732680/17

Plaintiff, Law Office of Zara Javakov Esq., P.C., Zachary Albright Whiting, Esq., 100 Livingston Street, 4th Floor Brooklyn, NY 11201

Defendant Rivkin Radler LLP, Michelle Rita, Esq., 926 RXR Plaza, Uniondale, NY 11556-0926

The court’s Decision and Order is based upon consideration of the following papers:

CPLR 2219(a) Recitation

ORDER TO SHOW CAUSE & AFFIDAVITS ANNEXED 1

OPPOSITION/CROSS-MOTION 2

REPLY/OPPOSITION TO CROSS-MOTION

EXHIBITS

In an order to show cause dated August 7, 2019, Defendant moves pursuant to CPLR 2221(d)(2) to reargue this court’s Decision/Order dated March 27, 2019.^[FN1] Defendant asserts that this court misapplied the law when it denied Defendant’s motion for summary judgment which was based upon Plaintiff’s failure to appear at the scheduled Examinations Under Oath (EUO). Defendant states that the Nassau County Supreme Court made a final determination on this issue in a declaratory judgment dated August 22, 2018 (Supreme Court Order). Defendant argues that under the doctrine of res judicata the Supreme Court Order was a declaratory judgment which made a final determination of fact that now precludes Plaintiff’s cause of action to recover no-fault benefits. Defendant disputes this court’s finding that the Supreme Court Order was an order granted on default with no preclusive effect rather than a declaratory judgment with the full force and effect of a court’s ruling on substantive issues of fact and law.

Based on the following analysis, this court grants Defendant’s motion to reargue, vacates its prior Decision/Order and issues this Decision in its place.

This court acknowledges that it erred in finding that the Supreme Court Order did not have a preclusive effect because it was granted on default. As Defendant correctly argues, the fact that its declaratory judgment was granted on Plaintiff’s default is irrelevant to its preclusive effect: “[a] Supreme Court’s order is a conclusive final determination, notwithstanding that it was entered on default, and res judicata applies to an order or judgment taken by default” (Ava Acupuncture, P.C. v. NY Central Mut. Fire Ins. Co., 34 Misc 3d 149[A] [App Term, 2d Dept. 2d, 11th and 13th Jud Dists 2012]; Atlantic Chiropractic, P.C. v. Utica Mutual Ins. Co., 62 Misc 3d 145[A] [Sup Ct, App Term, 2d Dept. 2d, 11th and 13th Jud Dists 2019]).

The language in the Supreme Court Order, while sparse, is sufficient to articulate a final determination concerning Plaintiff’s failure to satisfy a condition precedent in order to seek reimbursement of no-fault benefits. ^[FN2] The Supreme Court Order does not mention EUO’s, but it does refer to the Summons and Verified Complaint Defendant submitted in support of its application for a declaratory judgment. In the second paragraph of the Verified Complaint Defendant explicitly stated that it sought a declaratory judgment based upon Plaintiffs’ failure to appear for the EUO’s (Def. 1 exh. 2). Therefore, the Supreme Court Order does have a preclusive effect on this matter and the doctrine of res judicata bars Plaintiff’s action to recover no-fault benefits.

Accordingly, the court’s Decision/Order dated March 27, 2019 is vacated and this Decision stands in its place.

This constitutes the decision and order of this court.

December 2, 2019

Brooklyn, NY

ENTER.

CONSUELO MALLAFRE MELENDEZ

Judge, Civil Court

Footnotes

Footnote 1: The relevant portion of the Order reads as follows: “Defendant’s motion is denied to the extent it claims the order dated August 22, 2018 in State Farm Mutual Automotive Ins. Co et al v. Psychology After Accident, PC Nassau Cty Index #614025/18 has a preclusive affect. The Court finds that the Nassau County order is merely a judgment on default and not a declaratory judgment…” See, Active Chiro v. 21st Century Ins. Co., 58 Misc 3d 140 (A) (App Term, 2d Dept 2018).”

Footnote 2: The Supreme Court Order only states that Defendant “seeks declaration that it is under no obligation to reimburse [Plaintiff] for services based upon [Plaintiff’s] failure to satisfy conditions precedent to coverage or verify their claims as required by law” (Supreme Court Order).

[*1]

Civil Court of the City of New York, New York County, December 2, 2019

APPEARANCES OF COUNSEL

Rivkin Radler LLP (Angelica M. Barcsansky, Andrea C. Sacks, Garin Scollan and Amy Wiedmann of counsel) for defendant.

Law Offices of Leon Kucherovsky (David Forman of counsel) for plaintiffs in the first and second above-entitled actions.

These actions, addressed together here solely for the purposes of this decision, relate to assigned, unpaid no-fault claims submitted by plaintiffs Taira RX Corp., a pharmacy, and HKP Physical Therapy, P.C. (collectively plaintiffs), a medical clinic, to defendant Government Employees Insurance Company (Geico). In every Taira action, Geico moves pursuant to CPLR 3212 for summary judgment, alleging that plaintiffs filed these actions prematurely because verification requests remain outstanding, and that Geico had no obligation to deny the claims before receiving a complete verification response. In the HKP action, Geico argues that the denials were justified because HKP failed to respond to reasonable verification requests. Plaintiffs oppose each motion, arguing that the requests are inappropriate and/or unjustified, and that plaintiffs have substantially complied. Plaintiffs also ask the court to search the record and grant summary judgment in their favor. For the reasons below: (1) Geico’s motions in the Chen (index No. CV-702201/17), Devito (index No. CV-702185/17), Generoso (index No. CV-700042/18), Nauth (index No. CV-702243/17), Williams (index No. CV-702247/17), Xu (index No. CV-703115/17), and Zahmoul (index No. CV-700208/18) actions are granted and those complaints are dismissed without prejudice as premature; (2) Geico’s motion in the Hyppolite action (index No. CV-702191/16) is granted, and the complaint dismissed with prejudice; (3) Geico’s motion in the Gomez action (index No. CV-701984/17) is granted in part and denied in part; and (4) the Flores (index No. CV-702233/17) and Fores (index No. CV-702213/17) motions are denied and summary judgment is granted in favor of plaintiffs.

Background Facts and Procedural History

I. Taira

A. Facts Common to All Taira Actions

In 2016, prior to any relevant claim submission, the owner of MSB Rx, doing business as Forest Drugs (MSB), Michael Bassanell, sold MSB to Taira, which continued to operate Forest Drugs.^[FN1] According to Geico, its investigation revealed “an alarming increase in the amount of prescription drug products{**67 Misc 3d at 285} prescribed to no-fault patients suffering from minor injuries sustained in fender-bender type automobile accidents” (defendant/Sacks affirmation ¶ 11). Geico alleges that the prescriptions were “medically unnecessary,” prescribed at “no-fault clinics” operating as “medical mills . . . for the sole purpose of submitting inflated, fraudulent billing” (id.).

In furtherance of Geico’s investigation, in addition to document requests including financial and prescription records, Geico sought an examination under oath (EUO) of Bassanell. After Bassanell’s EUO on April 27, 2017, Geico requested additional categories of documentation that it determined to be necessary and reasonable for its investigation (defendant’s reply, exhibit 2):^[FN2]

1. contracts/agreements between MSB Rx Corp./Bassanell and Taira/Mikhail Borukhov relating to the sale, transfer, and ongoing relationship between the two entities;

2. applications, registration forms, and accompanying documents submitted by or on behalf of Taira and/or MSB Rx Corp. to the New York State (NYS) Board of Pharmacy in connection with its request for registration or licensing;

3. documents filed with NYS evidencing the sale, transfer, and/or change in ownership of MSB Rx Corp. from Bassanell to Taira and Mikhail Borukhov;

4. tax forms, payroll tax returns, and employment agreements for all persons who have performed work for or on behalf of Taira as a pharmacist or pharmacy technician;

5. 2016 and 2017 federal, NYS, and NYC quarterly payroll tax returns prepared or filed by Taira and MSB Rx Corp.;

6. purchase invoices, wholesale receipts, or related documentation evidencing the purchase of all pharmaceutical products, including those used in any compounded drugs;

7. information regarding the prescriptions relating to diclofenac gel, diclofenac/lidocaine compound cream, lidocaine patches, and flector patches from June 2016 onward; and

8. the number of prescriptions that Taira dispensed from June 2016 onward pursuant to prescriptions from Mani Ushyarov,{**67 Misc 3d at 286} Solomon Halioua, Oleg Fuzaylov, Terry-Jan Blackett-Bonnett, and Danny Fuzaylov.^[FN3]

B. Specific Taira Actions^[FN4]

1. Gengguan Chen (index No. CV-702201/17)

a. Bills 1-3 ($357.32, $7.07, $13.16 for Mar. 6, 2017 Prescriptions)

On June 22, 2017, Geico received the first bill (Geico exhibit A [Chen action]).^[FN5] Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 1, 2017, then again on August 11, 2017 (id.). Geico has not yet issued a denial.

b. Bills 4-5 ($56.90, $313.28 for June 14, 2017 Prescriptions)

On July 14, 2017, Geico received the subject bills (Geico exhibit B [Chen action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 31, 2017, then again on August 31, 2017 (id.). Geico has not yet issued a denial.

2. John Devito (index No. CV-702185/17)

a. Bills 1-2 ($2,364, $232.19 for June 1, 2017 Prescriptions)

On July 6, 2017, Geico received the subject bills (Geico exhibit A [Devito action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 26, 2017, then again on August 28, 2017 (id.). After a January 3, [*4]2018 exam by Dr. Russ, on January 10, 2018, Geico issued a denial of all future benefits, but this claim remains pending (Taira exhibit G [Devito action]).

3. Angie Flores (index No. CV-702233/17)

a. Bills 1-3 ($399, $2,364, $125.02 for May 15, 2017 Prescriptions)

On June 7 and 8, 2017, Geico received the subject bills (Geico exhibit A [Flores action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, {**67 Misc 3d at 287}Geico sought verification on June 26, 2017, then again on August 10, 2017 (id.).^[FN6] After a January 3, 2018 exam by Dr. Yang, on October 27, 2017, Geico issued a denial of all future benefits, but this claim remains pending (Taira exhibit G [Flores action]).

4. Damarys Fores (index No. CV-702213/17)

a. Bill 1 ($1,432.05 for May 15, 2017 Prescription)

On June 8, 2017, Geico received the subject bill (Geico exhibit A [Fores action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on June 26, 2017, then again on August 10, 2017 (id.).^[FN7] After receiving some of the requested items, Geico sent a subsequent letter on October 31, 2017, outlining which items Geico considered to be outstanding (id.). Geico has not yet issued a denial.

5. Michael Generoso (index No. CV-700042/18)

a. Bill 1 ($1,528.80 for June 26, 2017 Prescription)

On August 7, 2017, Geico received the subject bill (Geico exhibit A [Generoso action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on August 18, 2017, then again on September 19, 2017 (id.). After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which items Geico considered to be outstanding (id.). After a July 17, 2017 exam by Drs. Silverman and Lyons, Geico issued a denial of all future benefits on October 27, 2017, but this claim remains pending (Taira exhibit G [Flores action]).

6. Jose Gomez (index No. CV-701984/17)

a. Bill 1 ($891.50 for May 3, 2017 Prescription)

On June 21, 2017, Geico received the subject bill (Geico exhibit A [Gomez action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 10, 2017, then again on August 11, 2017 (id.). Geico has not yet issued a denial.

b. Bill 2 ($703 for May 3, 2017 Prescription)

On June 21, 2017, Geico received the subject bill (Geico exhibit A [Gomez action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, {**67 Misc 3d at 288}Geico sought verification on July 10, 2017, then again on August 11, 2017 (id.). On July 12, 2017, Geico denied the claim for lack of medical necessity based on a November 8, 2016 exam by Dr. Hershon (Geico exhibit B [Gomez action]).

7. Deonarine Nauth (index No. CV-702243/17)

a. Bill 1 ($313.28 for May 16, 2017 Prescriptions)

On June 22, 2017, Geico received the subject bill (Geico exhibit A [Nauth action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 11, 2017, then again on August 14, 2017 (id.).^[FN8] After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which items Geico considered to be outstanding (id.). After a September 12, 2017 exam by Dr. Krishnan, Geico issued a denial of all future benefits on September 21, 2017, but this claim remains pending (Taira exhibit G [Flores action]).

8. Armmeen Williams (index No. CV-702247/17)

a. Bill 1 ($1,700.11 for May 8, 2017 Prescriptions)

On June 22, 2017, Geico received the subject bill (Geico exhibit A [Williams action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 12, 2017, then again on August 15, 2017 (id.). After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which items Geico considered to be outstanding (id.). After a July 25, 2017 exam by Dr. Littman, Geico issued a denial of all future benefits on July 31, 2017, but this claim remains pending (Taira exhibit G [Williams action]).

b. Bill 2 ($1,700.11 for May 31, 2017 Prescriptions)

On June 22, 2017, Geico received the subject bill (Geico exhibit A [Williams action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 26, 2017, then again on August 28, 2017 (id.). After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which [*6]items Geico considered to be outstanding (id.). After a July 25, 2017 exam by Dr. Littman, Geico issued a denial of all future benefits on July 31, 2017, but this claim remains pending (Taira exhibit G [Williams action]).{**67 Misc 3d at 289}

9. Ke Xu (index No. CV-703115/17)

a. Bill 1 ($1,442.61 for July 19, 2017 Prescriptions)

On August 11, 2017, Geico received the subject bill (Geico exhibit A [Xu action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on August 23, 2017 (id.). Geico sent a follow-up verification request letter on September 27, 2017 (id.). After Taira responded with some of the documents and objections to the other categories, Geico sent another follow-up letter on November 3, 2017, outlining which items remained outstanding (id.). Geico has not yet issued a denial.

b. Bill 2 ($1,184.50 for Aug. 3, 2017 Prescriptions)

On September 1, 2017, Geico received the subject bill (Geico exhibit B [Xu action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on September 12, 2017 (id.). Geico sent a follow-up verification request letter on October 16, 2017 (id.). After Taira responded with some of the documents and objections to the other categories, Geico sent another follow-up letter on November 7, 2017, outlining which items remained outstanding (id.). Geico has not yet issued a denial.

10. Hiba Zahmoul (index No. CV-700208/18)

a. Bills 1-2 ($703 and $1,432.05 for July 14, 2017 Prescriptions)

On September 7, 2017, Geico received the subject bill (Geico exhibit A [Zahmoul action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on September 22, 2017, then again on October 24, 2017 (id.). After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which items Geico considered to be outstanding (id.). Geico has not yet issued a denial.

b. Bill 3 ($1,432.05 for July 29, 2017 Prescriptions)

On September 25, 2017, Geico received the subject bill (Geico exhibit A [Zahmoul action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on October 3, 2017, then again on November 1 and 6, 2017, one of which explicitly outlined which items Geico considered to be outstanding (id.). Geico has not yet issued a denial.

C. Requests and Responses Common to All Taira Actions

Taira’s responses to the verification requests, as reflected in all of its submissions here, [*7]are identical. Taira’s first response{**67 Misc 3d at 290} dated August 8, 2017, contains a litany of objections including, as relevant here, that no “good faith basis” existed for Geico’s verification requests (Taira exhibit A). On August 28, 2017, Geico objected to Taira’s “voluminous boilerplate objections” and characterized Taira’s response as “minimal” (Geico exhibit C). Geico justified its request by noting that Dr. Ushyarov had been sued multiple times in connection with no-fault fraud, that “New York State has numerous laws and regulations governing the licensing of pharmacies,” and that there were numerous deficiencies in Bassanell’s testimony (id.).

Taira also sent a further “comprehensive reply” on August 17, 2017 (Taira exhibit B). Taira’s August 17 reply again argued that there was no good faith, case-specific basis for the verification request and asserted numerous objections, but provided a limited response (Taira exhibit C). In a response on September 7, 2017, Geico argued that its requests were reasonable by invoking various concerns including the nature and frequency of the pharmaceutical products prescribed and dispensed, arrangements between Taira and physicians and clinic locations, compounding formulations and practices, billing and coding practices, and compliance with licensing laws (Geico/McCarthy aff ¶ 4; Geico exhibit C). Part of the alleged scheme involved a transfer by Michael Bassanell, Pharm.D., of an entity known as MSB Rx, doing business as Forest Drugs, to Taira Rx, owned by Mikhail Borukhov, Bassanell’s former assistant (Geico/McCarthy aff ¶ 6). According to Geico, the investigation ultimately revealed practices, including inaccurate billing, meant to maximize profits rather than meet medical necessity, as well as potential noncompliance with licensing laws (Geico/McCarthy aff ¶¶ 5, 8, 9). The Bassanell EUO raised additional questions, including Bassanell’s continuing role with Taira as a supervising pharmacist and the practice of continuing to pay the salary of all employees—including Taira’s employees—from MSB Rx’s bank account, even after the transfer of MSB Rx to Taira (Geico/McCarthy aff ¶ 10). Similarly, one doctor associated with Taira, Mani Ushyarov, has twice been sued by insurance carriers (Geico/McCarthy aff ¶ 11). According to Geico’s September 7, 2017 letter, “multiple claimants have indicated . . . that they did not actually receive the prescriptions that were purportedly written by Dr. Ushyarov and Dr. Sudberg and then billed to [Geico]” (Geico reply, exhibit 2).

Taira’s subsequent objection on October 17, 2017, summarized its prior compliance, again asserting that Geico had not{**67 Misc 3d at 291} justified its request, and arguing among other things that Geico had not asserted which pharmaceutical laws or regulations had allegedly been violated (Taira exhibit C). Geico replied again on October 17, 2017, this time identifying several specific deficiencies: (1) complete records of the number of Dr. Ushyarov’s prescriptions submitted by Taira to Geico; (2) wholesale invoices which “would have a direct bearing on the fees that [Taira] can charge to . . . Geico”; (3) “documents concerning the number of prescriptions originating from certain high-volume prescribing physicians, and certain federal and state documents” (id.).

Geico’s subsequent replies, dated November 22, 2017, and August 8, 2018, supplemented its responses to Taira’s objections and provided further justification for Geico’s requests, including citation to provisions of New York laws and regulations pertaining to pharmacies and kickbacks (see Geico reply, exhibit 2, citing Education Law §§ 6530 [18], [38]; 6811, 6509-a; 8 NYCRR 29.1 [b] [3]). Taira’s final response is dated July 19, 2018, essentially reiterating its objections (Taira exhibit E).

II. HKP (index No. CV-702191/16)

On February 15, 2016, Geico conducted EUOs of Hitenkumar Patel, P.T. and Chin Yeung Chan, LAc (Geico/Scollan affirmation ¶ 2, exhibit 4). Those depositions, as well as other Geico investigations, raised suspicions that HKP could, among other things, “be engaged in unlawful fee-splitting arrangements and illegal kickback schemes with non-physicians” and billing improperly with “pre-determined treatment protocols” to maximize profits (Geico/Scollan affirmation ¶ 6; Geico/Simmons aff ¶ 4). According to Geico, several factors contributed to this suspicion: (1) one of HKP’s locations in Brooklyn having been implicated in layperson control, unlawful referral relationships, and predetermined treatment protocols; (2) bills regularly exceeding the actual care that patients received; (3) “anonymous calls” advising patients to treat at the Brooklyn location and that they would be represented by the Mandel Law Firm downstairs from HKP’s Lynbrook location; (4) the use of employees or independent contractors essentially conceded in Patel’s EUO (Geico/Simmons aff ¶¶ 6-8, citing exhibit 4). Based on the prior investigation, preliminary investigation here, and EUOs, on March 22, 2016, Geico requested (Geico/Simmons aff ¶ 9, exhibit B):

1. written agreement between Achiever United Inc. (an employment agency) and Patel and/or HKP;{**67 Misc 3d at 292}

2. invoices from and payments to George Davinner’s taxi company to Patel and/or HKP for the past six months;

3. written lease agreement between Patel and/or HKP and Rexco Property, LLC for the location at 225-21 Linden Boulevard, Cambria Heights along with cashed rent checks for the last six months;

4. W-2s of all HKP employees;

5. intake forms for all of the patients subject to the EUO;

6. HKP’s incorporation documents;

7. copies of cashed rent checks (front and back) from Patel and/or HKP to Dr. August at 4009 Church Avenue, Brooklyn for the past six months;

8. invoices from and payments to “Mike” for transportation service to Patel and/or HKP for the past six months; and

9. corporate bank records from Chase Bank to HKP for the past six months.

