District Court of Nassau County, Second District

02593/08

Michael A. Ciaffa, J.

The principal issue presented at the trial of this no-fault action concerns the defendant’s burden to affirmatively prove a defense of lack of medical necessity through a complete set of medical records.

The limited medical records submitted to defendant’s peer review doctor show that a treating doctor’s “diagnostic plan” included MRIs of claimant’s spine and left shoulder, which were arguably unnecessary and premature at the time of the doctor’s evaluation, only one day post accident. However, the MRIs, themselves, were not performed for several weeks. In the meantime, claimant presumably followed the doctor’s plan respecting a course of conservative treatment, which included “a conservative physical medicine and rehabilitation program” with physical therapy 3 to 5 times a week. But the record is silent on whether claimant’s symptoms improved, got worse, or stayed the same, during the course of that program.

Without doubt, if defendant had denied a claim involving MRIs performed within a few days of the initial evaluation, it would have a strong argument that the tests were premature and unnecessary. But the facts at bar are different. The MRIs, for reasons not disclosed, were not performed immediately. If claimant underwent follow-up care, as prescribed, the particulars are not part of the trial record. Contrary to defendant’s argument that the Court should draw an adverse inference against plaintiff for not producing a complete medical record, the plaintiff, aided by the presumption of medical necessity, need not produce a single bit of evidence until defendant meets its considerable burden under the standards of Nir v. Allstate Ins. Co., 7 Misc 3d 544, 546-7 (Civ Ct Kings Co 2005).

The Court declines defendant’s invitation to determine the sufficiency of its medical necessity defense based solely upon the facts known by the treating doctor [*2]when a given test is recommended. Rather, decisions to recommend tests prematurely, or without an adequate documented objective basis, are merely circumstances that must be weighed in the overall context of defendant’s burden and the presumption of medical necessity.

Defendant, here, met only half of its burden. It proved, to the Court’s satisfaction, that the tests were recommended prematurely, and without adequate justification, just one day after the accident. Nevertheless, at least in cases, like this one, where a lengthy interval of time preceded the subject tests, defendant must be held to its burden of disproving the presumed medical necessity of the tests at the time they were actually conducted.

In reaching this conclusion, the Court believes that it follows, logically, from basic no-fault law principles. Although it has not found any case directly in point, the defendant’s burden is well established, and consistent with that burden, defendant will necessarily need to submit a complete medical record in most cases in order to satisfy its burden.

For these reasons, the Court concludes that the absence of medical documentation is a critical factor under the circumstances at bar. Without knowledge of the claimant’s condition and response to treatment in the weeks that followed the initial evaluation, the Court cannot determine whether the MRIs were, indeed, unnecessary and inappropriate at the time they were performed. Since defendant carries the burden on this issue, the Court must find for the plaintiff.

Submit Judgment on Notice.

SO ORDERED:

DISTRICT COURT JUDGE

Dated: January 27, 2010

CC:Friedman, Harfenist, Kraut & Perlstein, Esqs.

Lawrence N. Rogak, LLC [*3]

MAC:ju 1/14/10

District Court of Nassau County, First District

30566/05

Plaintiff – Friedman, Harfenist, Langer & Kraut

Defendant – DeSena & Sweeney

Fred J. Hirsh, J.

This action appears to be a simple claim to recover first party no-fault benefits for a cervical MRI and lumbar MRI performed by Elmont Open MRI on Almarto Wiggins (“Wiggins”) on March 24, 2005. State Farm Fire and Casualty Company (“State Farm”) denied payment for these MRIs on the grounds they were not medically necessary based upon the peer review report of Edward M. Weiland, M.D. (“Dr. Weiland”). Dr. Weiland’s letterhead and curriculum vitae indicates that he is a board certified neurologist.

The denial raises the issue of who is a proper expert to issue a peer review report and to testify regarding whether treatment or tests are medically necessity.

Wiggins was injured in an automobile accident that occurred on February 9, 2005. State Farm was the insurance carrier that provided no-fault benefits to Wiggins.

On February 16, 2005, Wiggins was examined by a neurologist, A. Etamadi, M.D. The neurological exam was essentially normal. Dr. Etamadi diagnoses relevant to this action are a cervical spine sprain/strain and a lumbar spine sprain/strain. Dr. [*2]Etamadi recommended a follow up visit in four weeks and an orthopedic consultation.^[FN1]

Wiggins also came under the care of a chiropractor, Mark Heyligers, D.C

(“Dr. Heyligers”) on February 15, 2005. A sheet a heading “Initial Report” prepared by Dr. Heyligers is dated 3/22/04. The face page of the “Initial Report” makes reference to objective findings and x-ray analysis contained in an attachment thereto. The x-ray analysis (Roentgenological Report) is attached to the copy of the Initial Report in evidence. The objective findings are not.

Prior to March 24, 2005, Dr. Heyligers recommended Wiggins have a cervical and lumbar MRIs. The exact date these MRIs were ordered is not contained in the records introduced into evidence. The referral sheet for the MRIs incorrectly places Wiggins date of birth on the line for the referral date. The referral sheet does not state the reason the MRIs were ordered. However, the referral sheet states the referring doctor is Dr. Heyligers. The MRIs were performed by plaintiff on March 24, 2005. The reports of the reading of the MRIs were sent to Dr. Heyligers.

Wiggins received chiropractic care and treatment from Dr. Heyligers from February 15, 2005 to at least May 25, 2005. This clear because Dr. Heyligers issued a letter of medical necessity regarding the cervical and lumbar MRIs dated May 25, 2005. None of the records relating to the treatment Wiggins received from Dr. Heyligers other than the Initial Report and the x-ray analysis were reviewed by Dr. Weiland or placed in evidence at trial.

Dr. Heyligers May 25, 2005 letter diagnoses Wiggins as having a cervical sprain/strain, lumbar sprain/strain, brachial radiculitis and neuritis of sciatic nerve. Dr. Heyligers recommended physical therapy and chiropractic care three times a week. Dr. Heyligers states the diagnostic testing was recommended to permit him to provide Wiggins with proper treatment.

Dr. Weiland did not testify at trial. State Farm had Marlon Seliger, M.D. (“Dr. Seliger”) prepare a re-peer report. Dr. Seliger is a medical doctor whose field of expertise is neurology. State Farm called Dr. Seliger testified on the issue of medical necessity.

The parties stipulated to plaintiff’s prima facie case. The parties also stipulated to the timely denial of the claim on the grounds of lack of medical necessity. The parties stipulated into evidence the peer review reports of Dr. Weiland and Dr. Seliger, the medical reports and records reviewed by the doctors in preparing their peer review reports and the other information and documentation reviewed by the peer review doctors.

Dr. Seliger concurred with Dr. Weiland’s determination the cervical and lumbar MRIs were not medically necessary. Dr. Seliger testified the medical records he reviewed indicated an essentially normal neurological examination of the cervical and [*3]lumbar spine. The neurologist who examined Wiggins a week after the automobile accident diagnosed Wiggins as having a cervical sprain/strain and a lumbar sprain/strain as a result of the automobile accident. The only diagnoses Dr. Seliger found in the Initial Report of Dr. Heyligers was a mild cervical and lumbar myospasm.

Dr. Seliger further testified since the doctors providing treatment to Wiggins had reached a diagnosis and had developed a treatment plan without performing the MRIs the MRIs were not medically necessary. Cervical and lumbar MRIs are not medically necessary under these circumstances unless the results of the MRIs would influence treatment.

Dr Weiland’s peer review report and State Farm’s denials predate Dr. Heyligers’s letter of medical necessity. Therefore, this letter was also not considered by State Farm in issuing its denials.

Dr. Seliger did not review Dr. Heyligers’s letter of medical necessity in preparing his re-peer report. He reviewed only those records and reports that Dr. Weiland had reviewed.

Dr. Heyligers’s letter of medical necessity was introduced into evidence at trial. Dr. Seliger reviewed the letter of medical necessity and testified it did not change his opinion that the MRIs were not medically necessary.

DISCUSSION

A presumption of medical necessity attaches to a timely submitted no fault claim.

All County Open MRI & Diagnostic Radiology. P.C. v. Travelers Ins. Co., 11 Misc 3d 131(a) (App.Term 9th & 10th Jud. Dists. 2006). Since the parties stipulated to plaintiff’s prima facie case, the cervical and lumbar MRIs were presumptively medically necessary.

The burden then shifts to the defendant to rebut the presumption of medical necessity. A.B. Medical Services PLLC v. Utica Mut. Ins. Co., 10 Misc 3d 50 (App.Term 2nd & 11th Jud. Dists. 2005); and A Plus Medical, P.C. v. Government Employees Ins. Co., 21 Misc 3d 799 (Civil Ct. Kings Co. 2008).

In order to meet this burden, the defendant must establish the treatment or tests in question were not in accordance with generally accepted medical/professional practice. Delta Medical Supplies, Inc. v. NY Central Mutual Ins. Co., 14 Misc 3d 1231(A) (Civil Ct. Kings Co. 2007); and CityWide Social Work & Psychological Servs. V. Travelers Indem. Co., 3 Misc 3d 608 (Civil Ct. Kings Co. 2004).

The defendant must prove there is a factual basis and medical rationale for the opinion of the peer review doctor the services rendered or tests performed by plaintiff were not medically necessary.. Prime Psychological Services, Progressive As. Ins. Co., 24 Misc 3d 1244(A) (Civil Ct. Richmond Co. 2009); and Nir v. Allstate Ins. Co., 7 Misc 3d 544 (Civil Ct. Kings Co 2005).

Expert testimony is required to establish what the generally accepted medical/professional practices are and how ordering the tests or treatment departed from generally accepted medical/professional standards. Dunn v. Khan, 62 AD3d 828 (2nd Dept. 2009); and Lyons v. McCauley, 252 AD2d 516 (2nd Dept. 1998).

Chiropractics is separate and distinct from the practice of medicine so that a physician’s standard is not controlling upon a chiropractor in the practice of his or her profession. Taormina v. Goodman, 83 AD2d 1018 (2nd Dept. 1978). In determining [*4]whether treatment performed or tests ordered by a chiropractor are medically necessary, the court must determine the generally accepted standard of care in the field of chiropractics and whether the providing the treatment or ordering of the tests was in accordance with those generally accepted chiropractic standards. 1B NY PJI3d 2:150, at 802 (2009).

To qualify as an expert, the witness must possess “…the requisite skill, training, education, knowledge or experienced from which it can be assumed that the information imparted or the opinion rendered is reliable (citations omitted).” Matott v. Ward, 48 NY2d 455, 460 (1979); and de Hernandez v. Lutheran Medical Center, 46 AD3d 517 (2nd Dept. 2007). When a doctor testifies outside his area of expertise, the party calling the doctor must lay a foundation establishing the doctor is familiar with the generally accepted practice in the area in question to lay a proper a foundation for the expert’s opinion. Shectman v. Wilson, -A.D.3d-, 2009 WL 4674047 (2nd Dept. 2009); and Geffner v. North Shore University Hosp., 57 AD3d 838 (2nd Dept. 2009).

State Farm had a neurologist perform the peer review and called a neurologist to testify the cervical and lumbar MRIs ordered by a chiropractor were not medically necessary. Even though the parties stipulated Dr. Seliger was an expert, his field of expertise is neurology not chiropractics. State Farm did not establish Dr. Weiland, the peer reviewer, or Dr. Seliger, the re-peer, were familiar with generally accepted chiropractic practices or the generally accepted reasons why a chiropractor would order a patient to have a cervical or lumbar MRI.^[FN2] Therefore, Dr. Weiland’s peer review report and Dr. Seliger’s testimony are insufficient to rebut the presumption of medical necessity that attaches to a timely filed no-fault claim.

For the foregoing reasons, the court finds for the plaintiff.

The clerk is directed to enter a judgment in favor of the plaintiff and against the defendant in the sum of $1791.73 together with interest and legal fees in accordance with the No-Fault Law and Regulations and costs and disbursements as taxed by the clerk.

Submit judgment.

SO ORDERED:

Hon. Fred J. Hirsh

District Court Judge

Dated: January 6, 2010

Footnotes

Footnote 1:Wiggins did see an orthopedist on March 7, 2005 on recommendation of Dr. Heyligers. The orthopedic consult was for injuries to Wiggins right knee. The orthopedic consult report makes no mention of the orthopedist having examined Wiggins cervical or lumbar spine or recommending any care, treatment or tests for the cervical or lumbar spine.

Footnote 2:Dr. Seliger would have been qualified to testify the MRIs were not medically necessary had the tests been ordered by a neurologist. However, the record reflects Wiggins was examined once by a neurologist who did not order or recommend either MRI.

[*1]

District Court of Nassau County, First District, September 28, 2009

APPEARANCES OF COUNSEL

Law Offices of Nancy S. Kinden for plaintiff.

{**25 Misc 3d at 1020} OPINION OF THE COURT

Fred J. Hirsh, J.

Plaintiff moves for leave to enter a default judgment.

Background

This case presents the issue of whether a no-fault insurance carrier that has paid no-fault benefits can sue a provider to recover no-fault benefits paid on a fraudulent claim.

Andrey Armstrong was injured in an automobile accident on September 5, 2008.

On October 4, 2008 and October 9, 2008, Alev Medical Supply, Inc. purportedly provided medical supplies to Armstrong. Armstrong assigned his right to no-fault benefits for these items to Alev.

Alev submitted the bills for these medical supplies to the plaintiff Lincoln General Insurance Company. Lincoln provided no-fault insurance benefits for Armstrong for claims arising out of Armstrong’s September 5, 2008 motor vehicle accident.

Lincoln received the bills from Alev on November 10, 2008.

Lincoln paid the bills in part and denied the bill in part on December 4, 2008. Lincoln issued checks to Alev for the portions of the bills it paid and issued denials for the balance of the bills. Lincoln denied a portion of the bills on the grounds the charges for the medical supplies and equipment were not in accordance with the no-fault payment schedule (11 NYCRR part 68).

Alev received and deposited the checks issued in payment of the claims.

On December 18, 2008, Armstrong testified at an examination under oath (11 NYCRR 65-1.1 [d]) that he never received any of the equipment Alev claims it provided to him, for which Alev billed Lincoln and for which Lincoln paid.

Lincoln commenced this action seeking to recover the money it paid to Alev on the claim.

Alev has defaulted in the action. Lincoln now moves for leave to enter a default [*2]judgment.

Discussion

An insurer has 30 days from receipt of a no-fault claim to pay or deny the claim. (Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007]; Kingsbrook Jewish Med. Ctr. v{**25 Misc 3d at 1021} Allstate Ins. Co., 61 AD3d 13 [2d Dept 2009]; 11 NYCRR 65-3.8 [a] [1].)

An insurer’s time to pay or deny a claim is tolled or extended if the insurer timely requests verification and/or upon receipt of the verification, timely requests additional verification of the claim. (St. Barnabas Hosp. v American Tr. Ins. Co., 57 AD3d 517 [2d Dept 2008]; Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 [2d Dept 2005], lv denied 7 NY3d 704 [2006].)^[FN1] When an insurer timely requests additional verification, the 30-day period in which to pay or deny the claim is tolled pending receipt of the additional verification. (Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., supra; Montefiore Med. Ctr. v Government Empls. Ins. Co., 34 AD3d 771 [2d Dept 2006].)

