District Court of Suffolk County, Second District

BAC 4407-11

Plaintiff Attorney: Baker,Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth

Defendant Attorney: Short & Billy, P.C.

David A. Morris, J.

Upon the following papers numbered 1 to8read on the motion by defendant to strike the notice of trial and to compel discovery;and the cross-motion by plaintiff for a protective orderNotice of Motion and supporting papers1, 2Notice of Cross Motion and supporting papers4, 5Answering Affidavits and supporting papers7Replying Affidavits and supporting papersFiled papers; OtherExhibits- 3; 6; 8(and after hearing counsel in support of and opposed to the motion) it is,

ORDERED that this motion by the defendant to strike the notice of trial (22 NYCRR §212.17(c))

and to compel discovery (CPLR §3124) is granted. The plaintiff’s cross-motion for a protective order (CPLR §3103) is denied. The defendant has been served with a notice of trial although court records do not reflect the filing of a notice of trial with the clerk of the court. In the event that a notice of trial has in fact been filed with the court it will be deemed stricken as the motion is timely (22 NYCRR §212.17(c)) and the matter is not ready for trial as pre-trial disclosure has not been completed. In this regard the defendant’s motion papers include copies of various demands for disclosure, together with affidavits of service, to which the plaintiff has not responded. The plaintiff has not timely challenged the propriety of the demands for disclosure (see CPLR §3120 and §3122). In the absence of a timely objection the plaintiff is obligated to produce the information requested except as to matters which are palpably improper or privileged [*2](Radiology Today, P.C. v. GEICO General Ins. Co., 32 Misc 3d 4). It is well settled that fraudulently incorporated medical corporations are not entitled to reimbursement of no-fault medical benefits and such defense is non-waivable and may be asserted at any time (State Farm Mutual Auto Ins. Co. v. Mallela, 4 NY3d 313; Midwood Acupuncture, P.C. v. State Farm Mutual Auto Ins. Co., 14 Misc 3d 131(A)). The failure to state such a defense with particularity in the answer does not preclude the defendant from seeking pre-trial disclosure related thereto (Medical Polis, P.C. v. Progressive Ins. Co., 35 Misc 3d 139(A); Lexington Acupuncture, P.C. v. General Assurance Co., 35 Misc 3d 42). The defendant has put forth sufficient factual allegations, such as the federal indictment of plaintiff’s principle owner concerning fraudulent medical clinics, warranting such manner of disclosure herein. The defendant is not required to demonstrate good cause for such disclosure as it is material and necessary to its defense (One Beacon Ins. Group v. Midland Med. Care, P.C., 54 AD3d 738). In light of the foregoing the defendant is entitled to an examination before trial of plaintiff’s principle owner (see Medical Polis, P.C. v. Progressive Ins. Co., supra; New Era Acupuncture, P.C. v. State Farm, 24 Misc 3d 134).

Accordingly, the plaintiff is hereby directed to serve full and complete responses to all of the defendant’s demands for disclosure within thirty (30) days from the date of mailing of this order by the court. The plaintiff shall produce its principle owner for an examination before trial within thirty (30) days after serving responses to the demands for disclosure at a time, date and place mutually convenient to the parties.

Dated:June 5, 2012J.D.C.

[*1]

District Court of Suffolk County, Third District, December 19, 2011

APPEARANCES OF COUNSEL

Law Offices of Gabriel & Shapiro, LLC, Wantagh (Jason Moroff of counsel), for plaintiff. Mura & Storm, PLLC, Buffalo (Scott D. Mancuso of counsel), for defendant.

{**35 Misc 3d at 162} OPINION OF THE COURT

C. Stephen Hackeling, J.

Preferred Mutual Insurance Company (hereafter Preferred) makes an application to this court seeking either a venue transfer pursuant to CPLR 510 (3) or dismissal of the plaintiff, Scott Croce, D.C.’s (hereafter Croce) complaint pursuant to CPLR 327 (a). For the reasons hereafter stated, the application to dismiss this complaint is granted with leave to recommence same in an alternative forum subject to the provisions of CPLR 205 (a).

The Facts

In advancing its “forum non conveniens” dismissal motion, Preferred asserts that the undisputed relevant facts are that Preferred issued the subject no-fault automobile insurance policy in Buffalo, New York to a resident of Buffalo, New York. The subject accident occurred in Buffalo, New York. The injured{**35 Misc 3d at 163} party resided in Buffalo, New York, and following the accident, the injured party was treated in Buffalo, New York. The injured party was examined via an independent medical examination in Williamsville, New York (a Buffalo suburb). The plaintiff treated the injured party in Buffalo, New York. Preferred denied the bills at issue by sending denials to the plaintiff at a Buffalo, New York address, and such denials were based on the opinion of a medical doctor located in Buffalo, New York. Croce commenced this action pursuant to UDCA 404 as Preferred maintains independent insurance business agents who conduct business on its behalf within the District. Preferred does not maintain a formal business office in the District and was served with the summons care of the New York State Insurance Department at 25 Beaver Street, New York, New York.

Issues Presented

Does the Suffolk County District Court have the power to transfer or dismiss an action between two New York State residents because it may be better litigated at a city court in Buffalo, New York?

Discussion

Preferred’s application is two pronged and seeks either dismissal pursuant to CPLR 327 or a transfer of venue pursuant to CPLR 510 to Erie County, New York.^[FN*] The court will deal summarily with the CPLR 510 transfer request and deny same as it is statutorily prohibited from ordering a transfer outside its geographic jurisdiction by UDCA 306. (See Barco Auto Leasing Corp. v Wolf, 179 Misc 2d 815 [App Term, 2d Dept, 9th & 10th Dists 1999]; Personnel Career Servs. v Pizza Huts of Dutchess County, 149 Misc 2d 729 [App Term, 1st Dept 1991].) Section 101 of the CPLR expressly subordinates its general provisions to a conflicting alternative specific statute as contained in the UDCA. (See A&S Med. v ELRAC, Inc., 184 Misc 2d 257 [Civ Ct, Queens County 2000]; Neurologic Servs. v American Tr. Ins. Co., 183 Misc 2d 496 [Civ Ct, Bronx County 1999].) Even{**35 Misc 3d at 164} absent a conflict with the UDCA, section 510 contemplates transfers within a court’s geographic jurisdiction. Erie County is outside this court’s territorial jurisdiction.

Forum Non Conveniens

The request for the invocation of the doctrine of forum non conveniens (hereafter FNC) is more problematic. As identified in several legal treatises, there presently exists split authority as to whether CPLR 327 FNC is available to inferior courts of limited jurisdiction such as City Civil Court and the various District Courts. (Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 29A, CCA 301, at 100; Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 29A, UDCA 202, at 463; Siegel, NY Prac § 28 [4th ed]; Siegel, Civil Court Forum non Conveniens, 55 Siegel Prac Rev 3 [1997]; 1 Carmody-Wait 2d, NY Prac § 2:64, at 112; Haig, Commercial Litigation in NY Courts 3d § 3:27 [1 West’s NY Prac Series 2010]; see also Idrobo v Martin, 2003 NY Slip Op 51387[U] [2003].)

