District Court of Nassau County, First District

27134/07

Attorneys for plaintiff: Law Offices of Robert E. Dash

Attorneys for defendant: Marshall & Marshall

Andrew M. Engel, J.

The Plaintiff commenced this action on July 26, 2007 seeking to recover no-fault first party benefits for health care services provided to its assignor between June 5, 2006 and September 19, 2006, following a motor vehicle accident of February 1, 2006. Issue was joined on or about September 5, 2007. The Defendant now moves for summary judgment pursuant to CPLR § 3212. The Plaintiff opposes the motion and cross-moves for summary judgment.

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) The court’s function in determining such a motion is issue finding, not issue determination. Sillman v. Twentieth Century-Fox Film Corporation, supra . 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). 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 University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985)

[*2]

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

The Defendant admits its receipt of the Plaintiff’s claim forms which are the subject of this action, and does not challenge their timeliness or the propriety. The Defendant’s motion is based, instead, upon seven (7) denial of claim forms, each denying the Plaintiff’s claims based upon a physical examination conducted by Thomas J. McLaughlin, D.C. on May 23, 2006, at the Defendant’s request. Dr. McLaughlin concluded that all acupuncture and chiropractic services following the date of his examination were not medically necessary.

The Defendant will be precluded from raising its defense of lack of medical necessity if it fails to demonstrate a timely and proper denial of the Plaintiff’s claim within thirty (30) days of its receipt. 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 threshold question presented on the Defendant’s motion, therefore, is whether or not the Defendant has tendered proper proof of mailing of its denial of claim forms.

As correctly and succinctly set forth in Presutto, L.M.T., P.C. v. Travelers Insurance Company, 17 Misc 3d 1121, 851 NYS2d 66 (Civ. Ct. NY Co. 2006):

There are three distinct methods to demonstrate proof of mailing. The first and simplest method is to provide an affidavit from an individual with personal knowledge of the actual mailing. The second is where an acknowledgment by the adverse party that it received the subject document serves as an admission. … The third and most common method is where the party provides proof of a standard office procedure, which ensures that documents are properly addressed and mailed. (emphasis in original)

In the matter sub judice, the Defendant, relying upon the first and third method stated above, seeks to establish the required proof of mailing with the affidavit of Laurie Absher, one of its Litigation Examiners.

Ms. Absher advises the court that she is “fully familiar with the facts herein based upon personal knowledge and review of the file that is maintained in the regular course of business by New York Central Mutual Fire Insurance Company[.]” [emphasis in original] (Absher Affidavit 1/9/08, p. 1) Specifically, with regard to the mailing of the Defendant’s denial of claim forms, Ms. Absher alleges that she has “personal knowledge that [her] office mailed same in accordance with its normal business practice and procedure[.]” (Absher Affidavit 1/9/08, p. 6) Nowhere in her affidavit does Ms. Absher indicate how she obtained this “personal knowledge.” Ms. Absher does not allege that she mailed these denials, that she saw them mailed, that she ever handled these denials or was actually involved, in any way, with their mailing. What Ms. Absher does say is that “[t]he file maintained by Defendant indicates that all of the Defendant’s mailing procedures and safeguards were followed for this claim.” (Absher Affidavit 1/9/08, p. 7) She further avers that she “reviewed the Defendant’s computer log, and they accurately reflect all activity that has occurred on the claim for Plaintiff’s bills for medical serivces [and that the] computer log accurately reflects information for this claim, including the date the bills were received and the date the no-fault denials were mailed.” (Absher Affidavit 1/9/08, p. 8-9) Knowledge obtained upon a review of files and computer records, however, is not, as Ms. Absher posits, “personal knowledge.”

Her conclusory statement of “personal knowledge” notwithstanding, it is clear from the [*3]foregoing that Ms. Absher has no personal knowledge of the actual mailing of the denial of claim forms. It is equally clear that Ms. Absher’s knowledge of any such mailing is limited to her alleged knowledge of her office’s mailing practices and procedures and her review of purported computer records, which are not submitted to this court. Given that Ms. Absher utterly fails to set forth the facts which form the basis for this alleged “personal knowledge,” her conclusory assertion of same 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)

Ms. Absher also attempts to demonstrate the timely mailing of the Defendant’s denial of claim forms by describing what she alleges is a procedure “designed to ensure that all such correspondence is collected and personally delivered to the United States Postal service for mailing on the same day it is generated.” (Absher Affidavit 1/9/08, p. 7-8) To succeed using this method of proving mailing, Ms. Absher is required to describe “a standard office practice or procedure designed to ensure that items are properly addressed and mailed” Residential Holding Corp. v. Scottsdale Insurance 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)

The court first notes that, in a carefully worded paragraph, Ms. Absher attests that she is “familiar with the general business practices of New York Central today and in 2001. During 2001, as well as currently, it was/is New York Central’s general business practice to mail verifications and denials on the same date that they are generated.” [emphasis in original] (Absher Affidavit 1/9/08, p. 2) Conspicuously absent from Ms. Absher’s affidavit is any allegation that she is familiar with the Defendant’s record keeping or mailing practices as it existed in 2006, the year here in question. Ms. Absher clearly has not demonstrated her knowledge of such practices and procedures as they existed at the time here in question and cannot establish proper proof of mailing of the denials in question.

The above notwithstanding, the practice and procedure described by Ms. Absher, while it may be Defendant’s “standard office practice and procedure” Residential Holding Corp. v. Scottsdale Insurance Company, supra ., it is not one “used to ensure that items were properly addressed and mailed.” id.; 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.”]

In essence, Ms. Absher describes the procedure as an employee taking the denial form, placing it in an envelope which is in turn placed in a bin in a central location in the office, then taken to a bin in the Defendant’s mail room, the contents of which are subsequently taken from the mail room to the post office. When stripped of all of its excess verbiage, it appears that the Defendant’s mailing procedure is to place the denial form in an envelope and to have someone subsequently mail same. The fact that the envelope containing the denial form is handled by a number of the Defendant’s employees and makes a number of stops in the office before it is allegedly taken to the post office in no way ensures that the items are properly mailed.

Absent from the Defendant’s alleged office procedure is any indication that there exists a practice of comparing the names and addresses on the denial forms with that of the Plaintiff’s [*4]billing, or the existence of a mailing list used to compare the names and addresses on the denial forms with the items mailed, or whether a list is maintained 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 whether anyone routinely checked to see if the total number of envelopes mailed matched the number of denial forms generated on a particular day, or a certificate of mailing identifying the items allegedly delivered to the United States Postal Service. 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) The use of any one of these practices or procedures would ensure the document’s routine mailing. Without such safeguards, notwithstanding the fact that the Defendant follows the same procedure, there is no way for the Defendant, or the court for that matter, to determine whether or not, or to even presume that all denial forms generated by the Defendant on a particular day are actually mailed. The procedure Ms. Absher describes does not take into account the possibility that an item of mail might get misplaced or lost anywhere between the desk at which it is printed and the United States Post Office. If this were to occur, under the practices and procedures described by Ms. Absher, no one would know and the Defendant would have no way of tracking the lost denial forms. Compare: Presutto v. Travelers Insurance Company, supra .

Ms. Absher’s statements to the effect that “[t]he file maintained by the Defendant indicates that all of Defendant’s mailing procedures described are carried out in accordance with the procedures set forth above[,]” (Absher Affidavit 1/9/08, p. 7) and “I reviewed the Defendant’s computer log, and they accurately reflect … information for this claim, including the date the bills were received and the date the no-fault denials were mailed[,] (Absher Affidavit 1/9/08, p. 8-9) are, themselves, insufficient to establish the mailing of Defendant’s denial of claim forms. 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) Such statements are conclusory and unsupported by any evidentiary proof. Moreover, these statements, based upon files and computer records which are not before this court, are hearsay and are not in admissible form. If the Defendant has such files and computer records, which adequately confirm the mailing of the denial of claim forms, then the Defendant has the obligation lay a proper foundation for such records, pursuant to CPLR §§ 4518 and 4539, and tender them in admissible form.

Even if the Defendant had offered adequate proof of mailing, the Defendant has failed to properly demonstrate the lack of medical necessity as a matter of law. The Defendant’s admission of receipt of the Plaintiff’s claims and the absence of any challenge by the Defendant to either the propriety or timeliness of same establishes the medical necessity of the subject services in the first instance. 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). Given the presumption of medical necessity which attaches to the Defendant’s admission of the Plaintiff’s timely submission of [*5]proper claim forms, the burden shifts to the Defendant to submit proof in admissible form establishing that the treatment in question was not necessary. Amaze Medical Supply Inc. v. Eagle Insurance Company, 2 Misc 3d 128(A), 784 NYS2d 918 (App. Term 2nd and 11th Jud. Dists. 2003); West Tremont Medical Diagnostic, P.C. v. GEICO Insurance Company, 13 Misc 3d 131(A), 824 NYS2d 759 (App. Term 2nd and 11th Jud. Dists. 2004).

The Defendant relies upon the report of Dr. Thomas J. McLaughlin, who conducted a physical examination of the Plaintiff’s assignor on May 23, 2006, in an effort to establish the lack of medical necessity for the treatment in question. Dr. McLaughlin’s report, however, is “[f]atally missing … any mention of the applicable generally accepted medical/professional standard and the plaintiff’s departure therefrom.” American Chinese Acupuncture, P.C. v. State Farm Mutual Automobile Insurance Company, 18 Misc 3d 1125, 2008 NY Slip Op. 50205 (Civ. Ct. Richmond Co. 2008) The examination by the Defendant’s doctor notwithstanding, “its denial based on lack of necessity, … , was Conclusory [sic] unsupported by … an independent medical examination, setting forth a sufficiently detailed factual basis and medical rationale for the claim’s rejection (e.g. Choicenet Chiropractic P.C. v. Allstate Ins. Co., NYLJ, Mar. 7, 2003 [App Term, 2d & 11th Jud Dists]).” Amaze Medical Supply Inc. v. Eagle Insurance Company, supra .; See also: A.B. Medical Services PLLC v. Liberty Mutual Insurance Company, 10 Misc 3d 128, 809 NYS2d 480 (App. Term 2nd and 11th Jud. Dists. 2005)

Additionally, Dr. McLaughlin’s opinion is rebutted by the affidavit of Peter M. Swerz, D.C., submitted on behalf of the Plaintiff. Dr. Swerz, who treated the Plaintiff, sets forth details of his examination and findings and concludes, albeit in similarly conclusory fashion, that based thereon “the procedures performed were medically necessary to treat the injuries sustained by Ms. Lopez.” (Swerz Affidavit 3/24/08, ¶ 5e) At the very least, these conflicting affidavits raise an issue of fact which, if for no other reason, would require the denial of the Defendant’s motion.

Based upon all of the foregoing, the Defendant’s motion for summary judgment is denied.

PLAINTIFF’S CROSS-MOTION FOR SUMMARY JUDGMENT

To the extent that this court (Engel, J.) has previously held that “[t]o make out a prima facie case, the Plaintiff would be obligated to establish the proper submission of the bills in question and the Defendant’s failure to either pay or properly deny same within thirty (30) days of receipt thereof[,]” Maple Medical Acupuncture, P.C. v. Motor Vehicle Accident Indemnification Corporation, 15 Misc 3d 1124, 841 NYS2d 219 (Dist. Ct. Nassau Co. 2007); See also: Elmont Open MRI & Diagnostic Radiology, P.C. v. Country-Wide Insurance Co., 15 Misc 3d 552, 830 NYS2d 886 (Dist. Ct. Nassau Co. 2007), these decisions should not be followed. While, certainly, that is one of the ways a plaintiff may make out a prima facie casein a no-fault first party benefits case, See: Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274, 660 NYS2d 536 (1997); Hospital for Joint Diseases v. New York Central Mutual Fire Insurance Company, 44 AD3d 903, 844 NYS2d 371 (2nd Dept. 2007); Nyack Hospital v. State Farm Mutual Automobile Insurance Company, 8 AD3d 250, 777 NYS2d 700 (2nd dept. 2004), it is not the prima facie threshold a plaintiff must meet to succeed when moving for summary judgment or at trial. If it were, in cases where a timely denial was served, it would be impossible for a plaintiff to ever make out a prima facie case.

While some courts have held that a properly completed claim form alone establishes a plaintiff’s prima facie case in no-fault first party benefits cases, See: Damadian MRI In Elmhurst, [*6]P.C. v. Liberty Mutual Insurance Company, supra .; Amaze Medical Supply Inc. v. Eagle Insurance Company, supra .; King’s Medical Supply, Inc. v. Hereford Insurance Company,5 Misc 3d 55, 785 NYS2d 270 (App. Term 9th and 10th Jud. Dists. 2004), it is now widely recognized that plaintiffs establish “a prima facie showing of their 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 (citations omitted).” Mary Immaculate Hospital v. Allstate Insurance Company, 5 AD3d 742, 774 NYS2d 564 (2nd Dept. 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); New York and Presbyterian Hospital v. Selective Insurance Company of America, 43 AD3d 1019, 842 NYS2d 63 (2nd Dept. 2007); Countrywide Insurance Company v. 563 Grand Medical, P.C., 855 NYS2d 439 (1st Dept. 2008); Ultra Diagnostics Imaging v. Liberty Mutual Insurance Company, 9 Misc 3d 97, 804 NYS2d 532 (App.Term 9th and 10th Jud. Dists 2005);Shtarkman v. Allstate Insurance Company, 8 Misc 3d 129(A), 801 NYS2d 781(App.Term 2nd & 11th Jud. Dists. 2005); Psychological Practice, P.C. v. Kemper Auto & Home Insurance Company, 12 Misc 3d 137(A), 824 NYS2d 766 (App.Term 2nd & 11th Jud. Dists. 2006); AVA Acupuncture, P.C. v. GEICO General Ins. Co., 17 Misc 3d 41, 844 NYS2d 570 (App.Term 2nd & 11th Dist. 2007); Andrew Carothers, M.D., P.C. v. New York Central Mutual Fire Insurance Company, 16 Misc 3d 136(A), 847 NYS2d 900 (App.Term 2nd & 11th Jud. Dists. 2007); PDG Psychological, P.C. v. Lumbermans Mutual Casualty Co., 16 Misc 3d 131(A), 841 NYS2d 828 (App.Term 2nd & 11th Jud. Dists. 2007); Be Well Med. Supply, Inc. v. New York Cent. Mut. Fire Ins. Co., 18 Misc 3d 139(A), 2008 NY Slip Op. 50346 (App.Term 2nd & 11th Jud. Dists. 2008); Boris Kleyman, P.C. v. Kemper Insurance Company, 19 Misc 3d 138(A), 2008 NY Slip Op. 50877 (App.Term 2nd & 11th Jud. Dist. 2008); Mani Medical, P.C. v. New York Central Mutual Fire Insurance Company, 19 Misc 3d 128(A), 2008 NY Slip Op. 50508 (App.Term 2nd & 11th Jud. Dist. 2008); R.J. Professional Acupuncturist, P.C. v. Travelers Property Casualty Insurance Company, 19 Misc 3d 130(A), 2008 NY Slip Op. 50541 (App.Term 2nd & 11th Jud. Dists. 2008) Insurance Department Regulation 11 N.Y.C.R.R. § 65-3.8(a)(1) unequivocally defines “overdue” benefits as those “not paid within 30 calendar days after the insurer receives proof of claim ….” Insurance Law § 5106(a) similarly defines “overdue” benefits as those “not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained.” Citing these sections, the Court of Appeals has also recognized that “[f]ailure to pay benefits within the 30-day requirement renders benefits overdue,’ ….” Presbyterian Hospital in the City of New York v. Maryland Casualty Company, supra . at 278, 660 NYS2d 536, 537 (1997); See also: Fair Price Medical Supply Corp. v. Travelers Indemnity Company, 42 AD3d 277, 837 NYS2d 350 (2nd Dept. 2007) [“Amounts not paid within the 30-day time frame are overdue,” ….”]; New York and Presbyterian Hospital v. Selective Insurance Company of America, supra .

