District Court of Nassau County, First District

14267/04 325d

Vito M. DeStefano, J.

This no-fault action arises out of an accident that occurred on December 6, 2002. The plaintiff provided medical treatment to Keith Elman and thereafter submitted Forms N-F5 and UB-92 to the defendant in the amount of $5,567.67. The defendant did not pay or deny the claim within 30 days of receipt. The plaintiff now moves for summary judgment. The defendant opposes, arguing, inter alia, that: plaintiff’s claim is premature because requests for additional verification were made and not responded to; plaintiff’s claim is improper because it failed to obtain a properly executed assignment of benefits; plaintiff has failed to submit proof of medical necessity.

The plaintiff’s motion is granted for the following reasons:

A medical provider makes a prima facie showing of entitlement to summary judgment by submitting evidentiary proof that the necessary billing forms were mailed and received, and that payment of no-fault benefits was overdue (11 NYCRR 65.15 [g]; Insurance Law 5106[a]; New York Hospital Medical Center of Queens v Motor Vehicle Accident Indemnification Corp., 12 AD3d 429 [2d Dept 2004]; Mary Immaculate Hospital v Allstate Insurance Company, 5 AD3d 742 [2d Dept 2004]; A.B. Medical Services PLLC, D.A.V. Chiropractic P.C. v Prudential [*2]Property & Casualty Insurance Co., 2005 NY Slip Op 25032 [App. Term. 1st Dept 2005]). Once the plaintiff meets its burden, the burden shifts to the defendant to show the existence of a triable issue of fact.

Here, plaintiff’s motion papers and supporting exhibits establish that no-fault forms were received by the defendant on January 13, 2003 and that defendant never paid or denied the claim. Indeed, defendant confirms these facts in its opposition papers. Accordingly, plaintiff has satisfied its prima facie burden. Defendant, in contrast, has failed to meet its burden by raising any issues of fact.

In this regard, defendant’s argument that the plaintiff’s claim is premature is without merit. It is true that “[a] claim need not be paid or denied until all demanded verification is provided” (New York Hospital Medical Center of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002] citing 11 NYCRR 65.15 [g][1][I]), however, it is incumbent upon the defendant insurer to demonstrate with sufficient proof that a timely request for verification was actually made.

In Contemp. Med. Diag. & Treatment, P.C. v Government Employees Insurance Co. (2005 NY Slip Op 50254U), decided March 2, 2005, the Appellate Term, Second Department, rejected the insurer’s assertions as to what constituted adequate proof of mailing of a request for verification:

[T]he assertion of defendant’s no-fault claims examiner that it was “the usual and customary course of business at GEICO that all documents are mailed on the same day they are generated” was conclusory and failed to specify either that it was the duty of the claims examiner to ensure compliance with said office procedures or that the claims examiner had actual knowledge that said procedures were complied with. Since defendant’s opposition papers did not contain an affidavit of someone with personal knowledge that its verification requests were actually mailed, or describing the standard office practice or procedures it used to ensure that such requests were properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]), defendant failed to establish by competent evidence that it timely mailed its verification requests, and the 30-day period within which it was required to pay or deny the claim was therefore not tolled (see S&M Supply Inc. v Lancer Ins. Co., 4 Misc 3d 131[A], 2004 NY Slip Op 50695[U], supra).

At bar, the affidavit of litigation representative Jeffrey Stangle submitted in opposition to the motion is wholly inadequate to establish an issue of fact as to whether timely request for additional verification was made, or, in fact, if any request for verification was made at all (see, also, Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374 [2d Dept 2001]). [*3]Notably, Mr. Stangle’s affidavit states only that “my office mailed a request for additional verification,” without indicating any personal knowledge of the mailing. The affidavit does not provide any details concerning when or how the request was allegedly made; nor does it describe any standard office practices to ensure that the requests were properly mailed. Therefore, the plaintiff’s claim is not premature.