Judge Ritholtz of New York City Civil Court has opined that the applicability of CPLR 327 to inferior courts is questionable as its purview has historically been limited to Supreme Court practice; “enabling it to refuse to entertain out-of-State actions, involving nonresidents.” (Suffolk Chiropractic Ctr. v GEICO Ins. Co., 171 Misc 2d 855, 857 [Civ Ct, Queens County 1997]; see also generally Varkonyi v S.A. Empresa De Viacao Airea Rio Grandense [Varig], 22 NY2d 333 [1968].) This reasoning is consistent with the common law which existed prior to 1972.

FNC is a common-law doctrine which until 1952 allowed New York courts to abstain from entertaining personal injury cases involving nonresidents. (Bata v Bata, 304 NY 51 [1952].) As a result of the Bata decision, the Court of Appeals determined it had the authority and inclination to change the FNC common-law doctrine to allow for its utilization in contract and other cases. The one limiting prohibition to this equitable doctrine was the inflexible rule that FNC could not be invoked if a party was a New York resident. The Court of Appeals again amended and expanded the doctrine in January 1972 by opining that a party’s New York residency was not an absolute bar to FNC invocation (i.e., it was to be only one of many [*2]considerations). (Silver v Great Am. Ins. Co., 29 NY2d 356 [1972].) It is undisputed that the common law, including the Bata and Silver modifications, was enacted into statutory form in 1972 via the enactment of CPLR 327 which provides:{**35 Misc 3d at 165}

“(a) When the court finds that in the interest of substantial justice the action should be heard in another forum, the court, on the motion of any party, may stay or dismiss the action in whole or in part on any conditions that may be just. The domicile or residence in this state of any party to the action shall not preclude the court from staying or dismissing the action.”

CPLR 327 was intended by the Legislature to be only a codification of the Silver rule, and was confirmatory in nature of the common law and not innovative. (Siegel, NY Prac § 28 [4th ed].) The complication presented is the fact that CPLR 327 utilizes the generic word “court,” without limitation, and indicates that this court does have the authority to dismiss the subject action. The dilemma presented is how does this court reconcile this inconsistent language with the Legislature’s intention to only codify, not amend, the common law which was utilized previously only by New York’s original jurisdiction Supreme Courts.

In contrast to the line of reasoning that FNC is not available to inferior courts is the line of cases first reported in Suriano v Hosie, wherein courts have determined that FNC is available to District Courts. (59 Misc 2d 973 [Nassau Dist Ct 1969]; Roseman v McAvoy, 92 Misc 2d 1063 [Civ Ct, NY County 1978]; A&S Med. v ELRAC, Inc., 184 Misc 2d 257 [Civ Ct, Queens County 2000].) This court concurs that the Legislature did not intend to expand the common law when it enacted the 1972 codification.

The determinative fact herein is exactly what was the FNC common law in 1972? Judge Kelly in the A&S decision correctly points out that the Court of Appeals, in a one-sentence decision (decided June 1, 1972), reversed the First Department, Appellate Division (which had reversed a City Court) and did not challenge the use of FNC in sustaining a Civil County Court dismissal. (See Rafter v Newark Ins. Co., 30 NY2d 819 [1972].) While inconsistent with the pre-1972 common law, it appears that the Court of Appeals, several months prior to section 327’s statutory enactment, again modified and expanded it, much as the High Court did in its Bata (1952) and Silver (1972) decisions. All three of these common-law amendments were thereafter codified into section 327. The Legislature in enacting statutes is presumed to be acquainted with the common law. (Transit Commn. v Long Is. R.R. Co., 253 NY 345 [1930].) Statutes in derogation of the common law are strictly construed{**35 Misc 3d at 166} against change. (McKinney’s Cons Laws of NY, Book 1, Statutes § 301 [a]; see generally Bertles v Nunan, 92 NY 152 [1883]; Dollar Dry Dock Bank v Piping Rock Bldrs., 181 AD2d 709 [2d Dept 1992].) As such, the Legislature’s use of the generic word “court” in section 327 accurately codified the then existing 1972 FNC common law, which for several months had included inferior courts.

Having determined that the District Court has the discretionary authority to invoke the FNC doctrine; the court now turns to its appropriateness. The test to be applied is based in equity, is multipronged and is laid out in the Court of Appeals Bata and Silver decisions, as well [*3]as its decisions in Varkonyi v S.A. Empresa De Viacao Airea Rio Grandense (Varig) (22 NY2d 333 [1968]); and Martin v Mieth (35 NY2d 414 [1974]). In light of the undisputed facts presented, the court can think of no case under which a FNC dismissal by an inferior court would be more appropriate. Every single contact with this insurance dispute involves residents and actions occurring in Buffalo, New York. To not invoke FNC under these circumstances would effectively vitiate its purpose and existence.

Accordingly, Croce’s complaint is dismissed subject to the six months tolling provisions of CPLR 205.

Footnotes

Footnote *: The court notes that, although “lack of personam jurisdiction” is asserted as a affirmative defense in its answer, the defendant has not moved to challenge plaintiff’s assertion of long-arm presence jurisdiction in its present application. Subject to the possibility that this defense may have been waived, this court seriously questions the existence of personam jurisdiction. (See generally Diagnostic Rehab., Medicine Serv., P.C. v Republic W. Ins. Co., 2003 NY Slip Op 51458[U] [Civ Ct, Kings County 2003]; Mingmen Acupuncture Servs. v American Tr. Ins. Co., 183 Misc 2d 270 [Civ Ct, Bronx County 1999].)

District Court of Suffolk County, Third District

HUC 1503/2007

Rapuzzi, Palumbo & Rosenberger, P.C.

Jason Moroff, Esq.

Attorney for the Plaintiff

3361 Park Avenue

Wantagh, New York 11793

Bruno, Gerbino & Soriano, Llp

Adam D. Levine, Esq.