Once a plaintiff properly establishes the proper and timely submission of its claim to a defendant and that the claim is “overdue” the burden shifts to the defendant to establish a triable issue of material fact. Psychological Practice, P.C. v. Kemper Auto & Home Insurance Company, 12 Misc 3d 137(A), 824 NYS2d 766 (App.Term 2nd & 11th Jud. Dists. 2006); AVA Acupuncture, P.C. v. GEICO General Ins. Co., supra . A defendant may do so by providing [*7]proof, in evidentiary form, that it either paid the claim or properly denied same within thirty (30) days of its receipt. The failure to properly demonstrate payment or denial within thirty (30) days notwithstanding, a defendant may also raise triable issues of fact by presenting proof, in evidentiary form, regarding any non-precludable defenses. See: Central General Hospital v. Chubb Group of Insurance Companies, 90 NY2d 195, 659 NYS2d 246 (1997); Presbyterian Hospital in the City of New York v. Maryland Casualty Company, supra . If a defendant does any of this, raising triable issues of fact, summary judgment will be denied to a plaintiff. See: Psychological Practice, P.C. v. Kemper Auto & Home Insurance Company, supra . [after plaintiff demonstrated benefits were overdue the defendant demonstrated, by proof in admissible form, that it timely served a denial of claim based upon a defense of lack of medical necessity, raising issues of fact requiring the denial of plaintiff’s motion and defendant’s cross-motion for summary judgment] To the same effect see Andrew Carothers, M.D., P.C. v. New York Central Mutual Fire Insurance Company, supra .; A.B. Medical Services, PLLC v. Liberty Mutual Insurance Company, supra .; New York & Presbyterian Hospital v. American Transit Insurance Company Where, however, a defendant fails to submit such sufficient proof summary judgment will be granted. See: Westchester Medical Center v. AIG, Inc., supra . [after plaintiff demonstrated benefits were overdue the defendant’s opposition was insufficient to raise a triable issue of fact as to the issuance of a proper and timely denial resulting in the granting of summary judgment to the plaintiff] To the same effect see PDG Psychological, P.C. v. Lumbermans Mutual Casualty Co., supra .

Applying these principles to the matter before this court, the affidavit of Dr. Swerz establishes, prima facie, that the Plaintiff’s claims were timely submitted and that the claims are overdue. Dr. Swerz has laid a proper business record foundation, 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), 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) Additionally, while the Plaintiff fails to provide proper proof of mailing of the claims in issue, the Defendant admits their timely receipt by submitting copies date-stamped received, thereby curing any defect 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) Dr. Swerz further alleges that these claims have not been paid.

In the face of the Plaintiff’s prima facie demonstration of its right to the relief requested, to avoid summary judgment the Defendant must come forward with proof in evidentiary form establishing the timely service of a proper denial or some other valid reason for having failed to [*8]pay these claims. As discussed at length herein above, the Defendant has failed to do so.

Accordingly, the Plaintiff’s cross-motion for summary judgment is granted.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

May 29, 2008

___________________________

Andrew M. Engel

J.D.C.

[*1]

District Court of Nassau County, First District, March 26, 2008

APPEARANCES OF COUNSEL

Friedman, Harfenist, Langer & Kraut, Lake Success, for plaintiff. Law Offices of Robert P. Macchia, Mineola, for defendant.

{**19 Misc 3d at 775} OPINION OF THE COURT

Anthony W. Paradiso, J.

{**19 Misc 3d at 776}Plaintiff moves pursuant to CPLR 2221 (d) and (e) to reargue and renew the prior order of this court dated May 23, 2007. The defendant opposes the motion. For the reasons that follow, the motion is granted. Upon reconsideration, the court adheres to its original determination.

In moving to reargue pursuant to CPLR 2221 (d), the plaintiff asserts that the court overlooked or misapprehended matters of law and fact in granting the relief requested by the defendant. Specifically, the plaintiff argues that Allstate’s motion was, in essence, one to strike the notice of trial which was not supported by the requisite affidavit detailing the need for additional discovery required by section 212.17 (d) of the Uniform Civil Rules for the District Courts (22 NYCRR 212.17 [d]). Plaintiff insists that Allstate did not demonstrate the unexpected or unanticipated circumstances that necessitated the late discovery. In this regard, plaintiff points out that counsel for the defendant examined plaintiff’s principal, Dr. Robert Hard, on five different occasions during the period from October 2004 through July 2005, and waited until August 2007 to make its motion to amend, consolidate and compel additional discovery.

The court is not persuaded by the plaintiff’s arguments. “A note of issue should be vacated when it is based upon a certificate of readiness that contains erroneous facts, such as that discovery has been completed” (Drapaniotis v 36-08 33rd St. Corp., 288 AD2d 254 [2d Dept 2001]). Such a misstatement renders a notice of trial “a nullity” (see Gregory v Ford Motor Credit Co., 298 AD2d 496, 497 [2d Dept 2002]). Here, a review of the transcripts of Dr. Hard’s examination under oath (EUO) reveals that defendant’s counsel requested the documents sought in the motion under review on numerous occasions during the course of the examination. The documents requested included plaintiff’s agreement with Bayside Management Inc. (at 70), corporate tax returns (at 51, 148), facility leases (at 215), and banking records (at 314). Counsel [*2]for the defendant renewed his demand for these documents on numerous occasions during the course of Dr. Hard’s examination (at 177, 266, 363). Despite these outstanding demands, the plaintiff filed its notice of trial on August 18, 2005, just one month after the last demand for the documents, and six months after the Court of Appeals decided State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]), which clearly rendered the material sought relevant to Allstate’s defense of fraudulent incorporation (see Midwood Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 14{**19 Misc 3d at 777} Misc 3d 131[A], 2007 NY Slip Op 50052[U] [App Term, 2d Dept 2007]).

The plaintiff is mistaken, if not disingenuous, in its position that the defendant never requested these items in writing. The EUO notice sent to Dr. Hard on May 26, 2004 specifically required him to produce all documents relating to the plaintiff’s ownership, corporate structure, and affiliation with any consulting, management, billing or collection entities, as well as tax returns, banking documents, and leases. Indeed, plaintiff’s attorney acknowledged this very fact in his affirmation in opposition to the original motion, which included the EUO notice and document request as exhibit C.

Accordingly, the court did not overlook or misapprehend any matters of fact or law when it, in effect, struck the plaintiff’s notice of trial, allowed the defendant to amend its answer to assert a Mallela defense, and compelled the production of outstanding discovery relevant to that defense. Contrary to plaintiff’s assertion, the moving affirmation of Allstate’s attorney on the original motion set forth sufficient allegations of fraud in the corporate form to justify the amendment and compel the discovery (see Bromer Med., P.C. v Chubb Indem. Ins. Co., 18 Misc 3d 138[A], 2008 NY Slip Op 50298[U] [App Term, 1st Dept 2008]).

The court is also convinced that it did not overlook or misapprehend any matters of fact or law in allowing the consolidation of all pending no-fault cases involving the same parties. A motion for consolidation is addressed to the sound discretion of the court, and absent substantial prejudice to the opposing party, is proper where there are common questions of law and fact (see RCN Constr. Corp. v Fleet Bank, N.A., 34 AD3d 776 [2d Dept 2006]). Here, it is evident that all of the no-fault matters pending between Eastern Medical and Allstate are subject to the same Mallela defense of fraudulent incorporation. If proven, the applicable law would require a dismissal of all pending actions.

Consolidation for the purpose of entertaining the Mallela defense certainly serves the interests of judicial economy and efficiency. Be that as it may, if Allstate is unable to prove its Mallela defense, then the court agrees with plaintiff that the consolidation of the pending no-fault actions becomes untenable as each is driven by unique facts arising from separate and distinct circumstances. Accordingly, the court takes this opportunity to clarify that the consolidation of the pending no-fault matters is for the sole purpose of determining the merits{**19 Misc 3d at 778} of Allstate’s Mallela defense, and is without prejudice to a subsequent motion to sever the cases should that defense fail.

In moving to renew pursuant to CPLR 2221 (e), the plaintiff asserts that there has been a change in the law that would change the prior determination. Specifically, the plaintiff argues that the Appellate Division’s recent decision in Fair Price Med. Supply Corp. v Travelers Indem. Co. (42 AD3d 277 [2d Dept 2007]), “radically reshaped the landscape of fraud based defenses,” such that Allstate’s Mallela defense is untimely and therefore unavailable. The court concludes that the plaintiff is mistaken in its application of Fair Price to the facts at hand. [*3]

In Mallela, the Court of Appeals held that a medical provider is not entitled to recover first-party no-fault benefits under Insurance Department Regulations (11 NYCRR) § 65-3.16 (a) (12) if it is fraudulently incorporated. As in the present case, the insurer in Mallela alleged that the medical provider, while nominally owned by a physician, was actually operated by nonphysicians in violation of New York’s licensing statutes. The Mallela court declared the regulation valid and held that “carriers may look beyond the face of licensing documents to identify willful and material failure to abide by state and local law[s]” (Mallela, 4 NY3d at 321).

On June 12, 2007, the Appellate Division, Second Department, decided Fair Price Med. Supply Corp. v Travelers Indem. Co. (42 AD3d 277 [2007]). That action involved an insurer’s attempt to deny a fraudulent claim for medical supplies almost two years after the 30-day pay or deny period mandated by Insurance Law § 5106 (a) had expired. The court found the fraud defense untimely.

In reaching this conclusion, the Appellate Division relied upon Court of Appeals precedents in Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co. (90 NY2d 274 [1997]) and Central Gen. Hosp. v Chubb Group of Ins. Cos. (90 NY2d 195 [1997]) to draw a distinction between defenses based on a lack of insurance coverage in the first instance and those based on policy exclusions. Acknowledging that the preclusion rule cannot be applied so as to create coverage where none otherwise exists, the court held that the fraud alleged in Fair Price did not go to the issue of coverage and thus required a timely denial. Summarizing the applicable law, the Appellate Division explained: “In determining whether compliance with the 30-day rule is required, the pertinent inquiry is whether the asserted defense is based on a lack of coverage. The kind of fraud scheme{**19 Misc 3d at 779} involved—and whether there is any fraud scheme at all—is irrelevant” (Fair Price, 42 AD3d at 285).

Relying on the above pronouncement, the plaintiff asserts that Allstate’s allegations of fraud in the corporate form, even if true, should have been asserted in a timely denial. Since they were not, plaintiff insists that Allstate is precluded from raising such a fraud defense at this time. The problem with this argument is that it assumes the Court of Appeals was ignorant of its own precedent in Presbyterian and Central Gen. when it decided Mallela, and that the Fair Price court chose to somehow abrogate Mallela in its decision. The court rejects these unsupported assumptions.

It is evident that the appellate courts in Presbyterian, Central Gen. and Fair Price were dealing in large measure with contract interpretation—the extent to which policies of insurance covered certain situations, and the extent to which the insurers’ obligations under those policies were subject to applicable laws and regulations. In contrast, the Mallela court was not dealing with contract interpretation, or the interplay between policies of insurance and applicable laws and regulations. Rather, Mallela dealt strictly with statutory interpretation.

The question certified to the Court of Appeals in Mallela was whether insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises to which patients have assigned their claims. The Mallela court was simply faced with the task of determining whether a rule promulgated by the Superintendent of Insurance (11 NYCRR 65-3.16 [a] [12]) was valid. The rule excluded payments made to fraudulently licensed providers from the meaning of “basic economic loss” as set forth in Insurance Law § 5102. Acknowledging that the rule set up a conflict between the prompt payment goals of the no-fault law on [*4]the one hand, and the antifraud goals embodied in the State’s licensing statutes on the other, the court unhesitatingly pronounced that the regulation was valid, and that “[w]here, as here, the Superintendent has properly crafted a rule within the scope of his authority, that rule has the force of law and represents the policy choice of this State” (Mallela, 4 NY3d at 321).

Significantly, in Mallela there was no contention that the medical services in question were unnecessary or improperly rendered, or that the insureds were otherwise ineligible for coverage. There was no suggestion that the payments were not otherwise required under the terms of the policies. The court{**19 Misc 3d at 780} specifically noted as much. Even so, the Mallela court did not qualify the insurer’s right to deny payment to the fraudulently incorporated provider by requiring a timely denial. In this regard, it is instructive that the Mallela court quoted a relevant passage from its earlier decision in Matter of Medical Socy. of State of N.Y. v Serio (100 NY2d 854, 866 [2003]), which provided that the challenged regulations “create not a new category of exclusion, but rather merely a condition precedent with which all claimants must comply in order to receive benefits under the statute” (Mallela, 4 NY3d at 321 n 3 [emphasis added]).

This court is convinced that Fair Price did nothing to diminish an insurer’s right to assert a Mallela defense in appropriate circumstances, even after the 30-day pay or deny period of Insurance Law § 5106 (a) has expired. Such a defense is not predicated on a policy exclusion or the extent of coverage provided by a contract of insurance. Nor does it arise from the operation of an insurance policy within the context of the no-fault laws and regulations. A Mallela defense is not a policy-based defense at all, but rather a statutory defense that arises from a claimant’s failure to comply with applicable sections of the Business Corporation Law, Limited Liability Company Law and/or Education Law. It is a defense based on the claimant’s failure to satisfy a condition precedent to payment. It is not concerned with fraudulent acts that trigger policy exclusions or implicate policy coverage.

Thus, in Metroscan Imaging, P.C. v GEICO Ins. Co. (13 Misc 3d 35 [App Term, 2d Dept 2006]), the Appellate Term affirmed an order of the Civil Court which consolidated multiple no-fault actions and allowed the insurer to assert a Mallela defense in each. The court held that medical providers who fail to meet applicable licensing requirements are not entitled to no-fault reimbursement “since their authority to render professional services was obtained through fraudulent means” and possession of such authority is “a prerequisite to reimbursement” (id. at 38).