Geico concedes that it received some of the requested information, but did not receive: (1) copies of cashed checks paid to “Mike” for transportation services from Patel and/or HKP for all six months prior to claim submission, specifically September through December 2015; (2) HKP’s Chase records for six months; or (3) proof of rent payments from subtenants to Patel and/or HKP at the Cambria Heights location (Geico/Scollan affirmation ¶ 11). According to Geico, these records are necessary to determine whether illegal kickback payments were disguised as rent or transportation payments (Geico/Scollan affirmation ¶ 12).

Geico sent second requests for the subject claims on April 25, 2016 (Geico exhibit C; Geico/Lamirande aff [discussing Geico’s mailing procedures]). On July 27, 2016, having failed to receive a response, Geico denied the subject claims for September 19, 2015 treatment totaling $122.53, [*8]September 29 through October 24, 2015 treatment totaling $246.40, and November 5 through November 24, 2015 treatment totaling $369.60 (Geico exhibits D-L). On July 27, 2017, one year after Geico’s denial, HKP responded in writing to Geico, making essentially the same arguments made here: (1) that at the EUO, HKP provided a justification for not responding to the verification requests: they could not produce the subtenant’s checks because they were returned; and (2) the other arguments addressed below; in sum and substance, that the demands were improper (HKP exhibit A, citing Geico exhibit 4 at 86-87).{**67 Misc 3d at 293}

Discussion

I. Threshold Considerations

A. Denial of Future Claims Based on Lack of Medical Necessity (Devito [index No. CV-702185/17], Flores [index No. CV-702233/17], Generoso [index No. CV-700042/18], Nauth [index No. CV-702243/17], Williams [index No. CV-702247/17])

Taira asserts in various actions that Geico’s post-independent medical examination denial of future no-fault benefits obviates Taira’s responsibility to respond to any outstanding verification demands. Indeed, “[a]n insurance carrier may not, after repudiating liability, create grounds for its refusal to pay by demanding compliance with proof of loss provisions of the policy. Rather, the insurance carrier must stand or fall upon the defense upon which it based its refusal to pay” (Matter of State Farm Ins. Co. v Domotor, 266 AD2d 219, 220-221 [2d Dept 1999] [internal quotation marks omitted]). The denials here, however, pertain to “further acupuncture, chiropractic, massage therapy, diagnostic testing, and supplies treatment [sic],” not the pharmaceutical treatment at issue here (see generally Taira exhibit G). Moreover, even if the denial did pertain to pharmaceutical treatment, the denial explicitly limits treatment going forward, not the prior charges at issue here. Accordingly, with the limited exception of the Gomez action discussed below, this branch of Taira’s motion is denied.

B. Estoppel (All Actions)

Plaintiffs also assert that Geico’s arguments should be estopped because more than a dozen arbitrations involving the same or similar parties and issues were decided in Taira’s favor. Geico also cites numerous decisions in its favor. However, because no-fault arbitrations are designed as “expedited, simplified affair[s] meant to work as quickly and efficiently as possible” with “limited or non-existent” discovery, complex fraud claims—like the one asserted here by Geico—”cannot be shoehorned into this system” (21st Century Ins. Co. v Gladstein, 2015 NY Slip Op 30527[U],*6 [Sup Ct, NY County 2015], quoting Allstate Ins. Co. v Mun, 751 F3d 94, 95 [2d Cir 2014] [emphasis omitted]). Accordingly, no-fault arbitration decisions are not afforded preclusive effect and this branch of plaintiffs’ motion is denied.

II. Summary Judgment

“[T]he proponent of a summary judgment motion must make a prima facie showing of entitlement to{**67 Misc 3d at 294} judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires a [*9]denial of the motion, regardless of the sufficiency of the opposing papers. Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action” (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986] [citations omitted]; CPLR 3212 [b]).

A. Taira Actions

1. Flores (index No. CV-702233/17) and Fores (index No. CV-702213/17) Actions (Timeliness of Verification Follow-Up)

“Where there is a timely original request for verification, but no response to the request for verification is received within 30 calendar days thereafter, or the response to the original request for verification is incomplete, then the insurer, within 10 calendar days after the expiration of that 30-day period, must follow up with a second request for verification” (see Sound Shore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 106 AD3d 157, 163 [2d Dept 2013]; 11 NYCRR 65-3.6 [b]).

“At a minimum, if any requested [additional] verifications has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested” (11 NYCRR 65-3.6 [b]).

With the two exceptions noted here and in footnote 5 above, the court finds that both parties have demonstrated through attached affidavits that all mailings, including claims, initial post-EUO verification requests, follow-up letters, subsequent follow-up letters, responses, and denials referenced in the papers and recounted above, were properly and timely sent pursuant to the no-fault regulations. The parties do not dispute receipt of any of the relevant documents.

In the Flores and Fores actions, however, Geico timely sought verification on June 26, 2017, but did not send a follow-up{**67 Misc 3d at 295} until August 10, 2017 (Geico exhibit A [Flores/Fores actions]).^[FN9] Where an insurer does not follow up within the 10-day period, “guided by the principle that the no-fault regulations are in derogation of the common law and must be strictly construed,” an insurer’s time to deny a claim is not tolled (Sea Side Med., P.C. v State Farm Mut. Auto Ins. Co., 12 Misc 3d 1127, 1130-1131 [Civ Ct, Richmond County 2006]). Accordingly, Geico’s motion for summary judgment is denied.

Additionally, in searching the record pursuant to Taira’s request and CPLR 3212 (b), the court also finds that, on these two actions, plaintiff has set forth the fact and amounts of the loss and the fact that payment is overdue, thereby demonstrating entitlement to judgment (Sea Side Med., P.C., 12 Misc 3d at 1131, citing Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2d Dept 2004] [“the plaintiff hospitals made a prima facie showing of their entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed [*10]statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue”]). Accordingly, the court awards summary judgment to plaintiff in these actions.

2. Gomez Action (index No. CV-701984/17) (Medical Necessity Defense)

In the Gomez action (index No. CV-701984/17), Geico denied the second claim for lack of medical necessity (Geico exhibit B [Gomez action]; see Background Facts and Procedural History [I] [B] [6] [b] at 287-288). Taira correctly argues that a denial of the second Gomez claim would, pursuant to Domotor, absolve Taira of any responsibility to respond to outstanding verification requests (see Discussion [II] [A], supra; Domotor, 266 AD2d at 220-221). The court finds that the affidavit of Michael Tamburo, DO sufficiently rebuts Geico’s prima facie demonstration of a lack of medical necessity (Taira exhibit H [Gomez action]). Accordingly, while the court, for the reasons below, finds the first claim subject to severance and dismissal, summary judgment on the second claim (Taira’s first and second causes of action) is denied based on an issue of fact.

3. All Other Taira Actions (Validity of Verification Requests/Responses)

In all actions involving Taira as plaintiff, Taira argues that corporate verification requests are inappropriate because{**67 Misc 3d at 296} pharmacies, unlike medical providers, are not subject to the same scrutiny, particularly in the context of corporate structure, and in any event that plaintiffs have substantially complied. Geico argues that this action is premature because the demands are justified and remain outstanding. While the court agrees that the considerations applicable to actions involving medical providers and pharmacies are not identical, they are similar enough to justify Geico’s verification requests, and therefore justify dismissal, as premature, of any actions in which Taira has failed to fully respond to timely verification requests.

[1] “The insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested” (11 NYCRR 65-3.5 [c] [emphasis added]). Upon request, an insured individual or their assignee must, among other things, “provide any other pertinent information that may assist the [insurer] in determining the amount due and payable” (11 NYCRR 65-1.1 [d] [sec I] [Proof of Claim. Medical, Work Loss, and Other Necessary Expenses] [d]). “No-Fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim, which shall include verification of all of the relevant information requested pursuant to [11 NYCRR 65-3.5]” (11 NYCRR 65-3.8 [a] [1]).

As Taira argues, however, insurers must not demand verification of facts unless there are good reasons to do so. The lodestar for “good cause” was, until recently, State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]). In Mallela, the Second Circuit certified to the Court of Appeals the question whether

“a medical corporation that was fraudulently incorporated under N.Y. Business Corporation Law §§ 1507, 1508, and N.Y. Education Law § 6507(4)(c) [is] entitled to be reimbursed by insurers, under New York Insurance Law §§ 5101 et seq., and its implementing regulations, for medical services rendered by licensed medical practitioners” (Mallela, 4 NY3d at 320, citing State Farm Mut Auto. Ins. Co. v Mallela, 372 F3d 500, 510 [2004]).

The Court of Appeals held that such providers were not eligible for reimbursement, but also that “carriers may look beyond the face of licensing documents to identify willful and material failure to abide by state and local law,” provided that “[t]he regulatory scheme, however, does not permit abuse of the truth-seeking opportunity that 11 NYCRR 65-3.16 (a) (12){**67 Misc 3d at 297} authorizes” (Mallela, 4 NY3d at 321-322). Importantly, the Court of Appeals found that “carriers will be unable to show ‘good cause’ unless they can demonstrate behavior tantamount to fraud. Technical violations will not do” (id. at 322).

The Mallela Court addressed the concern that carriers might “turn this investigatory privilege into a vehicle for delay and recalcitrance” (Mallela, 4 NY3d at 321-322). That is, while “carriers may look beyond the face of licensing documents to identify willful and material failure to abide by state and local law, . . . [t]he regulatory scheme . . . does not permit abuse of the truth-seeking opportunity that 11 NYCRR 65-3.16 (a) (12) authorizes” (Mallela, 4 NY3d at 321-322; see also Pomona Med. Diagnostic P.C. v Adirondack Ins. Co., 36 Misc 3d 127[A], 2012 NY Slip Op 51165[U],*1 [App Term, 1st Dept 2012] [to avoid employing “pretrial discovery as a fishing expedition (without) a reliable factual basis for what amounts to, at best, mere suspicions,” a defendant must set forth “case-specific allegations” to justify pretrial disclosure]; Omega Diagnostic Imaging, P.C. v MVAIC, 29 Misc 3d 129[A], 2010 NY Slip Op 51779[U],*1 [App Term, 1st Dept 2010] [action was not premature for outstanding verification request where there was “no good reason” for defendant to demand that plaintiff and its assignor obtain an “affidavit of no insurance” from the out-of-state driver who struck the assignor]; cf. Brownsville Advance Med., P.C. v Country-Wide Ins. Co., 33 Misc 3d 1236[A], 2011 NY Slip Op 52255[U], *2-3 [Nassau Dist Ct 2011] [no-fault law’s purpose “not served when an insurer repeatedly request the same verification from the same provider, especially in the situation where the material demanded has previously been provided or is readily obtainable from easily accessible public records”]; see also American Chiropractic Care, P.C. v GEICO Ins., 57 Misc 3d 529, 535 [Civ Ct, Kings County 2017] [to balance the need to address no-fault fraud with burden on medical professionals of preparing and appearing for EUOs, insurer could and should have responded to provider’s request for explanation “to demonstrate a good faith basis for the EUO”]).

Where the record reveals “detailed and specific reasons for believing that plaintiff may be ineligible to recover no-fault benefits as a fraudulently incorporated professional service corporation,” special circumstances exist which justify disclosure of documents such as “plaintiff’s certificate of incorporation, management agreements, and the names of plaintiff’s{**67 Misc 3d at 298} shareholders” (Midborough Acupuncture, P.C. v State Farm Ins. Co., 21 Misc 3d 10, 12 [App Term, 2d Dept, 2d & 11th Jud Dists 2008], citing Mallela, 4 NY3d 313; see also Dore v Allstate Indem. Co., 264 AD2d 804, 804-805 [2d Dept 1999] [finding, based on “indicia of fraud,” special circumstances to warrant the disclosure of income tax returns, bank account information, and employment records]).

Numerous post-Mallela cases focused on a similar concern—whether an insurer can deny a medical claim (or pursue more information) when there is good cause to believe that a medical practice is fraudulently incorporated—for example, if the provider was not wholly owned or controlled by physicians (see e.g. Pro-Align Chiropractic, P.C. v Travelers Prop. Cas. Ins. Co., [*12]58 Misc 3d 857, 861 [Suffolk Dist Ct 2017]). Indeed, disclosure aimed at investigating that concern has come to be known as Mallela material (see Victory Med. Diagnostics, P.C. v Nationwide Prop. & Cas. Ins. Co., 36 Misc 3d 568, 574 [Nassau Dist Ct 2012]). The contested issues here, however, are whether Mallela disclosure is available for other regulated disciplines, including—as relevant here—pharmacies, and what type of alleged conduct constitutes “good cause” for the purposes of requesting Mallela-type disclosure. The governing statutes and regulations, together with a recent Court of Appeals decision, Andrew Carothers, M.D., P.C. v Progressive Ins. Co. (33 NY3d 389 [2019]), support Geico’s position.^[FN10]

The Carothers Court revisited Mallela‘s holding that “[i]n the licensing context, carriers will be unable to show ‘good cause’ unless they can demonstrate behavior tantamount to fraud” (33 NY3d at 405). In determining that the trial judge did not err in declining to issue a charge requiring a “tantamount to fraud” finding by the jury, the Carothers Court determined that “[a] corporate practice that shows ‘willful and material failure to abide by’ licensing and incorporation statutes may support a finding that the provider is not an eligible recipient of reimbursement under 11 NYCRR 65-3.16 (a) (12) without meeting the traditional elements of common-law fraud” (33 NY3d at 405-406 [“The no-fault insurance regulations make providers ineligible for reimbursement when their violations of the cited statutes are more than merely technical and ‘rise to the level of’ a grave violation such as fraud”]).

{**67 Misc 3d at 299}Although Carothers, like Mallela, addressed “good cause” in the context of medical licensing, nothing in either case, the Insurance Law, or laws and regulations governing pharmaceutical practice suggest that pharmaceutical practice is not subject to regulation. Generally, Insurance Law § 5102 et seq. requires no-fault carriers to reimburse patients (or their assignees) for “basic economic loss” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 320 [2005]). “Basic economic loss” includes, as relevant here,

“[a]ll necessary expenses incurred for . . . medical, hospital (including services rendered in compliance with article forty-one of the public health law, whether or not such services are rendered directly by a hospital), surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; . . . and . . . any other professional health services” (Insurance Law § 5102 [a] [1] [emphasis added]).

Providers are not, however, eligible for reimbursement by a carrier “if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed” (11 NYCRR 65-3.16 [a] [12] [emphasis added]; Mallela, 4 NY3d at 320).

Of course, “New York State or local licensing requirement[s]” are not limited to medicine and include pharmaceutical practice. Although Geico concedes that pharmacies, unlike medical practices, may be owned by a layperson, Geico identifies—and identified in at least one letter to Taira—additional statutory and regulatory bases for its verification requests. These include Education Law § 6530 (18) and (38), which define, respectively, professional [*13]misconduct as “[d]irectly or indirectly offering, giving, soliciting, or receiving or agreeing to receive, any fee or other consideration to or from a third party for the referral of a patient or in connection with the performance of professional services” and “[e]ntering into an arrangement or agreement with a pharmacy for the compounding and/or dispensing of coded or specially marked prescriptions”; Education Law § 6811 (7), which makes it unlawful for “[a]ny person to enter into an agreement with a physician, dentist, podiatrist or veterinarian for the compounding or dispensing of secret formula (coded) prescriptions”; Education Law § 6509-a, which prohibits regulated professionals, including pharmacists, {**67 Misc 3d at 300}from “directly or indirectly request[ing], receiv[ing] or participat[ing] in the division, transference, assignment, rebate, splitting or refunding of a fee for, or . . . directly request[ing], receiv[ing] or profit[ing] by means of a credit or other valuable consideration as a commission, discount or gratuity in connection with the furnishing of . . . drugs [or] medication” (citing Education Law § 6800 et seq.); and 8 NYCRR 29.1 (b) (3), which prohibits any professional licensee from “directly or indirectly offering, giving, soliciting, or receiving or agreeing to receive, any fee or other consideration to or from a third party for the referral of a patient or client or in connection with the performance of professional services.”

To investigate potential violations of those provisions—thereby rendering Taira ineligible for benefits—Geico justified the requests in its verification letters. Geico noted in those letters, among other things, that “Bassanell was unable to testify as to the medical necessity of the prescriptions at issue,” that Bassanell stayed on as Taira’s supervising pharmacist despite owning two other pharmacies, that “certain doctors repeatedly prescribed the same exorbitantly priced items,” that Bassanell continued to control Taira’s bank account despite selling the business, and that individuals working for Taira are not Taira employees (defendant’s reply, exhibit 2). These requests (and accompanying demonstrations of good cause) would have been sufficient even under Mallela, which required behavior “tantamount to fraud. Technical violations will not do” (Mallela, 4 NY3d at 322). But the requests were certainly appropriate under Carothers, which clarified that Mallela‘s holding was not limited to “behavior tantamount to fraud,” thereby bolstering this court’s finding of “good cause.” The requests are appropriately tailored to the nature of the pharmacy sale, licensing, payroll, pricing, individual prescriptions, and prescriptions by individual doctors.

[2] Moreover, just as an insurer must have “good cause” to demand verification, so too must a provider have a “reasonable justification” for refusal to provide a response. 11 NYCRR 65-3.8 (b) (3) provides, with exceptions not relevant here, that “an insurer shall not issue a denial of claim form . . . prior to its receipt of verification of all of the relevant information requested pursuant to sections 65-3.5 and 65-3.6 . . . (e.g., medical reports, wage verification, etc.).” A 2013 amendment aimed to correct two shortcomings of the prior regulations: that the regulations{**67 Misc 3d at 301}

“(1) impose[d] no deadline for responding to a verification request nor permit[ted] an insurer to deny a claim if it never receives the requested verification, allowing some claims to remain open indefinitely; [and] (2) d[id] not address how a verification request, notice . . . , or denial of claim should be treated when the document contains an immaterial defect or omission, resulting in unnecessary legal actions and arbitrations” (NY St Dept of Fin Servs, Notices of Adoption, 11 NYCRR 65-3.5, 65-3.8, available at 2013 NY Reg Text 292688 ¶ 3 [eff Apr. 1, 2013]).

One of the amendments granted additional discretion to the insurer, providing that “an [*14]insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the applicant has not submitted all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply” (11 NYCRR 65-3.8 [b] [3] [emphasis added]). The second required that “[a]n applicant from whom verification is requested shall, within 120 calendar days from the date of the initial request for verification, submit all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply” (11 NYCRR 65-3.5 [o] [emphasis added]).

The amendments, read together in the context of its stated regulatory aims and in the context of the verification process generally, demonstrate clear overlap and an inverse relationship between “good cause” for verification requests and “reasonable justification” for denial; that is, the more “good cause” there is, the less “reasonable” any justification for denial, and vice versa. Because Geico has made a strong showing of good cause, Taira’s justification for withholding any responsive items within its control must be equally compelling. To the extent, however, that Taira’s arguments merely categorize the verification requests as irrelevant (because pharmacies are not regulated in precisely the same manner as medical practices), unduly burdensome, or moot because they have already been substantially complied with, the arguments cannot prevail. Taira’s opposition papers, in ably delineating which requests it believes are reasonable or unreasonable, undermine its own argument that it was unable to identify what materials it had chosen or refused to provide.

Accordingly, Geico’s requests are reasonably tailored toward investigation of Taira’s eligibility for benefits. Because the{**67 Misc 3d at 302} claims at issue here were never affirmatively denied, and because Geico had no obligation to do so, these actions are premature and summary judgment dismissing the complaints is appropriate.

The court is not persuaded by Taira’s citations to several cases standing for the proposition that “an insurer is not entitled to obtain documentary material relating to a potential Mallela or fraudulent corporation defense” (plaintiffs’ affirmation), as none are binding upon this court. Indeed, in one of the few appellate cases on this issue, the Appellate Term, First Department held that “[d]efendant is entitled to discovery pertaining to its defense of fraudulent incorporation” (Statewide Med. Servs., P.C. v Travelers Ins. Co., 16 Misc 3d 127[A], 2007 NY Slip Op 51253[U],*1 [App Term, 1st Dept 2007], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U],*8 [Civ Ct, Bronx County 2005] [denying depositions because “defendant’s submission in this case lacks a reliable foundation to infer that the medical providers are engaging in behavior that can be described as ‘tantamount to fraud’ ”]).

Accordingly, the court holds that Geico’s post-EUO verification requests were appropriate, and therefore finds Taira’s response deficient. Because certain items, according to Taira’s own responses, are admittedly outstanding, summary judgment dismissing the complaints as premature is therefore appropriate.

