the City of New York, Kings County

011541/05

Peter P. Sweeney, J.

Plaintiff Primary Psychiatric Health, P.C. commenced this action to recover assigned first-party no-fault benefits for psychological services that it provided to multiple assignors. The parties appeared before the undersigned for trial on November 9, 2006. At that time, the only open claims were for psychological services provided to assignors Everald Poole and Terry Johnson.

Before the trial began, the parties stipulated to the elements of plaintiff’s prima facie case. Defendant’s sole defense to the claims was that there was “no coverage at all” under its policy because neither of plaintiff’s assignors suffered a psychological injury as a result of the underlying motor-vehicle accident. Citing Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195 [1997], counsel for the defendant maintained that this defense is non-waivable and not subject to the 30 day preclusion rule.

Plaintiff rested without calling any witnesses. Defendant called two witnesses, Dr. Michael Rosenfeld and Dr. Samuel M. Rock.

Dr. Rosenfeld testified that he performed an independent psychological examination of Everland Poole on February 25, 2003 at defendant’s request. As part of his examination, he interviewed Mr. Poole to determine the nature and onset of his psychological complaints. Dr. Rosenfeld maintained that such an interview is standard practice and an essential component of a psychological examination. He further testified that he relied upon the information Mr. Poole gave him during the interview in forming his professional opinion and that psychologists routinely rely upon such information in forming professional opinions.

Plaintiff’s counsel objected and maintained that anything said by Mr. Poole during the interview was hearsay. He further maintained that since no evidence was presented demonstrating that the information provided by Mr. Poole was reliable, Dr. Rosenfeld could not rely upon such information as a basis for his opinion.

The court reserved decision and permitted Dr. Rosenfeld to testify over the objection. The parties were directed to brief the issue and the court agreed that it would consider striking Dr. Rosenfeld’s opinion testimony if plaintiff prevailed on the objection.

Dr. Rosenfeld testified that when he asked Mr. Poole to describe his psychological [*2]complaints, Mr. Poole gave him no indication that he had suffered a psychological injury. He made no complaints of suffering from any type of psychological symptomology.

Dr. Rosenfeld testified he proceed to conduct a full psychological examination of Mr. Poole and that the examination was in all respects “unremarkable.” Based upon his examination, he opined that Mr. Poole did not sustain a psychological injury as a result of the accident.

Dr. Rock was the next to testify. Dr. Rock performed an independent psychological examination of Terry Johnson at defendant’s request on April 2, 2003. He also conducted an interview of his subject as part of his examination. Plaintiff’s counsel again objected and maintained that Dr. Rock should not be allowed to base his opinion on the information he obtained from Mr. Johnson during the interview because such information was hearsay and no evidence was presented demonstrating that the information was reliable. The court again reserved decision and allowed Dr. Rock to testify over objection.

Dr. Rock testified that Mr. Johnson told him, in sum and substance, that he had no psychological complaints whatsoever following the accident. He further testified that all other aspects of his examination were within normal limits. He opined that Mr. Johnson did not suffer a psychological injury as a result of the accident.

Upon reviewing and evaluating the evidence and the memorandums of law submitted by the parties, and having had the opportunity to assess the credibility of the witnesses, the Court makes the following findings of fact and conclusions of law.

Discussion:

The covering language contained in the Mandatory Personal Injury Protection Endorsement (PIP Endorsement), obligated the defendant to “pay first-party benefits to reimburse for basic economic loss sustained by an eligible injured person on account of personal injuries caused by an accident arising out of the use or operation of a motor vehicle or a motorcycle during the policy period and within the United States of America, its territories or possessions, or Canada” (11 NYCRR 65-1.1 [emphasis added] ). While an insurer is generally precluded from raising any defense to a claim for first-party no-fault benefits where the claim was not denied within 30 days of its receipt, as here, (Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 [1997], failure to deny a claim within 30 days does not preclude an insurer from defending a claim “on a strict lack of coverage ground” (Central General Hosp. v. Chubb Group of Ins. Companies, 90 NY2d 195, 198 [1997] ). Stated differently, “the preclusion remedy does not apply to a defense of no coverage at all” (90 NY2d at 202).