Attorney for the Defendant

445 broad Hollow road, Suite 220

Melville, New York 11747

C. Stephen Hackeling, J.

At a trial of the above captioned medical service provider “no-fault” action conducted June 17, 2010, neither side presented witnesses. Instead the plaintiff offered into evidence a Notice to Admit dated May 12, 2010 which asked the defendant to admit it received the attached claim and assignment for no-fault medical provider services for $3,485.00, that no verification of information was requested, and that payment was not made thereon. Thereafter, the plaintiff rested asserting the establishment of a prima facie cause of action pursuant to NY Ins. Law § 5106(a). The defendant asserts that the plaintiff cannot avail itself of the statutory NY CPLR 3123 admissions as it did respond to same. The defendant’s response to the Notice to Admit contained the same verbatim response to each of the forty questions which reads: “Defendant can [*2]neither admit nor deny this matter as it pertains to a material issue of fact that can only be resolved at the time of trial, and is therefore not the proper subject of a Notice to Admit.” It is the defendant’s contention that it need not produce a witness to establish its affirmative defense of lack of medical necessity as the plaintiff has not carried its burden of establishing a prima facie cause of action.

It is noted that the Appellate Courts are split on the availability of Notices to Admit to establish a medical provider no fault insurance claim. This court has previously decided that the Notice to Admit could be used to establish a NY Ins. Law § 5106(a) prima facie cause of action. Advanced Tempromandibular Disorder & Dental Surgery v. Progressive Northeastern Ins. Co., 27 Misc 3d 436 (Suf. Co. Dist. Ct. 2010) 896 NYS2d 830. Subsequent to that decision, the Appellate term of the Supreme Court, First Department has allowed no fault plaintiffs to establish their prima facie case via Sec. 3123 admissions and expressly found that facts such as receipt of a claim and the failure to respond or pay within 30 days were not legal conclusions which constitute inappropriate requests to admit. Central Nassau Diagnostic Imaging, P.C. v. Geico., 2010 NY Slip Op 20244 (App. Term, 1st Dept., 2010).

The plaintiff in this action seeks to push the envelope one step further by asking for a finding that a written timely inappropriate response similarly constitutes a statutory admission sufficient to establish a prima facie case without the need to call a witness.

The Notice to Admit is a procedural device used to narrow the disputed issues to be addressed at trial. See Hodes v. City of New York I, 165 AD2d 168, 566 NYS2d 611 (App. Div. 1st Dept. 1991). If a party declines to do anything in response to the Notice to Admit, the requested admissions are deemed admitted. The proper response as per CPLR Sec. 3123 is either an admission, a denial, or ” if the matters of which an admission is requested cannot be fairly admitted without some material qualification or explanation such party may, in lieu of a denial or statement, serve a sworn statement setting forth in detail his claim..”^[FN1] Unlike requests for written interrogatories where a party is permitted to object in lieu of responding (CPLR 3133 (a)), such a procedure is not authorized with a Notice to Admit. See Webb v. Tire and Brake Distributor, Inc., 13 AD3d 835, 786 NYS2d 636 (NYAD 3rd Dept. 2004), cited in Prime Psychological Serv. P.C. v. Auto One Insurance Co.,18 Misc 3d 1122(A) (NY Civ. Ct. 2008). If there is a request for an improper admission, the correct procedure is to seek a protective order, pursuant CPLR § 3103. See Saqiv v. Gamache, 26 AD3d 368 (N.Y.A.D. 2nd Dept. 2006).

The plaintiff s Notice to Admit has established its prima facie case that; (1) necessary billing documents were mailed to and received by insurer, and (2) that the payments of no-fault benefits was overdue. New York Insurance Law § 5106; See Countrywide Ins. Co. v. 563 Grand Medical, P.C., 50 AD3d 313 (NY AD 1st Dept. 2008). As the defendant has presented no testimony or alternative evidence to rebut the plaintiff’s case, this Court must enter judgment for [*3]the plaintiff in the sum of $3,485.00. The plaintiff shall settle judgment plus appropriate costs, interest and attorneys fees upon twenty (20) days notice.

___________________________

J.D.C.

Dated: June 23, 2010

Footnotes

Footnote 1: The assertion that a fact is too “material” to be admitted or denied does not qualify for this sworn “explanation” exemption.

[*1]

District Court of Suffolk County, Third District, April 7, 2010

APPEARANCES OF COUNSEL

Law Offices of Karen C. Dodson, Melville, for defendant. Rapuzzi, Palumbo & Rosenberger, P.C., Wantagh, for plaintiff.

{**27 Misc 3d at 929} OPINION OF THE COURT

C. Stephen Hackeling, J.

Ordered that the defendant’s application for summary judgment is granted in part and denied in part. This action is for medical provider first-party no-fault benefits. Plaintiff raises the threshold issue of whether this application is timely, and asserts that it is procedurally barred as it was made later than 120 days following the filing of the notice of trial.

Summary Judgment Procedural Distinction Supreme Versus District Court

The 120-day requirement is found in CPLR 3212 (a). Pursuant to this statute, applications for summary judgment relief must be made no later than 120 days after filing of the “note of issue,” unless the court has set an earlier date. The note of issue is part of the calendar practice of the supreme and county courts. It is not utilized in District Court practice, in which a “notice of trial” is employed (compare CPLR 3402 and 22 NYCRR 202.21, with UDCA 1301 and 22 NYCRR 212.17 [a]). In enacting the 120-day requirement for summary judgment motions in supreme and county courts, the legislature chose not to enact an amendment to the Uniform District Court Act or to otherwise expressly provide that the reference in CPLR 3212 (a) to the note of issue should be treated as a reference to the notice of trial. The legislature’s election to differentiate between a “notice of trial” and a “note of issue” in fashioning its 120-day section 3212 (a) limitation must be respected. In construing New York’s statutes, the legislature has proscribed that the court follow the Latin maxim “expressio unius est exclusio alterius,” i.e., “where a law expressly describes a particular act . . . an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted or excluded.” (McKinney’s Cons Laws of NY, Book 1, Statutes § 240; see also Doyle v Gordon, 158 NYS2d 248 [Sup Ct, NY County 1954].)

Additionally, although UDCA 1001 reads, in part, that “[m]otion practice in [district] court, including time provisions for the making . . . of motions . . . shall be governed by the CPLR,” this provision is not a basis for applying the 120-day{**27 Misc 3d at 930} time limitation of CPLR 3212 (a) to summary judgment motions in this court, as the latter statute only refers to the note of issue. If ever UDCA 1301 and the court rules are amended to require a note of issue instead of a notice of trial, the UDCA 1001 120-day limitation found in CPLR 3212 (a) will apply here. At present, however, the legislature appears to have deemed the litigation delays once existing in supreme and county court calendar practice (which it addressed in 1996 by adding the 120-day limitation to CPLR 3212 [a]) to be of insufficient magnitude in District Court to apply the limitation here. The court is also persuaded by Judge Straniere’s opinion in Panicker v Northfield Sav. Bank (12 Misc 3d 1153[A], 2006 NY Slip Op 50880[U] [Civ Ct, Richmond County 2006]), holding that the 120-day limitation of CPLR 3212 (a) is inapplicable to Civil Court summary judgment motions. Accordingly, the defendant’s application is not barred as untimely, and the court will consider it upon the merits.