4. HKP Action

HKP argues that “once an application appears for an EUO the carrier is not entitled to [*15]further disclosure and must pay or deny the claim within 30 days of the applicant’s appearance at an EUO” (plaintiffs/Forman affirmation ¶ 21 [HKP action]). The court cannot identify any support for the proposition that all post-EUO demands are improper, including in HKP’s own citation in support of that proposition; to the contrary, the no-fault regulations explicitly provide that “[t]he insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested” (11 NYCRR 65-3.5 [c] [emphasis added]). Notably, HKP did not argue that a physical therapy practice would not be subject to inquiries into corporate or employment structure; rather, it repeated the pharmacy arguments made in the Taira action—despite the fact that HKP is not a pharmacy—which the court addressed above (plaintiffs/Forman affirmation ¶ 23 et seq. [HKP action]).

{**67 Misc 3d at 303}HKP also argues that it has substantially complied with the verification requests and cannot produce the remainder of the records. Specifically, HKP focuses on Patel’s EUO testimony that HKP could not produce records of its subtenant’s payments because it did not possess the rent checks (plaintiffs/Forman affirmation ¶¶ 34-38, citing Geico exhibit 4 at 86-87 [HKP action]). Relying on this testimony, HKP argues that responding to Geico’s follow-up demands was unnecessary because Geico “did not respond to [or acknowledge HKP’s] objection at the EUO” (plaintiffs/Forman affirmation ¶ 39 [HKP action]). But Geico did respond; in addition to the subsequent letters, Geico’s counsel followed up Patel’s statements regarding the rent check by asking if HKP could produce rent invoices (Geico exhibit 4, tr at 87, lines 7-24).

In any event, however, other than disputing that the requests were inappropriate, HKP does not argue that it substantially complied with the other verification requests seeking checks to “Mike” for transportation services from Patel and/or HKP from September through December 2015 or Chase records. Based on the court’s holding that such requests were appropriate, the regulations authorized Geico’s denial of HKP’s claims for HKP’s failure to respond to timely verification requests. Accordingly, summary judgment dismissing the HKP action is appropriate.

Conclusion and Order

For the above reasons, it is hereby ordered that in Chen (index No. CV-702201/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Devito (index No. CV-702185/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Flores (index No. CV-702233/17), Geico’s motion for summary judgment (seq No. 001) is denied, and upon searching the record, it is ordered and adjudged that in Flores (index No. CV-702233/17), the Clerk of Court shall enter judgment for plaintiff on the first and second causes of action in the [*16]amount of $2,364, plus interest at 2% per month from August 7, 2017, pursuant to 11 NYCRR 65-3.9 (a) and attorneys’ fees pursuant to 11 NYCRR 65-4.6; and it is further ordered and adjudged that in Flores (index No. CV-702233/17), the Clerk of Court shall enter judgment for plaintiff on the third and fourth causes of action in the amount of $125.02, plus interest at 2% per month{**67 Misc 3d at 304} from August 7, 2017, pursuant to 11 NYCRR 65-3.9 (a) and attorneys’ fees pursuant to 11 NYCRR 65-4.6; and it is further ordered and adjudged that in Flores (index No. CV-702233/17), the Clerk of Court shall enter judgment for plaintiff on the fifth and sixth causes of action in the amount of $399, plus interest at 2% per month from August 7, 2017, pursuant to 11 NYCRR 65-3.9 (a) and attorneys’ fees pursuant to 11 NYCRR 65-4.6; and it is further ordered that in Fores (index No. CV-702213/17), Geico’s motion for summary judgment (seq No. 001) is denied; and upon searching the record, it is further ordered and adjudged that in Fores (index No. CV-702213/17), the Clerk of Court shall enter judgment for plaintiff on the first and second causes of action in the amount of $1,432.05, plus interest at 2% per month from August 7, 2017, pursuant to 11 NYCRR 65-3.9 (a) and attorneys’ fees pursuant to 11 NYCRR 65-4.6; and it is further ordered that in Generoso (index No. CV-700042/18), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Gomez (index No. CV-701984/17), Geico’s motion for summary judgment (seq No. 001) is granted in part and denied in part to the extent that Taira’s third and fourth causes of action shall be severed and dismissed without prejudice as premature; and it is further ordered that in Nauth (index No. CV-702243/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Williams (index No. CV-702247/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Xu (index No. CV-703115/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Zahmoul (index No. CV-700208/18), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further[*17] ordered that in Hyppolite (index No. CV-702191/16), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed with prejudice; and it is further ordered that Geico shall serve a copy of this order with notice of entry for each action under separate cover/index number within 20 days of receipt.

Footnotes

Footnote 1:In early 2019, Geico sued MSB, Bassanell, and several others in the federal Eastern District of New York, alleging a “massive, on-going fraudulent scheme . . . spearheaded by a pharmacist, Michael Slava Bassanell, who has used a series of three pharmacies . . . to submit thousands of fraudulent no-fault insurance charges for medically unnecessary, illusory, ‘pain relieving’ prescription drug products” (defendant’s reply, exhibit 1; ED NY, case No. 1:19-cv-00232-NG-PK).

Footnote 2:Defense counsel submitted numerous, unpaginated letters as one exhibit, and also failed to paginate affirmations (defendant’s reply, exhibit 2). In the future, given the size and detail of such submissions, counsel are encouraged to submit and flag each communication as individual exhibits.

Footnote 3:These individuals were also named in the federal complaint (see n 1).

Footnote 4:While each Geico submission is tailored to its respective claim, it appears that Taira’s responses are all identical. Accordingly, they are addressed together below.

Footnote 5:It appears that Taira did not submit the bills within 45 days after services were rendered. However, 11 NYCRR 65-1.1 permits extension when “the eligible injured person submits written proof providing clear and reasonable justification for the failure to comply with such time limitation” and, in any event, Geico does not dispute that the claim was timely.

Footnote 6:As discussed in detail below, though Geico characterizes this follow-up as timely, it is not.

Footnote 7:Geico attaches letters dated June 26 and June 28, 2017, which appear to be identical.

Footnote 8:As discussed in Background Facts and Procedural History (I) (C) below, in this action and others in which Geico sent a follow-up letter in mid-to-late August, Taira’s first consolidated response is dated August 8, 2017, but likely not received and processed until after Geico’s follow-up letter.

Footnote 9:To the extent a second letter, also attached as exhibit A, bears a June 28, 2017 date, the August 10, 2017 letter is nevertheless untimely.

Footnote 10:Carothers was decided before these motions were argued and fully submitted, and was discussed by counsel at oral argument.

[*1]

Civil Court of the City of New York, Richmond County, November 12, 2019

APPEARANCES OF COUNSEL

Bruno, Gerbino & Soriano, LLP, Melville, for defendant.

Law Offices of Gabriel & Shapiro, Wantagh, for plaintiff.

{**66 Misc 3d at 420}This action for first-party no-fault benefits arises out of a motor vehicle accident that occurred on August 2, 2014, involving plaintiff’s assignor, Chetram Paraboo. Due to the injuries that he sustained in the accident, plaintiff’s assignor received treatment at Krasner Chiropractic, P.C. (hereinafter, plaintiff). Plaintiff commenced this action seeking to recover $1,754.62 for services that were performed between August 4, 2014, and January 15, 2015, plus statutory interest and attorney’s fees.

Defendant IDS Property & Casualty Insurance Company now moves for summary judgment dismissing the complaint pursuant to CPLR 3212. Defendant argues it is entitled to summary judgment as the subject occurrence was not a covered event as it was an intentional act and plaintiff’s assignor made misrepresentations of fact and false and/or fraudulent statements in the presentation of the claim. Alternatively, defendant argues that it is entitled to summary judgment based upon plaintiff provider’s failure to appear for duly scheduled examinations under oath (EUOs) or partial summary judgment as to defendant’s prima facie case.

Plaintiff cross-moves for partial summary judgment as to its own prima facie case and opposes defendant’s motion. In response, defendant has submitted opposition to plaintiff’s cross motion.

In support of its motion, defendant submits the affidavit of Michael A. Callinan, Esq., of Bruno, Gerbino & Soriano, LLP, and the affidavits of senior special investigator James Glampe and litigation examiner Carrie Erickson. Defendant also submits copies of the police accident report relating to the subject occurrence and the EUO transcripts of Liloutie Sydnor (nonparty owner of the vehicle operated by nonparty Lisa Brown) taken on October 13, 2014; of plaintiff’s assignor, Chetram Paraboo, taken on November 24, 2014; of Lisa Brown (nonparty operator of the vehicle in which plaintiff’s assignor was a passenger) taken on December 2, 2014; and of Glenis Brown (nonparty husband of Liloutie Sydnor and the father of operator Lisa Brown) taken on March 23, 2015.

In his affidavit, Mr. Glampe states that the subject occurrence was not a covered event in that it was an intentional or staged act. He selectively provides a recitation of alleged discrepancies in the testimony of each of the above stated EUO witnesses regarding the subject occurrence. He also claims that the police accident report relating to the subject occurrence {**66 Misc 3d at 421}and a witness stated that the driver of the host vehicle, nonparty Lisa Brown, was attempting to make an extremely dangerous and illegal right turn.^[FN1]

In his affidavit, Mr. Callinan states that he is a partner with the firm of Bruno, Gerbino & Soriano, LLP, attorneys for defendant. In that capacity, he is personally responsible for the day-to-day handling of the within matter and all claims referred to his firm by defendant and its parent company Ameriprise Financial, Inc. Mr. Callinan sets forth the policies and procedures relating to the scheduling, confirmation and taking of EUOs in the ordinary course of business for the within matter. According to Mr. Callinan, in an effort to verify the medical bills for treatment rendered an EUO of plaintiff provider was scheduled for January 19, 2015, and February 27, 2015 (see defendant’s moving papers at exhibits S, T, X). The EUO request, dated December 19, 2014,^[FN2] scheduled the EUO of plaintiff provider for January 19, 2015. An amended EUO request, dated December 24, 2014,^[FN3] was sent requesting the EUO for the same date. On January 15, 2015, a letter was received from plaintiff’s counsel advising that plaintiff provider would not appear at the scheduled EUO since the claims had been denied. In response, defendant sent a letter acknowledging plaintiff’s letter, advising that the previously denied claims were being reconsidered and requesting alternate dates for the EUO. On January 19, 2015, plaintiff provider failed to appear for the EUO, and defendant proceeded to place a statement on the record. A second EUO request letter, dated January 22,{**66 Misc 3d at 422} 2015,^[FN4] scheduled the EUO for February 27, 2015. On or about January 23, 2015, and February 2, 2015, correspondence was exchanged between the attorneys as to defendant’s previously issued denials and the status of plaintiff provider’s claims in light of Lisa Brown’s request to be provided with another opportunity to appear for her EUO. By letter, dated February 25, 2015,^[FN5] defendant reiterated to plaintiff provider’s counsel that the previously denied claims were being reconsidered and to provide dates upon which plaintiff provider would be available to appear for an EUO. On February 27, 2015, plaintiff provider failed to appear, and a statement was placed on the record. Mr. Callinan was present in his office on January 19, 2015, and February 27, 2015. If plaintiff provider had appeared for its EUO on either day, he personally would have conducted said examination.

In her affidavit, Ms. Erickson initially states that an investigation of the subject occurrence determined that it was a staged intentional loss rather than an accident. She also asserts that plaintiff provider failed to appear for three EUOs^[FN6] that were needed to determine the facts of the alleged loss and{**66 Misc 3d at 423} to verify that all treatment and medical supplies billed on behalf of plaintiff’s assignor were received. She further asserts that each of the five claimed bills was denied within 30 days of receipt or within 30 days of plaintiff’s failure to appear for an EUO.^[FN7] Ms. Erickson also sets forth the policies and procedures utilized in the regular course of business for the creation and maintenance of delay letters with the explanation of benefits and the denial of claim forms—including those relating to the within matter (see defendant’s moving papers at exhibits D, E, F, G, H, I, J, L). She also sets forth the policies and procedures by which mail is received and sent from defendant’s offices and the methods by which the dates of same are recorded in the appropriate claim files.

In opposition to defendant’s motion and in support of its cross motion, plaintiff argues that defendant has failed to demonstrate that the subject incident was not a covered event; defendant’s denials are late and invalid as defendant failed to establish that it properly sought the EUOs; defendant deliberately defaulted plaintiff at the EUOs; defendant never formally rescinded its earlier denials; and there is no authority which would allow defendant to belatedly assert a new defense or issue verification requests beyond the statutory deadline. Plaintiff also argues that the testimony contained within the above stated affidavit of Ms. Erickson and the NF-3s annexed{**66 Misc 3d at 424} to defendant’s moving papers as exhibit C clearly demonstrate and establish plaintiff’s prima facie case.

Defendant opposes the within cross motion arguing that plaintiff has failed to establish that defendant failed to timely deny any of the claims at issue or prove its prima facie case that the prescribed statutory billing forms had been mailed and received, and that the payment of the no-fault benefits was overdue.

The portion of defendant’s motion seeking summary judgment on the basis that the subject occurrence was not a covered event because it was an intentional act and that plaintiff’s assignor made misrepresentations of fact and false and/or fraudulent statements in the presentation of the claim is denied. Defendant has failed to make a prima facie showing of entitlement to summary judgment. While assorted portions of the EUO testimony offered by the above stated affiants do conflict, said conflicts serve to create, rather than remove, issues of fact regarding how the subject occurrence took place. Furthermore, even if the above stated police accident report were in admissible form, which it is not as it is not certified as a business record pursuant to CPLR 4518, the officer did not witness or perform any investigation into the occurrence.

The portion of defendant’s motion seeking summary judgment on the basis that plaintiff failed to appear for a duly scheduled EUO is also denied and the defense of EUO no-show is precluded. As noted above, defendant initially requested plaintiff provider’s appearance at an EUO after it had received and denied plaintiff provider’s first three bills on the basis that the subject occurrence was not a covered event and that plaintiff’s assignor, Chetram Paraboo, had failed to appear for an EUO. Defendant’s request for plaintiff provider’s appearance at an EUO was sent after the denial of the first three bills and prior to defendant’s receipt of bills 4 and 5. At the time of the initial EUO request of plaintiff provider, there were no outstanding bills or claims.

This is a case of first impression wherein the defendant, after issuing a denial for one or more timely submitted claims, without notice to the plaintiff, decides to “reconsider” said claims while demanding that plaintiff provider appear for an EUO relating to the previously denied claims. The legislature established specific and uniform guidelines relating to the time and way no-fault claims are submitted, reviewed and denied. In Dermatossian v New York City Tr. Auth. (67 NY2d 219, 225 [1986]), the Court of Appeals stated that{**66 Misc 3d at 425}

“[t]o implement this legislative aim of curtailing delay and reducing expense in the adjustment of motor vehicle accident claims, the regulations (see,11 NYCRR 65.15) are written to encourage prompt payment of claims, to discourage investigation by insurers, and to penalize delays. Permitting evidence in a personal injury lawsuit of the fact that the defendant (if self-insured) or its insurer had paid the plaintiff the statutorily obligated first-party benefits would unquestionably frustrate the very purpose of the No-Fault Law by discouraging insurers from making prompt and voluntary payment of claims.”

There is no provision or exception in the no-fault statutes that provides for the defendant to unilaterally “review” cases again. This would obviate the intent and purpose of the No-Fault Law and create a dangerous precedent that could be used by defendants to improperly request additional verification such as EUOs or independent medical examinations.

Defendant is bound by its denials of November 17, 2014, and November 25, 2014 (see exhibits E, F, H of defendant’s moving papers), thereby making any EUO request of plaintiff provider untimely. Accordingly, defendant’s motion for summary judgment is denied and plaintiff’s cross motion is granted to the extent that plaintiff has demonstrated its prima facie case. The sole issue for trial is whether this is a covered event due to misrepresentations of the facts or it being a staged accident.

The remaining contentions of the parties are denied as moot.

Footnotes

Footnote 1:The court is given pause by what appears to be an attempt by defendant, through Mr. Glampe, to mislead this court. Defendant has clearly cherry-picked portions of the police accident report (see exhibit M of defendant’s moving papers) entitled “Accident Description/Officer’s Notes.” A whole reading of the section finds that it actually states:

“At t/p/o driver #1 states while driving W/B N. Conduit third lane/right lane driver #2 went from the middle lane attempted to make illegal right on Dumont causing her vehicle to collide with driver #2; Driver #2 states while driving straight on N. Conduit driver #1 rear ended her causing collision. No injuries; witness added to report.”

The police officer did not witness the incident and there are no affidavits from the driver of vehicle number 1 or the listed witness.

Footnote 3:Which addresses EIP/Claimant: Liloutie Sydnor and Lisa Brown (see exhibit T of defendant’s moving papers).

Footnote 4:Which addresses EIP/Claimant: Liloutie Sydnor & Lisa Brown (see exhibit X of defendant’s moving papers).

Footnote 5:Responding to a letter from plaintiff’s counsel that was received on February 24, 2015. Said letter requested proof that the previous denials had been properly rescinded and advised that plaintiff would not be available to appear for an EUO on February 27, 2015.

Footnote 6:Scheduling letters annexed to defendant’s moving papers as exhibits S, T and X only address EUOs scheduled for January 19, 2015, and February 27, 2015. Bills 1-3 were denied by defendant prior to the issuance of defendant’s first letter, dated December 19, 2014, requesting that plaintiff provider appear for an EUO (see defendant’s moving papers at exhibit S). Defendant’s second EUO letter, dated December 24, 2014 (prior to defendant’s receipt of bills 4 and 5), informed plaintiff provider’s attorney for the first time that defendant had elected to reconsider plaintiff’s previously submitted claims based on the request of Lisa Brown and plaintiff’s assignor Chetram Paraboo for an additional opportunity to appear at an EUO (see defendant’s moving papers at exhibit T). Said letter solely addressed the first three bills that had previously been submitted and were denied prior to defendant’s first EUO letter requesting that plaintiff provider appear for an EUO (see defendant’s moving papers at exhibits S, T). Defendant’s third letter, dated January 15, 2015, confirms receipt of a letter from plaintiff’s counsel advising that plaintiff would not appear at the EUO scheduled for January 19, 2015, and advised that based on the request of Lisa Brown to appear at an EUO, the claims for the first three bills were reopened and would be considered for payment (see defendant’s moving papers at exhibits U, V). As such, defendant would reschedule plaintiff’s EUO one final time (see defendant’s moving papers at exhibit V). Defendant’s letter of January 22, 2015 (see defendant’s moving papers at exhibit X), attempts to relate back to defendant’s original request of December 24, 2014 (which requested an EUO relating to the bills that had already been denied), as opposed to any new bills (i.e., bill 4 or 5) that may have been received. In addition, despite multiple requests from plaintiff’s counsel, defendant never advised plaintiff provider whether the previously served denials were formerly rescinded and never requested that plaintiff appear for EUOs relating to bills 4 or 5 as each succeeding letter from the defendant related to the initial EUO letter (see defendant’s moving papers at exhibits S, T, U, V, X, Y, Z, AA, BB).

Footnote 7:Bill 1 for date(s) of service (DOS) August 4, 2014-September 3, 2014, was received on September 22, 2014, delayed on October 8, 2014, denied on November 17, 2014, and re-denied on March 19, 2015, and July 7, 2015; bill 2 for DOS September 4, 2014-September 25, 2014, was received on October 6, 2014, delayed on October 20, 2014, denied on November 17, 2014, and re-denied on March 19, 2015, and July 7, 2015; bill 3 for DOS October 10, 2014, was received on November 17, 2014, denied on November 25, 2014, and re-denied on March 19, 2015, and July 7, 2015; bill 4 for DOS November 20, 2014-December 17, 2014, was received on December 29, 2014, allegedly delayed on January 12, 2015, and February 12, 2015, denied on March 12, 2015, and re-denied on July 7, 2015; bill 5 for DOS December 30, 2014-January 15, 2015, was received on February 5, 2015, allegedly delayed on February 12, 2015, denied on March 12, 2015, and re-denied on July 7, 2015 (see affidavit of Carrie Erickson ¶ 9; defendant’s moving papers at exhibits D-L).

741615/17

Pryanka Arora, Esq.

Law Office of Natalia Vassilieva, P.C.

3042 Ocean Avenue, 1st Floor

Brooklyn, NY 11235

Lawrence N Rogak, Esq.