Likewise, in Midwood Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (14 Misc 3d 131[A], 2007 NY Slip Op 50052[U] [App Term, 2d Dept 2007]), the Appellate Term reversed that portion of a Civil Court order which granted summary judgment to a medical provider, concluding that the insurer was entitled to discovery on the relevant issue of whether the medical provider was fraudulently incorporated (see Midwood at *1). Significantly, the court determined that a fraudulent incorporation{**19 Misc 3d at 781} defense “is a nonwaivable defense and is therefore not subject to the 30-day preclusion rule” (id.). The court affirmed the lower court’s refusal to sever the unrelated actions, concluding that the fraudulent incorporation defense was “likely to raise common issues of law or fact” in all five claims (id. at *2).

The undersigned cited the Metroscan Imaging and Midwood Acupuncture decisions in support of the court’s prior order, and continues to believe that these cases control the matter under review. Significantly, at least one Appellate Term decision after Fair Price concluded that [*5]a Mallela defense “is not waived by the failure to assert it in a denial of claim form, nor is it precluded as a result of an untimely denial” (Multiquest, P.L.L.C. v Allstate Ins. Co., 17 Misc 3d 37, 39 [App Term, 2d Dept 2007] [citations omitted]).

Accordingly, upon review of its decision dated May 23, 2007, the court adheres to its original determination.

District Court of Nassau County, First District

5444/07

Attorneys for plaintiff: Friedman, Harfenist, Langer & Kraut

Attorneys for defendant: Law Offices of Teresa M. Spina

Andrew M. Engel, J.

The Plaintiff commenced this action to recover no-fault first party benefits in the total sum of $879.73, for medical services allegedly provided to its assignor following a motor vehicle accident of February 2, 2005. The action was commenced on February 6, 2007. Issue was joined on April 10, 2007. The Plaintiff now moves for summary judgment. The Defendant opposes that motion and cross-moves for summary judgment as well. The Plaintiff opposes the Defendant’s cross-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). 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 [*2]University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985)

PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT

The Plaintiff alleges that it performed an MRI of its assignor’s cervical spine on February 26, 2005. The bills for this alleged service was dated March 30, 2005. According to the Plaintiff, this bill was received by the Defendant on April 1, 2005; and, the Plaintiff submits a copy of the denial (“N-F 10”) received, dated April 14, 2005, confirming this fact. The Defendant’s admission of having received the Plaintiff’s claims cures any defect 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)

The Plaintiff does not allege that the Defendant’s N-F 10 was untimely. The Plaintiff does allege that the Defendant’s N-F 10 is improper as to form and must be disregarded. Specifically, the Plaintiff suggests that the N-F 10 was not issued on the forms prescribed by the Insurance Department Regulation 68, having omitted therefrom items 2A through 2F, relating to categories of payments which have been denied in part, and items 3 through 17, relating to all policy issues, loss of earnings benefits and other reasonable and necessary expenses. The redaction of item number 5 also resulted in the omission of advice to the assignor and/or assignee that they may qualify for special expedited arbitration.

To establish its prima facie right to a judgment as a matter of law, the Plaintiff must demonstrate its timely and proper submission of the claims in question and the Defendant’s failure to either pay or issue a valid denial within thirty (30) days of receipt of those claims. 11 N.Y.C.R.R. § 65-3.(c); Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274, 660 NYS2d 536 (1997); Nyack Hospital v. State Farm Mutual Automobile Insurance Company, 11 AD3d 664, 784 NYS2d 136 (2nd Dept. 2004); Westchester Medical Center v. AIG, Inc., 36 AD3d 900, 829 NYS2d 180 (2nd Dept. 2007) If the Plaintiff fails to demonstrate each of these elements, by the submission of evidence in admissible form, the Plaintiff’s motion will be denied. Such is the case before this court.

The Plaintiff has failed to lay a proper evidentiary foundation for the introduction of its claim forms into evidence. The Defendant’s admission of receipt of the Plaintiff’s claim forms “did not concede the facts asserted in the claim forms and it remained plaintiff’s burden to proffer such evidence in admissible form, which it failed to do (see, Midborough Acupuncture, P.C. v. New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132 (A), 2006 N.Y.Slip Op. 51879(U), supra ).” 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); See also: Fortune Medical, P.C. v. Allstate Insurance Co., 14 Misc 3d 136, 836 NYS2d 492 (App. Term 9th & 10 Jud. Dists. 2007) “Indeed, absent a foundation to establish the admissibility of the provider’s claim forms as business records, said claim forms do not constitute proof of the act, transaction, occurrence or event’ set forth therein for which plaintiff seeks to recover (CPLR 4518).” Bajaj v. General Assurance, __ Misc 3d __, __ {18 Misc 3d 25} NYS2d __ 2007 WL 4165268 (App. Term 2nd & 11th Jud. Dists. 2007); See also: Ontario Medical, P.C. v. Sea Side Medical, P.C., 15 Misc 3d 129, 839 NYS2d 435(App. Term 9th & 10 Jud. Dists. 2007); V.S. Medical Services, P.C. v. One [*3]Beacon Insurance, 14 Misc 3d 142, 836 NYS2d 504 (App. Term 2nd & 11th Jud. Dists. 2006)

In recognition of this significant defect in its motion papers, the Plaintiff attempts, for the first time in reply, to lay a business record foundation for its claim forms. The use of reply papers for this purpose, however, is improper. The purpose of reply papers is to address arguments raised in opposition to the motion, not to permit the introduction of new arguments, issues, grounds or evidence in support of the motion. Merchants Bank of New York v. Gold Lane Corp., 28 AD3d 266, 814 NYS2d 99 (1st Dept. 2006); Litvinov v. Hodson, 34 AD3d 1332, 826 NYS2d 536 (4th Dept. 2006)

Contrary to the Plaintiff’s argument, CPLR § 2001, which provides the court with the discretion to “permit a mistake, omission, defect or irregularity, …, to be corrected” at any stage of an action, cannot be used to correct the Plaintiff’s failure to make out a prima facie case with proof in admissible form in the first instance. The cases relied upon by the Plaintiff are inapposite. In Moccia v. Carrier Car Rental, Inc., 40 AD3d 504, 837 NYS2d 67 (1st Dept. 2007) the court permitted a reply to provide a certificate of conformity for a previously submitted out of state affidavit to provide compliance with CPLR § 2309(c), nunc pro tunc. The court specifically noted that this did nothing more than correct a defect in form. Ramos v. Dekhtyar, 301 AD2d 428, 753 NYS2d 489 (1st Dept. 2003) involved papers submitted on a motion to renew, not in reply. Moreover, the only correction made was the affixing of a jurat to a previously affirmed chiropractor’s report; again correcting form, not substance. Farkas v. Tarrytown Lumber, Inc. 133 AD2d 251, 519 NYS2d 49 (2nd Dept. 1987) and Holy Spirit Association for Unification of World Christianity v. Harper & Row Publishers, Inc., 101 Misc 2d 30, 420 NYS2d 56 (S.C. NY Co. 1979) allowed replies to specify the sections under which the motions had been brought, which were either omitted or misstated in the original motion papers. Once again, the courts noted that the substance of the papers submitted were unchanged and that the replies were permitted to correct technical defects as to form. Krug v. Offerman, Fallon, Mahoney & Cassano, 245 AD2d 603, 664 NYS2d 882 (3rd Dept. 1997) is to the same effect, allowing a reply to correct the misidentification of a signature on an original affidavit, without making any substantive change.

In the matter sub judice, it is only after the Defendant had already served and submitted its opposition to the Plaintiff’s motion that the Plaintiff submitted the reply Affidavit of Brijkumar Yamraj, sworn to on October 22, 2007, which alleges, for the first time, that it is the Plaintiff’s regular office policy and procedure to record the information contained in the Plaintiff’s claim forms in its billing program upon completion of the tests performed; that the billing program automatically generates a bill for the services and that the bill is stored in the patient’s file. This affidavit does much more than correct a technical defect as to form; rather, it is testimonial and substantive in nature, attempting to set forth factual elements of the Plaintiff’s prima facie case. The Plaintiff may not, however, rely upon evidence submitted for the first time in reply to meet its prima facie burden. Rengifo v. City of New York, 7 AD3d 773, 776 NYS2d 865 (2nd Dept. 2004); Branham v. Loews Orpheum Cinemas, Inc., 31 AD3d 319, 819 NYS2d 250 (1st Dept. 2006); Migdol v. City of New York, 291 AD2d 201, 737 NYS2d 78 (1st Dept. 2002)

Accordingly, having failed to demonstrate all necessary elements to its entitlement to a judgment as a matter of law in the first instance, with evidentiary proof in admissible form, the Plaintiff’s motion for summary judgment is denied. [*4]

DEFENDANT’S CROSS-MOTION FOR SUMMARY JUDGMENT

The Defendant alleges that it timely served its N-F 10 in response to the Plaintiff’s claim. The Defendant further alleges that its N-F 10 was proper, having been issued on a form allegedly approved by the New York State Insurance Department. Relying on an affirmed peer review report, the Defendant also alleges that it has demonstrated a lack of medical necessity for the services in question, as set forth in its N-F 10.

Before the defense of lack of medical necessity will be considered, the Defendant must demonstrate, through the submission of evidentiary proof in admissible form, that it timely issued a proper N-F 10 asserting that defense in response to the Plaintiff’s claim. The Defendant will be precluded from raising its medical necessity defense where it fails to make such a demonstration. 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)

Addressing the timely service of the Defendant’s N-F 10, although the court does not find the affidavit of Kathleen McClernon to properly demonstrate “either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed (citations omitted)[,]” Residential Holding Corp. v. Scottsdale Insurance 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), or one “geared so as to ensure the likelihood that a notice … is always properly addressed and mailed[,]” Nassau Insurance Company v. Murray, 46 NY2d 828, 414 NYS2d 117 (1978), this issue need not be determined by the court. The Plaintiff acknowledges that its claim was timely denied and that it received the Defendant’s N-F 10. Plaintiff states, “On April 14, 2005, GEICO denied the bills for the elctrodiagnostic [sic] and/or other diagnostic services[,]” (Armao Affirmation 9/7/07, ¶ 7), and annexes a copy of the N-F 10 to its motion papers, confirming this fact. This admission cures the defect in the Defendant’s proof concerning the timeliness of its denial.

In an effort to demonstrate the propriety of its modified N-F 10 the Defendant relies upon the affidavits of Mark Pressler and Aurora de la Torre. In November 2006 Mr. Pressler was an Assistant Deputy Superintendent and Chief of the Property Bureau of the New York State Insurance Department, whose duties included oversight of the no-fault reparations system. Aurora de la Torre, is a Senior Vice President of Operations of Nadent-Health Data Services (“HDS”) and has held a management position with that company since 1980. In January and February of 1992 she was the Director of Operations. Her duties included providing assistance in no-fault claims procedure, systems and fee schedule coding.

Ms. de la Torre alleges that in January 1992 HDS contacted the Insurance Department of behalf of the Defendant, “to see if GEICO could use a form for denial of health service benefits which would not include boxes for defenses that had no application to the health provider’s claims.” (de la Torre Affidavit 2/5/07, ¶ 2) Ms. de la Torre submits a copy of the Insurance Department’s reply letter dated January 23, 1992 which states that the proposed form may not be [*5]used, indicating, inter alia, “Your page two as presently constituted does not meet the prescribed standards. … Your modification of page two of the NF-10 form is not acceptable and can not be used in its present format.” (Smeragliuolo Letter 1/23/92, ¶ 2) Ms. de la Torre alleges that HDS then amended its proposed form, in accordance with Mr. Smeragliuolo’s recommendations, and faxed a copy to the Insurance Department on January 31, 1992. Ms. de la Torre further alleges that HDS then received a letter from Mr. Smeragliuolo dated February 3, 1992 allowing the proposed amended N-F 10 to be used. HDS then so notified GEICO.

The affidavit of Mark Pressler confirms that on January 31, 1992 HDS submitted for approval a proposed N-F 10 to be used in denying health service claims, altering the form prescribed by Regulation 68. Quoting Mr. Smeragliuolo’s letter of February 3, 1992, Mr. Pressler alleges that the Insurance Department advised HDS that they ” may use this form for all No-Fault denials of benefits on or after February 1, 1992.'” (Pressler Affidavit 11/29/06, ¶ 3) Mr. Pressler explains that “[t]he letter was intended to convey the Department’s assent to the use of the form in conformity with the provisions of the regulation.” (Pressler Affidavit 11/29/06, ¶ 3)

Based upon the foregoing, the Defendant argues that the N-F 10 it used to deny the Plaintiff’s claim was issued on the same form approved by the Insurance Department and was, therefore, not only timely, but proper as to its form. For the reasons to be detailed below, this court does not agree.

It is initially noted that the Defendant has failed to submit a complete copy of the N-F 10 in question. As indicated hereinabove, according to the Defendant, the Insurance Department initially rejected its proposed altered N-F 10 due to problems with the form’s second page. While the Defendant alleges that it corrected these problems and obtained permission to use the corrected form, the Defendant fails to provide this court with the second page of the N-F 10 allegedly used. Without this page 2, it is impossible for this court to determine if the N-F 10 used was in conformity with the permission allegedly given by the Insurance Department and/or in compliance with Insurance Department Regulation 68 and the forms prescribed therein as of the date of denial. Given the absence of this page, the Defendant has failed to demonstrate that its N-F 10 was proper, as a matter of law. For this reason alone, the Defendant’s motion must be denied.

Additionally, it is not clear from the evidence submitted by the Defendant that the Defendant ever actually obtained approval to use the N-F 10 it submitted to the Insurance Department. Mr. Smeragliuolo’s letter of February 3, 1992, upon which the Defendant relies as proof of the Department’s approval, explicitly states, in referring to the Defendant’s proposed altered N-F 10, “Nonpolicy forms of this type are not approved by the Department.” (Smeragliuolo Letter 2/3/92, ¶ 2) Mr. Smeragliuolo’s opinion, that the Defendant’s proposed form “appears to comply with the standards set in Appendix 13-A” and that the Defendant “may use this form for all No-Fault denials of benefits on or after February 1, 1992[,]” (Smeragliuolo Letter 2/3/92, ¶ 2) not only contradicts his own statement regarding the Insurance Department’s refusal to approve this form, but is beyond the scope of his authority.

11 N.Y.C.R.R. § 2.5 clearly identifies which officials and employees of the Insurance Department may give written opinions. This regulation specifically limits those individuals to “[t]he superintendent, all deputy superintendents, the department counsel and bureau heads[.]” Moreover, 11 N.Y.C.R.R. § 2.5(e) advises that opinions issued by the Insurance Department “should not be broader than the scope of the powers and duties of the official or employee giving [*6]the same.” Mr. Smeragliuolo, is an Associate Insurance Examiner; he is not an official or employee who is empowered to issue an opinion on behalf of the Insurance Department. Additionally, as will be discussed at length hereinafter, the Insurance Department does not have any authorization to approve the use a modified N-F 10 “for all No-Fault denials of benefits on or after February 1, 1992.” (Smeragliuolo Letter 2/3/92, ¶ 2)

Even if Mr. Smeragliuolo’s opinion was considered to be approval of the Defendant’s proposed N-F 10, the N-F 10 which the Defendant served upon the Plaintiff was not the same as the one allegedly approved. Moreover, the Defendant has not submitted any proof that it obtained approval for the N-F 10 form it used, following the revision of Insurance Department Regulation 68.