The court also rejects defendant’s argument that the plaintiff’s claim is improper due to a defective assignment of benefits. The assignment is not signed by Mr. Keith Elman, but instead contains the notation “signature on file”. Moreover, omitted from the assignment is certain revocation language required by 11 NYCRR 65-3.11(b)(i). Significantly, however, defendant waived any defects in the assignment by failing to timely object to them (e.g., New York Hospital Medical Center of Queens v. New York Central Mutual Fire Ins. Co., 8 AD3d 640 [2d Dept 2004] [Defendant’s “objection to the claim or the basis of lack of proof of assignments were without merit” because it failed to establish that it requested verification of such assignments]; see, also New York Hospital Medical Center of Queens v. Motor Vehicle Accident Indem. Corp., 12 AD3d 429 [2d Dept 2004] [Defendant’s failure to object to the adequacy of plaintiff’s claim form within 10 days of receipt constituted a waiver of any defenses based thereon]; New York Hospital Medical Center of Queens v AIU Insurance Co., 8 AD3d 456 [2d Dept 2004]; Mount Sinai Hosp. v. Triboro Coach, 263 AD2d 11 [2d Dept 1999]; Presbyterian Hosp. in the City of New York v. Aetna Cas. & Sur. Co., 233 AD2d 433 [2d Dept 1996]; St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d 718 [2d Dept 1994]; AB Medical Services, PLLC v. Prudential Property & Casualty Ins. Co., 2005 NY Slip Op 25032 [NY App Term, Jan. 20, 2005]).

The defendant’s opposition papers fail to discuss, or even acknowledge, the controlling appellate authority on the issue of waiver. Instead, in support of its argument that plaintiff’s motion should be denied because of a defective assignment, defendant cites an opinion of the Office of the General Counsel to the Superintendent of Insurance (State of New York Insurance Department, Opinion dated February 18, 2003 [Assignment used by provider must contain prescribed statutory language]) and case law recognizing the Superintendent’s broad power to interpret, clarify and implement legislative policy (Ostrer v Schenck, 41 NY2d 782 [1977]).

The Court notes that there is no conflict between such authority and those cases which hold that defects in plaintiffs’ claim forms, including the assignment, are waived if not timely objected to. Moreover, if a conflict did exist, this court would be bound to follow appellate authority that is directly on point.

As to defendant’s argument regarding the failure of proof of medical necessity, again, defendant waived any such contention by failing to raise it in a timely denial (see, Bonetti v Integon National Ins. Co., 269 AD2d 413 [2d Dept 1999]; Mount Sinai Hosp. v. Triboro Coach, supra; Amaze Medical Supply Inc. v. Eagle Ins. Co., 2 Misc 3d 128A [NY App Term 2003]).

The defendant’s remaining contentions are also without merit. [*4]

Plaintiff is awarded judgment against the defendant in the amount of $5,567.67, plus statutory interest at 2% per month from February 13, 2003, and attorneys’ fees of 20%, not to exceed $850. In addition, plaintiff is awarded $50.00 costs on this motion.

So ordered:

DISTRICT COURT JUDGE

Dated:March 22, 2005

CC:Joseph Henig, P.C.

Freiberg & Peck, LLP

VMD/mp

District Court of Nassau County, First District

12979/04

Scott Fairgrieve, J.

Plaintiff moves for an order, pursuant to CPLR 3212, granting summary judgment in its favor in this action to recover fees for medical treatment provided under the no-fault law to its assignor, Rachael Charriah. The defendant opposes this motion and the plaintiff has served a reply.

Plaintiff’s assignor was involved in a motor vehicle accident on January 5, 2004. Plaintiff submitted a claim to defendant in the sum of $879.73, no part of which has been paid. The defendant admits receipt of the claim on March 4, 2004 and denial of the entire claim was made on March 22, 2004.

The motion papers have established that the plaintiff submitted its proof of claim and that the defendant issued its denial within thirty days of receipt of the claim. The denial was based upon a lack of medical necessity.

Plaintiff posits that the denial was defective since it was based on the opinion of a nurse. [*2]Therefore, the defendant has not met its burden of proof of demonstrating that the services rendered, an MRI, lacked medical necessity as a nurse is a layman and her testimony may not be used to establish the standard of care in the medical field.

It is the defendant’s position that the file-based review methodology is an entrenched procedure used in many professions to determine the necessity and quality of the services performed. Further, the defendant asserts it would be unreasonable to require the denial of coverage to be based on the ground of medical necessity to be made in the first instance by a peer review doctor exclusively.

As stated in Choicenet Chiropractic v. Allstate Insurance Co., 2003 NY Slip Op 50672U:

“The defense of lack of medical necessity may be asserted on the basis either of peer review or a medical examination as implicitly provided by Insurance Regulation 11 NYCRR 65-3.8(b)(4).”