Lincoln did not request verification of the claim submitted by Alev.

With limited exceptions, none of which are relevant to this case, an insurer is precluded from raising defenses including fraud not asserted in a timely denial. (Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Hospital for Joint Diseases v Travelers Prop.{**25 Misc 3d at 1022} Cas. Ins. Co., supra; Careplus Med. Supply, Inc. v Selective Ins. Co. of Am., 25 Misc 3d 48 [App Term, 9th & 10th Jud Dists 2009].)

Lincoln could have denied the claim on the grounds it was fraudulent. (Fair Price Med. Supply Corp. v Travelers Indem. Co., supra.) Lincoln did not. It paid the claim in part and denied the claim in part. The denial of the claim was based not upon fraud but upon the charges not being in accordance with the no-fault payment schedule.

The purpose of the No-Fault Law is “to ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists.” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003]; see Fair Price Med. Supply Corp. v Travelers Indem. Co., supra; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., supra.) An insurer can contest an illegitimate or fraudulent claim, but it must do so within the strict time periods and processes established by the No-Fault Law and regulations. (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997].)

The core objective of the No-Fault Law and regulations is “to provide a tightly [*3]timed process of claim, disputation and payment.” (Id. at 281; see LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217 [2009].)

Permitting Lincoln to recover in this action would allow an insurer to avoid or evade the time restrictions of the No-Fault Law and regulations by paying and then investigating a claim and suing to recover the previously paid benefits if the investigation reveals the claim was fraudulent. To permit this would subvert the entire no-fault system which establishes strict time limits by which an insurer must process, dispute and pay a claim.

The No-Fault Law and regulations require insurers to promptly investigate and pay claims. The regulations provide insurers with the verification process in order to obtain additional information designed to ferret out illegitimate or fraudulent claims.

While the 30-day period plus any applicable tolls for paying or denying a claim may be “too short a time frame in which to detect billing fraud, any change is up to the Legislature.” (Fair Price Med. Supply Corp. v Travelers Indem. Co. at 565.)

All bases that an insurer has for denying a no-fault claim, except for specific and limited exceptions, must be raised in a timely denial.^[FN2] The only way an insurer can avoid paying a fraudulent no-fault claim is to deny the claim as fraudulent in a timely denial and to assert and prove the defense at trial. (Id.; Lenox Hill Radiology & MIA, P.C. v Global Liberty Ins. Co. of N.Y., 24 Misc 3d 1225[A], 2009 NY Slip Op 51620[U] [Civ Ct, Richmond County 2009].){**25 Misc 3d at 1023}

One of the elements of an application for leave to enter a default judgment is proof of a cause of action against the defendant. (Francisco v Soto, 286 AD2d 573 [1st Dept 2001]; Joosten v Gale, 129 AD2d 531 [1st Dept 1987]; Siegel, NY Prac § 295 [4th ed].) Lincoln’s complaint fails to state a claim upon which relief can be granted.

Nothing in this decision precludes Lincoln from reporting this apparent insurance fraud (Penal Law art 176) to the appropriate law enforcement authorities or from obtaining restitution should Alev be prosecuted and found guilty of insurance fraud in connection with this claim. (Penal Law § 60.27.)

For the foregoing reasons, plaintiff’s motion for leave to enter a default judgment is denied. The action is dismissed.

Footnotes

Footnote 1: An insurer that seeks additional information about a claim can obtain verification by sending the claimant a request for verification within 10 business days of receipt of the claim. (11 NYCRR 65-3.5 [a].) Upon receipt of the initial verification, an insurer can seek additional information or proof regarding the claim by sending the claimant a request for additional verification within 15 business days of receipt of the prescribed verification forms. (11 NYCRR 65-3.5 [b].)

Footnote 2: An insurer is not precluded from raising the defenses of no coverage (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]) fraudulent incorporation (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), and staged accident (Central Gen. Hosp. v Chubb Group of Ins. Cos., supra; Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2d Dept 2005]; V.S. Med. Servs., P.C. v Allstate Ins. Co., 11 Misc 3d 334 [Civ Ct, Kings County 2006]) if such defenses are not asserted in a timely denial. Although generally not considered a defense not subject to preclusion if not asserted in a timely denial, an insurer cannot be required to pay more than the no-fault policy limits. (Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2d Dept 2004].)

District Court of Nassau County, Third District

4787/04

Attorneys: Israel, Israel & Purdy, LLP for Plaintiff

Carman, Callahan & Ingham, LLP for Defendant

Fred J. Hirsh, J.

BACKGROUND

Defendant moves to compel the deposition of German Laufer (“Laufer”) more than 3 years after the filing and service of the Notice of Trial and Certificate of Readiness for Trial. Laufer is the principal of the plaintiff Media Neurology P.C. (“Media”).

Media provided medical treatment to Jerome Ajodhasingh for injuries he sustained in a motor vehicle accident that occurred on May 17, 2004. Ajodhasingh assigned his right to receive no-fault benefits for this treatment and testing to Media.

On or about July 16, 2004, Media submitted its bill for this treatment to Liberty Mutual Insurance Company (“Liberty”) for payment. Liberty denied payment of the bill

on the grounds the services were not medically necessary.

Liberty did not serve a notice to take the deposition of Laufer as part of its discovery demands.

Discovery was completed. Media filed a Notice of Trial and Certificate of Readiness for Trial on March 27, 2006.^[FN1]

In November 2008, Laufer was indicted in Queens County on charges of no-fault insurance fraud and on other charges. The indictment alleges inter alia Laufer’s billed no-fault insurance carriers for services he did not perform or for tests he did not [*2]conduct.

DISCUSSION

A party has 20 days from service of the Notice of Trial and Certificate of Readiness for trial to move to vacate same on the grounds discovery is not complete. 22 NYCRR 212.17(c). This motion was made substantially more than 20 day after the Notice of Trial was served and filed.

In order to obtain discovery after the filing of the Notice of Trial, the party seeking discovery must demonstrate unusual and unanticipated circumstances developed after the filing of the Notice of Trial necessitating the discovery. Futersak v. Brinen, 265 AD2d 452 (2nd Dept. 1999). Generally, discovery is not permitted after a Notice of Trial is filed. Bilotti v. City of New York, 199 AD2d 297 (2nd Dept. 1993). Liberty asserts Laufer’s indictment for his alleged filing of fraudulent no-fault claims provides the unusual and unanticipated circumstances necessitating the deposition.

While a post Notice of Trial indictment of a principal of the plaintiff would ordinarily be an unusual and unanticipated circumstance permitting a deposition, it is not in this case.

A no-fault insurance carrier must either pay or deny a claim with 30 days of receipt of the claim. Kingsbrook Jewish Medical Center v. Allstate Ins. Co., 61 AD3d 13 (2nd Dept. 2009); and 11 NYCRR 65-3.8(a)(1). Except for certain limited exception, that are not applicable in this case, an insurance carrier is precluded from rasing a defense to a no-fault claim not stated in a timely served denial. Hospital for Joint Disease v. Travelers Prop. Cas. Ins. Co., 9 NY3d 312 (2007); and Presbyterian Hosp. in the City of NY v. Maryland Cas. Co., 90 NY2d 274 (1997). While a no-fault carrier may deny a claim on the grounds the claim is fraudulent, it must do so in a timely served denial. Fair Price Medical Supply Corp. V. Travelers Ins. Co., 10 NY3d 556 (2008). Liberty did not deny the claim on the grounds of fraud. Therefore, Liberty is precluded from raising fraud as a defense to this action at trial. Id.

CPLR 3101(a) requires “…full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof.” The terms “material” and “necessary” are to be liberally construed to provide for disclosure fo all factual material having a bearing on the case which will assist in preparing for trial. Allen v. Crowell-Collier Publishing Co., 21 NY2d 403 (1968); and Wall v. Villa Roma Resort Lodges, Inc., 299 AD2d 351 (2nd Dept. 2002).

Information is “material and relevant” for the purposes of CPLR 3101(a) if it, “…will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test is one of usefulness and reason.” Allen v. Crowell-Collier Publishing Co., supra at 406.. The demanded material must be produced if it can be used as evidence in chief, for rebuttal or for cross-examination. Allen v. Crowell-Collier Publishing Co., supra ; and Wind v. Eli Lilly & Co., 164 AD2d 885 (2nd Dept., 1990).

The deposition of Laufer is not material or relevant to this action. Since Liberty did not assert fraud as a basis for the denial of the claim filed by Media which is the subject of this action, Liberty is precluded from raising fraud as a defense to this action at trial. Fair Price Medical Supply Corp. v. Travelers Ins. Co., supra .

Laufer may not testify at trial. Media can establish its prima facie case without Laufer’s testimony. [*3]

Plaintiff establishes a prima facie case in an action for first party no-fault benefits through “…evidentiary proof that the prescribed statutory billing forms have been mailed and received, and that the payment of the no-fault benefits was overdue (citations omitted).” Westchester Med. Ctr. v. AIG, Inc., 36 AD3d 900 (2nd Dept. 2007); Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 (2nd Dept. 2004); and Bajaj v. General Assurance Co., 18 Misc 3d 25 (App.Term 2nd & 11th Jud. Dists. 2007).

The testimony from someone working in Media’s office other than Laufer could establish the bill submitted to Liberty in this case was a business record. William Conover, Inc. v. Waldorf, 251 AD2d 727 (3rd Dept. 1998); Craigg Total Health Family Health Chiropractic Care, P.C. v. QBE Insurance Corp., 20 Misc 3d 1118(A) (Dist. Ct. Nassau Co. 2008); and Lenox Hill Radiology v. New York Cent. Mut. Fire Ins. Co., 20 Misc 3d 851 (Dist.Ct. Nassau Co. 2008). Someone other than Laufer could testify to establish the bill was submitted timely. Careplus Med. Supply Inc. v. Travelers Home & Mar. Ins. Co., 7 Misc 3d 133(a) (App.Term. 2nd & 11th Jud. Dists. 2005); and King’s Medical Supply, Inc. v. Progressive Ins., 3 Misc 3d 126(a) (App.Term. 2nd & 11th Jud. Dists. 2004).

Timely submission of a no-fault claim creates a presumption of medical necessity. All County Open MRI & Diagnostic Radiology. P.C. v. Travelers Ins. Co., 11 Misc 3d 131(a) (App.Term 9th & 10th Jud. Dists. 2006).

The only purpose for which the charges alleged in the Queens County indictment could be used would be for impeachment if Laufer testifies at trial. CPLR 3117(a)(1).

If Laufer were to be convicted at trial or plead guilty to the Queens County charges prior to the trial of this action, Laufer could be asked if he testified at the trial of this action if he has been convicted of a crime and questioned regarding the facts underlying the conviction, People v. Sorge, 301 NY 198 (1950); and CPLR 4513.

Laufer could be cross-examined at trail regarding the allegations contained in the indictment or any other uncharged acts if those acts are criminal, immoral or vicious. People v. Walker, 83 NY2d 455 (1994); and People v. Schwartzman, 24 NY2d 214, cert. dnd. 396 U.S. 846 (1969). Laufer could also be cross-examined regarding these facts underlying the indictment or any other acts not charged in the indictment if they indicated an untruthful bend or a willingness to place his interests above those of society. People v. Walker, supra . If Laufer is acquitted, he could not be questioned regarding any of the facts alleged in the indictment. People v. Santiago, 15 NY2d 640 (1964); and People v. Parsons, 6 AD3d 364 (1st Dept. 2004).

If this court ordered Laufer to appear for deposition, Laufer could assert his Fifth Amendment right at the deposition. Dibble v. Consolidated Rail Corp., 181 AD2d 1040 (4th Dept. 1992); White v. Martins, 100 AD2d 805 (1st Dept. 1984); Ferraro v. New York Telephone Co., 94 AD2d 784 (2nd Dept. 1983); Watson v. State of New York, 53 AD2d 798 (3rd Dept. 1976); and Mora v. St. Vincent’s Catholic Med. Ctr. of New York, 8 Misc 3d 868 (Sup.Ct. N.Y.Co. 2005). Thus, even if the court were to order Laufer to appear for deposition there is a strong likelihood that Laufer would refuse to answer the questions posed to him by Liberty’s attorney.

The determination of whether unusual or unanticipated circumstances exist permitting discovery after the filing of the Notice of Trial is one addressed to the discretion of the trial court. Meadow Lane Equities Corp. v. Hill, -A.D.3d -, 879 NYS2d [*4]725 (2nd Dept. 2009).

Since the testimony that could be elicited at deposition could only be used only for the limited purpose of impeachment on cross-examination of a witness who might not even testify at trial and would could refuse to answer the questions by invoking his Fifth Amendment right, defendant has not establish unusual or unanticipated circumstances exist that would permit defendant to take the deposition of Laufer three years after the Notice of Trial was filed. Schissler v. Brookdale Hosp. Ctr., 289 AD2d 469 (2nd Dept. 2001).

The court notes that if Laufer is convicted of insurance fraud and this claim is a fraudulent claim, Laufer could be compelled to make restitution as part of his plea or sentence. Penal Law §60.27.

For the foregoing reasons, defendant’s motion for an order compelling German Laufer to appear for deposition is denied.

The attorneys for the parties are directed to appear for a pre-trial conference in Civil Part 3 on August 11, 2009 at 9:30 a.m.

SO ORDERED:

Hon. Fred J. Hirsh

District Court Judge

Dated: July 6 , 2009

cc:Israel, Israel & Purdy, LLP

Carman, Callahan & Ingham, LLP

Footnotes

Footnote 1:Since the recovery sought was less than $6000, the action had to proceed to mandatory arbitration. 22 NYCRR Part 28. Although the Notice of Trial was filed in March 2006, the action did not proceed to arbitration until June 24, 2008. A copy of the arbitrator’s award was mailed to the attorneys for the parties on July 7, 2008. 22 NYCRR 28.11. The Demand for a Trial De Novo was filed and the required fee was paid on July 15, 2008. 22 NYCRR 28.12.

The trial of this action was further delayed by the closing of the Third District Courthouse at the end of 2008 resulting in the action be reassigned to Civil Part 3 in Hempstead

District Court of Nassau County, First District

8153/08

Plaintiff: Friedman, Harfenist, Kraut & Perlstein, Esqs.

Defendant: DeMartini & Yi, LLP

Fred J. Hirsh, J.

Defendant Progressive Casualty Insurance Company (“Progressive”) moves for summary judgment. Plaintiff Elmont Open MRI & Diagnostic Radiology, P.C. (“Elmont”) cross-moves for summary judgment.

BACKGROUND

Andrea Henry (“Henry”) was injured in an automobile accident that occurred on October 16, 2007. Her treating doctor prescribed MRI’s of the cervical, thoracic and lumbar spines.