Insurance Department Regulation 68, implementing the no-fault law, was first promulgated in 1974. These regulations were repealed on September 1, 2001 and a revised Regulation 68 was issued at that time. Implementation of the new Regulations was stayed on August 31, 2001; and, the old Regulations remained in effect until April 5, 1992, when the stay on implementation of the new Regulations was lifted and they became effective. See: In re Medical Society of the State of New York v. Serio, 298 AD2d 255, 749 NYS2d 227 (1st Dept. 2002), aff’d 100 NY2d 854, 800 NE2d 728, 768 NYS2d 423 (2003)

At the time the Defendant sought approval of its modified N-F 10 form, the old Regulations were in effect. The N-F 10 in the matter before this court was issued more than thirteen (13) years later. The new Regulations had been in effect for approximately three (3) years; and, the prescribed form itself had been changed by the Insurance Department at least twice, once in March 2002 and again in January 2004. In fact, at the time of the March 2002 amendment of the prescribed form, Appendix 13 of the new Regulations explicitly provided, “Other than NYS form NF-AOB, no deviations may be made to the prescribed forms unless expressly acknowledged by the Department. … Insurers may continue to use currently existing stocks of prescribed No-Fault forms until May 1, 2003 at which time the revised prescribed forms must be utilized.” Despite these changes to the prescribed form, and the clear mandate that the new prescribed forms must be used, unless proper approval is given for their modification, the Defendant continued to use the modified N-F 10 it created in 1992. The Defendant’s suggestion, during oral argument on this motion, that it took it upon itself to further modify its N-F 10 form in an attempt to keep up with the amendments to the Regulations and the prescribed form, while continuing the alterations it began in 1992, is unavailing.

It is undisputed that the N-F 10 issued by the Defendant in this matter was neither on the prescribed form, as it existed in 2005, nor on the form allegedly approved by the Insurance Department in 1992. Neither the old Regulations nor the new Regulations permit an insurer to adjust or amend its forms of its own accord. Both the old and new Insurance Department Regulations only allow for the modification of an N-F 10 upon approval of the Insurance Department. See: 11 N.Y.C.R.R. § 65-3.4(c)(11); 11 N.Y.C.R.R. § 65-3.8(c)(1); and former 11 N.Y.C.R.R. § 65.15(c)(3)(x);11 N.Y.C.R.R. § 65.15(g)(3)(c); See also: New York University Hospital Rusk Institute v. Hartford Accident & Indemnity, 32 AD3d 458, 820 NYS2d 309 (2nd Dept. 2006) Even if the Defendant had received approval for the form it submitted to the Insurance Department in 1992, the evidence submitted at this time demonstrates that the N-F 10 used by the Defendant herein was neither on the allegedly approved form nor on a form which had ever been submitted to the Insurance Department for approval. [*7]

The above notwithstanding, whether the Defendant obtained approval for the N-F 10 form it served upon the Plaintiff or not, it appears that the Defendant improperly used that form in an effort to effectuate a complete denial of the Plaintiff’s claims in this matter. The Defendant’s use of this form to deny the Plaintiff’s claims violated the Insurance Department Regulations as they existed in1992 and as they existed at the time the Defendant’s N-F 10 was issued.

At the time the Defendant’s N-F 10 was served upon the Plaintiff, the revised Regulation 68, at 11 N.Y.C.R.R. § 65-4.4(c) provided, in pertinent part: “Attached is an appendix (13, infra) which includes the following prescribed claim forms that must be used by all insurers, and shall not be altered unless approved by the superintendent: (11) Denial of Claim Form (NYS N-F 10)[.]” Using virtually the same language quoted by Mr. Pressler in his affidavit, 11 N.Y.C.R.R. § 65-3.8(c)(1) provides:

If the insurer denies a claim in whole or in part involving elements of basic economic loss or extended economic loss, the insurer shall notify the applicant or the authorized representative on the prescribed denial of claim form, in duplicate, and shall furnish, if requested by the applicant, one copy of all prescribed claim forms submitted by or on behalf of the applicant thereto. However, where a denial involves a portion of a health provider’s bill, the insurer may make such denial on a form or letter approved by the department which is issued in duplicate. No form or letter shall be approved unless it contains substantially the same information as the prescribed form which is relevant to the claim denied.

Assuming, for the sake of argument, proper approval of the Defendant’s N-F 10, the propriety of the Defendant’s use of this N-F 10 in this matter must rise or fall on the intent and application of these regulations, which are in derogation of the common law and must be strictly construed. Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 226 AD2d 613, 641 NYS2d 395 (2nd Dept.1996) aff’d 90 NY2d 274, 683 NE2d 1 (1997); Presbyterian Hospital in the City of New York v. Aetna Casualty & Surety Company, 233 AD2d 431, 650 NYS2d 255 (2nd Dept.1996); Bennett v. State Farm Insurance Co., 147 AD2d 779, 537 NYS2d 650 (3rd Dept.1989)

“The intention of the Legislature is first to be sought from a literal reading of the act itself[.]” Statutes § 92; See also: DaimlerChrysler Corp. v. Spitzer, 7 NY3d 653, 627 NYS2d 88 (2006); State v. Patricia II, 6 NY3d 160, 811 NYS2d 289 (2006); In re M.B., 6 NY3d 437, 813 NYS2d 349 (2006). “[W]here the statutory language is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used (citations omitted).” Patrolmen’s Benevolent Association of City of New York v. City of New York, 41 NY2d 205, 391 NYS2d 544 (1976); See also: Tall Trees Construction Corporation v. Zoning Board of Appeals of Town of Huntington, 97 NY2d 86, 735 NYS2d 873 (2001) People v. Garson, 6 NY3d 604, 815 NYS2d 887 (2006) A statute must be construed as a whole; and, its various provisions must be considered together, with reference to each other. Statutes § 97; Friedman v. Connecticut General Life Insurance Company, 9 NY3d 105, __ NYS2d __ (2007); Charter Development Co., L.L.C. v. City of Buffalo, 6 NY3d 578, 815 NYS2d 13 (2006); In Matter of Notre Dame Leasing, LLC v. Rosario, 2 NY3d 459, 779 NYS2d 801 (2004) Every part of a statute is to be given [*8]meaning and effect; Statutes § 98; Heard v. Cuomo, 80 NY2d 684, 594 NYS2d 675 (1993); Matter of Yolanda D., 88 NY2d 790, 651 NYS2d 1 (1996) and any interpretation of one part which deprives meaning and effect to another is to be avoided. People v. Mobil Oil Corporation, 48 NY2d 192, 422 NYS2d 33 (1979) Roballo v. Smith, 63 NY2d 485, 483 NYS2d 178 (1984); People v. Jeanty, 94 NY2d 507, 706 NYS2d 683 (2000) “Words are not to be rejected as superfluous where it is practicable to give each a distinct and separate meaning (citations omitted).” Cohen v. Lord, Day & Lord,75 NY2d 95, 551 NYS2d 157 (1989); Rosner v. Metropolitan Property and Liability Insurance Company, 96 NY2d 475, 729 NYS2d 658 (2001); Leader v. Maroney, Ponzini & Spencer, 97 NY2d 95, 736 NYS2d 291 (2001) These well established rules of statutory construction are equally applicable to the construction of regulations. ATM One, LLC v. Landaverde, 2 NY3d 472, 779 NYS2d 808 (2004); East Acupuncture, P.C. v. Allstate Insurance Co., 15 Misc 3d 104, 832 NYS2d 737 (App.Term 2nd & 11th Dists.2007)

Applying these rules to the effect to be given to 11 N.Y.C.R.R. § 65-4.4(c)(11) and

11 N.Y.C.R.R. § 65-3.8(c)(1), it is clear that modified N-F 10 forms or letters of denial which have been approved by the Insurance Department may only be used “where a denial involves a portion of a health provider’s bill[.]” 11 N.Y.C.R.R. § 65-3.8(c)(1) If a health service benefits claim is being denied in full, the prescribed N-F 10 must be used.

As previously indicated, 11 N.Y.C.R.R. § 65-4.4(c) explicitly “prescribed [the] claim forms that must be used by all insurers, [which] shall not be altered unless approved by the superintendent[.]” Consistent with the first part of that subsection, the first sentence of 11 N.Y.C.R.R. § 65-3.8(c)(1) reiterates that any denial issued for all elements of basic economic loss must be made “on the prescribed denial of claim form[.]” This provision clearly does not allow for the use of any form other than the “prescribed form.” The natural significance of the words used have a definite meaning; and, the court may not add or subtract words to this sentence. People v. Zimmerman, __ NY2d, __ NYS2d __ (2007); Majewski v. Broadalbin-Perth Central School District, 91 NY2d 577, 673 NYS2d 966 (1998); Matter of Greenberg, 70 NY2d 573, 523 NYS2d 67 (1987) This latter provision clearly does not contain any authorization for use of a modified N-F 10 or letter of denial where a claim is to be denied in full. Nor does this provision authorize the Insurance Department to approve such use. To read this sentence otherwise would render the very next sentence of 11 N.Y.C.R.R. § 65-3.8(c)(1) meaningless.

The next sentence of 11 N.Y.C.R.R. § 65-3.8(c)(1), beginning with the word “However,” clearly designates that what follows is an exception to the language which preceded it, and gives effect to that portion of 11 N.Y.C.R.R. § 65-4.4(c) which authorizes the superintendent to approve changes to the prescribed forms. That exception, which would permit the use of a modified N-F 10 or letter of denial approved by the Insurance Department, is specifically limited to situations “where a denial involves a portion of a health provider’s bill.” 11 N.Y.C.R.R. § 65-3.8(c)(1) This limited exception leaves in tact the sentence which precedes it, mandating the use of the “prescribed denial of claim form” for all other elements of basic economic loss and extended economic loss, including health service benefits which are denied in full. Clearly, if the Regulations intended to allow the use of an approved modified N-F 10 or a letter of denial to deny a health service benefits claim in full, the sentence beginning with “However” would have included such claims within the exception’s ambit. Having failed to do so, the only interpretation [*9]of the controlling Regulation that can be gleaned from the clear and unequivocal language is that approved modified N-F 10s or letters of denial may only be used for partial denials of health service benefits; and, the Insurance Department does not have any authority to approve the use of modified N-F 10s or letters of denial for any other elements of basic economic loss.

A comparison of cases determining the validity of modified N-F 10 forms or letters of denial confirms this obvious interpretation of the controlling Regulations. In Nyack Hospital v. Metropolitan Property & Casualty Insurance Company, 16 AD3d 564, 791 NYS2d 658 (2nd Dept. 2005) the issue before the court was the validity of a modified N-F 10 form which the defendant had used to deny the plaintiff’s entire bill for medical services. In finding the use of the modified N-F 10 improper, and in granting the plaintiff summary judgment, the court held, “A proper denial of claim must include the information called for in the prescribed denial of claim form (citations omitted). The denial of claim form issued by the defendant in the case at bar, even if timely, was fatally defective in that it omitted numerous items of requested information, and thus was incomplete (citations omitted).” Nyack Hospital v. State Farm Mutual Automobile Insurance Company, 11 AD3d 664, 784 NYS2d 136 (2nd Dept. 2004) Summit Psychological, P.C. v. General Assurance Company, 9 Misc 3d 8, 801 NYS2d 117 (App.Term 9th & 10th Jud. Dists. 2005) and Spineamericare Medical, P.C. v. U.S. Fidelity & Guaranty Company, 12 Misc 3d 138(A), 824 NYS2d 766 (App.Term 9th & 10th Jud. Dists. 2006) are to the same effect. On the other hand, in New York University Hospital Rusk Institute v. Hartford Accident & Indemnity, supra . the court was confronted with a partial denial of the plaintiff’s claim for medical expenses. The court therein recognized that in such a situation a letter of disclaimer could be used, in lieu of the prescribed form, provided it had been approved by the Insurance Department and issued in duplicate. Summary judgment was nevertheless granted to the plaintiff due to the defendant’s failure to satisfy the latter requirements.

As can be seen from the affidavit of Mark Pressler, submitted by the Defendant, the Insurance Department is apparently in agreement with this court’s application of the controlling regulations. As previously indicated, Mr. Pressler specifically states that the Mr. Smiragliuolo’s letter of February 3, 1992, upon which the Defendant relies, was only “intended to convey the Department’s assent to the use of the form in conformity with the provisions of the regulation.” (Pressler Affidavit 11/29/06, ¶ 3) Moreover, Mr. Pressler makes very clear what he means by “conformity with the provisions of the regulation,” when he sets forth the Regulation, as it existed at that time, as follows:

If the insurer denies a claim in whole or in part involving elements of basic economic loss, or for accidents occurring on and after January 1, 1982 involving elements of extended economic loss, the insurer shall notify the applicant or the authorized representative on the prescribed denial of claim form, in duplicate, and shall furnish, if requested by the applicant, one copy of all prescribed claim forms submitted by or on behalf of the applicant thereto. However, where a denial involves a portion of a health provider’s bill, the insurer may make such denial on a form or letter approved by the department which is issued in duplicate. No form or letter shall be approved unless it contains substantially the same information as the prescribed form which is relevant to the claim denied.’ (emphasis in original) (Pressler Affidavit 11/29/06, ¶ 2)

As can be seen, the old Regulation, in pertinent part, was identical to the revised Regulation. By underlining the above section, Mr. Pressler, an Assistant Deputy Superintendent and Chief of the [*10]Property Bureau of the New York State Insurance Department, emphasizes that modified N-F 10 forms and letters of denial may only be approved by the Insurance Department and used by an insurer where the “denial involves a portion of a health provider’s bill.” To employ Mr. Pressler’s words, the use of a modified N-F 10 in any other circumstance would not be “in conformity with the provisions of the regulation.” (Pressler Affidavit 11/29/06, ¶ 3)

While the N-F 10 used in the matter before this court bears an “X” mark at item number 2, indicating that “A PORTION OF YOUR CLAIM FOR HEALTH SERVICES IS DENIED AS FOLLOWS[,]” it is clear from the remainder of the Defendant’s N-F 10 that this was not a denial of a portion of the Plaintiff’s bill, but a complete denial. The Defendant’s N-F 10 indicates that the amount of the bill in question was “$879.73,” that the amount paid by the Defendant was “$0.00,” and that the amount is dispute is “$879.73.” While it appears fairly clear that the Defendant’s N-F 10 was issued as a complete denial of the Plaintiff’s claim, at best, the conflicting entries raise a question of fact.