Lawrence N Rogak LLC

3355 Lawson Boulevard

Oceanside, NY 11572

RECITATION, AS REQUIRED BY CPLR 2219 (A), OF THE PAPERS CONSIDERED IN THE REVIEW OF THIS MOTION:

Notice of Motion and Affirmation in Support 1,2

Notice of Cross-Motion and Affirmation in Support 3, 4

Affirmation in Opposition 5

The Court hereby sua sponte vacates its decision and order dated June 9, 2019, and substitutes the following:

In an action to recover assigned first-party no-fault insurance benefits arising from an [*2]accident which occurred on November 30, 2015 in New Jersey, defendant moves for summary judgment based on a lack of New York insurance coverage as well as for a determination that New Jersey law applies to this action. Plaintiff, a New York corporation which rendered medical services in New York to its assignor, a New York resident, opposes defendant’s motion and cross-moves for summary judgment in its favor seeking payment of bills submitted in the amount of $3,745.37 based on the bills and an affidavit showing that the plaintiff had mailed them to the defendant more than thirty days prior to starting suit and had not received any denials of benefit.

The basis of defendant’s motion is the claim that plaintiff will be unable to submit proof that defendant’s policy covers the subject incident. To maintain a meritorious action, defendant claims plaintiff “must necessarily establish that either 1) the underlying policy under which NYS statutory no-fault benefits are sought contained a mandatory NYS PIP endorsement, and/or 2) that the actual motor vehicle accident giving rise to plaintiff’s claim occurred within New York State.” Defendant also argues that the laws of New Jersey should be applied since “The claimant was a pedestrian struck by a vehicle insured under a New Jersey policy.”

To support these claims, the defendant submits an uncertified copy of a police report purporting to show that the subject accident occurred in New Jersey and an affidavit from its claim representative Ms. Outhouse which simply states that defendant’s policy does not cover the alleged incident based on her review of the file.

As the plaintiff has not objected to the admissibility of the police report, its contents will be considered by the court. See, Bank of NY Mellon v Gordon 171 AD3d 197 [2d Dept 2019]. The police report indicates that the subject accident occurred in New Jersey between a pedestrian who resided in New York and a New Jersey driver driving a vehicle registered in New Jersey.

Plaintiff responds that New York law should apply as it is a New York corporation which rendered treatment to a New York resident in New York. Additionally, the plaintiff argues that the defendant has failed to produce a copy of its policy and thus failed to show its lack of a New York State no-fault endorsement.

New York utilizes the ‘grouping of contacts’ or ‘center of gravity’ analysis as the appropriate approach to resolve choice of law questions in cases premised on breach of contract. The ‘grouping of contacts’ approach seeks to determine which state has the most significant relationship to the contract or the parties. (See Matter of Arbitration between Allstate Ins. Co. (Stolarz), 81 NY2d 219 [1993], revg 178 AD2d 899 [3d Dept 1991]. The court must consider the spectrum of significant contacts, rather than a single possible gratuitous event, in its determination as to which state has the most significant relationship to the parties or the contract. (Id. See also, Matter of Eagle Ins. Co. v. Singletary, 279 AD2d 56 [2d Dept 2000]). Among the contacts to be considered are the state where the parties entered into the contract, negotiated and performed the contract, the domicile of the parties, and the place of subject matter of the contract. In the context of insurance contracts, the jurisdiction with the most significant relationship to the transaction and the parties will generally be the jurisdiction which the parties understood was to be the principal location of the insured risk. See Matter of Midland Ins. Co., 16 NY3d 536 [2011], revg 71 AD3d 221 [1st Dept 2010].

In Advanced Med. Diagnostics of Queens, P.C. v Geico Ins. Co., 38 Misc 3d 140(A) [App Term 2d Dept, 2d, 11th and 13th Jud Dists 2013], the court applied a ‘grouping of contacts’ or ‘center of gravity’ analysis to a first-party no-fault case in which the plaintiff’s assignor was injured in a motor vehicle accident which occurred in New York. The vehicle in question was [*3]being driven by a New Jersey resident who owned the vehicle which was insured by a New Jersey automobile insurance policy. Plaintiff, a New York corporation, rendered medical services to its assignor in New York. In that case, the court held that New Jersey law applied.

When dealing with procedural matters, such as the burden of proof and the admissibility of evidence, the law of the forum state applies. (See, Emmons v Country Lincoln Mercury Sales, Inc., 111 AD2d 213 [2d Dept 1985]; Able Cycle Engines, Inc. v Allstate Ins. Co., 84 AD2d 140 [2d Dept 1981]). Contrary to defendant’s contention, as the movant for summary judgment, the burden of proof is on the defendant to establish its policy does not cover the subject incident and that the laws of New Jersey apply to this case.

To prevail, the movant must establish entitlement to judgment as a matter of law by submitting admissible evidentiary proof (Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065 [1979]), with which includes an affidavit of a person having knowledge of the facts and other admissible evidence (GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965 [1985]). Absent such a showing, the motion must be denied regardless of the sufficiency of opposing papers. (Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]). Summary judgment should not be granted if there is any doubt as to the existence of a triable issue of fact. (Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223 [1978]). The court’s function in determining such a motion, is issue finding, not issue determination. (Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395 [1957]).

In the case at bar, defendant submits no admissible evidence to establish its policy does not cover the subject incident. Ms. Outhouse’s affidavit states defendant’s policy does not cover the subject incident based on her review of the claim file. However, she does not specify what records she reviewed, including whether she even reviewed defendant’s subject insurance policy at issue. Ms. Outhouse further makes no attempt to establish the foundation of any reviewed records nor proffer the records for the court’s review. In fact, Ms. Outhouse does not even state whether she reviewed defendant’s subject insurance policy, nor does she submit a copy in support of defendant’s motion.

The contents of business records are inadmissible without the introduction of the records themselves. (See, Bank of NY Mellon v Gordon, 171 AD3d 197 [2d Dept 2019]), and it is far from clear here what contents of what records Ms. Outhouse relied upon. Accordingly, Ms. Outhouse’s affirmation is conclusory and lacks probative value (Utica Acupuncture P.C. v. Amica Mut. Ins. Co., 55 Misc 3d 126(A), 2017 NY Slip Op. 50331(U) [App. Term., 1st Dept., 2017]). Similarly, the defendant’s failure to proffer its insurance policy or any admissible evidence as to its contents leaves open the possibility that the policy covering the subject accident was issued in New York or otherwise contains a New York no-fault endorsement which would permit the application of New York law. The defendant has failed to sustain its burden of proof to establish either that its policy does not cover the subject incident or that the laws of New Jersey apply to this case. Accordingly, defendant’s motion is denied.

Plaintiff seeks summary judgment based upon proof of the submission to the defendant of a timely claim form, proof of the fact and the amount of the loss sustained, and proof that the defendant failed to pay or deny the claim within the requisite 30-day period. Defendant neither rebuts the sufficiency of the proof of claim nor submits either proof of payment or any denials.

In New York, a no-fault provider establishes its prima facie entitlement to summary judgment by proof of the submission to the defendant of a timely claim form, proof of the fact and the amount of the loss sustained, and proof that the defendant either failed to pay or deny the [*4]claim within the requisite 30-day period or issued a timely denial of claim that was conclusory, vague or without merit as a matter of law. New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512 [2nd Dept 2006].

Plaintiff’s motion must nonetheless be denied. Although the defendant failed to dispel all issues of fact as to whether this case should be controlled by New Jersey law, its submission of the police accident report without objection by the plaintiff sufficiently raises an issue of fact regarding which state’s substantive law should be applied to this case.

In Advanced Med. Diagnostics of Queens, P.C. v Geico Ins. Co., the court pointed out that a conflict does exist between New York law and New Jersey law, since under New Jersey law, unlike New York Law, a provider has the burden to establish that the provided services were medically necessary, and this defense is non-precludable, that is, an insurer can raise a lack of medical necessity defense at any time.

Under New Jersey law, as the defendant has failed to show that the plaintiff’s assignor was, under a different insurance policy, a “named insured” or “a resident relative in [a] named insured’s household,” as those terms are used in N.J. Stat. § 39:6A-4.2, this case would fall under N.J. Stat. § 39:6A-4 which provides that no-fault (PIP) coverage is afforded to pedestrians injured by a qualifying automobile. See e.g., Lumpkins v Mkt. Transition Facility of New Jersey, 283 NJ Super 181 [Super Ct 1995]. Plaintiff has shown by admissible evidence that it gave defendant timely notice within twenty-one days of commencement of treatment as required by N.J. Stat. § 39:6A-5(a). Plaintiff additionally has shown that its bills are overdue, both as that term is defined by N.J. Stat. § 39:6A-5(g) and by our own 11 NYCRR 65-3.8(a). Plaintiff has not, however, submitted evidence proving the medical necessity of the services it rendered.

Accordingly, plaintiff’s cross-motion is granted only to the extent that it has proven that bills totaling $3,745.37 were timely submitted to the defendant and that no denial was issued. Defendant has raised a triable issue of fact as to whether New Jersey law should apply to this case. Should the defendant prove at trial that its policy in question contains only a New Jersey no-fault (PIP) endorsement and not a New York no-fault endorsement, then the plaintiff shall bear the burden of proving the medical necessity of the services it rendered.

Defendant’s motion is denied and plaintiff’s cross-motion is granted only to the extent indicated. This constitutes a decision and order of the court.

Dated: October 22, 2019

________________________

HON. ODESSA KENNEDY

Judge of the Civil Court

744329/16

Attorney for Plaintiff
Oleg Rybak, Esq.
The Rybak Firm, PLLC
1810 Voorhies Ave., 3rd Floor, Ste. 7
Brooklyn, NY 11235
(718) 975-2035

Attorney for Defendant
Katherine A. Hazelton, Esq.
Law Office of Goldstein & Flecker
2 Huntington Quadrangle, Ste. 2N01
Melville, NY 11747
(516) 714-7927

The court’s Decision and Order is based upon consideration of the following papers:

NOTICE OF MOTION & AFFIDAVITS ANNEXED 1

OPPOSITION/CROSS-MOTION 2

REPLY/OPPOSITION TO CROSS-MOTION 3

SUR REPLY

This is an action by Plaintiff medical provider to recover assigned first-party no-fault benefits for treatment provided to its assignor, David Cenevil (Injured Party). Plaintiff argues that it met its prima facie burden and requests that summary judgment be granted in its favor pursuant to CPLR 3212. Defendant opposes Plaintiff’s motion and cross moves for dismissal on grounds that the injuries were the result of an intentional assault when the insured, Bernard Foy (Insured), used his vehicle as a weapon to deliberately strike the Injured Party. Accordingly, Defendant asserts that the Injured Party’s injuries were not the result of an accident, but an intentional act which is not a covered loss under 11 N.Y.C.R.R. § 65-2.2(a). This court agrees.

In New York, an insurer must provide no-fault insurance benefits for injuries resulting from an accident. 11 N.Y.C.R.R. § 65-2.2(a), requires coverage for “personal injuries caused by an accident arising out of the use or operation of a motor vehicle” (emphasis added). In order for an insurer to be relieved of its obligation to cover a loss, it must come forward with evidence to demonstrate that the injuries were a result of an intentional or deliberate action (State Farm Mut. Auto. Ins. Co. v. Langan, 16 NY3d 349 [2011]; Liberty Mut. Ins. Co. v. Goddard, 29 AD3d 698 [2d Dept. 2006]). An insurer must establish its “founded belief” that the incident was an intentional act by a preponderance of the evidence (A.B. Med. Services PLLC v. Eagle Ins. Co., 3 Misc 3d 8, 9 [2d Dept. 2003]; V.S. Med. Servs., P.C. v. Allstate Ins. Co., 25 Misc 3d 39 [2d Dept. 2009]), and can meet its burden with circumstantial evidence (State Farm Mut. Auto. Ins. Co., v. Laguerre, 305 AD2d 490 [2d Dept. 2003]).

Here, Defendant has met its burden through substantial documentary evidence including a police accident report, a criminal complaint an arrest report and an affidavit from Defendant’s Special Investigation Unit (SIU) investigator Doug Pfleging. These documents consistently support a clear finding that the incident which lead to the Injured Party’s injuries was a result of an intentional act. According to the police accident report, the Insured deliberately hit the Injured Party with his vehicle: “At TPO witness stated that deft had a verbal dispute with his step son [sic]. Witness stated that deft (step father) used his vehicle to hit c/v and fled the accident scene” (Deft. Exh. B). Pursuant to the arrest report, the Insured was subsequently arrested on several charges including felony assault with intent to cause serious physical injury and felony assault for using his vehicle as a weapon (Deft. Exh. C).

In New York, to determine whether an event was accidental “it is customary to look at the casualty from the point of view of the insured, to see whether or not it was unexpected, unusual and unforeseen'” (State Farm Mut. Auto. Ins. Co. v. Langan, 16 NY3d at 355 quoting Miller v. Continental Ins. Co., 40 NY2d 675, 677 [1976]). The view point of the injured party is not considered “[b]ecause an injury is always fortuitous to a non-consenting victim” (State Farm Mut. Auto. Ins. Co. v. Langan, 16 NY3d at 355 quoting Michaels v. City of Buffalo, 85 NY2d [*2]754, 759 [1995]). The same is true when the injured party seeks benefits under the policy’s uninsured motorist endorsement (Castillo v. Motor Vehicle Indemnification Corp., 161 AD3d 937 [2d Dept. 2018]; Utica Mut. Ins. Co. v. Burrous, 121 AD3d 910 [2d Dept. 2014]). Here, both the witness’ statement and the testimony from the Injured Party are consistent with a finding that from the Insured’s perspective, the incident was a deliberate act meant to cause injury (Deft. Exh. D; see generally McCarthy v. Motor Vehicle Indemnification Corp., 12 NY2d 922 [1963]).

Plaintiff’s arguments concerning its prima facie case and timely denial of the claims are irrelevant. Defendant insurer “is not precluded, despite untimely disclaimer, from raising as a defense its denial of liability on the ground that the services rendered to treat the injuries at issue did not arise from a covered accident” (General Hospital v. Chubb Group of Insurance Companies, 90 NY2d 195, 201 [1997]). Furthermore, Defendant’s “strict compliance with the time requirements of both statute and regulations may be obviated and the preclusion remedy rendered unavailable when denial of claims is premised on a lack of coverage” (General Hospital v. Chubb Group of Insurance Companies, 90 NY2d at199).

Based on the foregoing, Plaintiff’s motion for summary judgment is denied. Defendant’s cross motion to dismiss is granted.

This constitutes the decision and order of this court.

September 4, 2019
Brooklyn, NY
ENTER.
__________________________________
CONSUELO MALLAFRE-MELENDEZ
Judge, Civil Court

732771/17

Attorney for plaintiff:
Oleg Rybak, Esq.
The Rybak Firm PLLC
1810 Voorhies Avenue
3rd Floor Suite 7
Brooklyn, New York 11235

Attorney for defendant
Lawrence N. Rogak, Esq.
Lawrence N. Rogak LLC
3355 Lawson Boulevard
Oceanside, New York 11572

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

Notice of Motion and Affirmation in Support 1,2

Notice of Cross-Motion and Affirmation in Support 3,4

Affirmation in Opposition to the Cross-Motion 5

The Court hereby sua sponte vacates its decision and order dated November 15, 2017, and substitutes the following:

In an action to recover assigned first-party no-fault insurance benefits arising from an accident which occurred on October 1, 2015, defendant moves for summary judgment based on plaintiff’s assignor’s alleged failure to appear for an examination under oath (“EUO”) and upon the defense of policy exhaustion. Plaintiff cross-moves for an order: 1) awarding summary judgment in favor of plaintiff pursuant to CPLR 3211(c) or CPLR 3212(a); 2) limiting the issues of fact for trial pursuant to CPLR 3212(g) that the statutory billing forms were mailed to and received by the insurance carrier and that payment of no-fault benefits was overdue; and 3) dismissing defendant’s affirmative defenses pursuant to CPLR 3211(b).

It is well settled that summary judgment is a drastic remedy (See Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395 [1957]), which should not be granted if there is any doubt as to the existence of a triable issue of fact. (See Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223 [1978]). Hence, the court’s function in determining such a motion, is issue finding, not issue determination. (Id. Sillman supra at 404).

To prevail, the movant must establish entitlement to judgment as a matter of law, by submitting admissible evidentiary proof. (See Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065 [1979]). Absent such a showing, the motion must be denied regardless of the sufficiency of opposing papers. (See Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]).

EUO NON

APPEARANCE DEFENSE

While plaintiff’s non-appearance at an EUO vitiates defendant’s obligation to provide coverage (see Five Boro Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 39 Misc 3d 141(A), 2013 NY Slip Op. 50753(U) [App Term, 2d Dept, 2d & 11th Jud Dists, 2013]), to show entitlement to summary judgement, defendant must prove that it properly mailed the EUO requests to the plaintiff, who failed to appear for the EUO, and that defendant mailed plaintiff a timely denial. (Interboro Ins. Co. v Clennon, 113 AD3d 596, 979 N.Y.S.2d 83, 2014 NY Slip Op 00092 [2d Dept 2014]).

Proof of mailing may be shown based on actual mailing or that the item was mailed pursuant to the affiant’s standard office practices and procedures designed to ensure proper mailing (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 857 N.Y.S.2d 211, 2008 NY Slip Op 04072 [2d Dept 2008]). Defendant’s affidavit submitted in the case at bar, fails to establish that the described procedures was designed to ensure that the EUO letters were addressed to the correct recipient and properly mailed (see Progressive Cas. Ins. Co. v Infinite Ortho Prods., Inc., 127 AD3d 1050, 7 N.Y.S.3d 429, 2015 NY Slip Op 03340 [2d Dept [*2]2015]).

To establish the proper mailing of the EUO requests, defendant submits an affidavit from its claim representative, Christina Valentin. Ms. Valentin states that an EUO notice was sent to plaintiff’s assignor, on December 9, 2015, scheduling the EUO for January 6, 2016; and upon assignor’s non-appearance, a follow up notice was sent on January 7, 2016 re-scheduling the EUO for February 9, 2016. Ms. Valentin describes the documents which purport to the be the notices as ” true and accurate copies of the scheduling notices sent by the Law offices of Lawrence N. Rogak LLC” to plaintiff’s assignor.

Contrary to Ms. Valentin’s statement, however, the EUO notices which were attached to defendant’s motion are not generated by the Law Office of Lawrence N. Rogak LLC, but by the Law Firm of Milber Makris Plousadis & Beiden, LLP. Ms. Valentin’s assertions are further erroneous in that the notices seek an EUO of the plaintiff’s employee, Dr. Darren T. Mollo, DC, and not of plaintiff’s assigner, who notably is not even among the named claimants listed in the notices. Thus, defendant fails to establish that it requested an EUO of plaintiff’s assignor, and further, that it accurately addressed and mailed the request to him. Each of said deficiencies, warrants denial of defendant’s motion.

In addition, defendant fails to meet its burden of showing that plaintiff’s assignor failed to appear for the EUOs. (Five Boro Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 39 Misc 3d 141(A), 2013 NY Slip Op. 50753(U) [App Term, 2d Dept, 2d & 11th Jud Dists, 2013]). Generally, to establish burden of plaintiff’s failure to appear for a scheduled EUO, a statement from an attorney alleging that he or she was present in the office on the relevant dates and that he or she would have been the one to conduct the EUO is sufficient to demonstrate personal knowledge of the no-show (T & J Chiropractic, P.C. v. State Farm Mut. Auto. Ins. Co., 47 Misc 3d 130[A], 2015 NY Slip Op. 50406(U) [App Term, 2d Dept, 2d 11th & 13th Jud Dists, 2015]).

In the instant matter, the only indication of plaintiff’s assignor’s nonattendance at the EUO is defense counsel’s conclusory affirmation in support of the instant motion which is devoid of evidence of his personal knowledge of the alleged non-attendance. Counsel neither indicates whether he was assigned to conduct the EUO nor whether he was present at the EUO. Accordingly, defendant’s motion is further denied on the basis of failure to establish the assignor’s EUO non-appearance.

Moreover, defendant fails to show the timeliness of its denial. “A claim need not be paid or denied until all demanded verification is provided.” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; 11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1].) If plaintiff fails to provide the requested verification within 120 calendar days from the date of the initial request, the insurer may deny the claim. (11 NYCRR 65-3.5 [o]). No-fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim, (11 NYCRR 65-3.8(a)(1)),

According to the denial, the “final verification” requested was on January 31, 2016. Yet, the moving papers contain no verification request, or any document dated January 31, 2016. As discussed above, the only verification requests annexed to defendant’s papers pertain to claimants whose treatment is not at issue in the instant action.

As defendant has failed to establish entitlement to judgment as a matter of law on the issues of proper mailing of the EUO request, the nonappearance of the plaintiff’s assignor at the EUOs and the timeliness of its denial, its motion for summary judgment, based on the EUO [*3]nonappearance is denied.