The Court held in Abraham v. Country-Wide Insurance Company, 3 Misc. 3d 130 (App Term, 2d and 11th Jud Dists 2004):

“As a general rule, for purposes of medical diagnosis and treatment, a nurse is a mere lay informant (e.g. Dombrowski v. Moore, 299 A.D.2d 949, 951, 752 N.Y.S.2d 183 [2002] whose medical opinions and conclusions drawn from the facts are incompetent and inadmissible (Nucci v. Proper, 270 A.D.2d 816, 817, 705 N.Y.S.2d 144 [2000], aff’d 95 N.Y.2d 597, 744 N.E.2d 128, 721 N.Y.S.2d 593 [2001]; People v. Russell, 165 A.D.2d 327, 332, 567 N.Y.S.2d 548 [1991]; see Prince, Richardson on Evidence § 7-101 [Farrell 11th ed]).”

Since the defendant has failed to prove lack of medical necessity through a medical examination or peer review, its denial is ineffective. Therefore, the defendant is precluded from offering a defense of lack of medical necessity despite the timeliness of the denial Amaze Medical Supply, Inc. v. Eagle Insurance Co., 2 Misc. 3d 128A (App Term, 2nd and 11th Jud Dists 2003).

Upon a review of the papers submitted, the Court concludes that the plaintiff has satisfied its burden of demonstrating entitlement to summary judgment. The defendant has failed to come forward with proof to establish the existence of triable issues of fact. Summary judgment, therefore, is granted in favor of the plaintiff.

Let judgment be entered in favor of the plaintiff in the sum of $879.73, plus statutory interest from April 4, 2004, together with statutory attorney’s fees along with costs and disbursements. Attorney’s fees not to exceed $850.00. The other issues raised by the defendant need not be addressed. [*3]

So ordered:

DISTRICT COURT JUDGE

Dated: August 26, 2004

CC:Friedman, Harfenist, Langer & Kraut

Jaffe & Nohavicka

SF/mp

[*1]

District Court of Nassau County, First District, August 23, 2004

APPEARANCES OF COUNSEL

Lawrence N. Rogak, LLC, Oceanside, for defendant. Dash & Burns, Jericho, for plaintiff.

{**5 Misc 3d at 838} OPINION OF THE COURT

Joel K. Asarch, J.

{**5 Misc 3d at 839}The defendant, Lumbermans Mutual Insurance Company, moves pursuant to CPLR 3103 (a) for a protective order denying the plaintiff disclosure of the contents of the defendant’s entire no-fault file with respect to its assignor. The defendant contends that it has provided the plaintiff with NF-10s, payment letters and bills, “both the bills at issue in this lawsuit, and for those services defendant believes to represent overlapping and concurrent care, which was the basis for denial” (affirmation of Steven D. Rhodes, Esq., dated Oct. 31, 2003 [emphasis supplied]). The defendant objects to the plaintiff being able to review the entire contents of its no-fault claims file. The plaintiff, on the other hand, relying in part on prior decisions issued by this court, contends that a review of the entire no-fault file will aid in the prosecution of the action and will permit it to discover those documents that led to the denial of the claim.

In this no-fault action, the plaintiff (a health service provider) seeks a judgment for health services allegedly rendered to Elaine McKeithan (the assignor) as a result of an automobile accident occurring on July 14, 2000. The defendant provided no-fault insurance benefits to Ms. McKeithan at the time of the accident under a policy of insurance. The plaintiff is seeking recovery of no-fault benefits from the defendant insurer in the sum of $2,950.36, together with statutory interest and attorney’s fees, due to medical services provided to the plaintiff’s assignor.

This action was commenced on or about March 14, 2002 by service of a summons and complaint upon the defendant. The defendant answered the complaint on or about April 23, 2002, denying the central allegations in the complaint and raising several affirmative defenses. The court notes that the basis for the denial of claim was that the “fees [were] not in accordance with fee schedules” and that “concurrent care involves overlapping/excessive and/or common services.”

This court stated in Ostia Med., P.C. v Government Empls. Ins. Co. (1 Misc 3d 907[A], 2003 NY Slip Op 51560[U] [Nassau County Dist Ct 2003]):

“A protective order is designed to guard against disclosure abuses. CPLR 3103(a) states, in relevant part, that:

” ‘ . . . The Court may at any time on its own initiative, or on motion of any party or of any person from [*2]whom discovery is sought, make a protective order denying, limiting, conditioning or regulating the use of any disclosure device. Such order shall be designed {**5 Misc 3d at 840}to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts.’