The MRI of the lumbar spine was performed by Elmont on November 24, 2007. The MRI’s of the cervical and thoracic spines were performed by Elmont on December 27, 2007.

Henry assigned her right to receive no-fault benefits for the MRI’s to Elmont.

Elmont submitted the bills for the MRI’s to Progressive, the insurance carrier that provided no-fault benefits for Henry. Progressive received the bill for the MRI of the cervical spine on December 26, 2007 and the bill for the MRI’s of the cervical and thoracic spine on January 11, 2008.

Progressive claims it denied the bill for the lumbar MRI by denial dated January 18, 2008. Progressive claims it denied the bill for the cervical and thoracic MRI’s by denial dated February 1, 2008.

The denial of benefits was based upon the peer review report of Harvey Goldberg, M.D. (“Dr. Goldberg”).

Progressive asserts the peer review report of Dr. Goldberg establishes the MRI’s were not medically necessary. Progressive further asserts the affidavit of Christopher R. Kenny (“Kenny”) establishes Progressive’s office procedures for preparing, addressing and mailing denials of claims. The Kenny affidavit purports to establish [*2]Progressive had established a procedure to ensure proper and timely mailing of denials.

Elmont asserts Dr. Goldberg’s peer review reports are inadequate to entitle Progressive to judgment as a matter of law. They further assert the Kenny affidavit does not establish the denials were timely mailed.

Elmont cross-moves for summary judgment. Elmont establishes it timely filed the claim. The timely filing of the claim is based upon the affidavit of Brijukmar Yamraj (“Yamraj”) Elmont’ s medical billing collection supervisor and Progressive’s NF-10. the Denial of Claim form .

Elmont performed the MRI of Henry’s lumbar spine on November 24, 2007. The bill for this MRI is dated November 29, 2007. Progressive acknowledges receipt of this bill on December 26, 2007.

Elmont performed the MRI’s of Henry’s thoracic and cervical spine on December 12, 2007. The bill is dated December 20, 2007. Progressive acknowledges receipt of this bill on January 11, 2008.

Elmont asserts this establishes the claims were received by Progressive within 45 days of the date services were rendered. 11 NYCRR 65-1.1. Progressive admits it has not paid the bills. Elmont claims the timely submission of the bills coupled with Progressive’s failure to pay within 30 days establishes its entitlement to summary judgment.

DISCUSSION

A no-fault insurer who denies a claim on the basis of lack of medical necessity must establish that the services were inconsistent with generally accepted medical practices. The opinion of the insurer’s expert standing alone is insufficient to establish that the tests were not medically necessary. Delta Medical Supplies, Inc. v. NY Central Mutual Ins. Co., 14 Misc 3d 1231(A) (Civil Ct. Kings Co. 2007); and CityWide Social Work & Psychological Servs. V. Travelers Indem. Co., 3 Misc 3d 608 (Civil Ct. Kings Co. 2004).

Dr. Goldberg’s peer review reports are inadequate as a matter of law to establish lack of medical necessity. Dr. Goldberg’s peer review report regarding the MRI of the lumbar spine does not state an opinion as to the medical necessity of this MRI. Dr. Goldberg does not state in his report he is familiar with the practices and procedures in the field. He adopts an opinion contained in Current Medical Diagnosis and Treatment, 42nd Ed. (“CMDT”). The court is not provided with a copy of the sections of CMDT upon which Dr. Goldberg relies.

Dr .Goldberg never states in his peer review report that he is familiar with generally accepted medical practices regarding the prescribing of a lumbar MRI, what those practices are and how or why ordering of a lumbar MRI when it was ordered departed from those practices.

Similarly, Dr. Goldberg’s peer review report regarding the cervical and thoracic spine is inadequate. He again adopts the opinion of CMDT without stating what that opinion is. He fails to states that he is familiar with the generally accepted medical practices and procedures regarding the ordering of thoracic and/or cervical MRI’s, what those standards are, the basis of those standards and/or how or why the MRI’s ordered [*3]and performed of Henry’s cervical and thoracic spine by Elmont were not in accordance with those practices and procedures.

This problem is compounded by the statement contained in Dr. Goldberg’s report that “I would be unable to certify the medical necessity for MRI studies of the cervical spine and thoracic spine planned on 11/29/2007.” The issue is not whether Dr. Goldberg would order those tests. In determining whether a test is medically necessary, the question is whether the tests or procedures are in accordance with generally accepted medical practices, not whether the peer review doctor’s personal opinion is the tests are not medical necessary. Id. and Nir v. Allstate Insurance Co., 7 Misc 3d 544 (Civil Ct. Kings Co. 2005).

The peer review doctor’s must establish a familiarity with generally accepted practice, must establish what generally accepted practice is under the circumstances and must state the questioned treatment was not in accordance with generally accepted medical practice. Williamsbridge Radiology & Open Imaging .v Travelers Indemnity Co., 14 Misc 3d 1231(A) (Civil Ct. Kings Co. 2007).

Before an expert witness is permitted to offer an opinion, the witness must be qualified as an expert. Price v. New York City Housing Auth., 92 NY2d 553 (1998); Caprara v. Chrysler Corp., 52 NY2d 114, rearg. dnd. 52 NY2d 1073 (1981); and Meiselman v. Crown Heights Hospital, 285 NY 389 (1941). To qualify as an expert, the witness must possess “…the requisite skill, training, education, knowledge or experienced from which it can be assumed that the information imparted or the opinion rendered is reliable (citations omitted).” Matott v. Ward, 48 NY2d 455, 460 (1979); and de Hernandez v. Lutheran Medical Center, 46 AD3d 517 (2nd Dept. 2007). Progressive fails to establish Dr. Goldberg is an expert. Progressive does not submit an affidavit or affirmation from Dr. Goldberg. Progressive relies upon the peer review report which is affirmed. The peer review report does not contain any information about Dr. Goldberg’s education, training or professional experience. Since Dr. Goldberg has not been qualified as an expert, the court cannot accept his opinion regarding the lack of medical necessity for the cervical, thoracic and lumbar MRI’s.

Dr. Goldberg’s peer review states the MRI of the lumbar spine “…has not been established as medically necessary.”This misstates the burden of proof. Plaintiff proves a prima facie case of medical necessity by submitting proof in evidentiary form the statutorily prescribed forms were timely mailed and received, and the no-fault benefits were nottimely paid. Globe Surgical Supply v. Geico Ins. Co., 59 AD3d 129 (2nd Dept. 2008); and Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 (2nd Dept. 2004). Once plaintiff has met this burden, the burden of proof shifts to the defendant to establish the test or treatment were not medically necessary. A Plus Medical P.C. v. Government Employees Ins. Co., 21 Misc 3d 799 (Civil Ct. Kings Co. 2008). Dr. Goldberg’s report does not meet the defendant’s burden.

Since the peer review reports of Dr. Goldberg are inadequate to establish a prima facie entitlement to judgment as a matter of law, defendant’s motion for summary judgment is denied. Widmaier v. Master Products, Mfg, 9 AD3d 362 (2nd Dept. 2004); and Ron v. New York City Housing Auth., 262 AD2d 76 (1st Dept. 1999).

Elmont has established the statutorily prescribed claim forms were received by Progressive within 45 days of the ay upon which the services were rendered. [*4]Progressive has failed to pay the bills. This Elmont has established a prima facie case that the treatment it provided was medically necessary. Fair Price Medical Supply Corp. v. Travelers Indemnity Co., 10 NY3d 556 (2008); and Hospital for Joint Diseases v. Travelers Property Casualty Ins. Co., 9 NY3d 312 (2007)

Progressive claims it timely denied these claims based upon an affidavit of Christopher R. Kenny (“Kenny”). Kenny was not the Progressive claims representative who issued or mailed the denial. The denial of claims forms were issued by David Karhan (“Karhan”).

A no-fault insurance carrier may prove timely mailing of a denial by submitting an affidavit made by the person who actually prepared and mailed the denial attesting to the preparation and mailing of the denial or by submitting an affidavit from an employee with knowledge of its office practice or procedures designed to ensure the denial was timely generated, addressed and mailed and those procedures were followed in connection with the notice involving plaintiff’s claim. St. Vincent’s Hosp. of Richmond v. Government Employees Ins. Co., 50 AD3d 1123 (2nd Dept. 2008). However, the court did not indicate precisely what must be stated in the affidavit to establish the office practices and procedures were designed to ensure the denial was timely generated, addressed and mailed.

Ideally such an affidavit would be made by the person who prepared the denial notice and would state (1) the affiant prepared the denial notice, (2) put the denial notice in the envelope, (3) checked to determine it was properly addressed, (4) stamped the envelope and (5) deposited the stamped envelope in a mail box. An affidavit made by the person who performed the first three elements and then deposited the envelope in the office outgoing mail together with a statement of familiarity with the procedures used to stamp and mail the items placed in the outgoing mail is sufficient to establish due and timely mailing. Lenox Hill Radiology v. Global Liberty Ins., 20 Misc 3d 434 (Civil Ct. NY Co. 2008).

An insurance carrier could meet the requirement of establishing due and timely mailing by attaching an affidavit of mailing to the office copy of the denial notice.^[FN1]

An insurance carrier could meet the requirement of proving due and timely mailing by mailing the denial notice with a certificate of mailing ^[FN2] or by mailing the denial [*5]notice by certified or registered mail, return receipt requested.^[FN3]

The requirement could be met if the medical provider acknowledges or admits the denial notice was timely mailed. This could be accomplished by taking a deposition of the plaintiff (CPLR 3107) at which the plaintiff’s witness could be asked if the Notice of Denial, NF-10 was received and if so, when was it received. Similar information could be obtained through interrogatories in which the plaintiff could be asked if it received the Notice of Denial, NF-10 and the date the NF-10 was received. CPLR 3130.

An insurance carrier could also meet the requirement by having the claims representative prepare as part of the claims processing procedure a log indicating the date the claim was received, the action taken on the claim and the date the payment, the demand for verification or the Notice of Denial, NF-10 was prepared and mailed. Such a record or log could, with proper foundation, be established as a business record. CPLR 4518(a).

Problems arise when the affidavit attesting to the preparation and mailing of the denial notice is made by a claims supervisor who has no personal knowledge of how or when the Notice of Denial, NF-10 was prepared or mailed. That is the situation in this case. The only fact Kenny’s affidavit can actually attest to is that he has reviewed the office file and found a Denial of Claim, NF-10 for the lumbar spine dated 1/18/08 and a Denial of Claim, NF-10 for the thoracic and cervical spine dated 2/1/08 in the file. Kenny has no first hand knowledge as to whether they were actually prepared on the date stated on the NF-10. The confusion as to the date these NF-10’s were actually prepared is compounded by a stamp on the NF-10 for the lumbar spine “Entered by ACL 0006 Jan. 21, 2008” and a stamp on the NF-10 for the thoracic and cervical spine “Entered by SXGD 154 Feb. 4, 2008”.

While evidence of habit or custom and practice may be admitted to establish that a person performed a certain act, the person must establish the habit or custom and practice is “…a deliberate and repetitive practice” by a person”in complete control of the circumstances.” (Citation omitted) as opposed to “conduct however frequent yet likely to vary from time to time depending upon the surround circumstance” (citation omitted).” Rivera v. Anilesh, 8 NY3d 627, 632 citing Halloran v. Virginia Chemicals Inc., 41 NY2d 386 (1977). Before a person can testify regarding whether a person actions constitute habit or custom and practice, the person offering evidence establishing they are familiar with that person’s habits. Halloran v. Virginia Chemicals, Inc., supra; and Beakes v. DaCunha, 126 NY 293 (1891) (plaintiff was permitted to testify it was his practice to be home on a specific day each month to transact business.). Kenny’s affidavit does not establish he was familiar with Karhan’s practices and procedures in preparing, dating or mailing Denial of Claim, NF-10’s. Kenny’s affidavit does not even state Karhan was advised of or familiar with Progressive’s company practices procedures regarding the preparation, addressing and mailing of NF-10’s. Essentially, the court is being asked [*6]to assume Karhan prepared and timely mailed the NF-10’s because they are in Progressive’s file and are dated within the 30 day period in which the carrier has to pay or deny a claim. 11 NYCRR 65-3.8.

The No-Fault Law and Regulations presents unique issues regarding timely mailing. The no-fault insurance carrier has 30 days from the date of receipt of a claim or verification of the claim to pay or deny a claim in whole or in part. 11 NYCRR 65-3.8. A no-fault insurance carrier who fails to deny a claim within 30 days is precluded from asserting most defenses to the claim. Fair Price Medical Supply Corp. v. Travelers Indemnity, Co., supra; and Hospital for Joint Diseases v. Travelers Property Casualty Ins. Co., supra.^[FN4] Therefore, proof of timely mailing of the denial is critical to the defense of lack of medical necessity. Progressive would be precluded from raising this defense unless it proves timely mailing of the denial of claims to Elmont. Careplus Medical Supply, Inc. v. Selective Ins. Co. of America, -Misc.3d-, 2009 WL 679251 (App.Term 9th & 10th Jud. Distrs. 2009).

The proof in this case is insufficient to establish proof of timely mailing. Kenny’s review of Progressive’s file establishes a copy of the NF-10 was in the file.

Progressive does not even state the reason why it did not submit an affidavit from Karhan, the person with actual first hand knowledge of the preparation and mailing of the NF-10.

The oft stated purpose of the No-fault law is “…to ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists.” Medical Society of the State of New York v. Serio, 100 NY2d 854, 860 (2003). See, Fair Price Medical Supply Corp. v. Travelers Indemnity Co., supra; and Hospital for Joint Disease v. Travelers Property Casualty Ins. Co., supra.

This court does not believe the stated purpose of the No-fault law is served by permitting the no-fault carrier to defeat a claim by submitting an affidavit by someone who lacks personal knowledge of the facts regarding the preparation and mailing of the Denial of Claim who assumes that because the NF-10 is in the office file and is dated before the 30 day period for paying or denying a claim has expired that the NF-10 was prepared and mailed timely.

This Court believes St. Vincent’s requires that if the no-fault insurance carrier cannot present an affidavit made by the person who actually prepared the NF-10 the [*7]affidavit should state: (1) why an affidavit cannot be obtained from the person who actually prepared and/or posted the NF-10 for mailing, (2) the company policy and procedures for preparing, addressing and mailing an NF-10 in effect at the time the NF-10 was prepared and mailed, (3) the claims representative who issued the NF-10 was aware of and advised to comply with company policy regarding the preparation and mailing of these forms, (4) the person making the affidavit knows the person who prepared the NF-10 was aware of company policy, (5) the person making the affidavit was aware that the claims representative who prepared the NF-10 had the habit of complying with company policy and (6) the basis of the person who makes the affidavit’s knowledge.

Kenny’s affidavit does not contain any of this information other than Progressive’s policy regarding the issuance and mailing of Denial of Claims. It does not establish Karhan was aware of this policy or complied therewith. .

Elmont’s papers establish an entitlement to judgment as a matter of law. The Yamraj affidavit establishes Elmont’s practices and procedures regarding the preparation and mailing of bills. Furthermore, Progressive’s NF-10’s indicate the bills were received within 45 days of the date the services were provided. Progressive admits they did not pay these bills.