Summary Judgment on the Merits

The proponent of an application for summary judgment must make a prima facie showing of its entitlement to judgment as a matter of law. Should it fail to do so, its motion must be denied. However, once it makes a prima facie showing, but not until then, the party opposing summary judgment must show the existence of factual issues requiring trial. If the opposing party makes this showing then, again, the motion must be denied. When the opposing party has not shown the existence of factual issues for trial, the proponent having established its prima facie case, summary judgment in favor of the proponent is appropriate (see CPLR 3212 [b]). [*3]

Contrary to plaintiff’s position, the affidavits of defendant’s litigation examiner and mail service establish that defendant made partial payment and partial denial of plaintiff’s claim in timely fashion. Taken together, these affidavits create a presumption of mailing by “proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed.” (See Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001].) The plaintiff has submitted no evidentiary proof to rebut this presumption.

Plaintiff, a health services provider, rendered his services to his assignor over 44 days from January 26, 2000 to May 23, 2000. The dispute with respect to the partial denial of much of plaintiff’s claim concerns defendant’s application of ground rule{**27 Misc 3d at 931} 11 of the medical fee schedule, which limits the payment for multiple procedures and modalities performed on the same day to the services plaintiff billed using current procedural terminology (CPT) codes 97010, 97032 and 97250. Defendant has made a prima facie showing that its interpretation and application of rule 11 is correct, and in its opposition plaintiff does not offer an adequate challenge to defendant’s interpretation. Defendant’s motion for summary judgment dismissing these portions of plaintiff’s claims is granted.

Defendant also disallowed a portion of plaintiff’s claims for March 13, 2000 and April 17, 2000 services under CPT code 99204 (code used by defendant in denying claim) or 99205 (code used by plaintiff in submitting claim). Whichever code is correct, both of them apply to office or other outpatient visits of new patients for purposes of evaluation and management. As the assignor was not a new patient, the denial of these portions of plaintiff’s claim was proper. The defense application for summary judgment dismissing these items of plaintiff’s claim is granted.

Part of plaintiff’s claim for January 31, 2000 was under CPT code 99213. Defendant has demonstrated that the computation of the amount for the service provided was incorrect, that the amount it paid was the correct amount, and that the plaintiff has not challenged defendant’s showing. Summary judgment dismissing this part of plaintiff’s claim is also granted.

The remaining disputes concern parts of the claim for services provided on January 27, 2000 and May 23, 2000. For January 27, 2000, plaintiff submitted its claim under CPT code 99244, which applies to office consultations. Defendant deemed the correct CPT code to be 99204, which applies to office visits, and made partial payment which accorded with the amount payable using CPT code 99204. Similarly, for May 23, 2000, plaintiff submitted a claim using CPT code 99214, which is for office or other outpatient visits that involve medical decisionmaking of moderate complexity. Defendant based its payment on CPT code 99213, for office or other outpatient visits involving medical decisionmaking of low complexity.

The defendant has submitted the affidavit of its certified professional coder in support of its application. In explaining her determination that CPT code 99204 should apply instead of CPT code 99244, the coder makes a conclusory allegation that “[b]ased on the submitted documentation, the 99204 code better reflects the service rendered” (affidavit of Jeanne [*4]MacLeod{**27 Misc 3d at 932}-Lang, Dec. 1, 2009, ¶ 12). Nothing is offered to explain her conclusion that 99204 is the better code. No mention is made at all of the determination to apply CPT code 99213 instead of 99214 for the May 23, 2000 claim. Defendant has failed to establish a prima facie case that it properly paid plaintiff for these two services, and so summary judgment with respect to them is inappropriate (CPLR 3212 [b]).

Accordingly, defendant’s motion for summary judgment is granted except for the following portions of plaintiff’s claim, described as they appear on plaintiff’s claim forms: (1) January 27, 2000, office, initial consultation visit, 99244, $182.18, and (2) May 23, 2000, office, follow-up visit, 99214, $71.

[*1]

District Court of Suffolk County, Third District, February 17, 2010

APPEARANCES OF COUNSEL

Rapuzzi, Palumbo & Rosenberger, P.C., Wantagh (Jason A. Moroff of counsel), for plaintiff. Carman, Callahan & Ingham, LLP, Farmingdale (Evelina K. Popijakowska of counsel), for defendant.

{**27 Misc 3d at 437} OPINION OF THE COURT

C. Stephen Hackeling, J.

At a trial of the above-captioned “medical service provider no-fault” action conducted December 17, 2009, neither side presented witnesses. Instead, the plaintiff offered into evidence a notice to admit dated November 13, 2009 which asked the defendant to admit it received the attached claim and assignment for no-fault medical provider services for $1,184.66, that the defendant denied the claim and that payment was not made thereon. Thereafter, the plaintiff rested asserting the establishment of a prima facie cause of action pursuant to Insurance Law § 5106 (a). The defendant conceded it did not respond to the notice to admit and presented no testimony or alternative evidence. It is the defendant’s contention that it need not establish its affirmative defense of lack of medical necessity as the plaintiff has not carried its burden of establishing a prima facie cause of action.

The issue presented to the court for disposition is whether a no-fault medical service provider can establish its section 5106 (a) prima facie cause of action through a notice to admit. It is the court’s opinion that it can.

The court concurs with the plaintiff’s assertion that New York’s courts have consistently [*2]held that a plaintiff in a medical service provider no-fault matter establishes its prima facie entitlement to relief by demonstrating: (1) the prescribed statutory billing forms were mailed to and received by the defendant; and (2) payment of no-fault benefits is overdue. (See Insurance Law § 5106 [a]; Kipor Medicine P.C. v MVAIC, 23 Misc 3d 948 [Civ Ct, Kings County 2009], citing Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; see generally Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2d Dept 2005]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004].)

At first blush it would appear that two such noncomplex elements could appropriately be established via a CPLR 3123 formal judicial admission. However, the Appellate Term, Second Department, for the 2d, 11th and 13th Judicial Districts has determined that a notice to admit, by itself, is not evidentiary proof sufficient to establish a prima facie case, and that witness{**27 Misc 3d at 438} testimony is necessary to lay a foundation to establish the admissibility of a claim in the form of a business record. (Bajaj v General Assur., 18 Misc 3d 25 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2007].) In stark contrast several Appellate Term courts in the First Department have determined that judicial admissions constitute evidence sufficient to prove mailing and receipt of no-fault medical provider claims. (See P.L.P. Acupuncture, P.C. v Travelers Indem. Co., 19 Misc 3d 126[A], 2008 NY Slip Op 50484[U] [App Term, 1st Dept 2008], citing Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8 [App Term, 1st Dept 2007].) This position is further buttressed by an Appellate Division, First Department, holding that informal judicial admissions established via answers to interrogatories in a personal injury action can establish a prima facie case. (Bigelow v Acands, Inc., 196 AD2d 436 [1st Dept 1993].)