“Thus, pursuant to the CPLR and UDCA, a protective order may be used, no matter what disclosure device is implicated . . .

“The Court can regulate discovery, pursuant to a protective order, by directing the time, order, place and questions to be asked in an EBT, or dictating the disclosure devices to be used or combination thereof, and even by defraying the costs of a party’s participation in the disclosure (see, Church [&] Dwight Co. Inc. v [UDDO] & Associates, Inc., 159 A.D.2d 275, 552 N.Y.S.2d 277 [1st Dept 1990]; Weeks Office Products, Inc. v Chemical Bank, 178 A.D.2d 113, 577 N.Y.S.2d 10 [1st Dept 1991]).

“Moreover, the Court has broad discretion in limiting or regulating the use of disclosure devices (see, Brignola v Pe[i]-Fei Lee, M.D.[,] P.C., 192 A.D.2d 1008, 597 N.Y.S.2d 250 [3d Dept 1993]).”

The arguments raised by the defendant concerning the purported immateriality and irrelevancy of the materials contained in the defendant’s no-fault file have been addressed by this court in CPT Med. Servs., P.C. v Allstate Ins. Co. (NYLJ, July 1, 2003, at 20, col 3). For the reasons stated in that decision, the court rejects this argument of the defendant and need not repeat itself here. (See also Hudson Med. v Allstate Ins. Co., 183 Misc 2d 749 [App Term, 2d Dept 1999].)

However, the defendant has now raised a further argument concerning the release of the entire no-fault file—that to do so would violate the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (42 USC § 1320d; 45 CFR parts 160, 164).

“The modern-day legislative trend is to protect a medical patient’s privacy. Under HIPAA, ‘protected health information’ is broadly defined as any individually-identifiable health information which was created by, among others, a health care provider, and which relates to, inter alia, the past, present, or future physical or mental health or condition of an individual. HIPAA and its supporting regulations, inter alia, established standards and procedures for the collection and disclosure of protected health information to prevent its wrongful disclosure” (Gunn v {**5 Misc 3d at 841}Sound Shore Med. Ctr. of Westchester, 5 AD3d 435, 437 [2d Dept 2004] [citations omitted]).

“HIPAA provides that a party deemed to be a ‘covered entity’ may not use or disclose protected health information except for in treatment, or for payment or health care operations of the individual patient, or to the individual patient, without receiving a proper authorization. A ‘covered entity’ is defined as (1) a health plan, (2) a health care clearinghouse, or (3) a health care provider who transmits any health information in electronic form, as prescribed by the regulation” (Lewis v Clement, 1 Misc 3d 464, 466 [Sup Ct, Monroe County 2003]).

“Except as otherwise provided herein, the standards, requirements, and implementation specifications of this subpart apply to covered entities with respect to protected health information” (45 CFR 164.500 [a]).

The plaintiff argues that the defendant is not a “covered entity” under HIPAA in that automobile medical payment insurance is an excepted benefit (see 42 USC § 300gg-91 [c] [1] [E]), and hence not subject to the requirements of HIPAA. This court respectfully disagrees. The defendant is a “health plan” as defined under 45 CFR 160.103 in that it is “an individual or group plan that provides, or pays the cost of, medical care,” which is defined elsewhere as amounts paid for “the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body” (42 USC § 300gg-91 [a] [2] [A]). The New York State Insurance Department, in an opinion letter dated July 8, 2003, indicated that “[a]n insurer that offers health insurance, in addition to either Workers’ Compensation or No-Fault insurance, would, unless [*3]it opts to be a hybrid entity, 45 C.F.R. § 164.103 (2003), be a covered entity.” Thus, the court finds Lumbermans Mutual Insurance Company, a member of the Kemper Insurance Companies and Unitrin, Inc., to be a covered entity. As a result, the release of protected health information must be limited “to the minimum necessary to accomplish the intended purpose of the use, disclosure, or request” (45 CFR 164.502 [b] [1]). While the provider may (and, in fact, must if it wants payment under no-fault) transmit protected health information (see, e.g. 11 NYCRR 65.12), the defendant is more restricted with its disclosure under HIPAA. The form NF-2 does not permit a blanket release of medical information, either to the plaintiff or otherwise.{**5 Misc 3d at 842}