Since the coverage provided by the PIP Endorsement is for “personal injuries caused by an accident arising out of the use or operation of a motor vehicle or motorcycle“, if defendant is correct in its assertion that Mr. Pool and Mr. Johnson did not sustain a psychological injury as a result of the accident, the court agrees that there would be “no coverage at all” for the claims. Defendant did not have to establish that it timely denied the claims to assert this defense.

In the instant case, after plaintiff’s prima facie case was established, defendant’s experts, Dr. Rosenfeld and Dr. Rock, presented unrebutted testimony that neither of Mr. Poole or Mr. Johnson sustained a psychological injury as a result of the underlying motor vehicle accident. The court fully credits the opinions of both psychologists and finds that there is no coverage for the claims.

The court rejects plaintiff’s contention that Dr. Rosenfeld and Dr. Rock should have been [*3]precluded from basing their professional opinions, in part, on the information obtained from plaintiff’s assignors during the independent psychological examinations. While it is true that an expert witness must generally rely on facts “in the record or personally known to the witness”(Cassano v. Hagstrom, 5 NY2d 643, 646 [1959], rearg. denied 6 NY2d 882 [1959] ), “[u]nder the professional reliability exception, material not in evidence may be used to formulate an expert’s opinion provided that the material not in evidence is of the kind accepted in the profession as a basis in forming an opinion, and the material not in evidence is accompanied by evidence establishing its reliability” (Scanga v. Family Practice Associates of Rockland, P.C., 27 AD3d 547, 548 [2nd Dep’t 2006]; citing, Hambsch v. New York City Tr. Auth., 63 NY2d 723, 726 [1984]; People v. Sugden, 35 NY2d 453, 460-461 [1974] ; Wagman v. Bradshaw, 292 AD2d 84, 85 [2nd Dep’t 2002] ). Once the predicates of the exception have been met,” hearsay testimony given by [an] expert . . . for the limited purpose of informing the [fact finder] of the basis of the expert’s opinion and not for the truth of the matters related’ is admissible” (People v Wright, 266 AD2d 246, 247 [1999], lv denied 94 NY2d 831 [1999], quoting People v Campbell, 197 AD2d 930, 932-933 [1993], lv denied 83 NY2d 850 [1994]).

Defendant demonstrated that the information provided by plaintiff’s assignors during their psychological examinations is of the kind of out-of-court material accepted in the field of psychology as a basis in forming a professional opinion. Indeed, plaintiff concedes this point. Plaintiff correctly asserts, however, that no evidence was presented demonstrating that the information provided by plaintiff’s was reliable.

In Home Care Ortho. Med. Supply, Inc. v American Manufactures Mut. Ins. Co., 2007 NY Slip Op 50302(U) [App. Term, First Dep’t 2006], the Appellate Term held that the lower court erred in precluding defendant’s expert “from testifying because his opinion [was] based, at least in part, on his review of the assignors’ medical records.” The court reasoned that “[p]laintiff may not be heard to challenge the reliability of the assignors’ medical records and reports, which, in response to defendant’s verification requests, were affirmatively relied upon by plaintiff as proof of claim” (id.); see also, Cross Continental Medical, P.C. v. Allstate Ins. Co., 822 NYS2d 356, 357 {13 Misc 3d 10} [App. Term, First Dep’t 2006] ).

In this court’s view, the holding in Home Care Ortho. Med. Supply, Inc. is consistent with the legislative policy reflected in the numerous provisions of the No-Fault Law which provide for the prompt verification and disposition of claims (Motor Vehicle Acc. Indemnification Corp. v. Aetna Cas. & Sur. Co., 89 NY2d 214, 222 [1996]; Presbyterian Hosp. in City of New York v. Maryland Cas. Co., 90 NY2d 274, 281[1997]; Dermatossian v. New York City Tr. Auth., 67 NY2d 219, 224-225 [1986]; Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 827 NYS2d 217, 220 {35 AD3d 720} [2nd Dep’t 2006] ).