The doctrine of stare decisis binds this court to follow the rulings of its Appellate Term (9th & 10th Jud Dists), the Appellate Division, Second Department, and the New York Court of Appeals. The plaintiff advances the argument that stare decisis requires it to adopt the Appellate Division/Appellate Term, First Department, decisions in the absence of a Second Department or Court of Appeals decision. (See Mountain View Coach Lines v Storms, 102 AD2d 663 [2d Dept 1984].) While generally true, the novel complicating factor in this case is that an Appellate Term court in a different district in this court’s Appellate Division has contemporaneously taken a contrary position. In such a circumstance, when presented with conflicting appellate decisions from outside its jurisdictional chain, this court determines that stare decisis does not bind it and that it is free to make its own decision.

The court notes that a sister Suffolk County District Court has already addressed the issue and rendered a treatise decision citing to a plethora of case law and to Professor David Siegel, New York Practice, Prince, Richardson on Evidence and Wigmore, Evidence, which allowed the use of notices to admit as prima facie evidence. (Seaside Med., P.C. v General Assur. Co., 16 Misc 3d 758 [Suffolk Dist Ct 2007].) This holding appears correct, especially in light of the simplified expedited payment process that the legislature has established for no-fault claims. “Notices to admit” are more than simply a discovery device, such as an interrogatory. The fundamental purpose of a notice to admit is to expedite the trial by eliminating the need to call a witness to prove an undisputed fact; matter which is easily{**27 Misc 3d at 439} provable or the genuineness of a document. (See Brilliant, Outside Counsel, Courts Differ on Notice to Admit Use in No-Fault Insurance Cases, NYLJ, Mar. 26, 2009, at 4, col 3; see generally Taylor v Blair, 116 AD2d 204 [1st Dept 1986].) The distinction between informal judicial [*3]admissions which are adduced in sworn deposition transcripts and interrogatory answers, and those established via formal judicial admissions established in a notice to admit, is that the informal admissions must be proved at trial via witness testimony. The absence of an affirmative denial waives the need to prove the requested admission as effectively as if admitted in the answer.

Accordingly, the court finds that the plaintiff has established an unrebutted prima facie cause of action pursuant to Insurance Law § 5106 (a) and enters judgment for it in the sum of $1,184.66 plus statutory interest from 30 days after its claim date, statutory attorneys fees and costs.

District Court of Suffolk County, Third District

HUC 3646-05

Baker, Sanders, Barshay, Grossman,

Fass, Muhlstock & Neuwirth

150 Herricks Road

Mineola, New York 11501

Attorneys for the Plaintiff

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, New York 11747

Attorneys for the Defendant

C. Stephen Hackeling, J.

Plaintiff’s complaint dated May 27, 2005, seeks recovery on fifteen separate no-fault medical provider insurance claims, together with statutory interest and statutory N.Y.S. Insurance Law Article 51attorney’s fees. Each claim is identified via its own independent cause of action and designated as the odd number causes of action detailed in the complaint. Each of these fifteen causes of action represents an individual bill/claim for services.

Issue Presented

On the October 25, 2007 trial date herein, the parties’ attorneys settled the above causes of action for first party benefits by agreeing that the plaintiff would recover a determined percentage of the principle sued for, together with interest and costs. The parties seek judicial intervention solely on the issue of the proper method of calculating statutory attorney’s fees to be awarded to the plaintiff.

-1-

Relying upon a NY State Insurance Department opinion the defendant argues that the Court should aggregate the plaintiff’s fifteen cause of action/claims, and award attorney’s fees in the amount of 20% of the aggregate amount of the bills encompassed in plaintiff’s complaint, with a maximum award of [*2]attorney’s fees capped at $850. The plaintiff argues that it is entitled to separate attorney’s fees for each bill submitted and overdue; in this case on each of the fifteen separate causes of action, which correspond to fifteen separate bills of a single provider for services rendered to a single assignor.

Legal Discussion

Regulation 11 NYCRR §65-4.6 (e) of the Insurance Law governs attorney’s fees in no-fault actions. It states that “….Subject to the provisions of subdivisions (a) and (c) of this section, the attorney’s fee shall be limited as follows: twenty percent of the amount of first-party benefits, plus interest thereon, awarded by an arbitrator in Court, subject to a maximum fee of $850”. The statute “requires payment of counsel fees on a per claim basis“. LMK Psychological Servs., P.C. v. State Farm Mut. Auto Ins. Co., 2007 NY Slip Op. 10443. (NYAD 3d Dept. 1994). See also Smithtown General Hospital v. State Farm Mut. Auto Ins. Co., 207 AD2d 338 (NYAD 2d 1994), interpreted a predecessor statute (11 NYCRR 65.17 (b) (6), awarded attorney’s fees on a “per claim” basis and rectified its lower Court’s imposition of a $850 ceiling on attorney’s fees in the entire action. As noted by the Court in Valley Stream Medical & Rehab., P.C. v. Allstate Insurance Co., 15 Misc 3d 576 (Civ. Ct. Queens, 2007), “the per claim’ calculation of attorney’s fees laid out in Smithtown General Hospital decision are properly calculated for each separate claim form submitted to an insurer… has been accepted as the proper approach.

In Alpha Chiropractic, PC. v. State Farm Mut. Auto Ins. Co.,14 Misc 3d 673 ( NY City Civ. Ct., 2006), the Court awarded attorney’s fees to plaintiff “as to each proof of claim form submitted pertaining to the assignor, equal to twenty percent of the amount set forth in each claim…” and explained that each “proof of claim” form refers to “an NF-3 (or its functional equivalent), which while often enumerating a number of medical services provided over more than one date, (and) relates to a single bill”. See also, Spineamericare Medical, PC. v. Liberty Mutual Ins. Co., 2002 NY Slip Op. 50511U ( District, Nassau, 2002), which awarded plaintiff’s attorneys’ fees in the amount of twenty percent of the total of each of two claims, “…subject to a cap of $850, separately applicable to each claim.”

This Court regards and agrees with the discussion of the Hon. Diane A. Lebedeff, in Valley Stream Medical & Rehab., PC. v. Allstate Insurance Co.(citation supra), which declines to adopt the reasoning of an Insurance Department opinion letter under its consideration and which aptly discusses the doctrine of stare decisis. By similar reasoning, this Court rejects any interpretation which relies on the Insurance Department opinion letter in question and which seeks to cap “no-fault” attorney fees at $850 per claim. Inasmuch as the causes of action contained in the instant complaint correspond to individual claims of the plaintiff herein, the plaintiff is entitled to attorney’s fees on a per claim basis on each odd numbered cause of action, at the rate of twenty percent of the amount settled to for each claim, with a maximum of $850 per claim.