.The party seeking summary judgment must make a prima facie showing of entitlement to judgment as a matter of law. Winegrad v. New York University Medical Center, 64 NY2d 851 (1985); and Zuckerman v. City of New York, 49 NY2d 557 (1980). Once the party seeking summary judgment has made a prima facie showing of entitlement to judgment as a matter of law, the party opposing the motion must come forward with proof establishing the existence of triable issues of fact or must demonstrate an acceptable excuse for its failure to do so. Zuckerman v. City of New York, supra; and Davenport v. County of Nassau, 279 AD2d 497 (2nd Dept., 2001); and Bras v. Atlas Construction Corp., 166 AD2d 401 (2nd Dept., 1991). Elmont has made a showing of entitlement to a judgment as a matter of law. Progressive has not.

For the foregoing reasons, defendant’s motion for summary judgment is denied. Plaintiff’s cross-motion for summary judgment is granted. The clerk is directed to enter judgment in favor of the plaintiff and against the defendant in the sum of $2751.34 together with interest in accordance with the No-Fault Regulations and legal fees in accordance with 11 NYCRR 4.6 together with costs and disbursements as taxed by the clerk.

Submit judgment.

So Ordered:

Hon. Fred J. Hirsh

District Court Judge

Dated: April 6, 2009

cc:DeMartini & Yi, LLP

Friedman, Harfenist, Kraut & Perlstein [*8]

Footnotes

Footnote 1:The affidavit of mailing would be similar to and serve the same function as the affidavit of service attached to legal papers served in accordance with CPLR 2103. See, CPLR 2103(f)(1).

Footnote 2:A Certificate of Mailing is document issued by the United States Postal Serivce evidencing that a piece of mail has been delivered to the Postal Service for mailing. The Certificate of Mailing indicates the date the item was mailed. See, United States Postal Service, Domestic Mail Manual, Section 503 – Extra Services 5.0 et. seq. Certificate of Mailing.

Footnote 3:The certified or registered mail receipt would reflect the date the notice was mailed. The return receipt would reflect the date the item was received by the addressee. See, United States Postal Service, Domestic Mail Manual, Section 503 Extra Services – 2.0 et. seq. Registered Mail and 3.0 et. seq. Certified Mail and 6.0 et. seq. Return Receipt.

Footnote 4:The Fair Price case points out the substantial and dire consequences to an insurance carrier who fails to timely deny a claim. Travelers was precluded from asserting a defense of fraud which might rise to the level of penal insurance fraud (See, Penal Law §176.00 et seq.) because the claim was not timely denied. The only defense that are not precluded as a result of an insurance carriers failure to timely deny a claim are lack of coverage [Central General Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195 (1997)], fraudulent incorporation. [State Farm Mutual Ins. Co. v. Malella, 4 NY3d 313 (2005)], and staged accident [Central General Hosp. v. Chubb Group of Ins. Cos., supra; Allstate Ins. Co. v. Massre, 14 AD3d 610 (2nd Dept. 2005); and V.S. Medical Services P.C. v. Allstate Ins. Co., 11 Misc 3d 334 (Civil Ct. Kings Co. 2006)].

[*1]

District Court of Nassau County, First District, February 17, 2009

APPEARANCES OF COUNSEL

Robert E. Dash, Syosset, for plaintiff. Freiberg & Peck, LLP, New York City, for defendant.

{**24 Misc 3d at 195} OPINION OF THE COURT

Gary F. Knobel, J.

Motion by defendant for an order discontinuing this action pursuant to CPLR 3217 (b), or in the alternative, for an order dismissing the plaintiff’s complaint pursuant to CPLR 3211 (a), is denied in its entirety. However, the plaintiff is directed to immediately purchase a new index number (see CPLR 2001).

The unusual procedural issues raised by this motion involve (1) the application of the recent amendment to CPLR 2001, which not only gives the court discretion to correct or ignore mistakes or omissions occurring at the commencement of an action, it requires the court to excuse the commencement error if a substantial right of a party is not prejudiced, (2) the effect of this amendment on the Court of Appeals’ commencement-by-filing decisions, (3) whether the revised version of CPLR 2001 should be applied when there is a defect in an action, such as the one at bar, that has been commenced by service of process, and (4) the timing of a motion to dismiss the complaint based upon the affirmative defenses alleging commencement infirmities, i.e., “fail[ure] to properly commence an action” and “fail[ure] to properly obtain an index number.”{**24 Misc 3d at 196}

The procedural history of this case is as follows:

Vinings Spinal Diagnostic, P.C., as assignee of Andrew Amitrano, commenced an action on November 26, 2001, under index No. 18354/01, against the defendant Progressive Casualty Insurance Company. The plaintiff sought to recover no-fault insurance benefits for medical services in the sum of $808.80 rendered to Andrew Amitrano on or about June 7, 2000.

In April of 2002, the plaintiff moved for an order pursuant to CPLR 3215 granting a default judgment against the defendant. That motion was subsequently withdrawn by stipulation, signed by all parties, dated April 1, 2002. Thereafter, the defendant filed an answer asserting 12 affirmative defenses.

On September 11, 2002, the defendant moved for an order pursuant to CPLR 3126 striking the plaintiff’s complaint for plaintiff’s failure to respond to the defendant’s outstanding discovery demands. The plaintiff opposed said motion and cross-moved for various [*2]forms of relief. By order dated November 27, 2002, this court denied defendant’s motion as moot since plaintiff had responded to the defendant’s outstanding discovery demands. The court’s order also denied the plaintiff’s cross motion as it was not properly noticed (see CPLR 2215).

On May 8, 2003, this action was referred to mandatory arbitration in accordance with 22 NYCRR 28.2. On October 16, 2003, the case was heard before an arbitrator where both parties appeared. The arbitrator’s award entered on January 13, 2004, stated that the action was “withdrawn without prejudice in order to re-institute the suit with the proper parties.” It appears that the parties entered into a stipulation of discontinuance in 2003. A review of the Clerk’s file of this action reveals that the stipulation of discontinuance dated “—2003” and filed with the Clerk’s office on March 14, 2004, provided, in relevant part, that:

“It is hereby stipulated and agreed by and between the attorneys for the respective parties herein that the above captioned is discontinued without prejudice[.] This discontinuance shall in no way prevent the institution of an action for the bills herein under John M. Horvath, D.C., P.C. The defendant, Progressive Insurance Company, shall serve an answer to the plaintiff’s complaint within forty (40) days of service thereof as service of the complaint is to be served on the law firm of Freiberg & Peck . . . by either personal delivery or certified mail, return{**24 Misc 3d at 197} receipt requested, and Freiberg and Peck agree to accept service of process on behalf of [defendant] Progressive Casualty Insurance Company.” (Emphasis added.)

The stipulation of discontinuance was signed by the attorneys for both parties (see CPLR 3217 [a] [2]). Consequently, the stipulation had the effect of discontinuing the action pending under index No. 18354/01.

Thereafter, on or about March 19, 2004, notwithstanding the fact that the action under index No. 18354/01 had been discontinued, an amended summons and complaint bearing that same District Court index number was served by regular mail on Freiberg & Peck. The name of the plaintiff, as contemplated by the parties’ stipulation, that was set forth on the amended summons and complaint was John M. Horvath, D.C., P.C., rather than Vinings Spinal Diagnostic, P.C. The plaintiff never purchased a new index number. Defendant served an amended answer to the plaintiff’s amended summons and complaint on March 24, 2004. The amended answer asserted three jurisdictional defenses, a fourth affirmative defense that “[t]he plaintiff has failed to properly commence an action,” a fifth affirmative defense that “[t]he Court has no jurisdiction over the parties,” and an eleventh affirmative defense that “[t]he plaintiff has failed to properly obtain an index number.” The defendant’s attorney claims that defendant’s file was archived in an “off-site storage facility” and “misplaced by the storage facility.”

Three years later, on January 25, 2007, this case was scheduled for a discovery conference by the Clerk of the Civil Term. The parties entered into a discovery stipulation which outlined the time frames for which both parties had to complete discovery. A review of the Clerk’s file indicates that [*3]this stipulation required the defendant to provide the plaintiff “with all relevant denial of claim forms, peer reviews/IMEs, including medical records reviewed by peer/IME doctor, within ninety (90) days of the date of this Stipulation (4-26-2007).” If the defendant failed to timely furnish these records, it would be precluded from offering that information at the time of trial. The plaintiff also stipulated to provide various discovery to the defendant. In addition, the parties reserved the right to schedule depositions following the exchange of the written discovery.

The branch of defendant’s motion pursuant to CPLR 3217 seeks an order discontinuing this action upon the ground that the plaintiff failed to properly commence the second action by{**24 Misc 3d at 198} its failure to purchase a new index number. Defendant further contends pursuant to CPLR 3211 (a) that any refiling by plaintiff of this action under a new index number would be time-barred by the six-year statute of limitations since the plaintiff was required to properly recommence its action by June 12, 2006.

In opposition plaintiff acknowledges that the prior action under index No. 18354/01 was discontinued by stipulation. It contends, however, that the defendant waived any claim regarding the plaintiff’s failure to purchase a new index number by serving an answer to the plaintiff’s amended summons and complaint and not raising an objection. The plaintiff further contends that the defendant should be barred by the doctrine of laches from bringing this motion to dismiss after the statute of limitations has expired.

The first issue the court will determine is the effect the stipulation of discontinuance has upon this action.

A party asserting a claim has a statutory right to voluntarily discontinue an action (CPLR 3217 [a] [1]). It is well settled that the voluntary making and filing of a stipulation of discontinuance has the effect of terminating an action. Several courts have held that when an action is discontinued by consent, “it is as though the action never existed” (American Progressive Health Ins. Co. of N.Y. v Chartier, 6 AD2d 579, 580 [1958]; see also Newman v Newman, 245 AD2d 353 [1997]). Moreover, courts have held that since no action is pending, there is no vehicle through which a motion can be made. The remedy by motion to enforce a stipulation is available only in connection with an existing action or special proceeding (see Bruck v Contos, 24 Misc 2d 1093 [1960]).

However, stipulations dismissing or discontinuing a case must be fairly and reasonably construed, in light of the surrounding circumstances and in view of the result which the parties were attempting to accomplish (Nordred Realties, Inc. v Langley, 169 Misc 659 [1938], affd 279 NY 636 [1938]). Notwithstanding the fact that a stipulation of discontinuance is entered into, an action is not automatically terminated unless there has been a showing that the parties have executed an express, unconditional stipulation of discontinuance (see Pegalis v Gibson, 237 AD2d 420 [1997]).

In the instant case, the action captioned Vinings Spinal Diagnostic, P.C. as assignee of Andrew Amitrano v Progressive Casualty Insurance Company which bore index No. 18354/01,{**24 Misc 3d at 199} was effectively discontinued on March 19, 2004, in accordance with the signed stipulation of discontinuance. The terms of the stipulation clearly express an intent by both parties to discontinue that action (see CPLR 3217 [a] [2]).

Consequently, the court must now determine the effect of plaintiff’s recommencement of the action at bar without purchasing a new index number, and the [*4]timeliness of defendant’s motion to dismiss.

In 1992, the method of commencing an action in supreme and county courts was changed by the Legislature from a commencement-by-service to commencement-by-filing system, making the payment of a filing fee and the filing of the initiatory papers the acts that commence an action (CPLR 304, 306-a; Matter of Gershel v Porr, 89 NY2d 327, 330 [1996]; Matter of Fry v Village of Tarrytown, 89 NY2d 714, 719 [1997]). This new commencement system became effective in the District Court 12 years later on September 8, 2005. The Legislature’s main reason for converting to a commencement-by-filing system was to raise money for state coffers by requiring the payment of a filing fee when the action was commenced (Matter of Fry v Village of Tarrytown at 719; Bellew v City of New York, 272 AD2d 104 [2000]). Although the legislative goal of raising substantial revenue was quickly met, extensive litigation arose over procedural issues pertaining to a defect in compliance with the statutory requirements of the commencement-by-filing system. There is no rule or section of the CPLR, or in the Uniform District Court Act, which serves as a basis upon which a defendant or a respondent can seek dismissal of the action or proceeding based on the specific ground of improper commencement or defective commencement in the filing of the action (see CPLR 3211 [a], [e]; 304, 305; UDCA 400). As a result, many trial and appellate courts disagreed over whether these infirmities were personal, or subject matter, jurisdictional defects. The Court of Appeals wrestled with these issues over a 10-year period in cases such as Matter of Fry v Village of Tarrytown (89 NY2d 714 [1997]), Matter of Gershel v Porr (89 NY2d 327 [1996]), Harris v Niagara Falls Bd. of Educ. (6 NY3d 155 [2006]) and Matter of Ballard v HSBC Bank USA (6 NY3d 658 [2006]), and set forth the following principles in balancing the competing interests of the parties in the commencement process:

(1) strict compliance with the commencement-by-filing system was mandatory, and noncompliance could result in outright dismissal of the proceeding;{**24 Misc 3d at 200}

(2) the improper commencement of an action, such as the failure to obtain a new index number for a subsequent identical action, or the failure to pay the fee for an index number, did not deprive a court of subject matter jurisdiction (if the defect did not undermine the constitutional or statutory basis to hear a case);

(3) these types of commencement infirmities fell into the category of a defect in personal jurisdiction, not subject matter jurisdiction;

(4) personal jurisdiction could only be obtained over a defendant if the defendant’s constitutional right to due process has not been violated and the plaintiff has complied with the commencement filing rules;

(5) defendant’s right to challenge personal jurisdiction, on the ground that the plaintiff committed an error, omission or defect in commencing the action, could be waived by the defendant intentionally or unintentionally; and

(6) defendant could only assert the right to object to personal jurisdiction by timely raising the objection in an answer as an affirmative defense, or in a pre-answer motion to dismiss.