In this case, the interviews conducted by defendant’s examining psychologists were essential components of the psychological examinations defendant had requested as additional verification of the claims. There is no basis to treat the information that was obtained from these interviews differently from information that defendant had obtained from the medical reports and records in Home Care Ortho. Med. Supply, Inc. In both cases, the information was obtained by the defendant in response to a verification request. The court therefore holds that the plaintiff in this case cannot challenge the reliability of the information obtained by defendant’s examining [*4]psychologists during the interviews.

In Home Care Ortho. Med. Supply, Inc., it was the plaintiff that provided the verification whereas in this case, it plaintiff’s assignors provided the verification. This distinction, in the court’s view, is irrelevant. Certainly, if plaintiff’s assignors were prosecuting this action, under Home Care Ortho. Med. Supply, Inc., they could not challenge the reliability of any verification they provided to the defendant in response to a verification request. Since an assignee “stands in the shoes” of an assignor and acquires no greater rights than its assignor (Long Island Radiology v. Allstate Ins. Co., 36 AD3d 763 [2nd Dep’t 2007]; Arena Const. Co. v. Sackaris & Sons, 282 AD2d 489 [2nd Dep’t 2007] ), logic dictates that an assignee should be estopped from challenging the reliability of verification provided by its assignor. This is especially true given the fact that the No-Fault regulations entitle insurers to obtain verification directly from eligible injured persons (11 NYCRR 65-3.5( c), 11 NYCRR 65-3.5(d); 11 NYCRR 65-1.1).

For all of the above reasons, it is hereby

ORDERED that judgment be entered in favor of the defendant dismissing the claims.

This constitutes the decision and order of the court.

Dated:March 27, 2007________________________________

PETER P. SWEENEY

Civil Court Judge

[*1]

Civil Court of the City of New York, New York County, March 12, 2007

APPEARANCES OF COUNSEL

Votto, Cassata & Gullo, LLP, Staten Island (Michelle S. Titone of counsel), for defendant. Sanders, Grossman, Fass & Muhlstock, P.C., Mineola (Michael C. Rosenberger and Shayna Sacks of counsel), for plaintiff.

OPINION OF THE COURT

Shlomo S. Hagler, J.

Defendant New York Central Mutual Fire Insurance Company (NYCM) moves for an order “revising the attorney’s fees on plaintiff’s judgment in the above captioned matter, pursuant to 11 NYCRR 65-3.10 and 65-4.6.” Plaintiff Adam Marigliano, LMT, opposes the motion.

Background

Plaintiff medical provider sought to recover the sum of $1,593.67 in first-party no-fault benefits assigned to him by defendant’s insureds. Defendant denied the claims based on lack of medical necessity, overlapping services, failure to bill services in accordance with the no-fault fee schedule, and lack of causal relationships between the accidents and the injuries alleged. As a result of defendant’s denial and subsequent nonpayment of claims, plaintiff commenced this action in or about August 2005 by the filing and service of the summons and verified complaint. (Exhibit A to defendant’s motion.) Defendant interposed its answer in September 2005. (Id.) Thereafter, plaintiff filed his notice of trial. Defendant then moved for an order to vacate the notice of trial pursuant to 22 NYCRR 202.21 (e) and 208.17 (c), and compelling plaintiff, plaintiff’s assignor, and the treating physician to appear for depositions pursuant to CPLR 3124 and 3125. Plaintiff opposed the motion and cross-moved for an order granting him summary judgment pursuant to CPLR 3212 or, in the alternative, a protective order pursuant to CPLR 3103.

By decision/order dated July 25, 2006 (prior order), this court granted defendant’s motion to vacate the notice of trial and compel depositions of plaintiff and the treating physician only. This court also granted plaintiff partial summary judgment on his third, seventeenth, twenty-seventh and [*2]thirty-first causes of action, each for assignor Jose Contreras in the sum of $69.29 for a total of $277.16, “together with interest at the statutory rate of 2% per month pursuant to 11 NYCRR § 65-3.9 (a) and statutory attorney’s fees pursuant to 11 NYCRR § 65-4.6.” The parties were directed to settle judgment accordingly.^[FN1] (Exhibit B to defendant’s motion.)