-2-

The plaintiff shall submit the stipulation of the parties (as to principle, interest and costs) along with a proposed judgment, which shall include attorneys fees calculated in amanor consistent with this [*3]decision.

Dated: January 10, 2008

____________________________

J.D.C.

Decision to be published_____yes_____no.

[*1]

District Court of Suffolk County, Fourth District, November 1, 2007

APPEARANCES OF COUNSEL

Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, LLP, Mineola, for plaintiff. Rivkin, Radler, LLP, Uniondale, for defendant.

{**18 Misc 3d at 797} OPINION OF THE COURT

G. Ann Spelman, J.

{**18 Misc 3d at 798}This action was commenced by plaintiff Custom Orthotics of NY, Inc. as assignee of Francisco J. Ramirez against defendant State Farm Mutual Auto Ins. Co. to recover first-party no-fault benefits. A trial de novo was held on July 16, 2007, and memoranda in support of the parties’ positions were submitted on or before August 6, 2007. The following is the court’s decision.

The ultimate issue to be considered at the trial of this matter was the medical necessity of the services for which compensation is sought. However, the preliminary issue was the ability of plaintiff to establish its prima facie case based solely upon answers given in the notice to admit, with reference to other documents, as no witness was produced. In fact, neither party had a witness available to testify, yet agreed to proceed with the trial. After introducing the notice to admit and other documents, plaintiff rested. Defendant rested a moment later. Plaintiff then moved for judgment in its favor followed by defendant’s motion to dismiss the complaint. Decision was reserved.

Defendant in its answers to plaintiff’s notice to admit admitted that it received the “claims for no-fault benefits” and “bills that are the subject of this action . . . to the extent that same were attached to the Summons and Complaint,” but specifically “reserve[d] the right to object to the validity of same at trial.” Defendant further admitted that it did not pay the claims or bills, but “only to the extent that no payment is due and owing.” In addition, as to plaintiff’s [*2]request for an admission that defendant received an assignment of benefits form for the claims underlying this action, defendant admitted “only that Plaintiff submitted a form that is purported to be an assignment of benefits” but “reserve[d] the right to object to [the] validity [thereof]” at trial.

Also introduced by plaintiff was defendant’s “Arbitration Submission.” Among other things, the arbitration “packet,” as counsel referred to it, contained defendant’s denial of plaintiff’s claims which was based solely upon a lack of medical necessity.

Among other things, defendant argued that the admissions sought to be used were “at the heart of the matter,” i.e., absolutely essential to plaintiff’s right to recovery, and that the facts underlying the admissions were “hotly contested,” thus precluding the use of the notice and its contents at trial. Defendant argued further that permitting plaintiff to proceed in this fashion improperly dispensed with the requirement that{**18 Misc 3d at 799} plaintiff’s witness establish a proper foundation for introduction of the documents necessary to establish its prima facie case.

The court is aware of persuasive authority supporting plaintiff’s position (see Seaside Med., P.C. v General Assur. Co., 16 Misc 3d 758 [Suffolk Dist Ct 2007] [unanswered notice to admit sufficient to establish prima facie case]; see also Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8 [App Term, 1st Dept 2007] [holding that defendant’s verified answers to interrogatories were formal judicial admissions and therefore sufficient to establish plaintiff’s entitlement to judgment in its favor]).

The case at bar is distinguishable, however, in that defendant answered the notice to admit, admitting the receipt of certain materials, but pointedly reserving its right to challenge the validity of plaintiff’s documentary evidence at trial. Under the circumstances presented, it cannot be said that plaintiff’s ability to establish a prima facie case is not “hotly contested,” as defendant argues. Significantly, no bills or claim forms were attached to the summons and complaint in the court’s file. Rather, what was appended was a computer printout generated by plaintiff.

In addition, recent case law suggests that the formalities surrounding the introduction of business records into evidence must be observed, and that a decision in favor of plaintiff herein would not survive on appeal (see Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [2d Dept 1999]; Fortune Med., P.C. v Allstate Ins Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50243[U] [App Term, 9th & 10th Jud Dists 2007]).

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

[*1]

District Court of Suffolk County, Third District, December 7, 2006

APPEARANCES OF COUNSEL

Freiberg & Peck, LLP, New York City (Michelle R. Kolodny of counsel), for defendant. Edward Shapiro, P.C., Wantagh (Jason A. Moroff of counsel), for plaintiff.

OPINION OF THE COURT

C. Stephen Hackeling, J.

It is ordered that this application by the defendant for summary judgment dismissing the plaintiff’s complaint is granted, and the plaintiff’s cross motion for summary judgment is denied as moot.

This is an action for first-party benefits (recovery of unpaid health services bill, statutory interest and statutory attorney’s fees) brought pursuant to the No-Fault Insurance Law by a health services provider who rendered medical services to a patient in exchange for the patient’s rights to collect no-fault benefits.

On a motion for summary judgment the test to be applied is whether triable issues of fact exist or whether on the proof submitted judgment can be granted to a party as a matter of law (Andre v Pomeroy, 35 NY2d 361 [1974]). It is incumbent on the proponent of the motion to set forth a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (Alvarez v Prospect Hosp., 68 NY2d 320 [1986]).

Upon the proponent making out a prima facie case, the burden shifts to the opponent of the motion to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact (Zuckerman v City of New York, 49 NY2d 557 [1980]). [*2]

Issue Presented

Does the production of an electronic signature assignment of benefits and NF-3 claim form in response to an insurer’s verification demand recommence the running of a tolled 30-day no-fault insurance claim denial period?

Cause of Action Tolled Pending Verification

Under New York’s No-Fault Insurance Law, an insurance carrier is required to either pay or deny a claim for benefits within 30 days from its receipt of the claim (see, 11 NYCRR 65-3.8 [c]). “Such benefits are overdue if not paid within 30 days after the claimant supplies proof of the fact and amount of the loss sustained” (Insurance Law § 5106 [a]). For the defendant to properly deny a claim, it must generate its denial and mail it to the plaintiff within 30 days. This period may be extended by, inter alia, a timely demand by the insurer for further verification of a claim (see, 11 NYCRR 65-3.5 [b]). Such demands must be made within 10 business days of the receipt of a completed application (see, 11 NYCRR 65-3.5 [a]). If the demanded verification is not received within 30 days, the insurance company must issue a follow-up request within 10 calendar days of the applicant’s failure to respond (see, 11 NYCRR 65-3.6 [b]). Further, an insurer must request any additional verification it will require within 15 days after receipt of one or more completed verification forms in order to further toll the 30-day payment or denial period (see, 11 NYCRR 65-3.5 [b]). The 30-day period in which the insurer has to either pay or to deny the claim does not begin to run until all demanded verification is provided (see, 11 NYCRR 65-3.8 [a] [1]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2004]). In fact, the insurer is precluded from issuing a denial while a verification request is outstanding (see, 11 NYCRR 65-3.8 [b] [3]).