In 2007, the Legislature saw a need to overrule the aforecited Court of Appeals decisions “to fully foreclose dismissal of actions for technical . . . non-prejudicial defects” in commencement, such as the “late payment of the fee [to purchase an index number] because of a bounced check (which is subsequently cured) or the failure to purchase a second index number,” regardless of whether the defendant objected in a timely and proper manner (see 2007 Rep of Advisory Comm [*5]on Civ Prac, at 24-25, reprinted in 2007 McKinney’s Session Laws of NY, at 2219 [hereinafter Report]). Consequently, the Legislature amended CPLR 2001^[FN*] to mandate a court “[a]t any stage of an action” to excuse or forgive and correct a mistake, omission, defect or irregularity in the commencement of an action unless “a substantial right of [an adverse] party” would be “prejudiced.”{**24 Misc 3d at 201} The Legislature, unlike the Court of Appeals, now distinguished between types of commencement defects: (a) minor, harmless errors which the court must excuse, and (b) major, inexcusable deficiencies that are not subject to correction in the court’s discretion because a “substantial right” of the defendant would be affected, such as the failure by the plaintiff to properly commence the action within the statute of limitations, or the filing of a bare summons without a complaint in contravention of the statutory requirement (see CPLR 304). With respect to the latter circumstance, the 2007 Report of the Advisory Committee on Civil Practice to the Chief Administrative Judge of the Courts of the State of New York (at 25, reprinted in 2007 McKinney’s Session Laws of NY, at 2219) specifically stated that the amendment to CPLR 2001 was not meant to overrule the 1984 Court of Appeals decision of Parker v Mack (61 NY2d 114 [1984]), that was issued in the previous era of commencement by service of process. Parker held that the service of a summons which (1) failed to recite the nature of the action and relief sought, as required by CPLR 305 (b), and (2) was served without a complaint, rendered the commencement of the action a nullity. The Parker Court implied that this type of commencement infirmity was such a serious defect in an initiatory process document that it deprived a court of subject matter jurisdiction, i.e., the power of the court to act to hear and determine the case before it. The “nullity” concept expressed in Parker was echoed 12 years later by the Court of Appeals in Matter of Gershel v Porr (the service of process on the defendant before that process was filed with the county clerk rendered the action a nullity), and by the dissent in Matter of Fry v Village of Tarrytown, but was distinguished in Matter of Ballard v HSBC Bank USA (6 NY3d 658, 663 [2006]), Harris v Niagara Falls Bd. of Educ. (6 NY3d 155 [2006]) and Matter of Fry (89 NY2d at 718-719). However, the Court of Appeals has never expressly overruled its decisions in Gershel or Parker. Consequently, last year, when the Appellate Division, Third Department, in Matter of Miller v Waters (51 AD3d 113 [2008]), was presented with an opportunity to interpret and apply the 2007 amendment to CPLR 2001, it seized upon the Legislature’s treatment of a Parker commencement defect as a defect in subject matter jurisdiction, depriving the court of the power to act. The Miller court declared that “[a]lthough the language of [CPLR 2001] is broad . . . the [amended] statute was not intended to allow courts to create subject matter jurisdiction{**24 Misc 3d at 202} where it does not exist” (Miller, 51 AD3d at 117). The court concluded that it will adhere to the precedent in the Third Department that “nonfiling of the papers necessary to institute the action is a nonwaivable, jurisdictional defect” (Miller at 116, 118). Thus, the Legislature’s amendment of CPLR 2001 will most likely revive the debate as to whether the nonfiling (or filing) [*6]of proper papers to commence an action or proceeding is a component of subject matter jurisdiction rather than personal jurisdiction.

Turning to the branch of defendant’s motion seeking the dismissal of the complaint based upon the infirmities in the commencement of this action, the relief sought must be denied, whether the revised version of CPLR 2001 is considered and applied, or whether the statutes in effect and the principles of law pronounced by appellate courts between 1996 and 2007 are applied.

Here the parties charted their own procedural course by entering into stipulations which (1) permitted the commencement of a subsequent action by a different plaintiff for the same relief sought in the original action, and allowed for service of the complaint on the defendant at its counsel’s office by certified mail, and (2) set forth a discovery schedule. Consequently, since the action at bar was recommenced in the District Court six months prior to the effective date (Sept. 8, 2005) of the commencement-by-filing system in District Court (see UDCA 400), the plaintiff was not, contrary to defendant’s contentions, required to first purchase an index number and file the summons and complaint before serving the “amended” summons and complaint. Nevertheless, the plaintiff was still required to purchase a new index number for the subsequent action (see UDCA 1911 [a] [1], [2]).

The commencement errors committed by plaintiff’s counsel—serving an amended complaint and serving process by regular mail instead of certified mail in accordance with the parties’ stipulation, and failing to purchase a new index number—were technical, nonprejudicial procedural defects that should be disregarded in accordance with the 2007 revision of CPLR 2001 (see Report, supra). This holding would also be consistent with the enactment in 2005 of section 400 (3) of the Uniform District Court Act, which mandates that the “[f]ailure to include the index number on the papers as served shall be cured by stipulation between the parties or by leave of court, which shall not be unreasonably withheld.”{**24 Misc 3d at 203}

Even if the former CPLR 2001 and the overruled Court of Appeals precedent are applied to the issue of whether the commencement infirmities herein can be excused, the same conclusion as set forth above should be reached. Although the defendant raised the affirmative defense of lack of personal jurisdiction in its answer and specifically noted that there were commencement defects, the defendant waived these objections by failing to move to dismiss the complaint based upon those grounds within 60 days after serving its answer (see CPLR 3211 [e]; Matter of Fry at 721 n 4; Federici v Metropolis Night Club, Inc., 48 AD3d 741, 742 [2008]; Page v Marusich, 30 AD3d 871, 873 [2006]; Sirkis v Cohen, 23 AD3d 369, 369-370 [2005]; Jacobowitz v Leak, 19 AD3d 453, 455 [2005]; Dimond v Verdon, 5 AD3d 718, 719 [2004]). CPLR 3211 (e) specifically requires, inter alia, the defendant to make a motion within that 60-day time limit for the dismissal of the case due to improper service of process. However, this court broadly interprets that provision in CPLR 3211 (e) to also require the defendant to timely move to dismiss the case based upon a defect in the commencement of an action. Consequently, this court declines to follow the Third Department appellate precedent of Sangiacomo v County of Albany (302 AD2d 769, 771 [2003]), and trial court decision in Laursen v Dundee Cent. School Dist. (13 Misc 3d 1209[A], 2006 NY Slip Op 51745[U] [2006]), which held that there is no time limit for that type of motion. The purpose of the 60-day time frame is to flesh out and address issues regarding personal jurisdiction during an early stage of the litigation rather than when the case is ready for trial. This is especially true where, as here, the defendant appeared and defended the subsequent action for three years before moving for dismissal based upon [*7]commencement infirmities (see Majchrowicz v Kolpak, Inc., 38 AD3d 1186, 1188 [2007]; Page v Marusich, 30 AD3d 871, 873 [2006]; Sirkis v Cohen, 23 AD3d 369, 369-370 [2005]; compare Matter of Miller v Waters, 51 AD3d 113 [2008]; Sangiacomo v County of Albany, 302 AD2d 769, 771 [2003]). In addition, defendant failed to demonstrate undue hardship pursuant to CPLR 3211 (e) to justify an extension of time to move for dismissal of the complaint on those grounds (see Britt v Buffalo Mun. Hous. Auth., 48 AD3d 1181 [2008]; Vandemark v Jaeger, 267 AD2d 672 [1999]).

Footnotes

Footnote *: CPLR 2001 provides that

“[a]t any stage of an action, including the filing of a summons with notice, summons and complaint or petition to commence an action, the court may permit a mistake, omission, defect or irregularity, including the failure to purchase or acquire an index number or other mistake in the filing process, to be corrected, upon such terms as may be just, or, if a substantial right of a party is not prejudiced, the mistake, omission, defect or irregularity shall be disregarded, provided that any applicable fees shall be paid.” (Emphasis added.)

District Court of Nassau County, First District

13451/07

Rachel L. Kaufman, Esq., Law Office of Robert E. Dash, Esqs., 6800 Jericho Turnpike, Suite 200A West, Syosset, New York 11791, (516) 931-5668, for the Plaintiff.

Richard A. D’Arrigo, Esq.

Nicolini, Paradise, Ferretti & Sabella, PLLC, 114 Old Country Road, P.O. Box 9006, Mineola, New York 11501, (516) 741-6355.

Andrew M. Engel, J.

This action seeking to recover no-fault first party benefits involves twenty-three (23) bills for chiropractic services allegedly performed by the Plaintiff totaling $1,975.28. The action was commenced on April 11, 2007. Issue was joined on or about May 22, 2007. The Plaintiff now moves for summary judgment, alleging that it timely submitted its claim forms to the Defendant and that the claims are overdue. The Defendant opposes the motion, alleging that it never received three (3) of the Plaintiff’s bills, that it timely denied seventeen (17) of the Plaintiff’s bills, and that it failed to deny three (3) of the Plaintiff’s bills.

To establish its prima facie right to summary judgment the Plaintiff must demonstrate submit “evidentiary proof that the prescribed statutory billing forms had been mailed and received and that payment of no fault benefits was overdue (citations omitted).” Mary Immaculate Hospital v. Allstate Insurance Company, 5 AD3d 742, 774 NYS2d 564 (2nd Dept. [*2]2004); See also: A.B. Medical Services, PLLC v. Liberty Mutual Insurance Company, 39 AD3d 779, 835 NYS2d 614 (2nd Dept. 2007); Westchester Medical Center v. AIG, Inc., 36 AD3d 900, 829 NYS2d 180 (2nd Dept. 2007); New York & Presbyterian Hospital v. American Transit Insurance Company, 45 AD3d 822, 846 NYS2d 352 (2nd Dept. 2007); New York and Presbyterian Hospital v. Countrywide Insurance Company, 44 AD3d 729, 843 NYS2d 662 (2nd Dept. 2007) Benefits are overdue if “not paid within 30 calendar days after the insurer receives proof of claim ….” 11 N.Y.C.R.R. § 65-3.8(a)(1); Presbyterian Hospital in the City of New York v. Maryland Casualty Company, supra . at 278, 660 NYS2d 536, 537 {90 NY2d 274} (1997); Fair Price Medical Supply Corp. v. Travelers Indemnity Company, 42 AD3d 277, 837 NYS2d 350 (2nd Dept. 2007); New York and Presbyterian Hospital v. Selective Insurance Company of America, 43 AD3d 1019, 842 NYS2d 63 (2nd Dept. 2007)

The Plaintiff attempts to meet its burden with the affidavit of Frank Amatulli, D.C. Dr. Amatulli was the assignor’s treating chiropractor and bases his affidavit upon his personal knowledge of this patient, the office practices and procedures he created and supervises, and his review of the patient’s treatment and billing records. Dr. Amatulli’s affidavit lays a proper business record foundation for the twenty-three (23) bills in question, See: Dan Medical, P.C. v. New York Central Mutual Fire Insurance Company, 14 Misc 3d 44, 829 NYS2d 404 (App. Term 2nd & 11th Jud. Dists. 2006); Fortune Medical, P.C. v. Allstate Insurance Co., 14 Misc 3d 136, 836 NYS2d 492 (App. Term 9th & 10 Jud. Dists. 2007); Ontario Medical, P.C. v. Sea Side Medical, P.C., 15 Misc 3d 129, 2007 WL 926349 (App. Term 9th & 10 Jud. Dists. 2007); V.S. Medical Services, P.C. v. One Beacon Insurance, 14 Misc 3d 142, 836 NYS2d 504 (App. Term 2nd & 11th Jud. Dists. 2006), providing for the admission of the “properly completed claim form[s], which suffice[] on [their] face to establish the particulars of the nature and extent of the injuries and [health benefits] received and contemplated’ (11 NYCRR § 65-1.1), and the proof of the fact and amount of loss sustained’ (Insurance Law § 5106[a])[.]” Amaze Medical Supply Inc. v. Eagle Insurance Company, 2 Misc 3d 128, 784 NYS2d 918 (2nd and 11th Jud. Dist. 2003); Damadian MRI In Elmhurst, P.C. v. Liberty Mutual Insurance Company, 2 Misc 3d 128(A), 784 NYS2d 919 (App. Term 9th and 10th Jud. Dists. 2003)

The Defendant admits the timely receipt of twenty (20) of the Plaintiff’s claim forms, thereby curing any defect which may exist in the Plaintiff’s proof of mailing. Prestige Medical & Surgical Supply Inc. v. Clarendon National Insurance Company, 13 Misc 3d 127(A), 824 NYS2d 758 (App. Term 2nd and 11th Jud. Dists. 2006); Magnezit Medical Care, P.C. v. New York Central Mutual Fire Ins. Co., 12 Misc 3d 144(A), 824 NYS2d 763 (App. Term 2nd and 11th Jud. Dists. 2006) Under such circumstances, the Plaintiff has, prima facie, demonstrated its right to summary judgment on twenty (20) of the twenty-three (23) claims in dispute. Moreover, the Defendant admits that for three (3) of these twenty (20) claims ^[FN1] it failed to pay or deny same, entitling the Plaintiff to summary judgment thereon in the sum of $101.10.

As to the remaining three (3) bills the Defendant denies their receipt. The Plaintiff may nevertheless demonstrate its prima facie entitlement to summary judgment thereon by providing proof of their service through “a standard office practice or procedure designed to ensure that items are properly addressed and mailed” Residential Holding Corp. v. Scottsdale Insurance [*3]Company, 286 AD2d 679, 729 NYS2d 776 (2nd Dept. 2001); See also: New York and Presbyterian Hospital v. Allstate Insurance Co., 29 AD3d 547, 814 NYS2d 687 (2nd Dept. 2006) On this score, Dr. Amatulli alleges that “it was the regular course of business for [his] office, UNIONDALE CHIROPRACTIC OFFICE, P.C., to generate a bill on the computer for all treatment/services rendered to its patients at the time of the patient’s office visit or within a reasonable time thereafter[.]” (Amatulli Affidavit 3/25/08, ¶ 10) According to Dr. Amatulli, these bills are then “placed in a standard envelope with proper postage attached[,] … [e]ither [h]e or a member of [his] office staff checks to ensure the bills are properly addressed … [and] the envelope containing the bill(s) is submitted to the local post office by [him] or another member of the office staff and/or deposited into a receptacle of the USPS.” (Amatulli Affidavit 3/25/08, ¶¶ 11-13)

In the past this court (Engel, J.) has expressed doubts about the sufficiency of various insurance companies’ proof of mailing which essentially alleged that a denial is generated on the date which appears thereon, is placed in an envelope which then travels around the office through a series of mail bins until ultimately delivered to the post office by an outside courier. Absent from these alleged office procedures was any indication that there existed a mailing list used to compare the names and addresses on the denial forms with the items mailed, or a list indicating the number of denial forms generated on a given day along with some identification of the matters in which the denial forms were generated, or a certificate of mailing identifying the items allegedly delivered to the United States Postal Service, or that anyone routinely checked to see if the total number of envelopes mailed matched the number of denial forms generated on a particular day. See: Matter of Lumbermens Mut. Casualty Co., 135 AD2d 373, 521 NYS2d 432 (1st Dept.1987); State-Wide Insurance Co. v. Simmons, 201 AD2d 655, 608 NYS2d 274 (2nd Dept.1994); Clark v. Columbian Mut. Life Insurance Co., 221 AD2d 227, 633 NYS2d 311 (1st Dept.1995); L.Z.R. Raphaely Galleries, Inc. v. Lumbermens Mutual Casualty Co., 191 AD2d 680, 595 NYS2d 802 (2nd Dept.1993) It was the opinion of this court that, when stripped of all of its excess verbiage, the insurance companies’ mailing procedures were simply to place a denial form in an envelope and to have someone subsequently mail same. Carle Place Chiropractic v. New York Central Mutual Fire Insurance Company, 19 Misc 3d 1139(A), Slip Copy, 2008 WL 2228633 (Dist.Ct. Nassau Co. 2008); Acupuncture Prima Care, P.C. v. State Farm Mutual Auto Ins. Co., 17 Misc 3d 1135(A), 851 NYS2d 67 (Dist.Ct. Nassau Co. 2007); New York Hospital Medical Center of Queens v. Liberty Mutual Insurance Company, 16 Misc 3d 1104(A), 841 NYS2d 827 (Dist.Ct. Nassau Co. 2007) Recently, however, the Appellate Division, Second Department has found just such a practice and procedure to adequately describe “a standard office practice[] or procedure[] designed to ensure that items were properly addressed and mailed (citations omitted).” St. Vincent’s Hospital of Richmond v. Government Employees Insurance Company, 50 AD3d 1123, 857 NYS2d 211 (2nd Dept. 2008). This court is now constrained to follow this appellate authority.