Arguments

The gravamen of defendant’s motion is that plaintiff is only entitled to a single attorney’s fee award for the total or aggregate of all four bills and causes of action plaintiff brought on behalf of the same assignor, Jose Contreras. In sharp contrast, plaintiff argues that he is entitled to a separate attorney’s fee award for each of the four claims. In other words, plaintiff seeks payment of attorney’s fees on a “per claim” basis.

Attorney’s Fees

The current statutory authority governing first-party no-fault benefits is codified in the “Comprehensive Motor Vehicle Insurance Reparations Act” under article 51 of the Insurance Law (L 1984, chs 367, 805). This legislation is commonly referred to as the “No-Fault Law” because it provides a plan for compensation of victims of motor vehicle accidents for economic loss without regard to fault or negligence. (Montgomery v Daniels, 38 NY2d 41 [1975]; Oberly v Bangs Ambulance, 96 NY2d 295 [2001].) The general framework for payment of first-party benefits, including attorney’s fees, derives from Insurance Law § 5106 (a). It states as follows:

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

Regulation 68, 11 NYCRR Part 65

The Insurance Department is the governmental agency responsible for the administration of article 51 of the Insurance Law. In this capacity, the Superintendent of Insurance, interpreting Insurance Law § 5106, promulgated Regulation 68 and codified it under 11 NYCRR part 65.

Four sections of these regulations—sections 65-4.6, 65-3.10, 65-3.19 and 65-4.10 (j)—form the blueprint or outline for payment of attorney’s fees in first-party benefit actions. However, section 65-4.6 is the only section which applies to awarding attorney’s fees in a court action where the claimant is the prevailing party. The other sections are inapplicable to court actions as they refer to late payment of claims, offsets, arbitration and master arbitration awards. [*3]

Section 65-4.6 sets forth the limitations on attorney’s fees pursuant to Insurance Law § 5106 (a). The relevant portions of this section dealing with court actions are subdivisions (a), (c) and (e) as follows:

“(a) If an arbitration was initiated or a court action was commenced by an attorney on behalf of an applicant and the claim or portion thereof was not denied or overdue at the time the arbitration proceeding was initiated or the action was commenced, no attorney’s fees shall be granted. . . .

“(c) Except as provided in subdivisions (a) and (b) of this section, the minimum attorney’s fee payable pursuant to this subpart shall be $60. . . .

“(e) For all other disputes subject to arbitration, subject to the provisions of subdivisions (a) and (c) of this section, the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850.”

Nomenclature

The dispute between the parties partially stems from the imprecise nomenclature of terms that health providers, insurers and even courts utilize interchangeably in first-party benefit actions. This is primarily so because the Insurance Department’s regulations interpreting Insurance Law § 5106 (a) do not contain a section defining integral terms. They often misuse the common terms of “bill,” “claim,” and “cause of action.”

A bill should be defined as an account of the provider’s request for payment for treatment/services rendered and/or supplies provided. A “claim” under article 51 of the Insurance Law should be referred to as a “proof of claim”^[FN2] which is submitted as a “Verification of Treatment by Attending Physician or Other Provider of Health Service” (form NF-3), or less commonly, “Verification of Hospital Treatment” (form NF-4), or “Hospital Facility” (form NF-5) or their functional equivalents. Significantly, the forms provide the insurer with the name of the policyholder, name and address of the provider, policy number, date of accident, date of health care service, place of service, description of various treatment/service rendered and charges billed. Each “proof of claim” form may encompass a bill for a single service or treatment rendered or multiple bills for several treatments and/or services rendered on one or more dates.