POLICY EXHAUSTION DEFENSE

Defendant also seeks to dismiss the complaint on the basis that its policy limits have been properly exhausted.An insurer is not required to pay a claim where the policy limits have been properly exhausted (Hospital for Joint Diseases v. State Farm Mut. Auto Ins. Co., 8 AD3d 533 [2nd Dept., 2004]). An insurer’s payment of full monetary limits set forth in the policy, terminates its duties under the contract (Presbyterian Hosp. in City of New York v. Liberty Mut. Ins. Co., 216 AD2d 448 [2nd Dept., 1995]).

Moreover, when an insurer receives claims for more than $50,000, payments for claims that are submitted prior to the exhaustion of the $50,000 shall be made in the order in which each service was rendered or each expense was incurred (11 NYCRR 65-3.15; Alleviation Medical Services, P.C. v. Allstate Ins. Co., 55 Misc 3d 44 [App. Term, 2nd Dept., 2d, 11th & 13th Jud. Dists., 2017]).

In the case at bar, to demonstrate the policy’s exhaustion based on priority of payment when defendant received the bill, defendant relies on a payment “ledger” which it contends is admissible based on its claim examiner’s statement that the document is “a true and accurate copy of the payment ledger maintained on this claimant.” Defendant, however does not satisfy the evidentiary requirements of CPLR §4518 absent information regarding who or by whom the ledger was created or maintained, or whether the data in the ledger was recorded contemporaneously or soon after the occurrence. As defendant must prove its defense in admissible form, the failure to establish the evidentiary foundation of the ledger, which is the essence of its policy exhaustion defense, warrants denial of its motion.

Aside from its inadmissibility, the ledger’s ambiguity, further prevents defendant from demonstrating the exhaustion defense. The ledger does not specify when defendant received any of the prior bills leading to the exhaustion of the policy, but contains vague headings such as ‘paid date,’ ‘service period start’ and ‘service period end’ without proof that any of the headings represent the date that defendant in fact received or paid the bill at issue.

Finally, defendant fails to establish that its exhaustion of policy defense was based on proper priority of payment of claims. The term “claims,” in the priority of payment regulation excludes claims that are incomplete because verification requests are outstanding (Nyack Hospital v. General Motors Acceptance Corp., 8 NY3d 294 [2007]). Consequently, while an insurer awaits verification of an unverified claim, it may pay subsequently received verified claims, even if that will result in exhaustion of the policy before the requested verification is finally received (Id.).

In the instant matter, defendant admits receipt of the bills at issue on December 16, 2015, when, as per the ledger, the entire $50,000 policy was still available to pay claims since no claims had been yet been paid. Since defendant has failed show that the 30-day period it had to pay the bill was tolled by a properly mailed verification request or by non-compliance with such verification, it failed to justify its nonpayment within the 30-days.

Defendant has failed to establish as a matter of law either the defense of EUO non-appearance or that of policy exhaustion. Thus, its motion for summary judgment is denied.

PLAINTIFF’S CROSS-MOTION

In opposition to the plaintiff’s cross-motion for summary judgment, defendant attaches a copy of a decision in Budget Truck Rental, LLC v. Mollo, Index No.: 150666/15 [Sup. Court, NY County, Lebovits, J.] which included a finding that the time that plaintiff in this case was not [*4]properly incorporated when it submitted its billing in that case which arose from a November 7, 2013 accident and therefore not entitled to payment for those bills.

If it is proven in this case that the plaintiff was ineligible to receive payment as of the date services were rendered, that would constitute a defense. (See, e.g., State Farm Mut. Auto. Ins. Co. v. Mallela, 4 NY3d 313 [2005]) Although the defendant presents no denial of claim on this basis of improper or fraudulent incorporation of the plaintiff, it is nonwaivable and may be asserted at any time notwithstanding the absence of a timely denial. (Lexington Acupuncture, P.C. v. General Assur. Co., 35 Misc 3d 42 [App Term, 2d Dept 2012]). Accordingly, there are material issues of fact as to plaintiff’s corporate status at the time that services were rendered necessitating the denial of plaintiff’s cross-motion.

All of the motions before this court are denied with one exception. Plaintiff’s cross-motion pursuant to pursuant to CPLR 3212(g) is granted only to the extent that it has been established that the bills at issue were mailed to and received by the defendant.

Dated: May 17, 2019
______________________
ODESSA KENNEDY
Judge of the Civil Court

706182/16

Attorney for Plaintiff: Olga Sklyut, Esq.

Attorney for Defendant: Law Office of Jason Tenenbaum, PC

In this action for the payment of no-fault benefits, defendant moves seeking an order, inter alia, granting it summary judgment and dismissal of this action. Saliently, and to the extent relevant to this Court’s decision, defendant avers that insofar as it timely denied plaintiff’s claims for medical services under the no-fault portion of the assignor ROBERT PEGUERO’s (Peguero) insurance policy, on grounds that Peguero failed to appear for two Independent Medical Examinations (IMEs), the instant action must be dismissed. Plaintiff opposes the foregoing portion of defendant’s motion asserting, inter alia, that insofar as the evidence presented by defendant with respect to whether Peguero appeared at the IMEs is conclusory. Thus, plaintiff contends that defendant fails to establish prima facie entitlement to summary judgment on this dispositve issue. Plaintiff also cross-moves seeking an order, inter alia, granting it summary judgment with respect to the IME defense raised by defendant. Specifically, plaintiff contends that the IME notices sent to the assignor were defective, null, and void as a matter of law. Defendant opposes plaintiff’s cross-motion for the same reasons it contends it is entitled to summary judgment, reiterating the timeliness of the IME notices and denials for Peguero’s failure to appear thereat.

For the reasons that follow hereinafter, defendant’s motion is granted, in part, and plaintiff’s cross-motion is denied.

The instant action is for payment of no-fault insurance benefits for medical treatment. The endorsed complaint alleges, in relevant part, the following: Between August and November 2013, plaintiff, as a result of a covered event occurring on August 5, 2013, provided medical treatment to Peguero. The value of said treatment was $4,004.11. Defendant, a no-fault ^[FN1] insurer, whose insurance policy issued to Peguero covered the foregoing treatment was presented with proof of the treatment and failed to pay plaintiff for the same. Thus, plaintiff seeks a judgment in the amount of $4,004.11.

Standard of Review

The proponent of a motion for summary judgment carries the initial burden of tendering sufficient admissible evidence to demonstrate the absence of a material issue of fact as a matter of law (Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Thus, a defendant seeking summary judgment must establish prima facie entitlement to such relief by affirmatively demonstrating, with evidence, the merits of the claim or defense, and not merely by pointing to gaps in plaintiff’s proof (Mondello v DiStefano, 16 AD3d 637, 638 [2d Dept 2005]; Peskin v New York City Transit Authority, 304 AD2d 634, 634 [2d Dept 2003]). There is no requirement that the proof be submitted by affidavit, but rather that all evidence proffered be in admissible form (Muniz v Bacchus, 282 AD2d 387, 388 [1st Dept 2001], revd on other grounds Ortiz v City of New York, 67 AD3d 21, 25 [1st Dept 2009]). Notably, the court can consider otherwise inadmissible evidence, when the opponent fails to object to its admissibility and instead relies on the same (Niagara Frontier Tr. Metro Sys. v County of Erie, 212 AD2d 1027, 1028 [4th Dept 1995]).

Once movant meets his initial burden on summary judgment, the burden shifts to the opponent who must then produce sufficient evidence, generally also in admissible form, to establish the existence of a triable issue of fact (Zuckerman at 562). It is worth noting, however, that while the movant’s burden to proffer evidence in admissible form is absolute, the opponent’s burden is not. As noted by the Court of Appeals,

[t]o obtain summary judgment it is necessary that the movant establish his cause of action or defense ‘sufficiently to warrant the court as a matter of law in directing summary judgment’ in his favor, and he must do so by the tender of evidentiary proof in admissible form. On the other hand, to defeat a motion for summary judgment the opposing party must ‘show facts sufficient to require a trial of any issue of fact.’ Normally if the opponent is to succeed in defeating a summary judgment motion, he too, must make his showing by producing evidentiary proof in admissible form. The rule with respect to defeating a motion for summary judgment, however, is more flexible, for the opposing party, as contrasted with the movant, may be permitted to demonstrate acceptable excuse for his failure to meet strict requirement of tender in admissible form. Whether the excuse offered will be acceptable must depend on the circumstances in the particular case

(Friends of Animals v Associated Fur Manufacturers, Inc., 46 NY2d 1065, 1067-1068 [1979] [internal citations omitted]). Accordingly, generally, if the opponent of a motion for summary judgment seeks to have the court consider inadmissible evidence, he must proffer an excuse for failing to submit evidence in inadmissible form (Johnson v Phillips, 261 AD2d 269, 270 [1st Dept 1999]).

When deciding a summary judgment motion the role of the Court is to make determinations as to the existence of bonafide issues of fact and not to delve into or resolve issues of credibility. As the Court stated in Knepka v Talman (278 AD2d 811, 811 [4th Dept 2000]),

[s]upreme Court erred in resolving issues of credibility in granting defendants’ motion for summary judgment dismissing the complaint. Any inconsistencies between the deposition testimony of plaintiffs and their affidavits submitted in opposition to the motion present issues for trial

(see also Yaziciyan v Blancato, 267 AD2d 152, 152 [1st Dept 1999]; Perez v Bronx Park Associates, 285 AD2d 402, 404 [1st Dept 2001]). Accordingly, the Court’s function when determining a motion for summary judgment is issue finding not issue determination (Sillman v Twentieth Century Fox Film Corp., 3 NY2d 395, 404 [1957]). Lastly, because summary judgment is such a drastic remedy, it should never be granted when there is any doubt as to the existence of a triable issue of fact (Rotuba Extruders v Ceppos, 46 NY2d 223, 231 [1978]). When the existence of an issue of fact is even debatable, summary judgment should be denied (Stone v Goodson, 8 NY2d 8, 12 [1960]).

No-Fault Law

Pursuant to 11 NYCRR 65-2.4(a) entitlement to no-fault benefits requires compliance with all conditions precedent, one of which is that

the eligible injured person or that person’s assignee or legal representative shall submit [*2]written proof of claim to the self-insurer, including full particulars of the nature and extent of the injuries and treatment received and contemplated, as soon as reasonably practicable but, in no event later than 45 days after the date services are rendered

(11 NYCRR 65-2.4[c]). Because the No-Fault Law is a derogation of common law, it must be strictly construed (Presbyt. Hosp. in City of New York v Atlanta Cas. Co., 210 AD2d 210, 211 [2d Dept 1994]; Maxwell v State Farm Mut. Auto. Ins. Co., 92 AD2d 1049, 1050 [3d Dept 1983]). Thus, compliance with the technical requirements of the no-fault law are preconditions for payment to a medical provider thereunder. Accordingly, a medical provider’s failure to tender a claim and requisite proof to an insurer within 45 days after medical services were rendered authorizes an insurer to deny the claim (Kane v Fiduciary Ins. Co. of Am., 114 AD3d 405, 405 [1st Dept 2014] [“The arbitrators were therefore correct that petitioner was required, but failed, to comply with the conditions precedent to coverage found in the implementing no-fault regulations. He did not submit timely written proof of claim to the insurer, including the particulars regarding the nature and extent of the injuries and treatment received and contemplated.”]; St. Barnabas Hosp. v Penrac, Inc., 79 AD3d 733, 734 [2d Dept 2010]; Sunrise Acupuncture PC v ELRAC, Inc., 52 Misc 3d 126[A], *1 [App Term 2016]).

Generally, once an insurer receives a claim from a medical provider, it must pay or deny the same within 30 days thereof (11 NYCRR 65-3.8[c]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168, 1168 [2d Dept 2010]; Nyack Hosp. v Gen. Motors Acceptance Corp., 27 AD3d 96, 100 [2d Dept 2005], affd as mod and remanded, 8 NY3d 294 [2007]; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554 [2d Dept 1999]). When an insurer fails to timely deny or pay a claim, as required by the statutory schedule, it is precluded from interposing a statutory exclusion defense (Presbyt. Hosp. in the City of New York v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584 [2d Dept 2002]; Mount Sinai Hosp. v Triboro Coach Inc., 263 AD2d 11, 16 [2d Dept 1999]; Presbyt. Hosp. in City of New York v Atlanta Cas. Co., 210 AD2d 210, 211 [2d Dept 1994]).

However, the foregoing period – within which to deny or pay a claim – can be extended by a proper request for verification (11 NYCRR 65-3.5[b] [“Subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification forms.”]), and when such a request is made, “an insurer is not obligated to pay or deny a claim until all demanded verification is provided” (New York and Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512, 513 [2d Dept 2006]; see Hosp. for Joint Diseases v Elrac, Inc., 11 AD3d 432, 434 [2d Dept 2004]; Nyack Hosp. at 101; New York Hosp. Med. Ctr. of Queens at 584; New York & Presbyt. Hosp. v Am. Tr. Ins. Co., 287 AD2d 699, 700 [2d Dept 2001]). A request for verification submitted more than 15 days after a claim is received does not render the same invalid and merely serves to diminish the 30 day period within which to pay or deny a claim once verification is received; such time diminished by the number of days beyond the 15 days within which to request verification prescribed by the No-Fault Law (11 NYCRR 65-3.8[j]; Nyack Hosp. at 100-101 [“Therefore, inasmuch as the defendants mailed the request for additional verification two days beyond the 15-day period, the time within which the defendants had to either pay or deny the claim was reduced from 30 to 28 days.”]). A request for verification, thus, tolls the time within which to pay or deny a claim and such time does not begin to run until the documents requested are provided (New York & Presbyt. Hosp. at 700 [“Since the respondent did not supply the additional verification of the claim, the 30-day period in which the defendant had to either pay or deny the claim did not begin to run.”]; Westchester County Med. Ctr. at 555).

A medical provider seeking payments under the relevant no-fault policy establishes prima facie entitlement to summary judgment with proof that it submitted a timely claim form to the defendant, proof of the fact and the amount of the loss sustained, and “proof either that the defendant [] failed to pay or deny the claim within the requisite 30-day period, or that the defendant [] issued [*3]a timely denial of claim that was conclusory, vague or without merit as a matter of law” (Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A] [App Term 2011]; see, New York and Presbyt. Hosp. at 513; Westchester Med. Ctr. at 1168; Nyack Hosp. at 100; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742 [2d Dept 2004]; E. Coast Psychological, P.C. v Allstate Ins. Co., 13 Misc 3d 133[A)] *1 [App Term 2006]; Mollins v Motor Veh. Acc. Indem. Corp., 14 Misc 3d 133[A], *1 [App Term 2007]). A provider can establish the foregoing with “evidentiary proof that the prescribed statutory billing forms were mailed and received [and] that payment of no-fault benefits [is] overdue” (St. Vincent’s Hosp. of Richmond v Govt. Employees Ins. Co., 50 AD3d 1123, 1124 [2d Dept 2008]). However, an insurer raises an issue of fact sufficient to preclude summary judgment when it tenders evidence establishing a timely denial (id. at 124 [“However, in opposition, the defendant submitted admissible evidence in the form of an affidavit of an employee with knowledge of the defendant’s standard office practices or procedures designed to ensure that items were properly addressed and mailed.”]; New York and Presbyt. Hosp. at 513 [“However, in opposition to the motion, the defendant established that it had made a timely request for additional information and that it timely denied the claim within 30 days of receipt of the hospital records it had requested to verify the claim. Accordingly, the Supreme Court properly denied that branch of the plaintiffs’ motion which was for summary judgment on the first cause of action.”]), or that denial within the 30 day prescribed by law was not given because such period was extended by a request for verification (Nyack Hosp. at 100 [“Here, the defendants presented evidence in opposition to the motion and in support of their cross motion demonstrating that the request for the complete inpatient hospital records mailed to the plaintiff on September 12, 2003, resulted in an extension of the 30-day statutory period.”]; New York Hosp. Med. Ctr. of Queens at 585; New York & Presbyt. Hosp. at 700).

Conversely, once an insurer establishes a timely denial on grounds that a plaintiff failed to tender a claim within 45 days, the insurer establishes prima facie entitlement to summary judgment (St. Barnabas Hosp. v Penrac, Inc. at 734; Sunrise Acupuncture PC at *1). In addition, an insurer who demonstrates that despite proper requests for verification, verification was never received resulting in a denial of the claim also establishes prima facie entitlement to summary judgment (New York Hosp. Med. Ctr. of Queens v QBE Ins. Corp., 114 AD3d 648, 649 [2d Dept 2014]; New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492, 493 [2d Dept 2006]; Nyack Hosp. at 99; Cent. Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2d Dept 2005]; Hosp. for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534 [2d Dept 2004]; Westchester County Med. Ctr. at 555). This is particularly true when a demand for verification remains unanswered for more than 120 days. To be sure, 11 NYCRR 65-3.5(o) states that

[a]n applicant from whom verification is requested shall, within 120 calendar days from the date of the initial request for verification, submit all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply. The insurer shall advise the applicant in the verification request that the insurer may deny the claim if the applicant does not provide within 120 calendar days from the date of the initial request either all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply.

Additionally, 11 NYCRR 65-3.8(b)(3) states that

an insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the applicant has not submitted all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply, provided that the verification request so advised the applicant as required in section 65-3.5(o) of this Subpart.

Thus, when the insurer establishes denial of a claim because a demand for verification went unanswered for 120 days or more, prima facie entitlement to summary judgment is established (Hosp. for Joint Diseases v Elrac, Inc., 11 AD3d 432, 434 [2d Dept 2004] [relying on 11 NYCRR 65.11[m][3] which is now 11 NYCRR 65-3.8[b][3], the court held that “[t]he defendant denied the claim on October 9, 2002, more than 180 days after NY & P Hospital first notified it of the claim. [*4]Under these circumstances, the claim was properly denied.”]; Hempstead Gen. Hosp. v New York Cent. Mut. Fire Ins. Co., 232 AD2d 454, 454 [2d Dept 1996] [same]; TAM Med. Supply Corp. v Tri State Consumers Ins. Co., 57 Misc 3d 133[A], *1 [App Term 2017]). Significantly, in Hosp. for Joint Diseases the court held that defendant – the insurer – established prima facie entitlement to summary judgment with an affidavit from a claims representative, who based on his review of defendant’s business records established defendant’s defense – timely denial (id. at 433-434)^[FN2] .

It is well settled that a party’s burden to establish that forms were mailed and therefore, presumed to have been received by another is established upon the tender of proof in admissible form “of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed” (New York and Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 547 [2d Dept 2006]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001] [“Here, the deposition testimony of AIC’s president, a certificate of mailing, and a mailing ledger signed and date-stamped by a U.S. Postal Service employee established the actual mailing of the notice of cancellation to the plaintiff, giving rise to a rebuttable presumption of deliver.”]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16, 18 [App Term 2007] [the law does not “requir[e] 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.”]).

With respect to denial of claims based on reasons other than a claimant’s belated submission, an insurer establishes prima facie entitlement to summary judgment on its defense for a denial when it both timely denies a claim and tenders substantive evidence supporting the reason for the denial (Harmonic Physical Therapy, P.C. v Praetorian Ins. Co., 47 Misc 3d 137[A], *1 [App Term 2015] [“The evidentiary proof submitted by defendant established that, following the timely denial of plaintiff-provider’s claim on the ground of lack of medical necessity, the governing insurance policy’s coverage limits had been exhausted through payment of no-fault benefits in satisfaction of arbitration awards rendered in favor of other health care providers, and that such payments were made in compliance with the priority of payment regulation.”]; Rummel G. Mendoza, D.C., P.C. v Chubb Indem. Ins. Co., 47 Misc 3d 156[A], * 1 [App Term 2015] [“The defendant-insurer made a prima facie showing of entitlement to summary judgment dismissing the first-party no-fault claims of plaintiff L.N.L. Physical Therapy Rehabilitation (“plaintiff”) in the aggregate sum of $2,220, by establishing that it timely denied the claims based on the independent medical examination (IME) report and follow-up report of its examining orthopedic doctor, which set forth a factual basis and medical rationale for her stated conclusion that the assignor’s injuries were resolved and that there was no need for further physical therapy treatment. In opposition, plaintiff failed to raise a triable [*5]issue.”]).