The only difference between the standard office practice or procedure approved by the Appellate Division in St. Vincent’s Hospital, id. and the standard office practice or procedure described by Dr. Amatulli is the absence of mail bins in Dr. Amatulli’s office. Accordingly, this court finds that the Plaintiff’s practice of placing its bills in a standard envelope, affixing proper postage, checking the address, and delivering the envelope to the post office or a USPS receptacle to be “a standard office practice[] or procedure[] designed to ensure that items were [*4]properly addressed and mailed (citations omitted).” St. Vincent’s Hospital of Richmond v. Government Employees Insurance Company, id.

“The defendant’s denial of receipt of the claims submitted by plaintiff …, [is] insufficient to rebut the presumption of receipt upon said plaintiff’s proof of proper mailing, and fails to raise an issue of fact as to these claims ( cf. Kihl v. Pfeffer, 94 NY2d 118 [1999]; King’s Med. Supply v. Progressive Ins., 3 Misc 3d 126[A], 2004 NY Slip Op 50311[U] [App Term, 2d & 11th Jud Dists] ).” A.B. Medical Services PLLC v. Motor Vehicle Accident Indemnification Corp., 6 Misc 3d 131(A), 800 NYS2d 341 (App.Term 2nd and 11th Jud. Dists 2005); See also: ATM One, LLC v. Landaverde, 2 NY3d 472, 779 NYS2d 808 (2004); A.B. Medical Services, PLLC v. American Transit Insurance Company, 15 Misc 3d 132(A), 839 NYS2d 431 (App.Term 2nd and 11th Jud. Dists.2007); A.B. Medical Services PLLC. V. USAA Cas. Ins. Co., 6 Misc 3d 126(A), 800 NYS2d 341 (App.Term 2nd and 11th Jud. Dists 2004) Accordingly, the Plaintiff is entitled to summary judgment on the three (3) bills totaling $246.24 which the Defendant denies receiving.^[FN2]

The Defendant having admitted its timely receipt of the remaining seventeen (17) bills, which carry a presumption of medical necessity, All County Open MRI & Diag. Radiology P.C. v. Travelers Insurance Co., 11 Misc 3d 131(A), 815 NYS2d 496 (App. Term 9th and 10th Jud. Depts. 2006); Damadian MRI in Elmhurst, P.C. v. Liberty Mutual Insurance Co., 2 Misc 3d 128(A), 784 NYS2d 919 (App. Term 9th and 10th Jud. Dists. 2003), “[t]he burden then shifts to defendant who, if not precluded, may rebut the presumption and establish the lack of medical necessity by submitting proof, such as a detailed peer review report or the results of an IME, that the health benefits provided were not medically necessary (citations omitted).” Stephen Fogel Psychological, P.C. v. Progressive Casualty Insurance Company, 7 Misc 3d 18, 793 NYS2d 661 (App.Term 2nd and 11th Jud. Dists. 2004) aff’d 35 NY3d 720, 827 NYS2d 217 (2nd Dept. 2006) See also: A.B. Medical Services PLLC v. Utica Mutual Insurance Company, 10 Misc 3d 50, 809 NYS2d 765 (App.Term 2nd and 11th Jud. Dists. 2005); Park Neurological Services P.C. v. Geico Insurance, 4 Misc 3d 95, 782 NYS2d 507 (App.Term 9th and 10th Jud. Dists. 2004)

As a threshold issue the Defendant must demonstrate that, absent timely verification requests, it properly denied the Plaintiff’s claims within thirty (30) days of their receipt, or it will be precluded from raising the defense of lack of medical necessity. Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274, 660 NYS2d 536 (1997); Mt. Sinai Hospital v. Triboro Coach Incorporated, 263 AD2d 11, 699 NYS2d 77 (2nd Dept. 1999); Church Avenue Medical Care, P.C. v. Allstate Insurance Company, 189 Misc 2d 340, 731 NYS2d 582 (App. Term 2nd Dept. 2001); Struhl v. Progressive Casualty Insurance Company, 7 Misc 3d 138(A), 801 NYS2d 242 (App. Term 9th and 10th Jud. Dists. 2005) The Defendant attempts to demonstrate the timely service of its denial of claim forms with the affidavits of Linda Bernstein, a Claims Representative, Lisa Russo, a Claims Support Services Supervisor, and Joseph Mandara, the President of All American Transport, Inc., a courier service employed by the Defendant.

The affidavit of Linda Bernstein is insufficient to establish the Defendant’s timely service of its denial of claim forms. While Ms. Bernstein alleges that she made her “affiramations (sic) [*5]based upon [her] personal knowledge[,]” she utterly “failed to set forth a basis to support her conclusory assertion,” First Aid Occupational Therapy, PLLC v. State Farm Fire and Casualty Company, 19 Misc 3d 143(A), Slip Copy, 2008 WL 2284874 (App.Term 2nd and 11th Jud. Dist. 2008) which is insufficient as a matter of law. See: Republic Western Insurance Company v. RCR Builders, Inc., 268 AD2d 574, 702 NYS2d 609 (2nd Dept. 2000); S & M Supply Inc. v. Allstate Insurance Company, 7 Misc 3d 130, 801 NYS2d 242 (App. Term 2nd and 11th Jud. Dists. 2005); Montefiore Medical Center v. Government Employees Insurance Company, 34 AD3d 771, 826 NYS2d 616 (2nd Dept. 2006); Struhl, M.D. v. Progressive Casualty Insurance Company, 7 Misc 3d 138, 801 NYS2d 242 (App. Term 9th and 10th Jud. Dists. 2005) Moreover, nowhere does Ms. Bernstein allege that she has any knowledge of the Defendant’s practices and procedures for the mailing of denial of claim forms. In fact, with regard to the mailing practices and procedures, Ms. Bernstein merely refers the court to the affidavit of Ms. Russo.

While Ms. Russo apparently does have knowledge of the Defendant’s “procedures for mailing of all documents sent from [the Melville State Farm] office,” (Russo Affidavit 6/11/08, ¶ 2), where she is located, the Defendant’s denials bear an address in Parsippany, New Jersey, which is the address to which the Plaintiff sent its bills. Moreover, while Ms. Russo attests that the denials were sent from her office in Melville, Ms. Bernstein attests that the denials were mailed from her office in Ballston Spa, New York. Neither Ms. Russo nor Ms. Bernstein claim to have any knowledge of the mailing procedures in the Defendant’s Parsippany, New Jersey office, nor do they attempt to explain how claims sent to the Parsippany, New Jersey office wind up in the Melville or Balston Spa offices to be denied.

The above notwithstanding, regardless of the office from which the Defendant’s denials were allegedly mailed, the affidavits upon which the Defendant relies do not describe “a standard office practice or procedure designed to ensure that items are properly addressed and mailed.” Residential Holding Corp. v. Scottsdale Insurance Company, supra .; See also: Nassau Insurance Company v. Murray, 46 NY2d 828, 414 NYS2d 117 (1978) [“office practice must be geared so as to ensure the likelihood that a notice … is always properly addressed and mailed.”] While, for the reasons set forth herein above, the Defendant has described a procedure designed to ensure that the denial of claim forms are properly mailed, none of the affidavits submitted by the Defendant describe any procedure used by the Defendant to ensure that they are properly addressed. Ms. Bernstein’s representation that “[a]ll denials on the bills referenced herein was (sic) mailed to the plaintiff at 482 Uniondale Ave., Uniondale, NY 11553[,]” (Bernstein Affidavit 6/11/08, ¶ 10) is conclusory and without probative value. Westchester Medical Center v. Countrywide Insurance Company, 45 AD3d 676, 846 NYS2d 230 (2nd Dept. 2007); Hospital for Joint Diseases v. Nationwide Mutual Insurance Company, 284 AD2d 374, 726 NYS2d 443 (2nd Dept. 2001); Careplus Medical Supply Inc. v. Travelers Home and Marine Insurance Co., 7 Misc 3d 133(A), 801 NYS2d 231 (App.Term 2nd and 11th Jud. Dists. 2005) Neither Ms. Bernstein, Ms. Russo nor Mr. Mandara even suggest how the address to which the Defendant’s denials were allegedly mailed was obtained or verified. While Ms. Russo represents that a Claims Service Assistant will “check to ensure that the document is dated with the actual date[,]” (Russo Affidavit 6/11/08, ¶ 8) neither she, nor anyone else on behalf of the Defendant indicates that anyone checks to ensure that the document is properly addressed. Clearly, half of the requirements necessary to demonstrate adequate proof of mailing is absent from the Defendant’s [*6]proof.

Having failed to properly demonstrate the timely service of denials of claim in response to the remaining seventeen (17) bills in question, the Plaintiff is entitled to summary judgment on these claims as well. Accordingly, the Plaintiff is entitled to the entry of a judgment in the sum of $1,975.28, plus interest and counsel fees pursuant to regulation and statute, along with the costs and disbursements of this action.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

August 7, 2008

___________________________

Andrew M. Engel

J.D.C.

Footnotes

Footnote 1: Bills dated July 15, 2002, January 14, 2003 and January 30, 2003 totaling $101.10

Footnote 2: Bills dated May 31, 2002, June 28, 2002 and March 2, 2004

[*1]

District Court of Nassau County, First District, July 25, 2008

APPEARANCES OF COUNSEL

Gullo & Associates (Paul Schneider of counsel), for defendant. Baker Sanders Barshay Grossman Fass Muhlstock & Neuwirth, Mineola (Michael Hayes of counsel), for plaintiff.

{**20 Misc 3d at 852} OPINION OF THE COURT

Andrew M. Engel, J.

The plaintiff commenced this action on or about July 15, 2002 seeking to recover $1,791.16, plus interest and counsel fees, in no-fault first-party benefits for services allegedly provided to its assignor, which remained unpaid by the defendant. Issue was joined on or about August 2, 2002. The defendant now moves for summary judgment against the plaintiff, dismissing the complaint. The plaintiff opposes this motion and cross-moves for summary judgment, requesting the entry of a judgment for the amount demanded in the complaint, or in the alternative, a declaration as to the sufficiency of the plaintiff’s prima facie case, the dismissal of the defendant’s affirmative defenses and the imposition of sanctions against the defendant. The defendant opposes the cross motion.

The parties do not dispute the following essential facts of this claim: The plaintiff performed MRIs of its assignor’s cervical and lumbar spine on January 4, 2002. The plaintiff submitted its bill for these services, dated April 5, 2002, in the total sum of $1,791.16, to the defendant, which received same on April 11, 2002. On April 24, 2002 defendant sent a verification request to the plaintiff and the plaintiff’s assignor seeking records from Mark Heyligers, D.C., the referring chiropractor. On May 28, 2002, not having received the requested records within 30 days, the defendant sent a follow-up verification request to the plaintiff and the assignor. The requested verification information was received by the defendant on June 5, 2002. On July 1, 2002 the defendant made a partial payment in the sum of $1,571.24 and denied the balance of the plaintiff’s claim,{**20 Misc 3d at 853} $219.92, asserting that the fees charged for the [*2]MRIs in question were in excess of the workers’ compensation fee schedule.^[FN1]

Defendant’s Motion

In support of its motion for summary judgment, the defendant argues that the plaintiff improperly billed 100% for both the cervical and lumbar MRIs. According to the defendant, the plaintiff was required to charge the same fee for MRIs as is called for in the workers’ compensation fee schedule, ground rule 3b, for diagnostic X ray procedures to two remote parts of the body, which calls for the payment of 100% of the greater single X ray fee charged and 75% of the lesser X ray fee. Applying this fee schedule for such X rays to MRIs the defendant alleges that it has paid the plaintiff’s claim in full, requiring dismissal of the complaint.

In opposition to the defendant’s motion the plaintiff initially argues that although the defendant’s denial of claim was received within 30 days of the defendant’s receipt of the requested verification information, the denial was nevertheless untimely. The plaintiff accuses the defendant of

“us[ing] the verification protocols to delay payment of the claim, and than [sic] once it determined the services were medically necessary, sought out a different basis to refuse payment. The verification requests do not extend the time in which the defendant has to deny the claim unless the defendant bases its denial on the requested verification.” (Hayes affirmation, Apr. 2, 2008.)^[FN2]

The plaintiff further posits that “a failure by the insurer to issue a denial when it is in possession of the necessary information serves as a waiver of any right to deny a claim based on such information.” (Hayes affirmation, Apr. 2, 2008.) The plaintiff does not cite any case law or regulation that supports either of these propositions. The controlling regulations and case law are, in fact, contrary to the plaintiff’s argument.{**20 Misc 3d at 854}

The Insurance Department regulations in effect at the time the claim herein arose provided, in pertinent part, “[w]ithin 30 calendar days after proof of claim is received, the insurer shall either pay or deny the claim in whole or in part” (11 NYCRR former 65.15 [g] [3]). Insurance Law § 5106 (a) similarly provided that no-fault first-party “benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained.” (See New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2d Dept 2004].) The regulations further provided that this 30-day period may be extended by the insurer’s timely demand for verification of the plaintiff’s claim (see 11 NYCRR former 65.15 [d], [e]), and “[n]o-fault benefits are overdue if not paid within 30 calendar days after the insurer receives verification of all of the relevant information requested pursuant to subdivision (d) of this section.” (See 11 NYCRR former 65.15 [g] [1] [i]; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [2d Dept 1999].) [*3]Moreover, “an insurer is not obligated to pay or deny a claim until all demanded verification is provided.” (Hospital for Joint Diseases v New York Cent. Mut. Fire Ins. Co., 44 AD3d 903, 904 [2d Dept 2007] [citations omitted]; see also New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., supra; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., supra; Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889 [2d Dept 2007]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2d Dept 2005].) In fact, 11 NYCRR former 65.15 (g) (2) (iii) specifically provided that “an insurer shall not issue a denial of claim form (NYS Form N-F 10) prior to its receipt of verification of all of the relevant information requested pursuant to subdivision (d) of this section (e.g., medical reports, wage verification, etc.)” (see New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002]; Summit Psychological, P.C. v General Assur. Co., 9 Misc 3d 8 [App Term, 9th & 10th Jud Dists 2005]; Shtarkman v Allstate Ins. Co., 8 Misc 3d 129[A], 2005 NY Slip Op 51028[U] [App Term, 2d & 11th Jud Dists 2005]), and if the defendant had issued a denial, on the basis of an alleged fee schedule violation, without asserting the defense of lack of medical necessity, before the requested medical records were received, the defendant would have been deemed to have waived a possible defense of lack of medical necessity. (S & M Supply Inc. v Allstate Ins. Co., 2003 NY Slip Op 51191[U] [App Term, 2d & 11th Jud Dists 2003].){**20 Misc 3d at 855}

The clear prohibition against issuing a denial of claim before all demanded verification information is received notwithstanding, the relevance of the medical records sought by the defendant before issuing its denial is patent. “Defendant is not required to provide a blank checkbook to plaintiff. Rather, defendant is entitled to find out whether and why each MRI was prescribed; in other words, the carrier is entitled to inquire as to the medical necessity before it pays the bills.” (Lenox Hill Radiology & MIA P.C. v Global Liberty Ins., 20 Misc 3d 434, 438 [Civ Ct, NY County 2008].) Given the nature of the defendant’s fee schedule defense, that it is only obligated to pay 100% of the more expensive MRI and 75% of the less expensive MRI, this issue would not arise if the defendant was of the opinion that one or both MRIs were not medically necessary. It is only after receiving the requested medical verification that the defendant was able to determine that the MRIs were medically necessary and the fees it believed it was then obligated to pay.