For each of the reasons stated above, having failed to properly demonstrate the timely service of a proper denial of claim, the Defendant’s motion for summary judgment is denied. Under these circumstances, the court need not pass on the validity of the Defendant’s defense of lack of medical necessity at this time.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

January 18, 2008

___________________________

Andrew M. Engel

J.D.C.

District Court of Nassau County, First District

12830/08

Attorneys for plaintiff: Friedman, Harfenist, Langer & Kraut, LLP

Attorneys for defendant: Picciano & Scahill, PC

Andrew M. Engel, J.

The Plaintiff commenced this action on April 4, 2007 seeking to recover no-fault first party benefits for acupuncture services provided to its assignor between February 20, 2002 and May 9, 2002, following a motor vehicle accident of June 5, 2001. Issue was joined on or about May 17, 2007. The Defendant now moves for summary judgment pursuant to CPLR § 3212. 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) The court’s function in determining such a motion is issue finding, not issue determination. Sillman v. Twentieth Century-Fox Film Corporation, supra . 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). 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 University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985)

The Defendant will be precluded from raising its defense of lack of medical [*2]necessity if it fails to demonstrate a timely and proper denial of the Plaintiff’s claim within thirty (30) days of its receipt. 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 threshold question presented, therefore, is whether or not the Defendant has tendered “either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed” Residential Holding Corp. v. Scottsdale Insurance 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) In support thereof, the Defendant submits the affidavit of Shalonne O’Tey-Simon, one of Defendant’s Claims Representatives, and Daudley Fanfan, a Claims Support Services Supervisor of the Defendant.

Ms. O’Tey-Simon indicates that she is a Claims Representative in the Defendant’s Ballston Spa, New York no-fault office. Ms. O’Tey-Simon alleges that she is the custodian of the records contained in the Defendant’s file relating to this matter and that she is “fully familiar with the facts and circumstances related to the above-captioned matter based upon [her] review of the file and computer records maintained by [her] office.” (O’Tey-Simon affidavit 6/28/07, ¶ 3) Based upon that review, although she neither alleges to have actual knowledge of the mailing nor describes a standard office practice or procedure for the mailings, Ms. O’Tey-Simon avers that “the denials were generated on the date stated in the bottom left hand corner marked date’ … are generated at or near the time the decision is made to deny the bill … [and] were sent from the Claim Representative to our Claims Support Services personnel for mail processing.” (O’Tey-Simon affidavit 6/28/07, ¶ 9) Ms. O’Tey-Simon concludes that “the bills in question were timely denied.” (O’Tey-Simon affidavit 6/28/07, ¶ 3) Ms. O’Tey-Simon’s conclusory statements regarding the mailing of the denials here in question are insufficient to establish their mailing. Westchester Medical Center v. Countrywide Insurance Company, __ AD3d __, __ NYS2d __, 2007 NY Slip Op. 09024 (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)

Daudley Fanfan, represents that he is a Claims Support Services Supervisor in the Defendant’s Melville, New York office and that his duties include supervising Claim Service Assistants. Mr. Fanfan avers that he is personally familiar with the Defendant’s practices and procedures in processing no-fault claims in the Melville, New York office and is responsible for making sure that those procedures are followed. Mr. Fanfan describes that practice as follows: The Defendant’s denial forms (NF-10s) are completed by Claim Representatives and/or Claim Processors on computers and printed directly to Claim Service Assistants in the “CSA pool.” When a Claim Service Assistant retrieves the NF-10 from a printer he or she must check to make sure the document is properly dated. If the NF-10 is based upon an examination conducted by a doctor of the Defendant’s choosing, the NF-10 is placed in a windowed envelope, along with the doctor’s report, and brought to the mail room within twenty-four (24) hours. In the event copies must also be mailed, they are place in non-windowed envelopes and a Claims Service Assistant hand addresses the envelope. All mail received in the mail room by 3:00 p.m. is stamped and [*3]picked up by All American Courier, on the same day and brought to the Melville, New York post office for mailing that day. Mail received by the mail room after 3:00 p.m. is similarly picked up and mailed the following day. Mr. Fanfan concludes that “In light of these procedures, all correspondence and documents, including NF-10s and requests for verification, are processed and properly addressed and mailed to the proper parties either on the date of the particular document or one business day thereafter.” (Fanfan Affidavit 6/27/07, ¶ 8)

When stripped of all of its excess verbiage, which is designed to meet the aforesaid proof of mailing requirements, all that Mr. Fanfan actually alleges is that, at the Melville, New York office, an NF-10 is retrieved from a printer, placed in an envelope, brought to the mail room and picked up by a courier who delivers the envelope to the United States Postal Service. It is the opinion of this court that while this may describe a “standard office practice and procedure” Residential Holding Corp. v. Scottsdale Insurance Company, supra ., it does not describe one “used to ensure that items were properly addressed and mailed.” id.; 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.”]

Absent from the Defendant’s alleged office practice and procedure is any indication that there exists a practice of comparing the names and addresses on the NF-10s with that of the Plaintiff’s billing, or the existence of a mailing list used to compare the names and addresses on the NF-10s with the items mailed, or whether a list is maintained indicating the number of NF-10s generated on a given day along with some identification of the matters in which the NF-10s were generated, or whether anyone routinely checked to see if the total number of envelopes mailed matched the number of NF-10s generated on a particular day, or a certificate of mailing identifying the items allegedly delivered to the United States Postal Service. 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) Without such safeguards, notwithstanding the fact that the Defendant follows the same procedure, there is no way for the Defendant, or the court for that matter, to determine whether or not all NF-10s generated by the Defendant on a particular day are actually mailed. The procedure Mr. Fanfan describes does not take into account the possibility that an item of mail might get misplaced or lost anywhere between the CSA pool and the United States Post Office. If this were to occur, under the practices and procedures described by Mr. Fanfan, no one would know and the Defendant would have no way of tracking the lost NF-10. Compare: Presutto v. Travelers Insurance Company, 17 Misc 3d 1121(A); 2007 NY Slip Op. 52095

In addition to these problems with the Defendant’s proof of mailing, nowhere do Mr. Fanfan or Ms. O’Tey-Simon indicate how they know the office practice and procedure Mr. Fanfan describes was followed in this case. See: Allstate Social Work and Psychological Svcs PLLC v. GEICO General Insurance Co., 6 Misc 3d 1010(A), 800 NYS2d 341 (Civ. Ct. Kings Co. 2005); Capri Medical, P.C. v. Auto One Insurance Company, 14 Misc 3d 1205(A), 836 NYS2d 483 (Civ.Ct. Kings Co. 2006) This is particularly troubling, given the fact that neither Mr. Fanfan nor Ms. O’Tey-Simon indicate they were employed by the Defendant and familiar with the Defendant’s office practices and procedures in February 2002 when the first of the [*4]denials in question were allegedly mailed. Similarly, although Mr. Fanfan indicates that he is fully familiar with the practices and procedures for mailing used in the Defendant’s Melville, New York office and Ms. O’Tey-Simon indicates that she is the custodian of the file in this matter, which is located in the Defendant’s Balston Spa, New York office, neither of them indicate from which office the denials herein were allegedly mailed, when, in fact, the Defendant’s denials bear the address of the Defendant’s Parsippany, New Jersey office.

For these reasons alone, this court finds that there are numerous questions of fact concerning the Defendant’s timely denial of the claims here in issue, which would preclude the granting of summary judgment to the Defendant. The above notwithstanding, the Defendant’s proof of the alleged lack of medical necessity is similarly wanting at this time.

The Defendant’s admission of receipt of the Plaintiff’s claims and the absence of any challenge by the Defendant to either the propriety or timeliness of same establishes the medical necessity of the subject services in the first instance. All County Open MRI & Diag. Radiology P.C. v. Travelers Insurance Co., 11 Misc 3d 131(A), 815 NYS2d 496 (App. Term 9th and 70th 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). Given the presumption of medical necessity which attaches to the Defendant’s admission of the Plaintiff’s timely submission of proper claim forms, the burden shifts to the Defendant to submit proof in admissible form establishing that the acupuncture treatment in question was not necessary. Amaze Medical Supply Inc. v. Eagle Insurance Company, 2 Misc 3d 128(A), 784 NYS2d 918 (App. Term 2nd and 11th Jud. Dists. 2003); West Tremont Medical Diagnostic, P.C. v. GEICO Insurance Company, 13 Misc 3d 131(A), 824 NYS2d 759 (App. Term 2nd and 11th Jud. Dists. 2004).

At issue here are four (4) bills for acupuncture services rendered between February 20, 2002 and May 9, 2002. Assuming that they were timely made, the Defendant’s denials of these services are based upon the report of a physical examination performed on behalf of the Defendant, by Ping Zhu, OMD, L.Ac. on February 4, 2002, which concluded “[T]here is no need for further treatment from an acupuncture point of view.” The opinion of Mr. Zhu, who is a New York State Licensed Acupuncturist and Board Certified in Chinese Herbal Medicine, was based upon a physical examination he conducted on February 4, 2002 in which he allegedly found the Plaintiff’s assignor to have a negative traditional Chinese medicine examination, a negative orthopedic examination, and a negative neurological examination. Mr. Zhu also lists some seventeen (17) medical records he reviewed.

The Plaintiff does not submit any medical evidence which attempts to rebut Mr. Zhu’s conclusion. The Plaintiff does allege, however, that the Defendant’s proof fails to prima facie demonstrate the lack of medical necessity for the treatment in question. The Plaintiff sets forth several arguments in support of this position.

The Plaintiff first argues that Mr. Zhu’s report is “fraught with hearsay and cannot satisfy State Farm’s burden” (Armao Affirmation 10/11/07, ¶ 9) because it relies upon unsworn reports which were not annexed to the Defendant’s papers. Although the Defendant may rely of the unsworn records and reports of the Plaintiff’s assignor’s treating physicians, Raso v. Statewide Auto Auction, Inc., 262 AD2d 387, 691 NYS2d 158 (2nd Dept. 1999); Torres v. Micheletti, 208 AD2d 519, 616 NYS2d 1006 (2nd Dept. 1994); Vignola v. Varrichio, 243 AD2d 464, 662 NYS2d 831 (2nd Dept. 1997); Home Care Ortho. Med. Supply, Inc. v. American [*5]Manufacturers Mutual Insurance Co., 14 Misc 3d 139(A), 836 NYS2d 499 (App.Term 1st Dept. 2007); Cross Continental Medical, P.C. v. Allstate Insurance Company, 13 Misc 3d 10, 822 NYS2d 356 (App.Term 1st Dept. 2006), there is nothing in this record to indicate how the documents listed by Mr. Zhu are related to the Plaintiff’s assignor or from whom they were obtained. Nevertheless, Mr. Zhu does not indicate that he relied upon these records and reports in reaching his determination, which, according to his report was based upon the alleged findings of his physical examination conducted on February 2, 2002.

The Plaintiff next argues that the allegedly unsworn and un-submitted documents actually “create triable issues of fact as they contain findings contrary to the IME review.” (Armao Affirmation 10/11/07, ¶ 16) While Mr. Zhu’s mere reference to the unsworn or unaffirmed reports is sufficient to permit the Plaintiff to rely upon and submit them in opposition to the motion, Kearse v. New York City Transit Authority, 16 AD3d 45, 789 NYS2d 281 (2nd Dept. 2005); Amaze Medical Supply Inc. v. Allstate Insurance Company, 12 Misc 3d 139(A), 824 NYS2d 760 (App.Term 2nd and 11th Jud. Dists. 2006); Ayzen v. Melendez, 299 AD2d 381, 749 NYS2d 445 (2nd Dept. 2002), the Plaintiff does not do so. Assuming the Defendant had made a prima facie demonstrated the lack of medical necessity, the Plaintiff cannot refute this showing through nothing more than counsel’s conclusory assertion that reports which are not before the court create triable issues of fact.

Finally, the Plaintiff argues that the Defendant is required, but has failed, to submit evidence of the applicable generally accepted medical/professional standard and the Plaintiff’s departure therefrom. The Plaintiff is correct. Adopting the standard set forth in Fifth Avenue Pain Control Center v. Allstate Insurance Company, 196 Misc 2d 801, 766 NYS2d 748 (Civ. Ct. Queens Co. 2003), this court holds: To find treatment or services are not medically necessary, it must be reasonably shown by medical evidence, in consideration of the patient’s condition, circumstances, and best interest of the patient, that the treatment or services would be ineffective or that the insurer’s preferred health care treatment or lack of treatment would lead to an equally good outcome.

See also: Hellander, M.D., P.C. v. State Farm Insurance Company, 6 Misc 3d 579, 785 NYS2d 896 (Civ. Ct. Richmond Co. 2004) To meet its burden, at a minimum, the Defendant must establish a factual basis and medical rationale for its asserted lack of medical necessity, Nir v. Allstate Insurance Company, 7 Misc 3d 544, 796 NYS2d 857 (Civ. Ct. Kings Co. 2005), which is supported by evidence of the generally accepted medical/professional practices, A.B. Medical Services, P.L.L.C. v. New York Central Mutual Fire Insurance Company, 7 Misc 3d 1018(A), 801 NYS2d 229 (Civ. Ct. Kings Co. 2005), and that the services rendered were inconsistent with those accepted practices. A.R. Medical Art, P.C. v. State Farm Mutual Automobile Insurance Company, 11 Misc 3d 1057(A), 815 NYS2d 493 (Civ. Ct. Kings Co. 2006). Generally accepted practice has been recognized to be “that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling.”City Wide Social Work & Psy. Serv. P.L.L.C. v. Travelers Indemnity Company, 3 Misc 3d 608, 77 NYS2d 241 (Civ. Ct. Kings Co. 2004); A.B. Medical Services, P.L.L.C. v. New York Central Mutual Fire Insurance Company, supra .; A.R. Medical Art, P.C. v. State Farm Mutual Automobile Insurance Company, supra . The conclusory opinion of Mr. Zhu, standing alone, is insufficient to demonstrate the lack of medical necessity. City Wide Social Work & Psy. Serv. P.L.L.C. v. Travelers Indemnity Company, supra .; Ultimate Medical Supplies v. Lancer Insurance Company, 7 Misc 3d 1002(A), 801 NYS2d 243 (Civ. Ct. Kings Co. 2004) [*6]

While Mr. Zhu reports that his traditional Chinese medicine examination, orthopedic examination and neurologic examination were negative, he fails to set forth his qualifications to conduct these latter examinations or to offer an opinion based thereon, which goes to the issue of credibility and weight to be accorded his opinions by the trier of facts, Hill v. New York Hospital, 277 AD2d 117, 716 NYS2d 568 (1st Dept. 2000); Williams v. Halpern, 25 AD3d 467, 808 NYS2d 68 (1st Dept. 2006). Moreover, Mr. Zhu fails to set forth what objective tests he performed to support his findings and conclusion. Under these circumstances, it cannot be said that the Defendant has properly established a prima facie showing of lack of medical necessity. Bedford Park Medical Practice P.C. v. American Transit Insurance Co., 8 Misc 3d 1025(A), 806 NYS2d 443 (Civ.Ct. Kings Co. 2005); cf. Hanna v. Alvarado, 16 AD3d 624, 791 NYS2d 440 (2nd Dept. 2005); Black v. Robinson, 305 AD2d 438, 759 NYS2d 741 (2nd Dept. 2003); Gamberg v. Romeo, 289 AD2d 525, 736 NYS2d 64 (2nd Dept. 2001)

Accordingly, the Defendant’s motion for summary judgment is denied.