The legal definition of cause of action is “[a] group of operative facts giving rise to one or more bases for suing; a factual situation that entitles one person to obtain a remedy in court from another person.” (Black’s Law Dictionary 235 [8th ed 2004].) [*4]

Payment of Attorney’s Fees

Claim Versus Cause of Action

One of the latest issues arising in the thicket of first-party no-fault regulations is whether attorney’s fees are awarded based on each “proof of claim” as defined above or computed through the aggregate of all bills, proofs of claim, and causes of action for the same assignor.

A majority of the trial courts which have dealt with this issue have awarded attorney’s fees based on each proof of claim. (See, e.g., Willis Acupuncture, P.C. v Government Empls. Ins. Co., 6 Misc 3d 1002[A], 2004 NY Slip Op 51702[U] [Civ Ct, Kings County 2004, Thomas, J.]; A.M. Med. Servs. P.C. v New York Cent. Mut. Fire Ins. Co., NYLJ, July 24, 2006, at 25, col 1 [Civ Ct, Queens County, Raffaele, J.]; Alpha Chiropractic P.C. v State Farm Mut. Auto Ins. Co., 14 Misc 3d 673 [Civ Ct, Queens County 2006, Siegal, J.]; Valley Stream Med. & Rehab, P.C. v Liberty Mut. Ins. Co., 15 Misc 3d 576 [Civ Ct, Queens County 2007, Lebedeff, J.].)

On the other hand, an informal opinion letter issued by the Office of the General Counsel of the Insurance Department on October 8, 2003 (exhibit C to defendant’s motion), and relied upon by one trial court in Marigliano v New York Cent. Mut. Fire Ins. Co. (13 Misc 3d 1079 [Civ Ct, Richmond County 2006, Sweeney, J.]), endorses the awarding of attorney’s fees based on the aggregate of all bills, proofs of claim, and causes of action for the same assignor.

While there is a plethora of cases in the Second Department on this complex issue, there do not appear to be any reported decisions in the trial and appellate levels of the First Department. Incredibly, this case appears to be one of first impression in the First Department even though the No-Fault Law was enacted more than 30 years ago. A proper review of this issue requires analysis of the legislative intent, statutory construction and historical perspective of Insurance Law § 5106 (a).

Legislative Intent

The noble and stated intent of the No-Fault Law was to create a new and improved insurance reparations system “which . . . assures that every auto accident victim will be compensated for substantially all of his [or her] economic loss, promptly and without regard to fault; [and] will eliminate the vast majority of auto accident negligence suits, thereby freeing our courts for more important tasks.” (Governor’s Mem approving L 1973, ch 13, 1973 McKinney’s Session Laws of NY, at 2335 [emphasis added]; Matter of Granger v Urda, 44 NY2d 91 [1978].)

The Court of Appeals also noted that the avowed purpose of the No-Fault Law was to “guarantee” “prompt and full compensation for economic losses . . . without the necessity of recourse to the courts[;] the Legislature acted reasonably to eliminate much of the wasted expenditures of premium dollars on expenses extraneous to treatment of injury.” (Montgomery v Daniels, 38 NY2d 41, 55 [1975] [emphasis added]; Insurance Law former § 675 [1].)

A lynchpin of the No-Fault Law was the prompt payment of victims’ claims under the so-called “30-day rule” as first-party benefits were “overdue if not paid within thirty days after the [*5]claimant supplies proof of the fact and the amount of loss sustained.” (Montgomery, 38 NY2d at 47, quoting Insurance Law former § 675 [1].)

“The Legislature provided that where an unpaid claim is overdue, as here, a claimant shall recover as part of his award his attorney’s reasonable fee (Insurance Law, § 675, subd 1 [now Insurance Law § 5106 (a)]). It is clear that the Legislature intended that an insurance company not be able to frustrate the operation of the statute [No-Fault Law] by throwing legal obstacles in the path of recovery.” (Matter of Simmons [Government Empls. Ins. Co.], 59 AD2d 468, 473 [2d Dept 1977].)

Thus, the Legislature intended to mandate the insurer’s strict compliance with the “30-day rule” to avoid the claimant resorting to judicial intervention by imposing one of the highest statutory interest rates payable at two percent per month as well as payment of attorney’s fees.