Alternatively, the plaintiff argues that the defendant has failed to submit proper proof in admissible form that plaintiff’s bills were in excess of the appropriate workers’ compensation fee schedule. On this score, the plaintiff is correct.

To prevail, the movant must first make a showing of entitlement to judgment, as a matter of law (Bank of N.Y. v Granat, 197 AD2d 653 [2d Dept 1993]), tendering evidentiary proof in admissible form. (Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065 [1979].) It is only thereafter incumbent upon the party opposing summary judgment to “demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action or tender an acceptable excuse for his failure so to do.” (Zuckerman v City of New York, 49 NY2d 557, 560 [1980].) The movant’s failure to make such a showing, regardless of the sufficiency of opposing papers, mandates the denial of a summary judgment motion. (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 [1985].)

In support of its motion, the defendant relies upon the affirmation of counsel, which [*4]is of no probative value (Zuckerman v City of New York, supra; Morissaint v Raemar Corp., 271 AD2d 586 [2d Dept 2000]; Citibank v Joffe, 265 AD2d 291 [2d Dept 1999]), the conclusory statement of one of its Litigation Examiners to the effect that the appropriate fee “[f]or multiple diagnostic x-ray procedures: for two remote parts, the charge shall be the greater fee plus 75% of the lesser fee” (Chase affidavit, Nov. 28, 2007, ¶ 2), and the decision of Honorable Denny{**20 Misc 3d at 856} Chin, from the United States District Court for the Southern District of New York, in Brentwoood Pain & Rehabilitation Servs., P.C. v Allstate Ins. Co. (508 F Supp 2d 278 [1997]), holding that the fees charged for MRIs by no-fault first-party benefits providers shall be in accordance with the workers’ compensation fee schedule, ground rule 3b, for diagnostic X ray procedures to two remote parts of the body.

The defendant’s reliance on Judge Chin’s decision is misplaced. “Federal case law is at best persuasive in the absence of state authority; it is largely irrelevant to a peculiarly local question . . . .” (Cox v Microsoft Corp., 290 AD2d 206, 207 [1st Dept 2002].) A determination by the federal court, “while entitled to great weight, is not binding on this court.” (New York R.T. Corp. v City of New York, 275 NY 258, 265 [1937] affd 303 US 573 [1938]; see also People v Kin Kan, 78 NY2d 54 [1991]; Walker v Walker, 51 AD2d 1029 [2d Dept 1976]; People v Weiner, 63 AD2d 722 [2d Dept 1978].) Nor is Judge Chin’s decision entitled to preclusive effect, pursuant to the doctrine of collateral estoppel, as the plaintiff was neither a party nor in privity with a party to that proceeding. (Ryan v New York Tel. Co., 62 NY2d 494 [1984]; see also Matter of Hee K. Choi v State of New York, 74 NY2d 933 [1989]; G. Rama Constr. Enters., Inc. v 80-82 Guernsey St. Assoc., LLC, 43 AD3d 863 [2d Dept 2007].)

While Judge Chin’s decision might ultimately prove to be correct, the defendant herein has failed to provide the court with any proof in admissible form which supports its fee schedule theory. This court notes that before Brentwoood Pain & Rehabilitation Servs., P.C. v Allstate Ins. Co. was removed to the federal court, Justice Joan A. Madden, sitting in the Supreme Court of New York State, New York County, denied a defense motion to dismiss on the same grounds now asserted by the defendant herein. In refusing to give Justice Madden’s decision preclusive effect, under the doctrine of law of the case, Judge Chin noted, inter alia, that Justice Madden “did not have the benefit of the additional letters that have been submitted to this Court.” (Brentwoood Pain & Rehabilitation Servs., P.C. v Allstate Ins. Co. at 289.) This court presently finds itself in the same position as Justice Madden.

Having failed to “proffer sufficient evidence to establish as a matter of law that [plaintiff’s] claims reflected the incorrect amount for the services provided . . . the court . . . denie[s] defendant’s motion for summary judgment.” (Triboro Chiropractic & Acupuncture, PLLC v New York Cent. Mut. Fire Ins.{**20 Misc 3d at 857} Co., 15 Misc 3d 145[A], 2007 NY Slip Op 51175[U], *2 [App Term, 2d & 11th Jud Dists 2007].)

Plaintiff’s Motion

The plaintiff will establish “a prima facie showing of [its] entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue.” (Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2d Dept 2004] [emphasis added; citations omitted]; see also A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2d Dept 2007]; Westchester Med. Ctr. v AIG, Inc., 36 AD3d 900 [2d Dept 2007]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 45 AD3d 822 [2d Dept 2007].) Benefits are overdue “if not paid within 30 calendar days after the insurer receives verification of all of the relevant information requested pursuant to subdivision (d) of this section.” (11 NYCRR former 65.15 [g] [1] [i]; see also Insurance Law § 5106 [a]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 42 AD3d 277 [2d Dept 2007]; New York & Presbyt. Hosp. v Selective Ins. Co. of Am., 43 AD3d 1019 [2d Dept 2007].) Plaintiff’s prima facie case does not require a showing that the fees it charged were in accordance with the workers’ compensation fee schedule. (AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 17 Misc 3d 41 [App Term, 2d & 11th Jud Dists 2007].) Plaintiff’s prima facie case does require that a proper business record foundation be laid (see Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]; Fortune Med., P.C. v Allstate Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50243[U] [App Term, 9th & 10th Jud Dists 2007]; Ontario Med., P.C. v Sea Side Med., P.C., 15 Misc 3d 129[A], 2007 NY Slip Op 50609[U] [App Term, 9th & 10th Jud Dists 2007]; V.S. Med. Servs., P.C. v One Beacon Ins., 14 Misc 3d 142[A], 2007 NY Slip Op 50369[U] [App Term, 2d & 11th Jud Dists 2007]) for the admission of the “properly completed claim form, which suffices on its face to establish the ‘particulars of the nature and extent of the injuries and [health benefits] received and contemplated’ (11 NYCRR 65-1.1), and the ‘proof of the fact and amount of loss sustained’ (Insurance Law § 5106[a]).” (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U], *2 [App Term, 2d & 11th Jud Dists 2003]; Damadian MRI in Elmhurst v Liberty Mut.{**20 Misc 3d at 858} Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists 2003].)

“[T]o the extent defendant insurer issued denial of claim forms or admitted receipt of plaintiff’s claim forms, . . . said admissions were not concessions of the facts asserted in plaintiff’s claim forms, and it was plaintiff’s burden to proffer such evidence in admissible form (Midborough Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132 [A], 2006 NY Slip Op 51879[U] [App Term, 2d & 11th Jud Dists 2006]).” (Bajaj v General Assur., 18 Misc 3d 25, 28 [App Term, 2d & 11th Jud Dists 2007.)

Distinguished from the case sub judice is the circumstance where the defendant pays the claim in full after litigation is commenced and the only issues remaining are the amount of interest and/or attorney’s fees to be paid. In such a case, a plaintiff’s failure to lay a proper business record foundation for the admission of its claim form will be overlooked. (Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52453[U] [App Term, 2d & 11th Jud Dists 2007].)

As previously indicated, the defendant herein concedes, both in its denial of claim form and in its motion papers, that the plaintiff’s claim was timely received. These admissions cure any defect which may exist in the plaintiff’s proof of mailing. (Prestige Med. & Surgical Supply, Inc. v Clarendon Natl. Ins. Co., 13 Misc 3d 127[A], 2006 NY Slip Op 51672[U] [App Term, 2d & 11th Jud Dists 2006]; Magnezit Med. Care, P.C. v New York Cent. Mut. Fire Ins. Co., 12 Misc 3d 144[A], 2006 NY Slip Op 51434[U] [App Term, 2d & 11th Jud Dists 2006].) The parties also agree that $219.92 of that claim remains unpaid. The plaintiff, however, has failed to lay a proper business record foundation for the admission of its claim form.

The plaintiff attempts to lay this foundation through the affidavit of Nicole Simeona, who advises the court that she is”employed by plaintiff’s counsel” (Simeona affidavit, Apr. 3, 2008), not [*5]by the plaintiff. Ms. Simeona further avers that she is “intimately familiar with the administration of all aspects of the collection department.” (Simeona affidavit, Apr. 3, 2008.) She does not indicate whose collection department, the plaintiff’s or her employer’s. Moreover, nowhere does Ms. Simeona allege that she has any knowledge of the plaintiff’s record keeping practices and the creation of the plaintiff’s claim form.{**20 Misc 3d at 859}

Accordingly, those branches of the plaintiff’s cross motion which seek summary judgment, or in the alternative, partial summary judgment, are denied.

That branch of the plaintiff’s cross motion which seeks an order dismissing the defendant’s affirmative defenses is granted to the extent of dismissing the defendant’s second and third affirmative defenses, alleging lack of medical necessity and failure to comply with policy conditions, respectively. The defense of lack of medical necessity was waived by the defendant’s failure to issue a timely denial of claim asserting such defense. (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997].) Additionally, both the second and third affirmative defenses merely plead conclusions of law and fail to allege any facts. (See Plemmenou v Arvanitakis, 39 AD3d 612 [2d Dept 2007]; Petracca v Petracca, 305 AD2d 566 [2d Dept 2003]; Staten Is.-Arlington, Inc. v Wilpon, 251 AD2d 650 [2d Dept 1998].) The defendant’s remaining affirmative defenses relate to the defendant’s claim that it paid the plaintiff, in full, pursuant to the appropriate workers’ compensation fee schedule.

Finally, that branch of the plaintiff’s motion which seeks the imposition of sanctions against the defendant, pursuant to 22 NYCRR 130-1.1, for alleged frivolous conduct, is denied. “People who live in glass houses should not throw stones.”

Footnotes

Footnote 1: While the plaintiff’s papers in opposition to the defendant’s motion question the defendant’s proof of service of the defendant’s verification requests and denial, at oral argument the plaintiff conceded the timeliness and receipt of the defendant’s verification requests, as well as the fact that the defendant issued its denial within 30 days of its receipt of the requested verification information. For this reason, the court will not address the defendant’s proof of service of the verification requests or the denial.

Footnote 2: The plaintiff has failed to number either the paragraphs or pages of the papers it submits on this motion.

District Court of Nassau County, Third District

CIV 4842/04

srael, Israel & Purdy, LLP attorney for Plaintiff

Law Offices of Robert P. Tusa, attorney for Defendant

Robert A. Bruno, J.

Plaintiff commenced this action to recover the sum of nine hundred fifty-eight dollars and thirty-two cents ($958.32) for psychiatric evaluation and testing performed on assignee on September 12, 2003, relating to injuries assignee allegedly sustained on August 30, 2003.

Prior to the commencement of the trial, the parties stipulated (“Stipulation”) to Plaintiff’s prima facie case and Defendant’s timely issuance of a proper denial of claim based upon a defense of lack of medical necessity. The Stipulation further provided that the only issue for this Court to decide was whether the services Plaintiff provided were medically necessary. The Stipulation was entered into evidence as Court Exhibit 1.

At trial, Defendant bears the burden of proof for its defense of lack of medical necessity (see A.R. Medical Art, P.C. v. State Farm Mutual Automobile Insurance Company, 11 Misc 3d 1057(A), 815 NYS2d 493, 2006 NY Slip Op 50260(U) [Civ. Ct. Kings Co. 2006]; A.B. Medical Services, P.L.L.C. v. New York Central Mutual Fire Insurance Company, 7 Misc 3d 1018(A), 801 NYS2d 299, 2005 NY Slip Op 50662(U) [Civ. Ct. Kings Co. 2005]).

A no-fault insurer defending a denial of first-party benefits on the ground that the billed for services were not medically necessary must show that the services provided were inconsistent with generally accepted medical/professional standards. The opinion of the insurer’s expert, standing alone, is insufficient to carry the insurer’s burden of proof that the services were not medically necessary (see CityWide Social Work & Psychological Services v. Travelers Indem. Co., 3 Misc 3d 608, 777 NYS2d 241 [Civ. [*2]Court Kings County 2004]; Ultimate Medical Supplies v. Lancer Insurance Co., 7 Misc 3d 1002(A), 801 NYS2d 243, 2004 NY Slip Op 51860(U) [Civil County Kings County 2004]; Expo Medical Supplies, Inc. v. Clarendon Insurance Company, 12 Misc 3d 1154(A), 819 NYS2d 209, 2006 NY Slip Op 50892(U), 2006 WL 1341418). At trial, Defendant bears the burden of proof for its claim of lack of medical necessity (see Expo Medical Supplies, Inc. v. Clarendon Insurance Company, supra; A.M. Medical Services v. Deerbrook Insurance Co., Slip Copy, 18 Misc 3d 1139A, 2008 NY Misc. LEXIS 749, 2008 WL 518022 (NY City Civ. Ct.), 2008 NY Slip Op. 50368(U)).

In order for Defendant to prevail, Defendant must establish a factual basis and medical rationale for its claim of lack of medical necessity (see Nir v. Allstate Insurance Co., 7 Misc 3d 544, 796 NYS2d 857 [Civ. Ct. Kings Co. 2005]). Defendants’ medical expert, Dr. Samuel Rock, testified that he reviewed the medical records and reports of the claimant and that he had sufficient information to render an opinion as to whether the services rendered were medically necessary. Dr. Rock testified on direct examination that he reviewed the medical records he received from Dr. Braun as well as other medical reports and results of the Beck inventory tests.

Dr. Rock also testified that the general accepted medical/professional standard for conducting the initial interview is six (6) weeks post-accident and to conduct the initial interview any earlier could result in a false positive, as most individuals experience some type of psychological stress after an accident, but the initial stress dissipates several weeks thereafter.

In the instant case, Dr. Braun conducted the initial interview on September 12, 2003, thirteen (13) days post accident, which according to Dr. Rock was improper and against generally accepted medical/professional standards.