This constitutes the decision and order of this court.

Dated: Hempstead, New York

December 3, 2007

___________________________

Andrew M. Engel

J.D.C.

[*1]

District Court of Nassau County, Third District, September 18, 2007

APPEARANCES OF COUNSEL

Nicolini, Paradise, Ferretti & Sabella, Mineola (Andrew Cox of counsel), for defendant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, Mineola (Michael C. Hayes of counsel), for plaintiff.

{**17 Misc 3d at 584} OPINION OF THE COURT

Howard S. Miller, J. [*2]

Defendant moves unopposed to reargue the court’s denial of a prior motion for severance of the two claims pending in this action. Those claims are brought by the same no-fault plaintiff assignee, arising out of services rendered to two unrelated assignors.

In the underlying motion, defendant cited Mount Sinai Hosp. v Motor Veh. Acc. Indem. Corp. (291 AD2d 536 [2d Dept 2002]) for the proposition that claims submitted by unrelated assignors ought to be severed. Mount Sinai, however, is distinguishable in that it also involved several unrelated assignees. That means that it is not subject to the general rule that a single plaintiff may join whatever claims he, she or it may have against an adverse party. (CPLR 601 [a].)

On motion for reargument, the defendant brings two additional cases to the court’s attention: Poole v Allstate Ins. Co. (20 AD3d 518 [2d Dept 2005]) and S.I.A. Med. Supply Inc. v GEICO Ins. Co. (8 Misc 3d 134[A], 2005 NY Slip Op 51170[U] [App Term, 2d & 11th Jud Dists 2005]). Defendant argues that those two cases make it clear that the court has discretion to sever no-fault claims when they arise out of different accidents, and indeed must sever when the plaintiff joins claims from 47 different assignees (as in Poole), or from 11 different assignees (at least in the Second and Eleventh Judicial Districts, as in S.I.A. Med. Supply).

The court understood and understands that it has discretion to sever claims under CPLR 603 when a trial would be unwieldy or confusing to the trier of fact. If this case had involved 47 different assignors, or perhaps even 11, the court would have exercised its discretion to sever. This case, however, involves only two different assignors and two different accidents. Thus, there is little danger of an unwieldy trial or of confusion to the trier of fact.

In reaching its prior decision, the court relied on CPLR 601 (a). “CPLR 601 (a) embodies the modern principle of civil procedure that a party should have maximum freedom to assert multiple claims against the adverse party. The claims need not{**17 Misc 3d at 585} be factually related.”^[FN*] If defendant’s argument were to be accepted, to the effect that two unrelated no-fault claims may not be joined by the same plaintiff, the court would be rendering CPLR 601 (a) essentially meaningless.

The court believes that the State Legislature put CPLR 601 at the beginning of an article for a reason, namely, that it is the general rule, and CPLR 603 is the exception. It follows that the joinder of two claims must nearly always be upheld. It is not necessary for the court to decide now where the line is to be drawn between two claims and 47 claims. That will depend on the circumstances of each case.

Finally, defendant argues that the criteria for evaluating a plaintiff’s voluntary [*3]joinder under CPLR 601 (a) should be the same as the criteria for evaluating an involuntary consolidation of claims under CPLR 602. That argument is seriously flawed because of the “modern principle” cited in the commentaries to CPLR 601. The CPLR gives the plaintiff considerable latitude to join claims under circumstances where there might be insufficient grounds for involuntary consolidation of those claims.

Because the defendant has cited nothing leading the court to believe that it misapprehended the law, the motion to reargue is denied.

Footnotes

Footnote *: Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C601:1, at 298 (emphasis supplied).

[*1]

District Court of Nassau County, Third District, May 22, 2007

APPEARANCES OF COUNSEL

Bruno, Gerbino & Soriano, LLP, Melville (Alyson J. Birdie of counsel), for defendant. Israel, Israel & Purdy, LLP, Great Neck (Veronica Renta Irwin of counsel), for plaintiff.

OPINION OF THE COURT

Howard S. Miller, J.

By order to show cause dated December 15, 2006, defendant moves for an order “rectifying plaintiff’s proposed judgment.” That proposed judgment was filed pursuant to this court’s order of September 29, 2006. The order dealt ambiguously with the issue of attorneys’ fees under the no-fault regulations, which are ambiguous themselves, in a case where multiple claims are litigated in the same action. The parties have been unable to agree on the resolution of that ambiguity, and now ask the court to resolve it.

Plaintiff in this action is a provider of medical services, and it received assignments from Eddie Medina of several claims for different services provided to Mr. Medina on different dates, all arising out of one automobile accident. Defendant insurer provided no-fault coverage to Eddie Medina for that accident.

Plaintiff submitted separate claims for each service. This court has already ruled that defendant must pay those claims, and it appears that defendant has done so. The court went on to direct that attorneys’ fees were awarded in the amount of 20% of each claim and that “[a]ttorney’s fees are not to exceed $850.” Plaintiff maintains that the $850 limitation applies to each cause of action, and it seeks to enter judgment accordingly for an amount well in excess of $850. Defendant resists that entry of judgment on the grounds that the $850 limitation applies to the action as a whole, and thus plaintiff may not enter judgment because defendant has already made payment based on an award of attorneys’ fees limited to one award of $850.

The dispute revolves around the interpretation of 11 NYCRR 65-4.6 (e), which provides, in relevant part as follows: “(e) For all other disputes subject to arbitration, . . . the attorney’s fees shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850.”

Plaintiff relies on a decision of the Appellate Division, Second Department,^[FN1] which interpreted a predecessor regulation, 11 NYCRR 65.17 (b) (6) (v),^[FN2] to hold that the $850 limitation applies per claim. Defendant relies on a more recent decision of the Civil [*2]Court, Richmond County,^[FN3] which distinguished Smithtown Gen. Hosp. on the grounds that it involved several different assignors, and that the Insurance Department has promulgated an opinion letter in which it opines that the $850 limitation applies per assignor. Because the instant dispute involves only one assignor, defendant argues that this court should give deference to the Insurance Department’s opinion letter and should follow Marigliano, not Smithtown Gen. Hosp.

While the court would agree that it ought to give some deference to the opinion of the Insurance Department in interpreting its own regulations, the court is not obliged to follow that opinion if there are good reasons not to do so. The court is obliged to follow the opinion of the governing Appellate Division until such time as it overrules its own precedent, particularly when there appears to be no good reason to overrule that precedent.

The court is concerned that the Insurance Department may have given inadequate consideration to the practical consequences on the court system if its opinion letter were to be followed by the courts. If attorney’s fees are limited to $850 per assignor in each action, then there is an incentive for medical suppliers holding multiple claims from the same assignor to file those claims as separate actions so that they can recover $850 in attorney’s fees in each action. Such a multiplicity of actions runs contrary to the principle of judicial economy, and would produce a lot of unnecessary paper and fees.

The insurance regulations provide for a limit of $850 per dispute. As far as this court is concerned, a “dispute” arises each time a claim is denied by an insurer. A medical provider ought not to be penalized for promoting judicial economy by consolidating a number of “disputes” (i.e., causes of action) into one civil action. If the Insurance Department really means for its regulations to be interpreted to apply per assignor or per action, it ought to say so clearly in the regulations after a proper rule-making process, not by opinion letter.

In the meantime, the court follows the rule in Smithtown Gen. Hosp. (supra) and modifies its prior order to the extent of clarifying that the $850 limitation on attorney’s fees applies to each cause of action. Defendant’s motion to the contrary is denied. Insofar as that motion pertains to other issues, the court finds them to be de minimis. Plaintiff may enter judgment accordingly for any amounts that remain unpaid. All stays in the order to show cause are vacated.

Footnotes

Footnote 1: Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co., 207 AD2d 338 (2d Dept 1994).

Footnote 2: The predecessor section did not differ in any material way from the current regulation. It provided, in pertinent part, as follows: “For all other disputes subject to AAA and IDA arbitrations, . . . the attorney’s fee shall be limited as follows: 20 percent of the amount of first-party benefits, plus interest thereon, awarded by the arbitrator or court, subject to a maximum fee of $850” (11 NYCRR 65.17 [b] [6] [v]).

Footnote 3: Marigliano v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 1079 (2006).

[*1]

District Court of Nassau County, First District, March 30, 2007

APPEARANCES OF COUNSEL

Michael S. Nightingale, Glen Cove, for defendant. Friedman, Harfenist, Langer & Kraut, Lake Success, for plaintiff.

OPINION OF THE COURT

Gary F. Knobel, J.

Motion by defendant for an order directing (1) plaintiff to produce for deposition “a person with personal knowledge of the justification and the necessity of the services rendered to plaintiff in this claim, along with the complete medical file for this patient within twenty days,” or (2) dismissing plaintiff’s complaint for its willful failure to appear for depositions, is denied in its entirety.

The issue presented on this motion has apparently not been reported in official or unofficial reporters (see, Ostia Med. v Government Empls. Ins. Co., 1 Misc 3d 907[A], 2003 NY Slip Op 51560[U] [2003]; cf. Metropolitan Radiological Imaging v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 675 [2005]): whether a radiological medical provider, who seeks to recover no-fault benefits provided to a patient/assignor based upon a referring physician’s prescription, must produce for its deposition an individual with personal knowledge of the medical necessity for the radiological scans or X-rays it performed. This court answers the question in the negative, and holds that the defendant’s remedy in this instance is to depose the patient/assignor’s nonparty referring, or treating, physician.

This is an action to recover first-party no-fault benefits by plaintiff, a diagnostic radiology company, for various services rendered to its assignor pursuant to a prescription given by the assignor’s treating physician. Plaintiff maintains that it did not diagnose, treat or otherwise examine the patient/assignor. The defendant denied plaintiff’s claim based upon a peer review doctor’s determination that the brain magnetic resonance imaging (MRI) scan performed on March 31, 2005, the lumbar MRI performed on May 5, 2005, the cervical MRI performed on May 10, 2005, and the right shoulder MRI performed on May 13, 2005 were not medically necessary (see, A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 7 Misc 3d 132[A], 2005 NY Slip Op 50605[U] [2005]).

Defendant contends that the plaintiff failed to comply with defendant’s “Notice To Take Deposition” dated July 24, 2006 which states in pertinent part

“that pursuant to CPLR Art. 31, the testimony upon oral examination of a person from plaintiff with firsthand knowledge of the services rendered and with firsthand knowledge of the [*2]justification for the services in this action, including but not limited to physicians, medical providers, office staff, billing manager, plaintiff’s alleged assignor, and all other necessary persons as adverse parties will be taken before a Notary Public.”

The notice further states

“that said person to be examined is required to produce at the examination the following: Plaintiff’s complete no-fault file for this patient, including any and all papers, prescriptions, wholesale invoices, records, medical reports, X-rays, MRI films or any other form of photograph or films, as well as any physical examination reports or other documents that may be relevant to the issues of necessary of supplies or treatment rendered, in order to establish proof of claim.”

Plaintiff’s explanation for not complying with defendant’s notice is that it did not have a physician, “with firsthand knowledge,” who could testify about the medical necessity to conduct the particular MRI scans on plaintiff’s assignor since the plaintiff did not, nor was it required to, conduct an independent medical examination of that person. In its opposition to the motion at bar, the plaintiff relies on Long Is. Radiology v Allstate Ins. Co. (12 Misc 3d 1167[A], 2006 NY Slip Op 51090[U], *5, revd 36 AD3d 763 [2007]), wherein the trial court stated that “[t]he prescription establishes medical necessity for the purpose of the radiologist.”

In support of its argument that its “Notice to Take Deposition” must be fully enforced, especially since the plaintiff did not object until now, the defendant relies on the Civil Court, Queens County, case of Albatros Med. v Government Empls. Ins. Co. (196 Misc 2d 656, 657 [2003]), where the court held that the defendant insurance company is “entitled to depose plaintiff to discover the basis upon which plaintiff determined that treatment was necessary.” However, the plaintiff medical provider in Albatros was not a radiology facility but apparently the office of the assignor’s treating physicians. The defendant also relies on the Appellate Term, Second Department, decision in West Tremont Med. Diagnostic, P.C. v GEICO Ins. Co. (13 Misc 3d 131[A], 2006 NY Slip Op 51871[U], *2), which held that “[w]here the defendant insurer presents sufficient evidence to establish a defense based upon the lack of medical necessity, the burden shifts to the plaintiff which must then present its own evidence of medical necessity . . . .” However, defendant’s reliance on West Tremont is misplaced since the Appellate Term was not concerned with the deposition of a plaintiff medical provider but with the shifting evidentiary burdens at trial pertaining to the issue of lack of medical necessity (see, James M. Ligouri Physician, P.C. v State Farm Mut. Auto Ins. Co., 15 Misc 3d 1103[A], 2007 NY Slip Op 50465[U]; Nir v Allstate Ins. Co., 7 Misc 3d 544 [2005]). Moreover, the West Tremont court further held that the trial court or jury can accept or reject the defendant insurer’s defense of “no medical necessity,” whether contradicted or not by plaintiff.

The purpose of article 31 of the CPLR is to provide

“full disclosure of all [evidence] material and necessary in the prosecution or defense of an action, regardless of the burden of proof, by . . . a party or the officer, . . . agent or employee of a party . . . [and] any other person, upon notice stating the circumstances or reasons such disclosure is sought or required” (CPLR 3101 [a] [1], [4]).

“The words ‘material and necessary’ [have been held] to require disclosure, upon request, of any facts bearing on the controversy which will [*3]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 Publ. Co., 21 NY2d 403, 406 [1968]; see, Andon v 302-304 Mott St. Assoc., 94 NY2d 740, 746 [2000].) Although the disclosure provisions of CPLR article 31 are to be construed liberally, the scope of permissible discovery is not unlimited since the trial court is invested with broad discretion to (a) supervise discovery, to (b) limit or regulate, at any time on its own initiative, the use of any disclosure device in order to prevent abuse, prejudice or unreasonable annoyance, and to (c) determine what is “material and necessary” as that phrase is used in CPLR 3101 (a) (see, Auerbach v Klein, 30 AD3d 451, 452 [2006]; Smith v Moore, 31 AD3d 628 [2006]; Matter of Andrew Carothers, M.D., P.C. v Insurance Cos. Represented by Bruno, Gerbino & Soriano LLP, 13 Misc 3d 970, 974 [2006]; CPLR 3103 [a]).