It is apparent to this court that there are two competing principles at work here. On the one hand, a claimant has the right under HIPAA to avoid unnecessary disclosure of his or her protected medical information and condition. To permit the release of medical information on conditions completely unrelated to the no-fault treatment by a provider without the express authorization of the claimant would fly directly in the face of HIPAA. On the other hand, to permit the defendant to be the gatekeeper of all medical information and to permit its release only after further proceedings before an already taxed court would run afoul of the full disclosure premises of CPLR article 31. This is not a situation where a health care provider is receiving protected health information in order to treat the claimant. Rather, the information is being sought to be used by the plaintiff’s attorneys in order to secure payment.

Thus, it is the holding of this court that if the plaintiff presents a valid authorization complying with the HIPAA regulations, to wit, 45 CFR 164.508 (a) (1), the plaintiff is entitled to review the defendant’s no-fault claims file, subject to privileged and protected material as specified in the Ostia and CPT decisions (supra). It is clear to this court that a claimant must be made aware that his or her medical information will be revealed to the plaintiff—something a claimant may or may not want. The core elements of a valid authorization contain the information to be disclosed, the name of the recipient, a description of “each purpose of the requested use or disclosure” and an expiration date, together with statements concerning the signer’s right to revoke the authorization et al. (45 CFR 164.508 [c].) The mere submission of an NF-2 is insufficient to comply with HIPAA. (See 45 CFR 164.508 [a] [1].) The privacy rights of the patient need to be preserved under HIPAA.

However, as the claimant is seeking third-party payment for services rendered, a more limited assignment signed by the claimant will permit the medical provider to obtain from the defendant those items directly bearing on the services rendered and any denial issued. It is clear that by seeking payment of the medical costs, the claimant has placed her condition in controversy with respect to those services rendered by the provider and for which payment is sought (CPLR 3121 [a]). The plaintiff has attached to its complaint an opinion letter by the New York Insurance Department, dated May 11, 1998. The letter reads, in relevant part,

“based on the foregoing definition, as long as the two {**5 Misc 3d at 843}providers are performing two different and distinct treatments it should not be classified as concurrent care. If the insurer and medical provider disagree on what should be classified as concurrent care, and a denial is then issued, the dispute may be brought before an arbitrator or court of competent jurisdiction for final resolution.” (See also Universal Acupuncture Pain Servs. v Lumbermens Mut. Cas. Co., 195 Misc 2d 352 [Civ Ct, Queens County 2003].)

Thus, in the present case, the motion of the defendant is granted in part. As the assignment does not constitute a valid authorization under HIPAA,^[FN*] the plaintiff is entitled to disclosure of all [*4]documents and materials specifically concerning the alleged concurrent treatment only. This case does not involve medical necessity of treatment—rather, concurrent care. The plaintiff is entitled to those documents in this case which concern the issue of concurrent care, whether relied upon by other providers or in peer reviews. Within 30 days of the date of this order, the defendant shall provide the plaintiff, if not already provided, with copies of all documents, independent medical examinations, bills et al. which concern treatment to the claimant’s right shoulder, lower back, cervical or lumbar spine or neck. Such therapies shall include massage, ultrasound, mechanical traction, electric stimulation, hot and cold packs and therapeutic exercises and activities performed by any provider. If the defendant fails to turn over any such documents or materials, it shall be precluded from offering such materials and items at trial, whether through direct use or through the testimony {**5 Misc 3d at 844}of an expert witness who has reviewed such documents in the formulation of his or her opinion.

Based on the foregoing, this court declines in this case to permit the disclosure of protected health information of the entire no-fault file. (See 45 CFR 164.512 [e].)

Footnotes

Footnote *: The assignment reads, in relevant part, that “I hereby instruct and direct the ___ Insurance Company to pay by check made out to . . . mailed directly to . . . or if my current policy prohibits direct payment to doctor, then I hereby also instruct and direct you to make out the check to me and mail it as follows . . . For professional or medical expense benefits allowable and otherwise payable to me under my current insurance policy as payment toward the total charges for professional services rendered.this is a direct assignment of my rights and benefits under the policy . . . I also authorize the release of any information pertinent to my case to any insurance company, adjuster, or attorney involved in this claim.” Further, the application for no-fault benefits provides that “This authorization or photocopy hereof will authorize you to furnish all information you may have regarding my condition while under your observation or treatment, including the history obtained, X-ray and physical findings, diagnosis and prognosis. You are authorized to provide this information in accordance with the new york comprehensive automobile reparations act (no-fault law).” Neither statement complies with 45 CFR 164.508 (c).