In addition to the foregoing, Dr. Rock testified that had the initial interview been properly conducted, a determination could have been made that claimant was not seriously psychologically disturbed and therefore no additional testimony would be necessary.

According to Dr. Rock, the medical reports he reviewed does not indicate whether the claimant was ever treated, or whether Dr. Braun ever examined claimant or just relied upon the paperwork generated from claimant’s self-administered Beck inventory tests.

In addition to the foregoing, Dr. Rock testified that the results of Dr. Braun’s tests indicated claimant had the mildest form of anxiety, and in Dr. Rock’s opinion, that diagnosis could have been determined during a proper forty-five (45) minute interview rendering subsequent testings unnecessary.

On cross-examination, Dr. Rock admitted, he did not review the accident report, hospital records or Dr. Gelphan’s report in concluding the tests performed on claimant [*3]were not medically necessary. However, on re-direct examination, Dr. Rock testified that even if he had reviewed those reports they would not have effected his opinion regarding the lack of medical necessity.

Once Defendant insurer presents sufficient evidence to establish a defense based on lack of medical necessity, the burden shifts to Plaintiff to present its own evidence of medical necessity (see Prince, Richardson on Evidence Section 3-104, Section 3-202 [Farrell 11th ed]; West Tremont Medical Diagnostic, P.C. v. Geico Ins. Co., 13 Misc 3d 131(A), 824 NYS2d 759, 2006 NY Slip Op 51871(U) [2006]). In the case at bar, Plaintiff did not call any witnesses to rebut Dr. Rock’s testimony but relied upon its cross-examination of Dr. Rock to defend its claim of medically necessity. The Court finds that Plaintiff has failed to refute Defendant’s expert witness testimony that the services provided deviated from the generally accepted medical professional standards and has failed to produce any rebuttal evidence to prove medical necessity for the services rendered.

Accordingly, judgment is hereby rendered for Defendant.

This constitutes the Decision and Order of the Court.

SO ORDERED.

DISTRICT COURT JUDGE

Dated: July 1, 2008

cc:Israel, Israel & Purdy, LLP

11 Grace Avenue, Suite 111

Great Neck, New York 11021

Law Offices of Robert P. Tusa

1225 Franklin Avenue, Suite 500

Garden City, New York 11530

District Court of Nassau County, First District

10700/07

Attorneys for plaintiff: Friedman, Harfenist, Langer & Kraut

Attorneys for defendant: McDonnell & Adels, P.C.

Andrew M. Engel, J.

The Plaintiff commenced this action to recover no-fault first party benefits for medical services allegedly provided to its assignor between February 1, 2002 and April 18, 2002, in the total sum of $200.00, which has not been paid. The action was commenced on or about March 22, 2007. Issue was joined on or about June 1, 2007. The Defendant now moves for summary judgment. The Plaintiff opposes the motion.

Summary judgment is a drastic remedy, Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395, 165 NYS2d 498 (1957), which should not be granted where there is any doubt as to the existence of a triable issue of fact. Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 413 NYS2d 141 (1978) To prevail, the movant must first make a showing of entitlement to judgment, as a matter of law, Bank of New York v. Granat, 197 AD2d 653, 602 NYS2d 942 (2nd Dept. 1993), tendering evidentiary proof in admissible form. Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065, 416 NYS2d 790 (1979). It is only thereafter incumbent upon the party opposing summary judgment to “demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action or tender an acceptable excuse for his failure so to do.” Zuckerman v. City of New York, 49 NY2d 557, 427 NYS2d 595 (1980). A movant’s failure to make such a showing, regardless of the sufficiency of opposing papers, mandates the denial of a summary judgment motion. Winegrad v. New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985)

“It is the position of the defendant that summary judgment should be granted as the accident of January 11, 2002 which is the subject of this claim was an intentional fraudulent act and therefore an uncovered event.” (Byrnes Affirmation 1/23/08, ¶2) The Defendant alleges, in [*2]the first instance, that this issue has already been decided in two (2) prior actions and that the Plaintiff is collaterally estopped from contesting this defense. In the alternative, the Defendant alleges that it has submitted sufficient evidence for the court to determine, as a matter of law, that the alleged accident of January 11, 2002 was no accident at all, but a staged event. Each of these arguments will be addressed separately.

In support of its collateral estoppel argument, the Defendant points to two (2) prior special proceedings seeking to permanently stay uninsured motorist arbitrations which had been filed by the driver and occupants of the vehicle involved in the alleged accident of January 11, 2002. One proceeding, State Farm v. Canela and Caba, was commenced in the Supreme Court of New York County; the other, State Farm v. Tavares and Fernandez, was commenced in the Supreme Court of Bronx County. Each of those applications was granted upon the default of the respondents therein. In addition thereto, the Defendant points to an order of the Civil Court of Queens County, in an action entitled Support Billing I Management Co. a/s/o Jeffery Canela v. State Farm Mutual Insurance Co., which afforded preclusive effect to the Bronx County default and granted the Defendant summary judgment.

“The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same.” Ryan v. New York Telephone Co., 62 NY2d 494, 478 NYS2d 823 (1984); See also: Choi v. State, 74 NY2d 933, 550 NYS2d 267 (1989); G. Rama Const. Enterprises, Inc. v. 80-82 Guernsey Street Associates, 43 AD3d 863, 841 NYS2d 669 (2nd Dept. 2007) “Two requirements must be met before collateral estoppel can be invoked. There must be an identity of issue which has necessarily been decided in the prior action and is decisive of the present action, and there must have been a full and fair opportunity to contest the decision now said to be controlling (see, Gilberg v. Barbieri, 53 NY2d 285, 291, 441 NYS2d 49, 423 NE2d 807 [1981]).” Buechel v. Bain, 97 NY2d 295, 740 NYS2d 252 (2001); See also: Capital Telephone Co., Inc. v. Pattersonville Telephone Co., Inc., 56 NY2d 11, 451 NYS2d 11 (1982) There is no question, in the matter sub judice, that there is an identity of issue. In each of the actions relied upon by the Plaintiff, as in the matter before this court, the issue presented is whether or not the alleged accident of January 11, 2002 was a staged event. The questions confronting the Defendant, however, are whether or not this issue was previously decided against the Plaintiff herein, or one in privity with the Plaintiff, and whether or not this issue was necessarily decided in those prior actions.

It is not disputed that the Plaintiff was not a party to the prior actions upon which the Plaintiff relies. It is also undisputed the Plaintiff’s assignor was neither a party nor in privity with a party in either State Farm v. Canela and Caba or Support Billing I Management Co. a/s/o Jeffery Canela v. State Farm Mutual Insurance Co. Clearly, neither of these determinations can bar this Plaintiff from re-litigating the issue of a staged accident in the matter before this court. While the Plaintiff’s assignor was a party to the State Farm v. Tavares and Fernandez proceeding, the determination as to whether or not the Plaintiff was in privity with its assignor will depend upon when the assignment was made.

“In the assignor-assignee relationship, privity must have arisen after the event out of which the estoppel arises. Hence, an assignee is deemed to be in privity with the assignor where [*3]the action against the assignor is commenced before there has been an assignment.” Gramatan Home Investors Corp. v. Lopez, 46 NY2d 481, 414 NYS2d 308 (1979); See also: A.B. Medical Services PLLC v. State Farm Mutual Auto Ins. Co., 11 Misc 3d 1077, 816 NYS2d 693 (Civ. Ct. Kings Co. 2006) Given the fact that it is the Defendant’s burden to demonstrate “that the decisive issue was necessarily decided in the prior action against a party, or one in privity with a party[,]” Buechel v. Bain, supra ., See also: Capital Telephone Co., Inc. v. Pattersonville Telephone Co., Inc., supra ., before collateral estoppel will apply, it is incumbent upon the Defendant to provide proof of when the assignment herein took place. The Defendant, however, has not done so. Moreover, it would appear from the dates of treatment, February 1, 2002 and April 18, 2002, that if there was in fact an assignment of benefits, it occurred prior to the commencement of the special proceedings upon which the Defendant relies, the petitions for which are dated December 2, 2002.

Even more problematic for the Defendant is the fact that the two determinations upon which it relies were rendered on the default of the respondents therein. Before collateral estoppel will apply, the issue in dispute must have been “actually litigated and determined” in the prior action. See: Koch v. Consolidated Edison Company of New York, Inc., 62 NY2d 548, 479 NYS2d 163 (1984), quoting Restatement of Judgments, Second § 27; See also: Scultz v. Boy Scouts of America, Inc., 65 NY2d 189, 491 NYS2d 90 (1985) As the Court of Appeals has decisively stated in Kaufman v. Eli Lilly and Company, 65 NY2d 449, 492 NYS2d 584 (1985), “If the issue has not been litigated, there is no identity of issues between the present action and the prior determination. An issue is not actually litigated if, … there has been a default ….” See also: Chambers v. City of New York, 309 AD2d 81, 764 NYS2d 708 (2nd Dept. 2003); Zimmerman v. Tower Ins. Co. of New York, 13 AD3d 137, 788 NYS2d 309 (1st Dept. 2004)

The Defendant having failed to demonstrate that the Plaintiff herein was in privity with its assignor in the prior proceedings upon which the Defendant relies, and the prior proceedings having resulted in orders entered on default, they shall not be given preclusive effect in the matter presently before this court. The question remains, however, whether or not the Defendant has demonstrated that the alleged accident of January 11, 2002 was staged, as a matter of law. This question must be answered in the negative.

At the outset it is noted that the papers submitted in support of the Defendant’s motion are not in admissible form sufficient to support a summary judgment motion. The affidavit of Erin K. Lawler, the Defendant’s investigator, makes clear that she does not have any personal knowledge and bases her opinion of fraud on a number of documents obtained, inter alia, from the Defendant and the Department of Motor Vehicles, along with conversations she allegedly had with members of the New York City Police Department and the insurance company of the alleged adverse vehicle. The statements allegedly made to Ms. Lawler by unidentified police officers and by an unidentified individual for the alleged adverse carrier are clearly hearsay statements and inadmissible. Similarly, a number of the documents upon which Ms. Lawler relies are not submitted to the court; and, no proper foundation is laid for those that are submitted. Simply annexing documents to the moving papers, without a proper evidentiary foundation is inadequate. Higen Associates v. Serge Elevator Co., Inc., 190 AD2d 712, 593 NYS2d 319 (2nd Dept. 1993) [*4]

The Defendant also relies upon what are represented to be a number of inconsistencies in recorded statements and examinations under oath allegedly taken from the Plaintiff’s assignor and the other occupants of the vehicle in which he was a passenger. The court notes that these transcripts, particularly those of the examinations under oath, are of extremely poor quality and largely illegible. Unless the Defendant considers these pages to be nothing more than filler, it would behoove the Defendant, in the future, to provide the court with legible copies.

While the Defendant’s attempt to submit the transcripts of these examinations is not barred by the hearsay rule, because the Defendant is not offering the statements contained therein for their truth, Spensieri v. Lasky, 94 NY2d 231, 701 NYS2d 689 (1999); Nucci v. Proper, 95 NY2d 597, 721 NYS2d 593 (2001); Winant v. Carras, 208 AD2d 618, 617 NYS2d 487 (2nd Dept. 1994) lv. den. 85 NY2d 812, 631 NYS2d 288 (1995), but for the exact opposite reason, to show their falsity and fraud, Stern v. Waldbaum, Inc., 234 AD2d 534, 651 NYS2d 187 (2nd Dept. 1996); DeLuca v. Ricci, 194 AD2d 457, 599 NYS2d 267 (1st Dept. 1993); Dawson v. Raimon Realty Corporation, 303 AD2d 708, 758 NYS2d 100 (2nd Dept. 2003), the transcripts, nevertheless, are not properly before this court. These transcripts are neither signed nor verified, Krupp v. Aetna Life & Casualty Co., 103 AD2d 252, 479 NYS2d 992 (2nd Dept.1984); Tancos v. Centaur Insurance Company, 133 AD2d 622, 519 NYS2d 730 (2nd Dept.1987); and, the Defendant offers no explanation as to why. McDonald v. Mauss, 38 AD3d 727, 832 NYS2d 291 (2nd Dept. 2007) Additionally, the Defendant has not demonstrated any formal requirements for the taking of these individuals’ alleged testimony sufficient to assure their accuracy. Complete Orthopedic Supplies, Inc. v. State Farm Insurance Company, 16 Misc 3d 996, 838 NYS2d 861 (Civ.Ct. Queens Co. 2007) Notably absent from the transcripts submitted are certifications as to the transcripts’ accuracy, executed by the Notary Public who purportedly took the testimony. cf. Morchik v. Trinity School, 257 AD2d 534, 684 NYS2d 534 (1st Dept.1999); Cox v. Jeffers, 222 AD2d 395, 634 NYS2d 519 (2nd Dept. 1995) Without such certification, the Defendant is asking the court to rely on transcripts which may be inaccurate. Jacobs v. Herrera, 4 Misc 3d 1018(A), 798 NYS2d 345 (Dist.Ct. Nassau Co. 2004) Moreover, it has been recognized that while the transcripts of examinations under oath may be admissible to defeat a summary judgment motion, they “are nonetheless hearsay. As such, such statements are inadmissible at trial unless, for example, they are used for impeachment purposes upon cross-examination in the event such declarant/assignor testifies.” CPT Medical Service, P.C. v. Utica Mutual Insurance, 12 Misc 3d 237, 811 NYS2d 909 (Civ.Ct. Queens Co. 2006)

The above notwithstanding, even if the Defendant’s supporting papers were in admissible form, while this documentation “demonstrate[s] to the court that [Defendant] had a founded belief’ that the alleged accident was intentionally caused in order to survive a summary judgment motion by the plaintiff-provider … defendant-insurer’s founded belief is usually not enough to obtain judgment on its own.” Universal Open MRI of the Bronx, P.C. v. State Farm Mut. Auto Ins., 12 Misc 3d 1151, 819 NYS2d 852 (Civ. Ct. Kings Co. 2006) The papers presented by the Defendant raise a number of factual issues which are subject to the inferences to be drawn from the evidence presented, many of which involve an assessment of credibility, and all of which must be reserved for the trier of facts. St. Luke’s Roosevelt Hospital v. Allstate Insurance Company; 303 AD2d 743, 757 NYS2d 457 (2nd Dept. 2003); Kolivas v. Kirchoff, 14 AD3d 493, 787 NYS2d 392 (2nd Dept. 2005); Scott v. Long Island Power Authority, 294 AD2d 348, 741 NYS2d 708 (2nd Dept. 2002); Lacagnino v. Gonzalez, 306 AD2d 250, 760 NYS2d 533 (2nd Dept. [*5]2003); Ocean Diagnostic Imaging P.C. v. State Farm Mutual Automobile Insurance Company, 9 Misc 3d 73, 803 NYS2d 333 (App. Term 2005)

Accordingly, for all of the foregoing reasons, the Defendant’s motion is denied.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

June 17, 2008

___________________________

Andrew M. Engel

J.D.C.