Here the defendant has failed to establish, either through another discovery device or other evidence, that any of the plaintiff’s physicians or employees would be in the extraordinary position of possessing personal knowledge bearing on the defense that the MRI scans conducted on plaintiff’s assignor were not medically necessary (compare, Fronczak v Zizzi, 295 AD2d 985, 986 [2002]). The Appellate Division, Second Department, recently held that the defendant insurer is not precluded from asserting and proving this defense against radiologists who accept assignments of no-fault benefits (Long Is. Radiology v Allstate Ins. Co., 36 AD3d 763, 765 [2007]). The defendant’s more appropriate avenue to pursue in seeking discovery on this issue, is to seek the deposition of the nonparty physician who prescribed the various MRI scans. Here, the defendant’s “Notice to Take Deposition” is too broad since it directs the plaintiff to produce a person to contest the defense to be offered by the defendant insurer at the trial, regardless of whether that person is independent of, and not an employee or agent of, the plaintiff (see generally, Dutch Trading Corp. v Centennial Ins. Co., 39 AD2d 691 [1972]; Buy For Less Wine & Liqs. v Commercial Union Ins. Co., 63 AD2d 976 [1978]). The principle that the “assignee ‘stands in the shoes’ of an assignor” should not be construed to mean that it is the plaintiff radiologist’s burden to produce at its deposition the nonparty who might possess information on the medical necessity for the prescribed radiological imagings. The defendant’s notice also erroneously requires the plaintiff to produce records and reports of other persons and companies.

Accordingly, despite the fact that plaintiff failed to seek timely a protective order pursuant to CPLR 3103 or 3122, the defendant’s notice to take deposition is palpably improper and is stricken (see, Spancrete Northeast v Elite Assoc., 148 AD2d 694, 695 1989]), without prejudice to the service of a proper notice that seeks the deposition of an individual with personal knowledge of plaintiff’s claims, and not the justification and necessity for the services rendered by plaintiff to its assignor.

[*1]

District Court of Nassau County, First District, February 23, 2007

APPEARANCES OF COUNSEL

Friedman, Harfenist, Langer & Kraut for plaintiff. Jaffe & Nohavicka for defendant.

OPINION OF THE COURT

Andrew M. Engel, J.

The plaintiff commenced this action to recover no-fault first-party benefits for medical services provided to its assignor on February 14, 2004, in the total sum of $1,791.73, which have not been paid. The action was commenced on or about June 6, 2005, and issue was joined on or about June 16, 2005. The plaintiff now moves for summary judgment. The defendant opposes the motion.

The plaintiff alleges that it properly served its bills dated February 27, 2004 upon the defendant and that same were received by the defendant on March 10, 2004. The defendant does not deny such receipt and admits same in its denial of claim, thereby curing any defect 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 plaintiff further alleges that the defendant’s denial, alleging lack of medical necessity, albeit timely, was improper. According to the plaintiff, the defendant’s denial was not on a properly prescribed denial of claim form and that the form used by the defendant omitted many fields, all in violation of 11 NYCRR 65-3.4 (c) (11) and 65-3.8 (c) (1).

The defendant argues that, because its denial was timely, the plaintiff will only be entitled to summary judgment if plaintiff eliminates the defense of lack of medical necessity as a matter of law, as part of its prima facie motion. According to the defendant, having failed to [*2]proffer competent medical evidence demonstrating that the subject medical services were necessary, the plaintiff’s motion must be denied.

To make out a prima facie case, the plaintiff must establish the proper submission of its claim and the carrier’s failure to either pay or issue a valid denial within 30 days. (11 NYCRR 65-3.8 [c]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664 [2d Dept 2004]; Westchester Med. Ctr. v AIG, Inc., 36 AD3d 900 [2d Dept 2007]; New York Craniofacial Care, P.C. v Allstate Ins. Co., 11 Misc 3d 1071[A], 2006 NY Slip Op 50500[U] [Civ Ct, Kings County 2006].) As will be discussed below, the plaintiff has established its prima facie right to the relief requested.

Although the timeliness of the defendant’s denial is admitted and not in issue, it must still be demonstrated that it was facially sufficient to have any effect. (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., supra; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43 [App Term, 2d & 11th Jud Dists 2004].)

In relevant part, 11 NYCRR 65-3.8 (c) (1) provides: “If the insurer denies a claim in whole or in part involving elements of basic economic loss or extended economic loss, the insurer shall notify the applicant or the authorized representative on the prescribed denial of claim form.” 11 NYCRR 65-3.4 (c) provides that Appendix 13 of the regulations includes the “prescribed claim forms that must be used by all insurers, and shall not be altered unless approved by the superintendent: . . . (11) Denial of Claim Form (NYS Form N-F 10).”

The defendant does not dispute the plaintiff’s documented allegations that its denial of claim was not on the prescribed form, was on a form disapproved for use by the New York State Insurance Department after May 1, 2003, and that the form used by the defendant redacted 15 areas of inquiry. Viewing this uncontroverted evidence in a light most favorable to the defendant (Corvino v Mount Pleasant Cent. School Dist., 305 AD2d 364 [2d Dept 2003]; Tassone v Johannemann, 232 AD2d 627 [2d Dept 1996]), the court finds no genuine issue of fact (Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395 [1957]; Rotuba Extruders v Ceppos, 46 NY2d 223 [1978]) to be resolved at trial concerning the propriety of the defendant’s denial, which is insufficient as a matter of law. (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., supra; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2d Dept 2005], lv denied 5 NY3d 713 [2005]; Spineamericare Med., P.C. v United States Fid. & Guar. Co., 12 Misc 3d 138[A], 2006 NY Slip Op 51293[U] [App Term, 9th & 10th Jud Dists 2006].)

The defendant’s argument that the plaintiff must still demonstrate the medical necessity for the services rendered is without merit. It is well established that:

“proof of a properly submitted statutory claim form, or its substantial equivalent, establishes a prima facie case of medical necessity on a plaintiff’s motion for summary judgment (Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]; see also Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists]). The burden then shifts to defendant who, if not precluded, may rebut the presumption and establish the lack [*3]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 (Amaze Med. Supply v Eagle Ins. Co. 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [2003], supra; see also Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [2003], supra).” (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 21-22 [App Term, 2d Dept 2004], affd 35 AD3d 720 [2d Dept 2006].) The defendant has offered nothing to substantiate its claim of lack of medical necessity.

It being uncontested, and determined as a matter of law, that the plaintiff’s claim was timely submitted and that the defendant failed to pay or properly deny that claim within 30 days, having failed to raise a claim of fraud or lack of coverage, the defendant is precluded from raising a defense to the plaintiff’s suit. (New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613 [2d Dept 1996]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11 [2d Dept 1999].)

Based upon the foregoing, the plaintiff’s motion for an order granting it summary judgment is granted; and the plaintiff is entitled to the entry of a judgment in the sum of $1,791.73, plus interest and attorney’s fees. The question has arisen, however, as to when interest begins to run. The plaintiff suggests interest accrues beginning 30 days after proper submission of its claims. The defendant suggests interest did not begin to accrue herein until the commencement of this action. Approximately 15 months of interest is in question.

There is no dispute that the applicable regulatory provisions governing an award of interest are 11 NYCRR 65-3.8 (a) (1); (c) and 65-3.9 (a) and (c). The dispute, as noted in Alpha Chiropractic P.C. v State Farm Mut. Auto Ins. (14 Misc 3d 673 [Civ Ct, Queens County 2006]), lies in how these provisions are to be applied. As Judge Bernice Daun Siegal noted therein, recent case law has been wrestling with the interpretation and interrelationship of these provisions, with differing results. (See East Acupuncture, P.C. v Allstate Ins. Co., 8 Misc 3d 849 [Civ Ct, Kings County 2005]; Tsai Chao v Country-Wide Ins. Co., 11 Misc 3d 1090[A], 2006 NY Slip Op 50794[U] [Nassau Dist Ct 2006].) This court will attempt to grapple with these issues as well.

As is relevant herein, 11 NYCRR 65-3.9 (a) unequivocally provides, “(a) All overdue mandatory and additional personal injury protection benefits due an applicant or assignee shall bear interest at a rate of two percent per month.” As applicable, 11 NYCRR 65-3.8 provides, “(a) (1) No-fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim . . . (c) Within 30 [*4]calendar days after proof of claim is received, the insurer shall either pay or deny the claim in whole or in part.” Reading these two subdivisions together, it has been held that a claim is “overdue” when the carrier has failed to either pay or properly deny the claim within 30 days of its receipt. (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664 [2d Dept 2004]; New York Craniofacial Care, P.C. v Allstate Ins. Co., 11 Misc 3d 1071[A], 2006 NY Slip Op 50500[U] [Civ Ct, Kings County 2006].) It is worth noting, at this point, the distinction between a claim which is properly denied, as opposed to one which is simply denied.

The aforesaid sections are internally consistent and unequivocal in their statement that interest begins to run if the payment of a claim is “overdue,” to wit: neither paid nor properly denied within 30 days, on the 30th day after the claim is submitted. The section which is causing all of the problems is 11 NYCRR 65-3.9 (c), which provides, in pertinent part:

“(c) If an applicant does not request arbitration or institute a lawsuit within 30 days after the receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations, interest shall not accumulate on the disputed claim or element of claim until such action is taken.” On a cursory reading, this section appears to be at odds with the preceding sections.

Judge Milagros A. Matos, in East Acupuncture, P.C. v Allstate Ins. Co., P.C. (supra), resolves this apparent conflict by noting that 11 NYCRR 65.15 (h) (3), now section 65-3.9 (c), makes specific reference to “an applicant” whereas 11 NYCRR 65.15 (h) (1), now section 65-3.9 (a), makes specific reference to interest payable to “an applicant or assignee.” Applying “a basic principle of statutory construction that a court will not by implication read into a clause of a rule or statute a limitation for which . . . no sound reason [can be found] (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 458 [1980] [internal quotation marks omitted]),” and deferring to the “special competence and expertise [of the Superintendent of Insurance] with respect to the insurance industry” (8 Misc 3d at 853), Judge Matos held that 11 NYCRR 65.15 (h) (3) (section 65-3.9 [c]) does not apply to provider/assignees, but only to “applicants.”

As pointed out by Judge Anthony W. Paradiso in Tsai Chao v Country-Wide Ins. Co. (supra), and recently reiterated by the Appellate Division, Second Department, in Long Is. Radiology v Allstate Ins. Co. (36 AD3d 763 [2007]), however, an assignee has no greater rights than its assignor and “stands in the shoes” of its assignor. (Arena Constr. Co. v Sackaris & Sons, 282 AD2d 489, 489 [2d Dept 2001]; Dilon Med. Supply Corp. v Travelers Ins. Co., 7 Misc 3d 927 [Civ Ct, Kings [*5]County 2005].) As such, the assignee must be held to the same obligations and restrictions as its assignor, the “applicant.”

The above notwithstanding, this court must nevertheless respectfully disagree with Judge Paradiso’s application of these apparently conflicting regulations. The court in Chao held that the restrictions of section 65-3.9 (c) apply to all claimants because to rule otherwise “encourages delayed suits and thrusts an unjustified financial burden on insurance companies who are forced to pay years worth of punitive interest payments that are eventually reflected in higher insurance premiums.” (11 Misc 3d 1090[A], 2006 NY Slip Op 50794[U], *3 [2006] [citation omitted].) This latter argument, however, is directly contradicted by 11 NYCRR 65-3.9 (f), which explicitly provides, “An insurer may not include in its ratemaking calculations any interest paid on an overdue claim.” Moreover, the interpretation of these regulations applied in Chao overlooks appellate authority which holds that interest accrues on all “overdue” payments, those not made within 30 days after a proper demand, without regard to when suit is commenced. (Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co., 207 AD2d 338 [2d Dept 1994]; Hempstead Gen. Hosp. v Insurance Co. of N. Am., 208 AD2d 501 [2d Dept 1994]; New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492 [2d Dept 2006]; St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [2d Dept 1995].)

This court believes there is a third interpretation to be given to these regulations, as proffered by the plaintiff herein and as alluded to by Judge Siegal in Alpha Chiropractic P.C. v State Farm Mut. Auto Ins. (supra), which meets the stated objectives of the statutory no-fault scheme, encouraging prompt resolution of and compensation for losses incurred by accident victims (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]), without rewarding a dilatory assignee with a windfall of interest or rewarding a dilatory insurance company which has failed to pay or properly deny a claim, by delaying the accrual of interest.

As the court pointed out in Alpha Chiropractic P.C. v State Farm Mut. Auto Ins. (14 Misc 3d at 676, supra), “the patently clear and unambiguous language in section 65-3.9 (c) referring to ‘the receipt of a denial of claim form’ [is] a key element in determining the date of accrual thereunder.” Significantly, the defendant therein never issued a denial; and, based thereon, Judge Siegal found the defendant’s argument that interest does not accrue until the commencement of arbitration or suit to be “totally without merit” (id.). The same must be said of denials, such as the one herein, which, although timely served, are patently invalid on their face. Distinguished from such denials, however, are denials which are timely and properly stated, e.g., a denial in proper form, based on the alleged lack of medical necessity, which sets forth a factual basis sufficient to establish, prima facie, the absence of medical necessity. (See Amaze Med. Supply Inc. v Allstate Ins. Co., 12 Misc 3d 142[A], 2006 NY Slip Op 51412[U] [App Term, 2d & 11th Jud Dists 2006] [proper denial [*6]defeated provider’s motion for summary judgment and defendant permitted to proceed with defense]; compare, Park Neurological Servs. P.C. v GEICO Ins., 4 Misc 3d 95 [App Term, 9th & 10th Jud Dists 2004] [defendant failed to set forth factual basis for alleged lack of medical necessity precluding the defendant from asserting such defense and mandating summary judgment for the plaintiff].)

Based upon all of the foregoing, it is the holding of this court that, in accordance with the unambiguous language of 11 NYCRR 65-3.9 (a) and 65-3.8 (a) and (c), interest on overdue payments, those where there is less than full payment and no valid denial issued within 30 days of receipt of the claim, shall run from 30 days after receipt of the claim. (Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co., supra; Hempstead Gen. Hosp. v Insurance Co. of N. Am., supra; New York & Presbyt. Hosp. v Allstate Ins. Co., supra; St. Clare’s Hosp. v Allstate Ins. Co., supra.) In all other cases, where the carrier has issued a proper and timely denial establishing a prima facie defense to the claim, interest shall run from the institution of arbitration or suit, if no such action is taken within 30 days after the plaintiff’s receipt of the denial of claim, in accordance with 11 NYCRR 65-3.9 (c). In making this distinction, the court notes that subdivision (a) makes specific reference to “[a]ll overdue” payments, whereas subdivision (c) specifically omits such language.