Statutory Construction

When construing a statute, a court “should consider the mischief sought to be remedied . . . and . . . should construe the act in question so as to suppress the evil and advance the remedy.” (McKinney’s Cons Laws of NY, Book 1, Statutes § 95; see also, T.D. v New York State Off. of Mental Health, 228 AD2d 95, 106 [1st Dept 1996]; Lincoln First Bank of Rochester v Rupert, 60 AD2d 193, 197 [4th Dept 1977].)

With this principle in mind, a fair reading of Insurance Law § 5106 (a) provides for payment of attorney’s fees on a “per claim” basis. The statute requires a claimant to supply the insurer with the “proof of the fact and amount of loss sustained.” This is tantamount to the claimant submitting to the insurer a “proof of claim” such as the NF-3, NF-4 or NF-5 forms or their functional equivalents. The statute further states that “[i]f proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied.” This infers that multiple treatments and services may be consolidated into a single “proof of claim” which is subject to the “30-day rule.” The triggering event which results in payment of interest and attorney’s fees is the insurer’s failure to pay a “valid claim or portion” thereof within 30 days. In other words, there is a cause and effect relationship. The “cause” is the insurer’s failure to timely pay any portion of the substantiated “proof of claim” and the “effect” is the insurer’s required payment of the claim with interest thereon and attorney’s fees. Simply stated, at the time any portion of the “proof of claim” becomes overdue, the insurer is liable to pay attorney’s fees for each overdue item.

As stated above, the legislative intent of the No-Fault Law was to promptly and fully compensate auto accident victims without judicial intervention. When an auto accident victim is forced to resort to litigation due to nonpayment of benefits, it frustrates the legislative intent to remedy “the mischief” and advance the goal of prompt and full compensation and to discourage litigation. Therefore, the payment of the victim’s attorney’s fees should be awarded for each “proof of claim” that becomes overdue.

Historical Perspective

There are at least three Second Department appellate decisions which have held that a claimant is entitled to recover statutory attorney’s fees on a “per claim” basis. (Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co., 207 AD2d 338 [2d Dept 1994]; Hempstead Gen. Hosp. v Insurance Co. of N. Am., 208 AD2d 501 [2d Dept 1994]; St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [2d Dept [*6]1995].)

What makes this issue perplexing is the brevity of each of the above appellate decisions which neither explained nor defined its usage of the term “claim.” Even the landmark case of Smithtown Gen. Hosp. v State Farm Mut. Auto Ins. Co. (supra) has been cited by both parties in support of their respective positions. Claimants assert the plain meaning of the term “claim” as actually a “proof of claim” (i.e., NF-3, NF-4, or NF-5). Insurers opine that the Smithtown court’s meaning of “claim” is really referring to 21 different causes of action and assignors. In other words, each cause of action for a different assignor constitutes a “claim.” A review of the Smithtown complaint and the briefs submitted to the Appellate Division indicates that the 21 claims at issue were actually 21 causes of action for 21 different assignors. Unfortunately, there were no two proofs of claim submitted for any one assignor. Therefore, no definitive determination of the issue may reasonably be adduced from the Smithtown holding.

However, there is an earlier Second Department decision in Mid-Island Hosp. v Empire Mut. Ins. Co. (120 AD2d 652 [2d Dept 1986]) which should end the controversy. In Mid-Island Hosp., plaintiffs served a complaint asserting five causes of action for nonpayment of first-party no-fault benefits. The first and second causes of action were brought by one of the plaintiffs, Mid-Island Hospital, on behalf of the same assignor, Mildred Koegel, for separate claims of $2,532 and $422. Plaintiffs argued they were entitled to additional “fees on fees” for prosecuting the action. The insurer took the position that plaintiffs were only entitled to payment of the then statutory minimum payment of $50 per claim for each cause of action and no “fees on fees” were authorized under the applicable statute. The Appellate Division affirmed the trial court’s finding that “plaintiffs were entitled to attorney’s fees of $50 on each of their five causes of action, as each claim was settled prior to commencement of the instant action.” (Id. at 653.) Significantly, the Appellate Division held that plaintiff Mid-Island Hospital was entitled to attorney’s fees of $50 for each of the two claims that it brought on behalf of Ms. Koegel. The Mid-Island Hosp. holding convincingly demonstrates that plaintiffs are entitled to be compensated for attorney’s fees for each proof of claim brought on behalf of the same assignor.