When requested by the insurer, submission by the claimant to an Independent Medical Examination (IME) is a condition precedent to the receipt of no-fault benefits. To be sure, the Comprehensive Motor Vehicle Insurance Reparations Act, with regard to first-party or no-fault benefits, states, in pertinent part, that

[n]o action shall lie against the Company unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage [,] which includes, that] [t]he eligible injured person shall submit to medical examination by physicians selected by, or acceptable to, the Company, when, and as often as, the Company may reasonably require

(11 NYCRR 65-1.1).

Accordingly, an insurer establishes prima facie entitlement to summary judgment on its defense that denial of benefits is warranted because the claimant failed to appear at an IME when it demonstrates that an IME was timely requested via and properly mailed the notices to the claimant and that the claimant failed to appear (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [1st Dept 2011]; Coast Med. Diagnostic, PC v Praetorian Ins. Co., 38 Misc 3d 148[A], *1 [App Term 2013]; City Care Acupuncture, PC v New York Cent. Mut. Fire Ins. Co., 39 Misc 3d 128[A], *1 [App Term 2013]; Shore Med. Diagnostic, P.C. v Praetorian Ins. Co., 34 Misc 3d 131[A], *1 [App Term 2011]). Notably, the failure to appear for an IME warrants denial of all claims made by the claimant, not just those arising after the date that claimant fails to appear for the IME, and regardless of whether prior denials were timely (Unitrin Advantage Ins. Co. at 560). Stated differently,

[t]he failure to appear for IMEs requested by the insurer when, and as often as, it may reasonably require is a breach of a condition precedent to coverage under the No—Fault policy, and therefore fits squarely within the exception to the preclusion doctrine, [such that], when defendants’ assignors fail[] to appear for the requested IMEs, plaintiff ha[s] the right to deny all claims retroactively to the date of loss, regardless of whether the denials were timely issued

(id. at 560).

A request that a claimant submit to an IME is a request for additional verification pursuant to 11 NYCRR 65-3.5(b) and upon failure of the claimant to appear any further request for an IME are follow-up verification requests governed by 11 NYCRR 65-3.6(b) (Celtic Med. P.C. v NY Cent. Mut. Fire Ins. Co., 15 Misc 3d 13, 14 [App Term 2007] [“Contrary to plaintiff’s contentions, the affidavits submitted by defendant were sufficient to establish that defendant’s requests and follow-up requests for IMEs were mailed in accordance with the time periods prescribed by the insurance regulations (11 NYCRR 65-3.5 [b]; 65-3.6 [b]).”]; A.B. Med. Services PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50, 54 [App Term 2005] [“All post-claim IME verification requests must be made within prescribed time frames, the initial request within 10 days of the claim’s filing (to be scheduled within 30 days of the claim’s receipt) and a “follow-up” request within 10 days of a subject’s non-appearance at the initially-scheduled IME (11 NYCRR 65—3.5 [a], [d]; 11 NYCRR 65—3.6[b].”]). Accordingly, the timeliness of the requests for and the denial of an IME are governed by the foregoing sections of the no-fault law (Celtic Med. P.C. at 14; A.B. Med. Services PLLC at 54).

Significantly, and again, an insurer meets the foregoing burden only if it tenders proof in admissible form from a person with personal knowledge of the mailings scheduling the IME, that the claimant failed to appear at the IME (LDE Med. Services, P.C. v Interboro Ins. Co., 31 Misc 3d 146[A]. *1 [App Term 2011]; Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 722 [2d Dept 2006]), and that a denial based on the non-appearance was timely mailed to the claimant (Longevity Med. Supply, Inc. v Praetorian Ins. Co., 47 Misc 3d 128[A], *1 [App Term 2015] [“In addition, an affidavit executed by defendant’s claims examiner demonstrated that the denial of claim form, which denied this claim based on plaintiff’s assignor’s nonappearance at the IMEs, had been timely mailed.”]; Atl. Radiology Imaging, P.C. v NY Cent. Mut. Fire Ins. Co., 36 Misc 3d 154[A], *1 [App Term 2012]). As to the latter, the evidence that claimant failed to appear [*6]must be from someone with personal knowledge (Fogel at *1). Thus, affirmations or affidavits from the medical providers who were to perform the IMEs, are sufficient, when they attest that claimant never appeared for the IME, to meet an insurer’s burden (Longevity Med. Supply, Inc. at *1; Atl. Radiology Imaging, P.C. at *1). Indeed, in Am. Tr. Ins. Co. v Lucas (111 AD3d 423 [1st Dept 2013]), the Appellate Division, in an action for declaratory judgment, reversed the trial court’s denial of the plaintiff/insurer’s motion for summary judgment, holding that the failure by the assignor to appear for an IME precluded entitlement to no-fault benefits under the relevant policy (id. at 423-424). Specifically, on the issue of the proof required to establish the failure to attend an IME, the court stated that

[p]laintiff submitted competent evidence that the notices scheduling the claimant’s medical examinations were mailed, as well as the failure to appear, based on the sworn affidavits of the scheduled examining physician and his employee. Contrary to defendants’ contention, the affidavits were not conclusory, as they established personal knowledge, the employee’s role in the physician’s no-fault department, and the physician’s personal knowledge of the office procedures when a claimant failed to appear for a medical exam

(id. at 423-424 [internal citations omitted and emphasis added]).

Defendant’s Motion

Defendant’s motion seeking summary judgment and dismissal of this action is granted, in part. Significantly, defendant establishes, beyond any factual dispute, that it properly and timely requested that Peguero appear for two IMEs, that Peguero failed to appear for the foregoing IMEs and that subsequently, defendant timely and properly denied payment of all no-fault claims related to medical treatment provided to Peguero because he failed to appear for two IMEs.

In support of its motion, and to the extent relevant to the Court’s decision, defendant submits:

An affidavit by Regina Abbatiello (Abbatiello), a No-fault Claims Adjuster employed by defendant who states, in relevant part, as follows: Abbatiello’s duties include the handling and management of no-fault claim files, the processing of all no-fault claims for defendant, and the payment and denial of such claims. Abbatiello states that she reviewed defendant’s records related to plaintiff’s claim and that her affidavit is based, in part on that review. Pursuant to defendant’s standard procedure, upon plaintiff’s claim for no-fault benefits arising from a motor vehicle accident occurring on August 5, 2013, and for which no-fault medical benefits were assigned by Pegeuero to plaintiff, claim no. NF13408803 was assigned to said claim. All documents generated and mailed by defendant in reference to plaintiff’s claim bore the foregoing claim number. On September 12, 2013, Omnimed Evaluation Services (Omnimed), on behalf of defendant, sent Peguero and his attorney a letter dated the previous day requesting that Peguero attend an IME on September 23, 2013. Peguero failed to attend the IME. Thereafter, on September 25, 2013, Omnimed sent Peguero and his attorney another letter dated the previous day requesting that Peguero attend an IME on October 2, 2013. Plaintiff failed to appear. As a result of Peguero’s failure to appear at the last scheduled IME, within 30 days thereof, all claims for no-fault medical benefits were denied. With regard to claim related correspondence received by defendant, when received via mail, it is stamped with the date when it is received, checked against a computerized system to identify with which claim number the correspondence is associated as well which adjuster is handling the respective claim. Thereafter, the correspondence is delivered to the appropriate adjuster’s incoming mail bin in that adjuster’s work area. With regard to forms denying claims or requesting additional verification, the date on the foregoing documents is the date the same are generated and placed in envelopes for mailing. The address on the envelopes in which those documents are placed and to which they are mailed is the address in defendant’s records as noted in claim documents received by defendant. When the foregoing documents are ready for mailing they are placed in an envelope by the adjuster assigned to the respective claim and then placed in a bin. Mail personnel then pick-up mail from the bins daily at 3:45PM. Claims personnel then affix appropriate postage to the envelopes and hand-deliver all outgoing mail to the United States Post Office in Melville, NY. The foregoing procedure is one to which defendant strictly adheres and it is Abbatiello’s responsibility to ensure compliance with the foregoing procedure. All documents annexed to Abbatiello’s affidavit, [*7]which relate to plaintiff’s no-fault claim were generated ^[FN3] in the regular course of defendant’s business and mailed on the date indicated on the document.

An affidavit by Karin Bruford (Bruford), Supervisor of the No-Fault Department at Omnimed, who states in relevant part, as follows: Bruford is respnsible for oversight and scheduling of IMEs by Omnimed on behalf of defendant. Upon receipt of a referral from defendant indicating that an assignor has to submit to an IME, Onmimed assigns a Claimant ID Number to the referral, which here was 21892-XB60 and all information forwarded to Omnimed regarding the claim is stored electronically in Omnimed’s computer program. Omnimed then determines the appropriate specialty and location of the doctor who will perform the IME. That doctor is then contacted via telephone to schedule the IME. Thereafter, Omnimed drafts a letter requesting that the assignor attend the IME. The letter bears all the relevant information, including the date, time, location and examining doctor’s information. The letter is then mailed to the assignor and his attorney at the address indicated in the no-fault claim records submitted to defendant by a provider and sent to Omnimed by defendant. Should an assignor fail to attend the IME, Omnimed is apprised by the physician and Omnimed then automatically reschedules the IME. If the physician apprises Omnimed that an assignor failed to attend a second IME, Omnimed generates a notice that is then mailed to defendant. Omnimed schedules an IME shortly after defendant sends it a referral. The letter scheduling the IME is placed in an envelope, addressed to an assignor and his attorney, appropriate postage is procured and Omnimed then places the envelope in the exclusive custody of the United States Postal Service. The foregoing is true for any letters rescheduling an IME. With relation to Peguero, defendant requested that Omnimed schedule an IME. On September 12, 2013, Omnimed sent Peguero and his attorney a letter dated the previous day requesting that Peguero attend an IME on September 23, 2013. Peguero failed to attend the IME. Thereafter, on September 25, 2013, Omnimed sent Peguero and his attorney another letter dated the previous day requesting that Peguero attend an IME on October 2, 2013. Plaintiff failed to appear. Bruford states that all the documents appended to her affidavit, including the letters requesting that Peguero attend an IME were created [*8]and maintained in the ordinary course of Omnimed’s business.

An affirmation by Ajendra Sohal (Sohal), a medical doctor, who states the following: Sohal’s office is located at 92-29 Queens Boulevard, No.CJ-17, Rego Park, NY 11374. Sohal was asked to perform an IME on Peguero on September 23, 2013. On the foregoing date, Sohal was at her office but Pegeuero never appeared for the IME. Sohal was again asked to perform an IME on Peguero on October 2, 2013. On the foregoing date, Sohal was again at her office but Peguero failed to appear. It was the practice of Sohal’s office to inform the IME vendor when a claimant fails to appear for an IME. Because Sohal, based on her personal knowledge was certain that Peguero never appeared for the IME, she informed Omnimed that Peguero failed to appear.

An application for no fault benefits dated October 7, 2013, wherein Peguero seeks no-fault benefits arising from a motor vehicle accident occurring on August 5, 2013. Peguero listed his address as 1233 Boston Road, Apt 4A, Bronx, NY 10456.

A legion of Verification of Treatment forms, the first of which is dated September 11, 2013 and within which plaintiff seeks payment from defendant for medical treatment provided to Peguero on August 15 and 16, 2013. A legion of Denial of Claim forms, wherein defendant denies payment on plaintiff’s claims within 30 days of the date on each of the Verification of Treatment forms. For example, with regard to the Verification of Treatment form just discussed, defendant’s Denial of Claim form, dated September 24, 2013, and the Explanation of Review form appended thereto, indicates that of the $267.50 billed, $51.44 would not be paid insofar as that portion exceeds the allowance in the fee schedule. Notably, defendant tenders a Denial of Claim form dated October 11, 2013, which indicates that plaintiff’s entire claim is denied because Peguero failed “to appear for two pain management independent medical examinations that were scheduled for 9-23-2013 and 10-02-2013.”

A Notice of Physical Examination form dated September 11, 2013. The form is from Omnimed and is addressed to Peguero at his address. The form apprises Peguero that Omnimed represents defendant and that he is scheduled to attend a medical examination as prescribed by the no-fault law. The form indicates that the examination is on September 23, 2013 at 5PM with Sohal. Peguero is provided with Sohal’s address and telephone number, told to confirm his appearance with Sohal, told to contact Omnimed if the date and time is not acceptable and apprised that he would be “reimbursed for any proven loss of earnings and reasonable transportation expenses incurred in complying with this request.”

A Re-scheduled No-fault Examination form dated September 24, 2013. The form contains substantially all of the information contained in the Notice of Physical Examination form dated September 11, 2013, except that Peguero is apprised that he did not appear for the first medical examination and is told to appear to be examined by Sohal at the same place and location but on October 2, 2013 at 6:15PM.

Based on the foregoing, defendant establishes prima facie entitlement to summary judgment on its defense predicated on Peguero’s failure to appear for and submit to an IME. As noted above, when requested by the insurer, submission by the claimant to an IME is a condition precedent to the receipt of no-fault benefits (11 NYCRR 65-1.1). Accordingly, an insurer establishes prima facie entitlement to summary judgment on its defense that denial of benefits is warranted because the claimant failed to appear at an IME when it demonstrates that an IME was timely requested via properly mailed notices to the claimant and that the claimant failed to appear (Unitrin Advantage Ins. Co. at 560; Coast Med. Diagnostic, PC at *1; City Care Acupuncture, PC at *1; Shore Med. Diagnostic, P.C. at *1). In addition, an insurer meets the foregoing burden if it tenders proof in admissible form from a person with personal knowledge of the mailings used to schedule the IME, claimant’s failure to appear at the IME (LDE Med. Services, P.C. at *1; Fogel Psychological, P.C. at 722), and that a denial based on claimant’s failure to appear was timely mailed to the claimant (Longevity Med. Supply, Inc. at *1; Atl. Radiology Imaging, P.C. at *1). Significantly, the evidence that claimant failed to appear must be from someone with personal knowledge (Fogel at *1), such as affirmations or affidavits from the medical providers who were to perform the IMEs (Am. Tr. Ins. Co. at 423-24; Longevity Med. Supply, Inc. at *1; Atl. Radiology Imaging, P.C. at *1).

Here, plaintiff, as per its first Verification of Treatment form, requested payment for medical services on September 11, 2013 and defendant then requested that Peguero appear for an IME that very day. Thus, the IME – which is a request for further verification – was timely requested.

To be sure, once an insurer receives a claim from a medical provider, it must pay or deny the same within 30 days thereof (11 NYCRR 65-3.8[c]; Westchester Med. Ctr. at 1168; Nyack Hosp. at 100; Westchester County Med. Ctr. at 554) or be precluded from interposing a statutory exclusion defense (Presbyt. Hosp. in the City of New York at 282; New York Hosp. Med. Ctr. of Queens at 584; Mount Sinai Hosp. at 16; Presbyt. Hosp. in City of New York at 211). However, the foregoing period – within which to deny or pay a claim – can be extended by a proper request for verification (11 NYCRR 65-3.5[b], and when such a request is made, “an insurer is not obligated to pay or deny a claim until all demanded verification is provided” (New York and Presbyt. Hosp. at 513; Hosp. for Joint Diseases at 434; Nyack Hosp. at 101; New York Hosp. Med. Ctr. of Queens at 584; New York & Presbyt. Hosp. at 700). A claim for verification tolls the time within which to deny a claim until 30 days after requested information is received if verification is requested within 15 days of receipt of claim or by the number of days beyond the 15 days that it took the insurer to request verification (11 NYCRR 65-3.8[j]; Nyack Hosp. at 100-101). Stated differently, generally, a request for verification tolls the time within which to pay or deny a claim and such time does not begin to run until the documents are provided (New York & Presbyt. Hosp. at 700; Westchester County Med. Ctr. at 555).

Notably, a request that a claimant submit to an IME is a request for additional verification pursuant to 11 NYCRR 65-3.5(b) and upon failure of the claimant to appear, a further request for an IME is a follow-up verification request governed by 11 NYCRR 65-3.6(b) (Celtic Med. P.C. at 14; A.B. Med. Services PLLC at 54).

Accordingly, because here, plaintiff submitted the foregoing claim on September 11, 2013, defendant had until October 11, 2013 to pay, deny it, or seek further verification. As indicated by the Notice of Physical Examination form sent to Peguero by Omnimed on defendant’s behalf, defendant timely requested (within 30 days) that Peguero attend an IME on the same day plaintiff’s claim form was dated. The IME was first scheduled for September 23, 2013, but as per Sohal’s affirmation, Peguero failed to appear for the IME and Omnimed was apprised. As a result, per Omnimed’s Re-scheduled No-fault Examination form dated September 24, 2013 (one day after Peguero’s failure to comply with the demand for verification – the IME request), Omnimed rescheduled the IME for October 2, 2013. Upon learning from Sohal that Peguero failed to appear for the second IME, Omnimed notified defendant, who then sent plaintiff a Denial of Claim form dated October 11, 2013 (nine days after Peguero failed to appear for the second IME), indicating that plaintiff’s entire claim would be denied because Peguero failed “to appear for two pain management independent medical examinations that were scheduled for 9-23-2013 and 10-02-2013.” Because defendant timely requested the initial IME within 15 days of receiving plaintiff’s claim form (11 NYCRR 65-3.5[b]), timely re-requested the IME within 10 days of Peguero’s failure to appear (11 NYCRR 65-3.6[b]), and timely denied the claim within nine of the 30 days it had to deny plaintiff’s claim for Peguero’s failure to appear at the IME, defendant establishes prima facie entitlement to summary judgment.

It bears noting, that while generally, pursuant to 11 NYCRR 65-3.5(o), denial of a claim for a plaintiff’s failure to tender information responsive to an insurer’s request for verification must occur no earlier 120 days after the failure by a provider to provide the information requested (Hosp. for Joint Diseases at 434; Hempstead Gen. Hosp. at 454; TAM Med. Supply Corp. at *1), no such requirement is imposed when a denial is one for an assignor’s failure to attend an IME. Specifically, 11 NYCRR 65-3.5(o) states that “[t]his subdivision shall not apply to a . . . medical examination request, or examination under oath request.”

It is well settled that proof of timely mailing of forms requesting verification (here, an IME), and forms denying claims are part of defendant’s burden for purposes of establishing prima facie entitlement to summary judgment (Unitrin Advantage Ins. Co. at 560; Coast Med. Diagnostic, PC at *1; City Care Acupuncture, PC at *1; Shore Med. Diagnostic, P.C. at *1). On this record, [*9]defendant meets the requisite burden. Indeed, a party’s burden to establish that forms were mailed and therefore, presumed to have been received by another is established upon the tender of proof in admissible form “of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed” (New York and Presbyt. Hosp. at 547; Residential Holding Corp. at 680; Delta Diagnostic Radiology, P.C. at 18).

On this record, defendant establishes timely mailing of the forms requesting that Peguero submit to an IME, which were mailed to Peguero by Omnimed on behalf of defendant with Bruford’s affidavit. With respect to the notices sent to Peguero scheduling his IMEs – here, the Notice of Physical Examination form and the Re-scheduled No-fault Examination form – Bruford states that they were mailed on the date indicated on the letters as per Omnimed’s mailing procedure, which was to place such letters in an envelope, addressed to an assignor and his attorney, to affix appropriate postage thereto and to place the envelope in the exclusive custody of the United States Postal Service.

Similarly, timely mailing of the Denial of Claim form dated October 11, 2013, denying plaintiff’s claims for Peguero’s failure to attend two IMEs is established by Abbatiello, who describes defendant’s mailing procedure with respect to such forms. Specifically, Abbatiello states that with regard to forms denying claims or requesting additional verification, the date on said forms is the date the same are generated and placed in envelopes for mailing, that the address on the envelopes in which those documents are placed and to which they are mailed is the same address in defendant’s records and derived from the claim documents sent to defendant by an assignor and/or insured. Abbatiello further states that when the foregoing documents are ready for mailing they are placed in an envelope by the adjuster assigned to the respective claim and then placed in a bin, where after proper postage is procured and affixed, the forms, in envelopes, are then hand-delivered to the United States Post Office in Melville, NY.

Nothing submitted by plaintiff in opposition to defendant’s motion raises an issue of fact sufficient to preclude summary judgment on the foregoing issue. Indeed, on this issue, plaintiff submits no evidence whatsoever and instead contends that defendant’s evidence is insufficient to establish defendant’s burden on summary judgment. Upon a review of all arguments asserted by plaintiff, the Court finds them to be bereft of merit.