The court believes that this dichotomy is not only mandated by the clear and specific language of the regulations, but is consistent with and promotes the underlying purpose of the no-fault scheme to eschew treating claimants as adversaries and to provide for prompt payment or disclaimer of first-party benefits to injured individuals. (Dermatossian v New York City Tr. Auth., 67 NY2d 219 [1986]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., supra.) Claimants should not expect, and the regulations do not allow, that they will be rewarded with a windfall of accumulating interest, in the face of a timely and valid denial, by delaying the prosecution of their claims. By the same token, insurance companies should not be heard to complain that interest will accumulate against them where they have failed, and continue to fail, to pay or properly deny a claim. In this way, the regulatory scheme is designed to provide incentive to both sides to administer and prosecute claims in a timely fashion.

Finally, the defendant’s argument that the total attorney’s fee herein should be no more than $850 is mooted by the fact that the plaintiff concedes that under any method of calculation the fee herein will not exceed $850.

Accordingly, the plaintiff’s motion for summary judgment is granted; and the plaintiff is entitled to the entry of a judgment in the principle sum of $1,791.73, plus interest at the rate of 2% per month compounded from April 9, 2004 and counsel fees in the sum of 20% of the principle award plus the interest thereon, but no more than $850. [*7]

All other matters not decided herein are hereby denied.

[*1]

District Court of Nassau County, First District, December 28, 2006

APPEARANCES OF COUNSEL

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

OPINION OF THE COURT

Gary F. Knobel, J.

The motion by the defendant for an order inter alia compelling the plaintiff to provide discovery responses is granted to the extent that (1) the plaintiff shall provide responses to all outstanding discovery demands by January 31, 2007, and (2) the parties shall appear for depositions in room 5 of the Supreme Court courthouse, 100 Supreme Court Drive, Mineola, New York, on or before February 28, 2007, at 9:30 a.m.; the plaintiffs shall be deposed first, to be immediately followed by an individual produced by the defendant with personal knowledge of the facts.

This is an action to recover $3,905.03 in no-fault benefits provided by the plaintiff to its assignor in the form of, inter alia, nerve conduction studies. The defendant concluded that these tests were medically not necessary and consequently refused to reimburse the plaintiff for the testing and services it provided to its assignor.

The defendant does not dispute that the plaintiff is entitled to disclosure of the assignor’s no-fault file which the defendant has in its possession since these records are material and necessary to the prosecution of plaintiff’s claim (see, Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 408 [1968]; Beutel v Guild, 5 AD3d 1087 [2004]; Scott v Albord, 289 AD2d 389 [2001]; Hinrichs v Tonnssen, 128 Misc 2d 196 [1985]). The defendant contends, however, that based upon this court’s holding in Westbury Med. Care, P.C. v Lumbermans Mut. Ins. Co. (5 Misc 3d 838 [2004, Asarch, J.]), it cannot produce the no-fault file without a valid authorization from the assignor complying with the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Notwithstanding this minor issue, the parties could not resolve their dispute over a narrow question which is discussed daily between practitioners in this field but apparently has not been officially reported upon in New York: does the plaintiff have to [*2]pay the defendant for the cost incurred by the defendant in copying its no-fault file? The defendant has demanded a $95 fee for copying the file even though it has not disclosed how many pages the file contains. The plaintiff’s attorney maintains that the plaintiff is entitled to have the file reproduced at no charge, arguing that “the only firm that requests a payment for the no-fault file is defendant’s counsel.” However, plaintiff’s counsel did not cite in his brief any analogous precedent which would directly support its argument. Plaintiff’s attorney also argues that if this court imposes a fee upon the plaintiff to obtain its assignors’ no-fault file “it will set a precedent on both the plaintiff’s and defendant’s bar to charge each other for the cost of reproduction of documents” (see, Fletcher v Atex Inc., 156 FRD 45, 50 n 4 [1994]).

The court has broad discretion to set the terms and conditions of discovery (Castagnazzi v Schlecker, 159 AD2d 533 [1990]). CPLR 3103 (a) permits a court to “make a protective order . . . regulating the use of any discovery device. Such order shall be designed to prevent unreasonable annoyance, expense . . . or other prejudice to any person.” A CPLR 3103 protective order is equally available in the District Court (as well as all lower courts) pursuant to section 1101 (c) of the Uniform District Court Act (and the applicable lower court act) (see, Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3103:6, at 560).

Appellate courts have required a party to pay a reasonable cost for the reproduction of medical records, regardless of whether a party or nonparty is in possession of those records (Colon v City of New York, 285 AD2d 523, 524 [2001] [defendants to reproduce plaintiff’s medical records at a cost to the plaintiff at 25c per page]; McCrossan v Buffalo Heart Group, 265 AD2d 875, 876 [1999] [nonparty health care provider cannot charge more than 75c per page for paper copies of records pursuant to Public Health Law § 18 (2) (e)]; Badach v Caggiano, 255 AD2d 919 [1998] [plaintiffs to pay for half the cost of obtaining duplicate copies of records and reports of treating and examining physicians which were acquired by the defendant through the authorizations provided by the plaintiffs]; Castagnazzi v Schlecker, 159 AD2d 533 [1990] [plaintiff to pay a reproduction fee of 25c per page plus $50 to the defendant for a duplicate copy of hospital records he obtained pursuant to the authorizations of the plaintiff]; Matter of McDonald v State Univ. of N.Y., Downstate Med. Ctr. [Univ. Hosp.], 129 AD2d 798 [1987] [petitioner must either pay the fee sought by the appellant for the reproduction of the medical records, or photocopy the record herself; if the latter option is chosen, she must pay a reasonable sum for the time spent by a hospital employee in supervising the copying]). Indeed, the rule in the Second Department—that “the party seeking discovery of documents . . . should pay the cost of their [reproduction]”—is based upon the principle that “each party should shoulder the initial burden of financing his own suit” (Rubin v Alamo Rent-A-Car, 190 AD2d 661, 663 [1993]; see also, Schroeder v Centro Pariso Tropical, 233 AD2d 314 [1996]; Lipco Elec. Corp. v ASG Consulting Corp., 4 Misc 3d 1019[A], 2004 NY Slip Op 50967[U] [2004]; Siegel, NY Prac § 353, at 578 [4th ed 2005]). However, the Legislature contemplated that the party who ultimately prevails on the merits is permitted at that later time to tax as disbursements the [*3]expenses incurred in connection with disclosure and recover them from the losing side (see, e.g., CPLR 8301 [a] [1], [9]; Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3103:5, at 559). The court can also exercise its protective powers under CPLR 3103 (a) in cases where there is a disparity in the parties’ economic resources, or where the expense of the disclosure greatly exceeds the small monetary recovery sought by the party (see, Connors, Practice Commentaries, supra at 559, 561).

After applying these principles to the facts and contentions at bar, the court concludes that the plaintiff has failed to demonstrate any basis upon which there should be a deviation here from the precedent and general rule in this department. Accordingly, the court directs the defendant to immediately inform the plaintiff’s attorney of the actual number of pages contained in the assignor’s no-fault file, and also directs the plaintiff to (1) provide the defendant’s attorney, by January 31, 2007, with a HIPAA authorization executed by plaintiff’s assignor (see, Westbury Med. Care, P.C. v Lumbermans Mut. Ins. Co., supra), and (2) exercise in writing to defendant’s attorney by January 31, 2007 four options: (a) to inspect the no-fault file at defendant’s counsel’s office and designate the pages to be reproduced at 25c per page, or (b) to inspect the no-fault file at the Supreme Court courthouse on the day designated for the depositions of the parties and photocopy in the courthouse the file or the designated portions thereof, or (c) to have the defendant photocopy the no-fault file at a cost to the plaintiff of 25c per page, and furnish the reproduced file to plaintiff’s attorney by February 7, 2007, or (d) to pay the defendant the sum of $95 to photocopy and reproduce the no-fault file.

District Court of Nassau County, First District

1761/06

La Sorsa & Beneventano

Morris, Duffy, Alonso & Faley

Randy Sue Marber, J.

The defendant, MVAIC, moves for summary judgment based upon the seventh and forty-sixth affirmative defenses contained in its answer. Specifically, the defendant argues that (1) there is no coverage with MVAIC because the plaintiff’s assignor has failed to qualify for MVAIC no-fault benefits pursuant to Insurance Law Article 52; and (2) the plaintiff’s claim may not be maintained because of the statute of limitations. The plaintiff opposes the motion and the defendant submits a reply.^[FN1]

The defendant claims the plaintiff’s assignor, Jonathan Laul, was a passenger of a motor vehicle owned by Crescencio Canela Company on October 11, 2000, the date of loss. On January 17, 2006 the instant action was commenced to recover $3,602.00 in unpaid medical bills in this Court by the filing of a summons with endorsed complaint (UDCA §403). The plaintiff alleges that it rendered services to its assignor on various dates in October, November and December of 2000 and January and February of 2001. The plaintiff goes on to claim that it [*2]timely submitted bills and claims to the defendant and those claims were neither paid nor denied in accordance with New York State no-fault regulations.

Generally speaking, to obtain summary judgment it is necessary that the movant establish its claim or defense by the tender of evidentiary proof in admissible form sufficient to warrant the Court, as a matter of law, in directing judgment in its favor (see, CPLR §3212[b]). The burden then shifts to the non-moving party. To defeat the motion for summary judgment, the opposing party must come forward with evidence to demonstrate the existence of a material issue of fact requiring a trial (see, CPLR §3212[b]; see also, Zuckerman v. City of New York, 49 NY2d 557, 427 NYS2d 595 [1980]). However, a movant’s failure to make such a prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers (Alvarez v. Prospect Hosp., 68 NY2d 32, 508 NYS2d 923 [1986]).

The defendant alleges that coverage is nonexistent with MVAIC as Mr. Laul failed to qualify for MVAIC no-fault benefits. In particular, the defendant argues that because the assignor has failed to provide proof of New York residency. Moreover, the defendant submits that the statute of limitations to become qualified has expired. In support of this proposition, the defendant annexes the affidavit of Laura Figueroa, a Qualifications Examiner with the defendant [see, Exhibit “E”]. The affidavit sets forth the defendant’s normal business practices and patterns of communicating with applicants. Ms. Figueroa states that on June 27, 2001 a letter was sent to Mr. Laul’s attorney stating the defendant was unable to process the Notice of Intent to make a claim because he failed to prove residency or to provide a social security number. In addition, Ms. Figueroa noted that a telephone conversation ensued between the defendant and Mr. Laul’s attorney regarding the deficiencies of his application. Accordingly, the defendant has made out a prima facie showing of its entitlement to summary judgment as a matter of law.

In opposition, the plaintiff, in an effort to meet its burden of raising a triable issue of fact, asserts that it filed a Notice of Intention to make a claim with MVAIC within 180 days. The plaintiff applies the standard generally applied in Insurance Law Article 51 actions. In a no-fault insurance action, a medical provider must submit evidentiary proof that the appropriate claim forms were mailed, that the forms were received by the insurer and that the payment of no-fault benefits was overdue (see Mary Immaculate Hospital et al v. Allstate Insurance Company, 5 AD3d 742, 774 NYS2d 564 [2d Dept 2004]; see also 11 NYCRR §65-3.3[d]; §65-3.5[a]). However, here, prior to a review pursuant to Article 51, the plaintiff must first comply with Article 52 and the Notice of Claim requirement. The plaintiff does not address the issue of the failure of the assignee to provide MVAIC with proof of residency.

Statute of Limitations

The applicable statute of limitations is found in CPLR 214(2). CPLR 214(2) reads, in pertinent part, as follows: [*3]

“an action to recover upon a liability, penalty or forfeiture created or imposed by statute except as provided in sections 213 and 215; … “

The Court of Appeals has held that a three (3) year statute of limitations period is applicable for a medical provider seeking to recover unpaid first party no fault insurance from MVAIC. The reason being is that MVAIC’s obligation to pay the claimants’ first party benefits and its entitlement to reimbursement are created or imposed by statute, but for which they would not exist (see, MVAIC v. Aetna Casualty & Surety Company, 89 NY2d 214, 652 NYS2d 584 [1996]; Line Chiropractic, P.C. v. Motor Vehicle Indemnification Corporation, 6 Misc 3d 1032[A], 800 NYS2d 347 [Civil Court Bronx 2005]).

In the instant case, the defendant’s claims interposed on or about October, November and December, 2000 and January 6, 13, 19, 2001 are dismissed as untimely. The remaining claims dated January 27, 2001 and February 10, 2001, although not denied for statute of limitation purposes as MVAIC concedes, are nonetheless dismissed on summary judgment.

Summary Judgment

The Motor Vehicle Accident Indemnification Corporation (MVAIC) was established to pay bodily injury damages and no fault benefits to qualified’ victims of motor vehicle accidents caused by uninsured motorists. In order to recover MVAIC benefits, the injured party must be eligible for MVAIC benefits, which requires that the party not have any other available insurance covering its claim and that the accident is of the nature contemplated by MVAIC. Upon proving that the claimant’s accident was of a type contemplated by MVAIC, the injured party must then be a “qualified person”, defined by MVAIC, as “… someone other than (1) an insured, or (2) the owner of an uninsured motor vehicle and his/her spouse when a passenger in such vehicle.”

Once a qualified person has complied with the requirements of Insurance Law Article 52, then that person will be considered a covered person and will be entitled to the rights that a person under Insurance Law Article 51 is entitled to regarding no-fault benefits.

The Court finds that complying with the “statutory requirement of timely filing a notice of claim must be established in order to demonstrate that the claimant is a covered person,’ within the meaning of the statute, entitled to recover no-fault benefits from the MVAIC” (see A.B. Med. Servs. PLLC v. Motor Veh. Acc. Indem. Corp., 2006 NY Slip Op 50139U, 2-3 (NY Misc 2006); Insurance Law §5221[b][2]; Ocean Diagnostic Imaging v. Motor Veh. Acc. Indem. Corp., 8 Misc 3d 137A, 803 NYS2d 19, 2005 NY Slip Op 51271U [App Term, 2d & 11th Jud Dists]). In the instant case, the plaintiff has failed to meet his burden in establishing the condition precedent, of qualifying as a covered person. Accordingly, MVAIC’s failure to timely deny plaintiffs’ claims does not preclude the dismissal of the plaintiffs’ causes of action based upon lack of coverage (A.B. Med. Servs. PLLC v. Motor Veh. Acc. Indem. Corp., 2006 NY Slip Op 50139U; see, Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195, 199-200, 681 NE2d 413, 659 NYS2d 246 [1997]). [*4]

Accordingly, the defendant’s motion for summary judgment is granted and the plaintiff’s complaint is dismissed.

So Ordered:

DISTRICT COURT JUDGE

Dated: December 5, 2006

cc:

Footnotes

Footnote 1:It should be noted that although the defendant references his statute of limitations argument in the notice of motion, it does not address the issue in the motion itself. It is only in the defendant’s reply that it raises these arguments for the first time. This is inappropriate and will not be considered by this Court (see, Matter of Zimmerman v. Planning Bd. of Town of Schodack, 294 AD2d 776, 742 NYS2d 431, lv denied 98 NY2d 612, 749 NYS2d 4 [3d Dept 2002]).