Insurance Department’s Opinion Letter of October 8, 2003

The Insurance Department’s opinion letter of October 8, 2003 is informal and not binding on any court. (State Farm Mut. Auto. Ins. Co. v Mallela, 372 F3d 500, 506 [2d Cir 2004]; Matter of Park Radiology v Allstate Ins. Co., 2 Misc 3d 621, 625 n 2 [Civ Ct, Richmond County 2003, Vitaliano, J.].)

Courts may defer to the government agency charged with the responsibility for administration of the particular statute “[w]here the interpretation of a statute or its application involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data and inferences to be drawn therefrom” (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459 [1980]). However, where

“the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent [as in this case], there is little basis to rely on any special competence or expertise of the administrative agency [the Insurance Department] and its interpretative regulations are therefore to be accorded much less weight. And, of course, if the regulation runs counter to the clear wording of a statutory provision, it should not [*7]be accorded any weight.” (Id.)

Similarly, where the Insurance Department’s interpretations of Insurance Law § 5106 (a) and its regulations are irrational and unreasonable, they will not be upheld. (Id.)

In this case, the Insurance Department’s opinion letter of October 8, 2003 limits the claimant’s recovery to the “total amount of individual bills disputed . . . regardless of whether one bill or multiple bills are presented as part of a total claim for benefits.” (Ops Gen Counsel NY Ins Dept No. 03-10-04 [Oct. 2003].) This is an irrational and unreasonable interpretation of the statutory construction of Insurance Law § 5106 (a), runs contrary to the legislative intent of providing claimants with prompt and full compensation, and ignores the historical perspective of the courts which have, at least, awarded the minimum attorney’s fees for each disputed claim which is resolved in favor of the claimant.

Accordingly, this court rejects the Insurance Department’s informal and nonbinding opinion letter of October 8, 2003, for reasons similar to those of several trial courts that have done so in the past. (Alpha Chiropractic P.C. v State Farm Mut. Auto Ins. Co., supra; Valley Stream Med. & Rehab, P.C. v Liberty Mut. Ins. Co., supra.)

Conclusion

Defendant’s motion to revise the attorney’s fees on the plaintiff’s judgment is denied as defendant failed to provide a copy of said proposed judgment and plaintiff is entitled to a minimum attorney’s fee of $60 for each of the four “claims” he asserted on behalf of his assignor, Jose Contreras. The parties are directed to settle the judgment accordingly.

Footnotes

Footnote 1: Neither party settled the judgment. Moreover, defendant failed to attach a copy of the proposed judgment that it seeks to revise.

Footnote 2: A “proof of claim” would be more accurate and avoid confusion because a “claim” can also be loosely defined as a “cause of action.” (Black’s Law Dictionary 264 [8th ed 2004].)

[*1]

Civil Court of the City of New York, Kings County, March 7, 2007

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City, for defendant. Gary Tsirelman, P.C., Brooklyn, for plaintiff.

OPINION OF THE COURT

Alice Fisher Rubin, J.

Plaintiff commenced this action against the defendant to recover first-party no-fault benefits pursuant to section 5106 (a) of the Insurance Law and Regulations of the New York State Insurance Department (11 NYCRR 65-1.1 et seq.), for medical services rendered.

Defendant moves for an order granting summary judgment in favor of defendant based on plaintiff’s attempt to relitigate a claim which was previously dismissed by the court, and imposition of sanctions against plaintiff’s counsel for having engaged in frivolous conduct.

Plaintiff opposes the motion on the grounds that the prior action was dismissed due to plaintiff’s failure to comply with discovery demands.