Plaintiff’s salient argument is that Sohal’s affirmation, wherein he states that Peguero failed to attend the IMEs scheduled by Omnimed on behalf of defendant is insufficient to establish that Peguero failed to appear. Essentially, despite Sohal’s contention that the contents of her affirmation are based on her personal knowledge, plaintiff contends that Sohal’s affirmation lacks the personal knowledge Sohal contends she had. To that end, paradoxically, rather than support the foregoing contention with case law relevant to that issue, plaintiff goes off on an inapplicable tangent. Again, prevailing law indicates that all that is required to establish a claimant’s failure to appear at an IME is that such assertion be from someone with personal knowledge (Fogel at *1), such as the medical provider who would have performed the IME (Am. Tr. Ins. Co. at 423-24; Longevity Med. Supply, Inc. at *1; Atl. Radiology Imaging, P.C. at *1).

Despite the foregoing body of law, plaintiff seeks to limit the definition of personal knowledge, carving from it those instances, where as here, someone’s basis for an assertion is essentially an eyewitness account, by citing cases prescribing the elements required to establish the presumption that mail was received after it was mailed. To be sure, plaintiff, relying on, inter alia, Viktor Gribenko, M.D., P.C. v Allstate Ins. Co. (10 Misc 3d 139[A] [App Term 2005]), a case regarding the burden of proof to establish presumption of receipt upon mailing, contends that Sohal’s assertion, that she knew that Peguero never appeared for his IMEs because she was at her office and therefore in a position to know, is insufficient because she fails to describe the entirety of the practices at her office with respect to conducting IMEs.

This Court is not persuaded by plaintiff’s assertion and finds Sohal’s affirmation far from conclusory. This is especially true here since the appellate case law on this issue does not avail plaintiff. In Am. Tr. Ins. Co. v Lucas, the court, on the issue of whether the claimant appeared for an IME found that “affidavits [submitted] were not conclusory, as they established personal [*10]knowledge, the employee’s role in the physician’s no-fault department, and the physician’s personal knowledge of the office procedures when a claimant failed to appear for a medical exam” (id. at 423-424). Here, Sohal, in addition to describing her office’s procedures when a claimant fails to appear for an IME , unequivocally states that she “was personally at [her] office on the above date[s] and [] Peguero never appeared for the IME[s.]” She then goes on to state that she “could state with certainty that Robert Peguero never appeared for the above IME(s).” Accordingly, Sohal’s affirmation is far from conclusory, states the basis for her assertion, and unequivocally establishes that Peguero never appeared for either of his two IMEs.

Plaintiff’s remaining arguments are similarly bereft of merit. For example, plaintiff’s contention that the amount of time given to Peguero to appear for IMEs is unreasonable and violative of 11 NYCRR 65-3.5(e)(“All examinations under oath and medical examinations requested by the insurer shall be held at a place and time reasonably convenient to the applicant and medical examinations shall be conducted in a facility properly equipped for the performance of the medical examination.”), as a matter of law, is unpersuasive. Here, the first notice was mailed on September 11 or 12, 2013 for an IME to be held on September 23, 2013. Thus Peguero was given 10-11 days’ notice. With regard to the second IME, Peguero was notified on September 24 or 25, 2013 that he was to appear for an IME on October 2, 2013. Thus, he was given seven-eight days’ notice. Nevertheless, whether the length of time provided is unreasonable is an issue the Court need not reach since that element is not part of defendant’s prima facie burden.

Indeed, the relevant case law states that prima facie entitlement to summary judgment on the issue of a claimant’s failure to attend an IME is established upon evidence that an IME was, inter alia, timely requested pursuant to 11 NYCRR 65-3.5(b) (Unitrin Advantage Ins. Co. at 560; Coast Med. Diagnostic, PC at *1; City Care Acupuncture, PC at *1; Shore Med. Diagnostic, P.C. at *1). There is no basis then, as urged by plaintiff, to conclude, that an insurer must also establish that the time period between notice of an IME and the IME is reasonable and convenient. Quite frankly, in the absence of admissible evidence decrying, as relevant here, the time period, the time period must be presumed reasonable. Here, then evidence from Peguero would be required, from whom no affidavit is submitted.

Because the failure to appear for an IME warrants denial of all claims made by the claimant, not just those arising after the date that claimant fails to appear for the IME, and regardless of whether prior denials were timely (Unitrin Advantage Ins. Co. at 560), the remainder of defendant’s motion – seeking, inter alia, summary judgment on other defenses – is denied as moot.

Plaintiff’s Cross-Motion

For the reasons stated above – that on this record, it is clear that Peguero failed to appear for timely and properly requested IMEs which resulted in a timely and proper denial of all no-fault medical claims, plaintiff’s cross-motion for summary judgment must be denied. It is hereby

ORDERED that the complaint be dismissed, with prejudice. It is further

ORDERED that defendant serve a copy of this Decision and Order with Notice of Entry upon plaintiff within thirty (30) days hereof.

This constitutes this Court’s decision and Order.

Dated:
__________________
Hon.___________________________
FIDEL E. GOMEZ, JCC

Footnotes

Footnote 1: The payment of no-fault benefits and claims made pursuant thereto are governed by, inter alia, 11 NYCRR 65-3.1 which states that “[t]he following are rules for the settlement of claims for first-party and additional first-party benefits on account of injuries arising out of the use or operation of a motor vehicle, a motorcycle or an all-terrain vehicle. These rules shall apply to insurers and self-insurers, and the term insurer, as used in this section, shall include both insurers and self-insurers as those terms are defined in this Part and article 51 of the Insurance Law, the Motor Vehicle Accident Indemnification Corporation (MVAIC), pursuant to section 5221(b) of the Insurance Law and any company or corporation providing insurance pursuant to section 5103(g) of the Insurance Law, for the items of basic economic loss specified in section 5102(a) of the Insurance Law.”

Footnote 2: It bears mentioning that the court’s reasoning in Hosp. for Joint Diseases – that “[p]ersonal knowledge of [defendant’s] documents, their history, or specific content are not necessarily required of a document custodian” (id. at 433), for purposes of laying a business record foundation sufficient to admit the documents in evidence, or in that case, for consideration on summary judgment – is merely a recognition of well settled law. Indeed, the business record foundation only requires proof that (1) the record at issue be made in the regular course of business; (2) it is the regular course of business to make said record; and (3) the records were made contemporaneous with the events contained therein (CPLR § 4518; People v Kennedy, 68 NY2d 569, 579 [1986]). Accordingly, “[i]t is well settled that a business entity may admit a business record through a person without personal knowledge of the document, its history or its specific contents where that person is sufficiently familiar with the corporate records to aver that the record is what it purports to be and that it came out of the entity’s files” (DeLeon v Port Auth. of New York and New Jersey, 306 AD2d 146 [1st Dept 2003]).

Footnote 3: Notably, Abbatiello’s foundation for the records appended to her affidavit would ordinarily only be sufficient to admit in evidence only those records generated by defendant. To be sure, records can generally be admitted for consideration at trial or on a motion upon a proper foundation that the same are business records – namely, that (1) the record be made in the regular course of business; (2) it is the regular course of business to make said record; and (3) the records were made contemporaneous with the events contained therein (CPLR § 4518; People v Kennedy, 68 NY2d 569, 579 [1986]). Here, the foregoing foundation was laid but there are a legion of records attached to the instant motion, namely the claim documents which defendant received from plaintiff which clearly were not generated by defendant and thus not their business records. Such records, therefore, are not generally admissible (Carothers v GEICO Indem. Co., 79 AD3d 864, 864-865 [2d Dept 2010], overruled on other grounds Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 114 AD3d 33 [2d Dept 2013], affd, 25 NY3d 498 [2015]. To be sure, “the mere filing of papers received from other entities, even if they are retained in the regular course of business, is insufficient to qualify the documents as business records” (Std. Textile Co., Inc. v Natl. Equip. Rental, Ltd., 80 AD2d 911, 911 [2d Dept 1981]). Accordingly, the records of a third-party are not the admissible business records of another party unless such third-party’s records were used in the preparation of the proponent’s business records such that they are fully incorporated into the proponent’s business records (Andrew Carothers, M.D., P.C. at 864—65; Plymouth Rock Fuel Corp. v Leucadia, Inc., 117 AD2d 727, 728 [2d Dept 1986]; see also People v DiSalvo, 284 AD2d 547, 548 [2d Dept 2001]). Here, however, all records appended to Abbatiello’s affidavit are clearly admissible because as detailed by Abbatiello, none of defendant’s records, specifically the forms denying claims and those forms where further verification is requested would be generated but for the records received by defendant and which are appended to Abbatiello’s affidavit.

[*1]

Civil Court of the City of New York, New York County, April 9, 2019

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn (Stefan Belinfanti of counsel), for plaintiff.

Law Offices of Rubin & Nazarian, Long Island City (Tasnim Hassanali of counsel), for defendant.

Background

Plaintiff commenced this action to recover assigned first-party no-fault benefits on behalf of Eric Daniel (assignor) in 2013. In 2018, plaintiff was awarded a judgment for the amount sued for. The action was then assigned to this court for a determination of plaintiff’s claim for attorneys’ fees.

The summons and complaint were filed on February 6, 2013.

On May 6, 2013, defendant appeared, by counsel, and filed an answer asserting 11 affirmative defenses, including that plaintiff’s assignor failed to appear for an independent medical exam (IME) and thus breached a condition precedent for coverage.

On June 25, 2013, defendant moved for summary judgment based on its defense that the assignor failed to appear for an IME. The motion was adjourned to October 4, 2013, April 1, 2014, July 25, 2014, and January 6, 2015. On February 5, 2015, defendant withdrew the motion.

There was a preliminary conference scheduled for October 4, 2013, and further conference dates on April 30, 2014, November 12, 2014, and April 22, 2015.

Plaintiff filed a notice of trial on May 14, 2015.

The action appeared on the trial calendar on May 25, 2016, June 8, 2017, July 5, 2018, September 24, 2018, November 5, 2018, and December 18, 2018. On December 18, 2018, the court (Ramirez, J.) issued a decision which stated in pertinent part:

“Plaintiff has made out a prima facie case. Defendant has failed to establish its defense of IME no show. Thus, judgment for Plaintiff for $944.12, plus statutory interest and filing fees.

“The issue of attorney fees will be severed and heard in Part MP2 on 2/20/19 at 9:30 am (Room 353).”

On February 20, 2019, the action was adjourned to April 1, 2019.

On April 1, 2019, the action was assigned to this court for a hearing to determine plaintiff’s claim for attorneys’ fees. The{**63 Misc 3d at 877} hearing commenced and concluded on that date. The matter was adjourned to April 8, 2019, for the submission of legal memoranda. On April 8, 2019, after the submission of memos by each party via email, the court reserved decision.

The Hearing

Plaintiff presented one witness at the hearing, Jennifer Raheb (JR), an attorney with the law firm representing plaintiff. Plaintiff also submitted a copy of the pleadings, the summary judgment motion papers, a printout from eCourts and the decision entering judgment.

JR testified that she has been admitted to practice law for 15 years, and has worked for Gary Tsirelman, P.C. for approximately five years. JR is familiar with this action and made all the court appearances on the case from at least May 2016 forward. JR testified credibly that each time the action appeared on the trial calendar, she spent approximately one hour preparing the file the night before. For this case, JR testified that the preparation included review of documents related to defendant’s IME no-show defense, including letters requesting an appearance for an IME and proof of mailing. JR testified that she also prepared cross-examination for the two witnesses she expected defendant to produce to establish proof of the assignor’s failure to appear and the scheduling letters.

JR did not do the opposition to the summary judgment motion, nor is there a record of opposition papers having been filed with the court. However, plaintiff did submit a copy of the opposition papers prepared by another attorney at the firm, Douglas Mace, Esq. (exhibit 7).

JR testified that in her experience motions on policy issues are much more complex than motions on medical necessity.

JR is assigned to handle the New York County no-fault cases for her firm and makes daily appearances in New York County Civil Court. JR typically arrives in court at around 9:30 a.m.

JR remembers first appearing on this case in 2015.

While JR had some independent recollection of specific appearances, much of her testimony was based on her general practice and procedures. JR testified that there were six appearances required for defendant’s summary judgment motion and eight appearances required for trial dates.

JR testified that no adjournments were granted without an application before the court on the trial dates, because of the age of the action. JR testified that she called defendant prior to{**63 Misc 3d at 878} each date and on each occasion, defendant stated they were ready to proceed.

JR appeared on May 25, 2016, before Judge Samuels and recalled that the trial was adjourned on defendant’s application.

JR appeared on June 8, 2017, and defendant made an application for an adjournment.

JR appeared on July 5, 2018, before Judge Nock, and defendant made an application to adjourn to secure a witness for the IME no-show defense. Defendant had only one witness available on that date.

JR testified that both parties knew early on that plaintiff would be seeking attorneys’ fees in this litigation, and that the case stood out in her mind for that reason.

On September 24, 2018, both parties appeared in court and conferenced the case with Judge Ramseur and her court attorney. Defendant decided at that time that it was not going to pursue the IME no-show defense and the action was adjourned to discuss a possible resolution including the issue of attorneys’ fees.

On November 5, 2018, defendant made an application for an adjournment and stated it did intend to proceed on the IME no-show defense at trial.

On December 18, 2018, the order entering judgment against defendant was issued. JR testified that plaintiff relied upon a notice to admit to establish its prima facie case. JR estimated that the trial could not have commenced before 11:00 or 11:30 a.m., because the court first went through the calendar calls.

The parties appeared on February 20, 2019, for the attorneys’ fees hearing, but the court had mis-calendered the matter and the hearing was adjourned to April 1, 2019.

On cross-examination, JR acknowledged that she maintained no contemporaneous records of the time she spent working on this case. For example, she did not record on any of the appearance dates the time she left the courthouse.

JR testified that she typically has more than one case on the morning calendar but less than 10 cases. While her office does maintain records of the specific number of cases she was handling on each of the dates in question, JR did not bring those records with her for the purpose of the hearing.{**63 Misc 3d at 879}

Discussion

It is undisputed that in this case defendant designated its IME no-show defense as a policy issue by checking off box 5 on the NF-10 denial of claim form.

11 NYCRR 65-4.6 (c) governs payment by insurers of applicants’ attorneys’ fees for services necessarily performed in the resolution of no-fault disputes and provides in pertinent [*4]part:

“For disputes subject to . . . court proceedings, where one of the issues involves a policy issue as enumerated on the prescribed denial of claim form (NYS form NF-10), subject to this section, the attorney’s fee for the arbitration or litigation of all issues shall be limited to a fee of up to $70 per hour, subject to a maximum fee of $1,400. In addition, an attorney shall be entitled to receive a fee of up to $80 per hour for each personal appearance before the arbitration forum or court.”

While defendant argues that there was no policy issue in this action, the court disagrees. “The failure to appear for IMEs requested by the insurer ‘when, and as often as, [it] may reasonably require’ (Insurance Department Regulations [11 NYCRR] § 65-1.1) is a breach of a condition precedent to coverage under the no-fault policy” (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [2011]).

Plaintiff has the burden in establishing the amount of hours reasonably spent on legal work in this action. Plaintiff admitted it was aware that it would be seeking attorneys’ fees in this action, and the best evidence of time spent would have been time records contemporaneously maintained by the attorney doing the work.

JR’s testimony on the hours she spent was essentially an educated guess based on her routine and custom. For example, in confirming that she appeared on the dates in question, JR testified that she relied in part on her records of days absent from work, and when she saw she was not absent she determined she would have been the attorney in court on a particular date.

Less guesswork would have been involved had plaintiff provided evidence of the number of other matters she handled on each date she appeared. This evidence was readily available to plaintiff, as acknowledged by JR in her testimony, but not provided to the court, nor subpoenaed by defendant.{**63 Misc 3d at 880}

The court finds that plaintiff’s attorneys spent at least one-half hour in court on each of the trial dates on May 25, 2016, June 8, 2017, July 5, 2018, September 24, 2018, November 5, 2018, and December 18, 2018. This is reduced from the one hour per appearance requested by plaintiff, based on the failure of counsel to maintain contemporaneous time records for the appearances, and the failure of plaintiff to provide the court with evidence on the number of cases the attorney was handling in court on each of the dates in question.

As JR did not testify with certainty that she appeared on the earlier dates, and no other attorney for plaintiff offered evidence of same, no time is awarded for court appearances prior to the initial trial date.

No award is made for appearances after the trial date, as these appearances were solely on the issue of attorneys’ fees and time spent substantiating counsel fees, also known as fees on fees, and are not permitted by the statute (Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2017]; Insurance Law § 5106 [a]).

The court further finds that JR spent one hour each night prior to scheduled trial dates in preparation.

Plaintiff is additionally awarded one-half hour for the preparation of opposition papers to defendant’s summary judgment motion. Again since there was no evidence on the amount of time the attorney who prepared the papers spent on the task, and the papers were never filed with the court, the time is more limited than requested by plaintiff.

Based on the foregoing, the court finds plaintiff is entitled to three hours for court appearances totaling $240 and 6.5 hours for trial preparation and the affirmation in opposition totaling $455. Plaintiff is entitled to a total of $695 for attorneys’ fees in this action.

Footnotes

Footnote *:The file was not available to the court at the time of the hearing. The procedural history is based on the case summary maintained by Civil Court as well as the documents and testimony presented at the attorneys’ fees hearing.

CV-130940-03/QU

LAW OFFICES OF DAVID B. O’CONNOR P.C.

Counsel for Plaintiff PDG Psychological P.C. As Assignee of Glendon Steve Antoine

2606 East 15th Street

Brooklyn, New York 11235

By: David Bryon O’Connor, Esq.

MCDONNELL ADELS & KLESTZICK, PLLC

Counsel for Defendant State Farm Mutual Insurance Co.

401 Franklin Avenue

Garden City, New York 11530

By: Julie Andrea Linwood, Esq. and Alisa Ann Burns, Esq.

I. Background

In this action, PDG Psychological P.C. (the “Plaintiff”) seeks to recover no-fault insurance benefits for alleged services rendered to Plaintiff’s assignor, Glendon Steve Antoine, based on an alleged automobile accident that occurred on or about May 5, 2003. Plaintiff served a summons and complaint on defendant State Farm Mutual Insurance Co. (the “Defendant”) on or about November 6, 2003. In turn, Defendant allegedly served its verified answer and discovery demands to Plaintiff on or about December 22, 2003.

Plaintiff moved for summary judgment and Defendant made a cross-motion to dismiss for failure to provide discovery or, in the alternative, to compel discovery. There is no indication that Plaintiff provided any responses to Defendant’s discovery demands prior to Defendant’s cross-motion. On July 8, 2005, the Court issued an order (the “July 8, 2005 Order”) denying Plaintiff’s motion for summary judgment for failure to establish a prima facie case and granting [*2]Defendant’s cross-motion, holding that “the action is dismissed unless with[in] thirty days after service of a copy of this order, with notice of entry, [P]laintiff provides a response to all previously served discovery demands and appears for an examination under oath.” On or about October 24, 2005, Plaintiff provided responses to Defendant’s discovery demands.

A prolonged period of inactivity appears to have followed and, on June 6, 2007, this case was converted to inactive, and the record indicates that both parties subsequently continued to remain inactive. Defendant alleges that in March 2011 it served notice of entry of the July 8, 2005 Order, with an attached copy of the July 8, 2005 Order, to Plaintiff. Plaintiff asserts that it did not receive a copy of the July 8, 2005 Order until March 11, 2011.

Nevertheless, this matter largely remained dormant until, on or about August 10, 2017, Plaintiff served a notice of trial and certificate of readiness, without having appeared for an examination under oath (“EUO”) as required by the July 8, 2005 Order. On August 17, 2017, Defendant moved: (1) to dismiss the complaint for failure to provide complete and meaningful discovery; or, in the alternative, (2) to strike Plaintiff’s notice of trial; (3) to compel Plaintiff to provide responses to Defendant’s discovery demands and appear for an examination before trial (“EBT”); and (4) to stay the accrual of no-fault interest. On April 18, 2018, this Court issued a decision and order (the “April 18, 2018 Decision”) denying Defendant’s motion to dismiss and granting Defendant’s motions to strike the notice of trial and to compel Plaintiff to appear for an EUO within 30 days of service of the order with notice of entry or the case would be dismissed. Defendant now moves to reargue the April 18, 2018 Decision and requests: (1) an order compelling Plaintiff to provide complete and meaningful discovery responses before appearing for an EUO; and (2) staying accrual of no-fault interest.

In accordance with Rule 2219 [a] of the Civil Practice Law and Rules (“CPLR”), the Court considered: (1) Defendant’s motion to reargue, Defendant’s counsel’s affirmation and attached exhibits; (2) Plaintiff’s counsel’s affirmation in opposition to said motion and attached exhibits; and (3) Defendant’s counsel’s affirmation in reply to Plaintiff’s affirmation in opposition and attached exhibits.