The Undisputed Facts

In the case at bar, the plaintiff’s claim for medical services was received by the defendant insurer on August 11, 2005. The defendant made an initial verification request that was mailed on August 22, 2005. The additional verification requested the following information:

“Pursuant to regulation 68, 65-3.11 (B) a provider must submit either a properly executed prescribed assignment of benefits or authorization to pay in order to receive direct payment from the insurer. As you have not submitted a properly executed form, we are unable to consider reimbursement. Enclosed is a prescribed assignment of benefits form for you to complete in full, have signed by the patient, and return to the undersigned. Advise us immediately if you are unable to submit a properly executed assignment or authorization.

“1. The assignment submitted was not signed by the patient.

“2. The assignment submitted was not signed by the provider, electronic signatures are not acceptable.

“3. We are in receipt of your bill for services, however, we have not yet received the fully [*3]completed, prescribed verification of treatment by attending physician form (NF-3). Every box must be fully completed, blank boxes will not be accepted. The patient must elect either box 20 authorization to pay or 21 assignment of benefits, but not both. If the prescribed assignment of benefits or authorization to pay has previously been submitted, please indicate same in box 21. Be advised we require the physician’s original signature on said form. Signature stamps and/or electronic signatures will not be accepted. We require submission of said form, for each provider of service, before consideration of their claim for services. (Regulation 68, 65-3.5F).

“Consideration of your claim will remain delayed pending our receipt of said form and any other verification duly requested. (NF3 attached hereto).”

A follow-up verification request was sent by the defendant on September 22, 2005 as no verifications were supplied by the plaintiff within 30 calendar days of the original request (see, 11 NYCRR 65-3.6 [b]). It is unrefuted that the plaintiff has not responded to the defendant’s verification demands.

Electronic Signatures

The defendant contends, inter alia, that both the assignment of benefits (AOB) form and the NF-3 claim form contain electronic signatures of the assignor/patient Edison Alcantara. Further, the defendant states that both forms show the assignee/provider’s signature as “on file.” The defendant argues that it was entitled to verify the signatures of the assignor/patient and the assignee/provider of health care services. The plaintiff does not rebut the documentary and testimonial evidence demonstrating that the defendant timely requested verification of the signatures of the assignor and assignee on both forms.

The plaintiff argues in opposition that the New York State Electronic Signatures and Records Act (ESRA) and the federal Electronic Signatures in Global and National Commerce Act (E-Sign) require the defendant insurance company to accept the electronic signature of the assignor/patient Edison Alcantara as equivalent to an original signature. The plaintiff contends that the New York state and federal laws give electronic signatures the same validity and effect as handwritten ones. Further, the plaintiff claims that a signature indicated as being “on file” is sufficient, and is not the equivalent of being absent from the particular form.

The defendant submits the October 25, 2006 opinion of the General Counsel’s Office of the New York State Insurance Department regarding electronic record retention of no-fault insurance claim forms in support of its argument that an insurance company is “not obligated to accept an electronic signature.” (Ops Gen Counsel NY Ins Dept No. 06-10-05 [Oct. 2006].) The General Counsel’s opinion addresses two questions presented by a firm representing radiology facilities inquiring whether it may use electronic documents and electronic signatures in submitting no-fault insurance claims. The first question presented asks: “Do the New York State Electronic Signatures and Records Act (‘ESRA’) and the federal Electronic Signatures in Global and National Commerce Act (‘E-Sign’) obligate an insurer to accept electronic records and signatures with No-Fault insurance claim forms?” The General Counsel’s answer was no. The Counsel states that “Neither E-Sign nor ESRA obligates an insurer to accept electronic records or signatures.” The second question presented [*4]asks: “May a digitally reproduced NF-AOB serve as an original document for purposes of a verification request by an insurer under Section 65-3.11 (c) of NY Comp. Codes R. & Regs. tit.11, Part 65 (Regulation 68)?” The General Counsel’s answer was “[y]es, provided that it is accurate and accessible as required under Section 7001 (d) (1) of E-Sign, and the insurer consents to the use of an electronic record as an original document.”

The General Counsel’s office examined the New York State law (ESRA) and the federal law (E-Sign), and concluded that neither law “obligates any person, including an insurer, to accept the use of electronic records and signatures. Accordingly, an insurer is not required to accept electronic records and signatures and may require that such records and signatures are submitted in hard copy form.” Moreover, the regulatory interpretations of the New York State Insurance Department are entitled to a “great deference” (see, Bronx Med. Servs., PC v Lumbermans Mut. Cas. Co., 2003 NY Slip Op 51022[U], *3 [App Term, 1st Dept 2003]; Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854 [2003]; Matter of Medical Malpractice Ins. Assn. v Superintendent of Ins. of State of N.Y., 72 NY2d 753 [1988]). Consequently, it is the opinion of this court that, as the defendant contends, with regard to a no-fault claim, an insurance company may choose to accept an electronic signature, but it is not obligated to do so. Hence, the defendant’s verification request was proper. As the plaintiff has not yet provided the demanded hard copy verification, the statutory period for the defendant to pay or to deny the plaintiff’s claim continues to be tolled (see, Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2d Dept 2004]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338 [2d Dept 2002]). As a consequence, the plaintiff’s claim herein is premature.

Further, although the plaintiff argues that there is no requirement that a no-fault AOB form contain a signature by the provider and that a signature indicated as being “on file” is sufficient, the form that the plaintiff elected to use clearly requires a “signature of provider.” The plain language of the no-fault insurance regulations requires that the provider submit a “properly executed assignment” on whatever form it chooses to submit. “It is well established that the No-Fault law is in derogation of the common law and must be ‘strictly construed’ ” (Presbyterian Hosp. in City of N.Y. v Atlanta Cas. Co., 210 AD2d 210 [2d Dept 1994]). Consequently, it is the opinion of the court that the plaintiff’s “on file” signature is not sufficient for a properly executed AOB form. As the plaintiff has also failed to comply with the defendant’s request for additional verification, the court finds that the 30-day period within which the defendant had to either pay or to deny the claim for no-fault benefits did not begin to run.

Accordingly, the defendant’s motion to dismiss is granted, and the plaintiff’s cross motion is denied as moot.

District Court of Suffolk County, Third District

HUC 1104-05

Edward Shapiro, P.C.

Attorney for Plaintiff

3351 Park Avenue

Wantagh, NY 11793

Robert P. Tusa, Esq.