The plaintiff commenced this action against the defendant to recover first-party no-fault benefits pursuant to section 5106 (a) of the Insurance Law and the regulations, in the amount of $800 for acupuncture treatment allegedly rendered to the assignor, Cindy Hall, as a result of an automobile accident which occurred on July 27, 2002. Prior to this action, the plaintiff commenced an action against defendant State Farm on behalf of the same assignor, Cindy Hall, for the same services as indicated in this action.

In the prior action, after service of the summons and complaint, issue was joined and discovery demands were made on or about January 30, 2003. On May 10, 2004, the plaintiff served a notice of trial. The defendant moved to strike the notice of trial on the grounds that discovery had not been completed. Thereafter on June 28, 2004, the defendant served a supplemental demand for discovery. On June 29, 2004, the parties appeared before the Honorable Ellen Spodek, and the attorneys entered into a stipulation which marked the case off the trial calendar, and required plaintiff to provide all discovery on or before July 29, 2004. Due to plaintiff’s failure to comply with the discovery demands as stipulated to, the defendant moved for [*2]an order to dismiss plaintiff’s complaint for failure to comply. On May 10, 2005, the parties appeared before the Honorable Robin Garson. After oral argument on the motion, the court granted defendant’s order to show cause, and dismissed the action due to plaintiff’s failure to comply with the stipulation requiring plaintiff to comply with all outstanding discovery.

Thereafter, the plaintiff commenced the action which is the subject of defendant’s motion to dismiss, pursuant to CPLR 3212. Defendant argues that the plaintiff is attempting to relitigate the same bills which were the subject of the previous lawsuit. Defendant further argues that the bills in question do not involve different dates of service than the previous bills submitted under the prior action, and therefore plaintiff is estopped from relitigating the bills in issue due to the dismissal of plaintiff’s prior action.

In opposition to defendant’s motion to dismiss, the plaintiff argues that pursuant to CPLR 205, the plaintiff can recommence the action within six months after termination. Plaintiff argues that Judge Garson’s dismissal of the prior case limited her holding to the discovery stipulation only.

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

The plaintiff timely commenced the instant action against the defendant seeking the same relief that it sought in the prior action.

“CPLR 205. Termination of action” states as follows:

“(a) New action by plaintiff. If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if the plaintiff dies, and the cause of action survives, his or her executor or administrator, may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period.”

However, this court disagrees with plaintiff’s argument that it is not precluded from commencing a new action under a new index number. The complaint was dismissed after oral argument of defendant’s motion to dismiss, on the grounds that the plaintiff failed to comply with discovery demands as per a stipulation signed by both attorneys. Plaintiff’s attempt to now argue that the discovery demands were unduly cumbersome and burdensome, and therefore plaintiff was unable to comply with said demands is too late. The arguments, as conceded to by plaintiff [*3]should have been made before the judge hearing oral argument on the motion to dismiss. Furthermore, plaintiff could have moved to reargue the motion and/or appeal the court’s decision.

In Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape Architects, P.C. (Habiterra Assoc.) (5 NY3d 514, 520 [2005]), the Court of Appeals held that the “neglect to prosecute” exception in CPLR 205 (a) applies not only where the dismissal of the prior action is for “[w]ant of prosecution pursuant to CPLR 3216, but whenever neglect to prosecute is in fact the basis for dismissal” (internal quotation marks omitted). The plaintiff failed to comply with discovery demands, and after repeated demands for the outstanding discovery, as well as failure to comply with a stipulation, defendant moved to dismiss the complaint, which was granted by the court.

The purpose of excluding actions dismissed for neglect to prosecute from those that can be, in substance, revived by a new filing under CPLR 205 (a) was to assure that a dismissal for neglect to prosecute would be a serious sanction, not just a bump in the road. (See, Andrea v Arnone, Hedin, Casker, Kennedy & Drake, supra; Carven Assoc. v American Home Assur. Corp., 84 NY2d 927 [1994]; Flans v Federal Ins. Co., 43 NY2d 881 [1978].)

Accordingly, defendant’s motion to dismiss is hereby granted; the complaint is dismissed in its entirety, without an imposition of sanctions.