District Court Of Nassau County, First District,

INDEX NO. 32065/02

Joel K. Asarch, J.

The following named papers numbered 1 to 4 were submitted on this Notice of Motion on July 18, November 5, November 20 and November 24, 2003:

Notice of Motion and Affidavits Annexed 1-2

Order to Show Cause and Affidavits Annexed

Answering Affidavits 3

Reply Affidavits 4

Factual Background

The forty-eight (48) cases listed in the above caption have been joined for the purposes of the instant motion only. The plaintiffs (hereinafter “plaintiff” or “medical provider”) are all medical providers, being represented by the same law firm, and the defendant in all forty-eight (48) cases is Government Employees Insurance Company (hereinafter “GEICO” or “insurance carrier”) . In all of the actions, the plaintiff is seeking recovery of no-fault benefits from GEICO, due to medical services provided to the plaintiff’s assignors, for injuries allegedly resulting from various motor vehicle accidents.

The plaintiff moves, pursuant to CPLR 3103(a), for a protective order vacating GEICO’s notice to compel the examination before trial (hereinafter “EBT”) of the medical provider. The plaintiff claims that as a matter of law, the defendant is not entitled to an EBT of the plaintiff. In the alternative, the plaintiff requests that if the Court should deny the plaintiff’s motion for a protective order, then the Court order supervised discovery, pursuant to CPLR 3104. GEICO opposes the plaintiff’s motion and cross-moves for an order granting costs and sanctions.

The legislature’s intent in enacting the no-fault law was to ensure that every automobile [*7]accident victim be compensated for substantially all of his or her basic economic loss (i.e., first party benefits ^[FN12]) promptly, without regard to fault and to significantly reduce the number of automobile personal injury cases litigated in the courts (see, Johnson v. Hartford Ins. Co., 100 Misc.2d 367, 418 N.Y.S.2d 1009 [Sup Ct Monroe County 1979]; Licari v. Elliot, 52 N.Y.2d 230 [1982]; Zlatnick v. GEICO, N.Y.L.J. 12/8/03, p. 21, col.1, 2003 WL 22849608, 2003 NY Slip Op. 23870 [Civil Court, Queens County], citing Medical Society of State of New York v. Serio, 100 N.Y.2d 853 (2003). Contrary to the legislature’s intent, however, in a large number of cases, prompt compensation is not occurring. Rather, medical providers, who have been assigned the injured victim’s right to first party benefits are resorting to litigation in New York courtrooms for recovery of first party benefits. In recent years, the Nassau County District Court, as well as many courts of limited jurisdiction in New York State, have become swamped with no-fault litigation for the recovery of first party benefits. Due to the recent influx of no-fault litigation, this Court has had to tackle numerous first impression, no-fault substantive and procedural issues. In fact, this Court has set up no-fault discovery conference calendars, to help ease the burden on the Court and to try to promote the intent of the legislature (i.e., prompt payment and/or resolution of no-fault claims).

The Court finds the legal issues presented in the parties’ respective motion papers to be as follows:

(1)Is an insurance carrier entitled to an EBT of a medical provider under the CPLR and the UDCA?

(2)Is an insurance carrier entitled to an EBT of a medical provider, as well as answers to [*8]interrogatories in a No-Fault Action?

(3)Is an insurance carrier entitled to an EBT of a medical provider, under the No-Fault Regulations, if it failed to request an oral Examination Under Oath under the New York Compilation of Codes, Rules and Regulations?

(4)Is the insurance carrier estopped from requesting an EBT of a medical provider because the insurance carrier failed to seek additional verification, under the New York Compilation of Codes, Rules and Regulations?

(5)Does the burden of proving “Medical Necessity” effect the insurance carrier’s right to an EBT of a medical provider?

(6)Do “Special Circumstances” exist, thereby permitting the plaintiff to produce a medical consultant, rather than the medical provider for the EBT?

(7) Is Court-supervised discovery necessary?

(8) Is the insurance carrier entitled to sanctions and costs?