Attorney for Defendant

898 Veterans Memorial Highway

Suite 320

Hauppauge, NY 11788

C. Stephen Hackeling, J.

After submission of stipulated facts by the parties , Dependable Ambulette, Inc., (hereafter “Dependable”) seeks to recover the sums of $2,015, $1,755, $975, $1,040, for transportation services rendered after April 5, 2002, upon automobile insurance policies issued prior thereto which contained assignability clauses. Dependable, the assignee herein, argues that the NYS Insurance Commissioner’s April 5, 2002 amendment to Art. 68, did not terminate existing policy endorsements but simply required all future insurance policies issued or renewed after April 5, 2002 to contain new endorsements prohibiting assignment of claims. In support of this decision, the plaintiff advances the unreported decision of Dependable Ambulette, Inc. V. Allstate Insurance Co., June 2, 2004, No. 0032/04 (Nassau Co. Dist. Ct. 2004) which holds that revised Insurance Department Regulation 68 can not be retroactively applied to claims made upon policies existing pre April 5, 2002.

This Court is sympathetic to Judge Janowitz’s legal reasoning in creating an “existing policy” exception to the Regulation 68 amendment which barred assignability of ambulance transportation services. However, the Appellate Courts appear to have subsequently clearly settled this controversy. The Second Department, citing to the Court of Appeals,

-1-

unequivocally upheld the dismissal of a post April 5, 2002 transportation no-fault insurance claim. See A B Medical Services PLLC, v. Motor Vehicle Acc. Indemnificatin Corp., 10 Misc 3d 145A (App. Term, 2nd Dept. 206) citing to Medical Society of State of New York v. Serio, 100 NY2d 854 (NY 2003). Though the Second Department and the underlying Appellate Term decision do not address the issue of an pre-existing April 5, 2005 policy endorsement; they expressly hold that the claims were properly dismissed as ” the plaintiffs therein… submitted its transportation copies subsequent to April 5, 2002 regulation… which no longer permit the assignment”. This holding does not appear to grant this Court license to find an exception to the established rule.

The Court notes that the “no-fault”automobile insurance system (NY Ins. Laws Art. 51) is a statutory creature which the legislature has given the Insurance Commissioner broad discretion to regulate. The rights running to the benefit of claimants are principally established via statute and regulation and only secondarily by endorsements made by the insurance carriers. The rights of the insurance carriers and their policy holders do not exist independently of the “no-fault” insurance system and can not be considered in any manner which is inconsistent to the regulations’ intent and purpose. The April 5, 2002 amendment properly voided any existing policy assignment language as “contrary to public policy”. See Medical Society of State of New York v. Serio, 100 NY2d 854 (2003)

Accordingly, the Court dismisses the plaintiff’s complaint.

_____________________________

J.D.C.

Dated: October 3, 2006

Huntington Sta., NY

Decision to be published ____yes___no.

-2-

[*1]

District Court of Suffolk County, Second District, October 24, 2005

APPEARANCES OF COUNSEL

Parker Law Firm, Farmingdale (Scott Schwaber of counsel), for plaintiff. Jeena R. Belil, Melville, for defendant.

OPINION OF THE COURT

Patrick J. Barton, J.

The within action for payment of no-fault benefits was commenced on March 19, 2004.

After hearing testimony and examining exhibits, I make the following findings of fact and conclusions of law.

Plaintiff is the assignee of Julia Johnson, who was involved in an automobile accident on July 19, 2003. At the time of the accident, there was an existing insurance policy issued by defendant containing benefits under the No-Fault Law.

Under this policy, plaintiff’s assignor was entitled to health service expenses resulting from the accident. She was referred by her treating physician to plaintiff for MRIs of her lumbar and cervical spine, and on July 29, 2003, the MRIs were performed.

Plaintiff timely submitted a bill for $1,571.80 to defendant on or about September 16, 2003 for these MRIs together with a proper no-fault verification form.

Defendant timely denied payment and its denial of claim form contained the sole affirmative defense of no medical necessity for the MRIs. The defendant bears the burden of proof on this defense (see Choicenet Chiropractic P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672[U] [App Term, 2d & 11th Jud Dists 2003]; Prime Med. v Travelers Indem. Co., 2 Misc 3d 1009[A], 2004 NY Slip Op 50234[U] [Civ Ct, Kings County 2004]). At trial, defendant’s expert, Dr. Joseph C. Cole, testified that he conducted a peer review and came to the conclusion that these MRIs were not medically necessary. Dr. Cole’s report was admitted into evidence as defendant’s exhibit B. I find that Dr. Cole’s testimony was not sufficient to establish by a fair preponderance of the credible evidence defendant’s burden to rebut the presumption of medical necessity.

However, in addition to the defense of no medical necessity, defendant, for the first time at trial, raised an objection to the referral herein as an improper self-referral prohibited by section 238-a of the Public Health Law. This issue is one of first impression in this court. Section 238-a [*2]provides in pertinent part:

“Prohibition of financial arrangements and referrals

“1. (a) A practitioner authorized to order clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services may not make a referral for such services to a health care provider authorized to provide such services where such practitioner or immediate family member of such practitioner has a financial relationship with such health care provider.

“(b) A health care provider or a referring practitioner may not present or cause to be presented to any individual or third party payor or other entity a claim, bill, or other demand for payment for clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services furnished pursuant to a referral prohibited by this subdivision . . .

“7. If a referring practitioner or a health care provider furnishing clinical laboratory services, pharmacy services, radiation therapy services, physical therapy services or x-ray or imaging services or any other person or entity collects any amounts that were billed in violation of this section, such referring practitioner and health care provider and other person or entity shall be jointly and severally liable to the payor for any amounts so collected.”

A “financial relationship” is defined in section 238 (3) of the Public Health Law as “an ownership interest, investment interest or compensation arrangement.” A review of the record in the instant matter indicates that the parties stipulated at trial that the referring physician, Dr. Gautam Khakar, was associated with Superior Medical Services, P.C. According to certified records from the New York State Education Department (introduced as defendant’s exhibit C), the single shareholder of Superior Medical Services, P.C. is Raymond V. Damadian. The certified records of the Education Department further revealed that Raymond V. Damadian is also the single shareholder of Stand-Up MRI of the Bronx, the plaintiff herein. As such, I find that this referral falls within the ambit of subdivision (1) of section 238-a. Although the defense of improper referral was not contained in defendant’s denial of claim form, I find that the defense was properly raised at trial, as the 30-day time limitation set forth in section 5106 (a) of the Insurance Law does not apply to cases that fall within the purview of section 238-a (1) of the Public Health Law (see Ozone Park Med. Diagnostic Assoc. v Allstate Ins. Co., 180 Misc 2d 105 [App Term, 9th & 10th Jud Dists 1999]). I also note that this was raised as an affirmative defense in defendant’s answer.

Accordingly, this case is dismissed.