II. Discussion

As an initial matter, Defendant argues that Plaintiff could not transfer this action to the Law Offices of David B. O’Connor P.C., which is the third counsel for Plaintiff, because there is no record of Defendant being served with a consent to change attorney form, pursuant to CPLR 321 [b], evidencing the change from original counsel to the second counsel. However, this argument was made for the first time in Defendant’s reply papers, which function to address arguments made in opposition to the position taken by the movant—not to permit the movant to introduce new arguments or new grounds for the requested relief (see Allstate Ins. Co. v. Dawkins, 52 AD3d 826, 827 [2d Dept 2008]). Thus, this Court declines to issue a decision on this argument, but notes that a consent to change attorney form for the transition of this action from second counsel to the Law Offices of David B. O’Connor P.C. was submitted and Defendant has not claimed that Plaintiff’s technical failure in complying with CPLR 321 [b] for the transition from the original counsel to second counsel caused Defendant any prejudice (see Sperry Assocs. Fed. Credit Union v. John, 160 AD3d 1007, 1009 [2d Dept 2018]).

CPLR 2221 (d) states, in pertinent part, that “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.” Defendant asserts that the April 18, 2018 Decision overlooked the deficiencies in [*3]Plaintiff’s October 24, 2005 discovery responses and the portion of Defendant’s motion seeking a stay of the accrued interest. Given that the April 18, 2018 Decision did not specifically address these issues, the Defendant’s motion is granted and the Court amends its April 18, 2019 Decision as explained below.

A. Discovery Responses

Defendant identified only three of the discovery responses provided by Plaintiff, on or about October 24, 2005, as insufficient. Specifically, Defendant asserts that Plaintiff’s responses to Question 5 and Question 7, of Defendant’s Demand for Verified Interrogatories, are insufficient because they indicate that proof of mailing for the bills at issue had been attached to Plaintiff’s responses, but no proof of mailing was attached. Defendant further asserts that Plaintiff’s response to Question 18 is insufficient because Question 18 requests “the name and address of the office manager and/or individual who assisted in preparing and sending the bills and/or verification of treatment forms attached to the Plaintiffs complaint” and, Plaintiff simply responded “not applicable.”

i. Motion to Dismiss

The Court reaffirms the denial of Defendant’s motion to dismiss based on Plaintiff’s alleged failure to comply with the July 8, 2005 Order. The July 8, 2005 Order provides that the 30-day deadline for Plaintiff to respond to Defendant’s discovery demands, and avoid dismissal, could only be initiated by “service of a copy of the order, with notice of entry,” and Plaintiff has not provided proof that the July 8, 2005 Order was ever served with notice of entry beyond Plaintiff’s submission of an unexecuted copy of a notice of entry dated May 1, 2011. Accordingly, Plaintiff’s October 24, 2005 responses were timely.

Furthermore, to the extent that any of Plaintiff’s responses are substantively insufficient, dismissal is not appropriate “where there is no clear showing that the failure to comply with discovery demands was willful or contumacious” (see Walter B. Melvin, Architects, LLC v. 24 Aqueduct Lane Condominium, 51 AD3d 784, 785 [2d Dept 2008] (noting that striking a pleading is a “drastic remedy” and further finding that “while the plaintiff was clearly dissatisfied with the responses to its demands, there was no showing of a pattern of willful failure to respond to discovery demands or comply with disclosure orders, so as to justify striking the defendant’s answer”); Conway v. Brooklyn Gas Union Co., 212 AD2d 498, 498 [2d Dept 1995]). The portion of Plaintiff’s response to Questions 5 and 7 that states “[s]ee attached proof of mailing,” suggests an intent to comply and Plaintiff’s failure to attach proof of mailing could simply be a misunderstanding or oversight. With respect to Plaintiff’s response to Question 18, “not applicable” may simply be an indication that such information is not available, and Plaintiff intends to satisfy its burden by providing evidence of Plaintiff’s “standard office practice or procedure designed to ensure that items are properly addressed and mailed” (Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001]). Accordingly, dismissal is not proper, and Plaintiff should be given a chance to clarify its responses (see Spiegel v. Goodman, 98 AD2d 815, 815 [2d Dept 1983]; Escobar v. St. Vincent’s Med. Ctr. Of Richmond, 2003 NY Slip Op 51674[U], *1 [App Term, 2nd & 11th Jud Dists 2011]).

ii. Motion to Strike Notice of Trial

The Court reaffirms its grant of Defendant’s motion to strike Plaintiff’s notice of trial. A notice of trial is properly vacated when the certificate of readiness incorrectly states a material fact regarding the completion of discovery (see Amoroso v. City of New York, 66 AD3d 618, 618 [2d Dept 2009]; Garofalo v. Mercy Hosp., 271 AD2d 642, 642 [2d Dept 2000]; Citywide Social [*4]Work & Psychological Servs., PLLC v. Autoone Ins. Co., 2011 NY Slip Op 51308[U], *1 [App Term, 2d Dept, 11th & 13th Jud Dists 2011] (finding that the court properly vacated a notice of trial due to outstanding discovery mandated in a prior order that directed plaintiff to provide discovery responses and appear for an examination before trial). It is undisputed that the EUO compelled in the July 8, 2005 Order has not yet occurred. Accordingly, Plaintiff’s statement that discovery has been completed in the certificate of readiness filed with the notice of trial in the current matter is erroneous and the notice of trial is properly stricken (see Amoroso, 66 AD3d at 618).

iii. Motion to Compel

This Court grants Defendant’s motion to compel sufficient responses to Questions 5, 7 and 18 of Defendant’s Demand for Verified Interrogatories. CPLR 3101 [a] provides that “[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof.” The phrase “material and necessary” is “to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity” Allen v. Crowell-Collier Pub. Co., 21 NY2d 403, 406 [1968]. The test in determining whether discovery is material and necessary “is one of usefulness and reason” (Id.).

The information sought by Questions 5, 7 and 18 is material and necessary and Plaintiff’s responses require clarity in light of their aforementioned issues. Thus, Plaintiff must provide sufficient responses to Questions 5, 7 and 18, and Plaintiff must produce any proof of mailing in its possession for the bills at issue. Plaintiff must provide said responses and documents to Defendant by no later than May 16, 2019 or this matter will be dismissed. Plaintiff may only extend this deadline with leave of the Court.

Additionally, although the Court reaffirms its grant of Defendant’s motion to compel Plaintiff to appear for an EUO, this Court finds that Plaintiff’s EUO is not preconditioned on Plaintiff’s discovery responses. The July 8, 2005 Order simply states that the Plaintiff must “respon[d] to all previously served discovery demands and appear[ ] for an examination under oath” to avoid dismissal (emphasis added). Contrary to Defendant’s suggestion otherwise, the July 8, 2005 Order does not address whether Plaintiff is required to respond to the discovery demands prior to being afforded the opportunity to appear for an EUO. Moreover, Defendant has not referred to any law that justifies its inactivity, with respect to both Defendant’s belated objections to Plaintiff’s discovery responses and apparent failure to even attempt to schedule an EUO.

In the over 12 years since the July 8, 2005 Order was issued, there is no evidence that the Defendant has served a notice of taking oral deposition pursuant to CPLR 3107 or even contacted Plaintiff about scheduling an EUO. Defendant seemingly blames its 12 years of inactivity on Plaintiff’s deficient discovery responses. However, the “ultimate determination of compliance [with respect to discovery] is the province of the court” (see Jones v. White Metal Rolling & Stamping Corp., 86 AD2d 687, 687-688 [3d Dept 1982]). Upon receiving responses from Plaintiff that Defendant deemed insufficient on or about October 24, 2005, Defendant could have immediately moved to compel satisfactory answers, but failed to do so (see J.R. Stevenson Corp. v. Dormitory Authority of State of NY, 112 AD2d 113, 117 [1st Dept 1985]). Considering that the July 8, 2005 Order provides that this matter “is” dismissed “unless“ Plaintiff responds to discovery requests and appears for an EUO, Defendant’s dilatory conduct played a significant role in this matter being brought to a standstill because Defendant waited [*5]almost 12 years to object to Plaintiff’s discovery responses and never afforded Plaintiff with an opportunity to appear for an EUO.

In light of Defendant’s delay in conducting an EUO of the Plaintiff and in order to expedite the completion of pretrial preparation, this Court further finds that if the Defendant fails to conduct an EUO of the Plaintiff by July 1, 2019, Defendant will be deemed to have waived it’s right to depose the Plaintiff, Plaintiff will no longer be obligated to appear for an EUO pursuant to the July 8, 2005 Order and Plaintiff will be permitted to file a notice of trial. If Plaintiff fails to appear for an EUO, at a time and place to be specified in written notice from Defendant of not less than 20 days beforehand or at such time and place as the parties may agree, this matter will be dismissed. This deadline may only be extended with leave of the Court.

B. Statutory Interest

The determination as to staying the accrual of no-fault interest cannot be made at this point. Prejudgment interest that accrues on overdue no-fault benefits at a rate of two percent per month “is a statutory penalty designed to encourage prompt adjustments of claims and inflict a punitive economic sanction on those insurers who do not comply” (East Acupuncture P.C. v. Allstate Ins. Co., 61 AD3d 202, 211 [2d Dept 2009]; see Aminov v. Country Wide Ins. Co., 986 NYS2d 909, 910 [App Term, 2d Dept, 11th & 13th Jud Dists 2014] (referring to interest accumulated pursuant to Insurance Department Regulations as prejudgment interest)). The Insurance Department Regulations provide that statutory prejudgment interest shall accumulate “unless the applicant unreasonable delays the . . . court proceeding” (11 NYCRR 65-3.9 [d]; see Aminov, 986 NYS2d at 910; Devonshire Surgical Facility v. Am. Tr. Ins. Co., 2011 NY Slip Op 50793[U], *5 [Civ Ct NY County 2011] (further noting that a “court proceeding ends with entry of judgment”)).

An award of this interest is only available to a prevailing claimant who has proven that that first party benefits are overdue (see Insurance Law § 5106 [a] (“benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained [and] [a]ll overdue payments shall bear interest at the rate of two percent per month”); Viviane Etienne Med. Care, P.C. v. Country-Wide Ins. Co., 25 NY3d 498, 502 [2015] (noting plaintiff’s “prima facie burden of showing the fact and amount of loss sustained”). Further proceedings in this matter must be conducted to determine whether the benefits at issue are overdue (see Viviane, 25 NY3d at 502; see also Solow v. Wellner, 205 AD2d 339, 341[2nd Dept 1994], affd 86 NY2d 528 [1995] (“[A] determination as to the landlord’s entitlement to prejudgment interest on back rent recovered is premature at this point [because] [a]lthough CPLR 5001 (a) provides that interest shall be recovered on monetary damages awarded for breach of contract . . . such award, like that of attorney’s fees, is generally only available to the prevailing party [and] [f]urther proceedings must be conducted to determine whether any of the parties will attain that status.”).

In fact, the July 8, 2005 Order found that Plaintiff failed to meet its prima facie burden in moving for summary judgment (see Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986] (noting that “failure to make such a prima facie showing requires denial of the [summary judgment] motion,” as opposed to the dismissal of a complaint). A determination by this Court on whether interest is tolled would be purely academic when there has not been an initial determination that interest is actually owed and accumulating, and this Court is prohibited from issuing such an advisory opinion (see Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d 801, 810 [2003]).

Furthermore, this Court also lacks evidence that is critical in determining the parameters of any tolling period in this matter. For example, Defendant has not submitted affidavits of service to prove service of its discovery demands or service of the July 8, 2005 Order with notice of entry. Additional evidence is also needed to determine whether Plaintiff is the cause of any unreasonable delay in this court proceeding, which must be established before interest can be tolled (see 11 NYCRR 65-3.9 [d]). Indeed, the extent to which Plaintiff caused any delay in this matter is questionable because Plaintiff’s ability to move forward in prosecuting this matter after the issuance of the July 8, 2005 Order was arguably limited by Defendant’s failure to provide Plaintiff with an opportunity to appear for an EUO. Notably, Defendant does not deny that it ignored Plaintiff’s alleged attempt to schedule an EUO even 12 years after the issuance of the July 8, 2005 Order.

Therefore, the Court denies Defendant’s motion to stay the accrual of no-fault interest, but Defendant may resubmit its motion on a later date.

III. Conclusion

Accordingly, the Court denies Defendant’s motion to dismiss, grant’s Defendant’s motion to strike, grants Defendant’s motion to compel, and denies Defendant’s motion to stay interest.

This constitutes the decision and order of the Court.

Dated: April 3, 2019

Jamaica, New York

Hon. John C.V. Katsanos

Judge, Civil Court

007745/11

Attorney for the Plaintiff: Gary Tsirelman P.C., 129 Livingston Street Brooklyn, Brooklyn, New York 11201

Attorney for the Defendant: Law Offices of Aloy O. Ibuzor, 485 Lexington Avenue, 7th Floor, New York, New York 10017

This is an action seeking reimbursement for medical services provided by Plaintiff under the No-Fault system. By Notice of Motion dated February 15, 2018, Plaintiff moves to vacate an order of administrative dismissal pursuant to CPLR 3215(c) dated March 30, 2017 and for leave to enter a default judgment against Defendant. Defendant opposes the motion.

The history of this case which culminated in the CPLR 3215(c) dismissal commenced with the timely purchase of an index number on January 26, 2011. Plaintiff, however, did not serve the summons and complaint on Defendant until June 5, 2013, over two years after the statutory 120-day service period had expired. Plaintiff attributes the delay to law office failure explaining that the office was unaware that it had failed to serve the summons and complaint due to an error caused by transferring files from an old management system to a new system between 2011 and 2012. In 2013, Plaintiff discovered that it did not possess an affidavit of service relative to this case and a process server was sent to serve Defendant in June of that year. Defendant, to date, has not answered. There is no indication in either the record or the parties’ moving papers that Plaintiff ever moved pursuant to CPLR 306(b) for an extension of time to effectuate service.

Plaintiff claims that the office filed a motion for a default judgment in July of 2014. Plaintiff states that because Defendant was personally served with process on June 5, 2013 and [*2]the affidavit of service was filed on June 6, 2013, it had until July 11, 2014 to move for a default. However, according to Civil Court records maintained for this index number, the motion for a default judgment was filed on August 6, 2014. On that same day, the court issued a “Judgment Rejection Notification.” The reason stated on the notice was “late service.” Plaintiff acknowledges timely receipt of this notice but did not move to cure the defect, claiming that an upgrade in its computer system resulted in the failure to alert a paralegal to draft a motion.

Plaintiff took no further action in this case and, in May of 2017, Plaintiff’s office learned that the action was administratively dismissed by an order of Judge Richard Montelione dated March 30, 2017. The order states:

“[p]laintiff(s) commenced this action to recover assigned first party no-fault benefits. Defendant failed to answer and more than one year had passed. There being no sufficient cause being shown why the complaint should not be dismissed, pursuant to CPLR 3215(c) it is therefore ordered, that the complaint is dismissed.”

Plaintiff now moves to vacate the administrative dismissal arguing that its motion should be granted because the court did not give it prior notice of the impending administrative dismissal. Plaintiff asserts that the court’s failure to give notice deprived the attorneys of an opportunity to be heard. Plaintiff further claims that this lack of notice constitutes its reasonable excuse for the failure to appear on March 30, 2017. Plaintiff also seeks to revive the August 6, 2014 application for a default judgment which it insists the court improperly rejected.

It is noted that the administrative dismissal order of March 30, 2017 was issued pursuant to CPLR 3215(c). The Second Department holds that “CPLR 3215(c) provides that ‘[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned … unless sufficient cause is shown why the complaint should not be dismissed’ ” (Myoung Ja Kim v. Wilson, 150 AD3d 1019, 1020 [2d Dept. 2017] quoting CPLR 3215[c]). This statute is strictly construed, as “[t]he language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory inasmuch as courts ‘shall’ dismiss claims (CPLR 3215[c]) for which default judgments are not sought within the requisite one year period, as those claims are then deemed abandoned” (Giglio v. NTIMP, Inc., 86 AD3d 301, 307—308 [2d Dept. 2011]; see HSBC Bank USA, N.A. v. Grella, 145 AD3d 669, 671 [2d Dept. 2016]).

Moreover, CPLR 3215(c) expressly provides that a court may dismiss a complaint as abandoned “upon its own initiative or on motion.” The statute further provides, however, that the failure to timely seek a default may be excused if “‘sufficient cause is shown why the complaint should not be dismissed'” (HSBC Bank USA, N.A. v. Grella, 145 AD3d at 671, quoting CPLR 3215[c]). To establish the sufficient cause required by CPLR 3215(c), “the party opposing dismissal must demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action” (Aurora Loan Servs., LLC v. Hiyo, 130 AD3d 763, 764 [2d Dept. 2015]; see Wells Fargo Bank, N.A. v. Bonanno, 146 AD3d 844, 845—846 [2d Dept. 2017]). “‘The determination of whether an excuse is reasonable in any given instance is committed to the sound discretion of the motion [*3]court'” (Pipinias v. J. Sackaris & Sons, Inc., 116 AD3d 749, 752 [2d Dept. 2014] quoting Giglio v. NTIMP, Inc., 86 AD3d at 308; see U.S. Bank, N.A. v. Dorvelus, 140 AD3d 850, 852 [2d Dept. 2016]). While a court has the discretion to accept law office failure as a reasonable excuse, such excuse must be supported by detailed allegations of fact explaining the law office failure (see CPLR 2005; CEO Bus. Brokers, Inc. v. Alqabili, 105 AD3d 989, 990 [2d Dept. 2013]; HSBC Bank USA, N.A. v. Wider, 101 AD3d 683 [2d Dept. 2012]; Ibrahim v. Nablus Sweets Corp., 161 AD3d 961, 963 [2d Dept. 2018]).

Plaintiff’s claim that the court was required to give notice prior to the CPLR 3215(c) dismissal based on Rhodehouse v. CVS Pharmacy, Inc., 151 AD3d 771 (2d Dept. 2017), is erroneous. The dismissal in that case was made pursuant to CPLR 3216, not CPLR 3215(c), which expressly provides that a court may dismiss an action as abandoned “upon its own initiative or on motion” (Ibrahim v Nablus Sweets Corp., 161 AD3d at 961).

This case was properly dismissed, sua sponte, pursuant to CPLR 3215(c) as the case lay dormant in the court system without joinder of issue and without a default judgment against Defendant for over three years. Furthermore, this application must be denied as Plaintiff does not submit an affidavit of merit and the excuse of law office failure is vague, conclusory, and unsubstantiated (see U.S. Bank, N.A. v. Dorvelus, 140 AD3d at 852; Baruch v. Nassau County, 134 AD3d 658, 659 [2d Dept. 2015]; Mattera v. Capric, 54 AD3d 827, 828 [2d Dept. 2008]; Ibrahim v. Nablus Sweets Corp., 161 AD3d at 963; Private Capital Group, LLC, v. Hosseinipour, 2019 WL 1141605 [2d Dept. 2019]).

This case has been riddled with procedural defects since inception. Although Plaintiff purchased the index number within the statute of limitations on January 26, 2011, the summons and complaint were not served on Defendant until June 5, 2013, over two years later. At no time did Plaintiff move for an extension of time to serve Defendant pursuant to CPLR 306(b) and this defect continues to plague this case. Plaintiff offers no reasonable excuse as to why it filed the motion for a default judgement over one year after Defendant defaulted in answering. It is not clear whether the court rejected the default papers because Plaintiff served Defendant beyond the statutory 120-days of filing without leave of court or because Plaintiff filed the motion late. In either case, it is clear that the court rejected Plaintiff’s default judgment as untimely and no motion was made at that time to cure the rejected papers.

All of the above demonstrates a general pattern of neglect for which Plaintiff has consistently failed to provide a reasonable excuse or otherwise remedy. Considering the history of procedural defects, this court cannot accept Plaintiff’s vague excuse that the implementation of a new case management and computer system were valid reasons for the office failures over the years and, specifically for the failure to timely file for default judgment which led to the administrative dismissal of March 30, 2017

Accordingly, Plaintiff’s motion to vacate the March 30, 2017 order of administrative dismissal pursuant to CPLR 3215(c) is denied and the complaint is dismissed with prejudice.

This constitutes the decision and order of this court.

April 1, 2019
Brooklyn, NY
ENTER
__________________________________
CONSUELO MALLAFRE-MELENDEZ
Judge, Civil Court