II. LEGAL ISSUES AND ANALYSIS

A protective order is designed to guard against disclosure abuses. CPLR 3103(a) states, in relevant part, that:

” … The Court may at any time on its own initiative, or on motion of any party or of any person from whom discovery is sought, make a protective order denying, limiting, conditioning or regulating the use of any disclosure device. Such order shall be designed to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts.”

Thus, pursuant to the CPLR and UDCA, a protective order may be used, no matter what disclosure device is implicated. In the instant case, the disclosure device at issue is an EBT of a medical provider in a no-fault case. In addition, by its own terms, the statute allows a protective order to be moved for “at any time” (CPLR 3103[a]). When deciding whether to grant a protective order, the Court must balance the importance of the information sought against the degree of prejudice the disclosure device would impose (see, Cynthia B. v. New Rochelle Hospital Medical Center, 60 N.Y.2d 452 [1983]).

The Court can regulate discovery, pursuant to a protective order, by directing the time, order, place and questions to be asked in an EBT, or dictating the disclosure devices to be used or combination thereof, and even by defraying the costs of a party’s participation in the disclosure (see, [*9]Church E. Dwight Co. Inc. v. Uddo & Associates, Inc., 159 A.D.2d 275, 552 N.Y.S.2d 277 [1st Dept 1990]; Weeks Office Products, Inc. v. Chemical Bank, 178 A.D.2d 113, 577 N.Y.S.2d 10 [1st Dept 1991]).

Moreover, the Court has broad discretion in limiting or regulating the use of disclosure devices (see, Brignola v. Pe-Fei Lee, M.D. P.C., 192 A.D.2d 1008, 597 N.Y.S.2d 250 [3d Dept 1993]).

(1)Although Pursuant to the CPLR and UDCA an Insurance Carrier is Entitled to an EBT of a Medical Provider in No-Fault Cases, a Condition Precedent to Such EBT in Cases Involving the Issue of “Medical Necessity” is a Showing by the Insurance Carrier that it Issued a Timely Denial of the No-Fault Claim Based on the Ground of “Medical Necessity”.

The plaintiff claims that the defendant insurance carrier is not entitled to an EBT of the medical provider under the CPLR and the UDCA. The plaintiff’s counsel asserts that the defense counsel’s demand for an EBT of the medical provider is in violation of CPLR 3101(a) because the two prong test set forth in CPLR 3101(a) cannot be met. The plaintiff’s position is that an EBT of the medical provider is not material and necessary to the defense of no-fault actions. The plaintiff feels that the defendant is not seeking discovery, but rather the defendant’s true motive is simply to harass and overburden medical providers with useless and duplicative depositions and to interfere with a medical provider’s ability to run a medical practice. The plaintiff’s counsel supports its position by claiming that in every action commenced by the plaintiff’s law firm against the defendant, the defendant has routinely served a demand for an EBT, regardless of the type of claim, or the amount of the claim. In further support of its argument, plaintiff’s counsel states that the relatively simple issues existing in an action for no-fault benefits do not warrant an extensive and overly burdensome EBT of a medical provider. The plaintiff’s counsel also claims that the expenses in preparing for and appearing at a lengthy EBT far outweigh the potential award in most actions, which are of relatively small amounts. In essence, the plaintiff’s counsel asserts that the medical providers will never recover their fees, if required to attend useless depositions.

The insurance carrier claims that it is entitled to an EBT of the plaintiff under the CPLR and UDCA. The defendant’s counsel asserts that the insurance carrier is not trying to harass the plaintiff, but rather an EBT of the medical provider is an essential discovery device for gathering information, material and necessary to the defense of no-fault law suits. The insurance carrier’s counsel claims that, after a review of the carrier’s records, no medical provider represented by the plaintiff’s law firm has ever appeared for an EBT requested by the defendant’s firm, despite a claim by defense counsel that the plaintiff’s law firm has served approximately two thousand four hundred and thirty six (2,436) law suits upon the defendant in the year 2002. The defendant’s counsel suggests that the plaintiff simply has no intention of ever complying with the CPLR, by producing a medical provider for an EBT.

UDCA §1101(a) requires that the Nassau County District Court adopt all of the procedures [*10]set forth in the CPLR with regard to disclosure.

CPLR 3101 states, in pertinent part, that:

“(a) Generally. There shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof, by:

(1) a party, or the officer, director, member, agent or employee of a party;

(2) a person who possessed a cause of action or defense asserted in the action; …”

Accordingly, pursuant to CPLR 3101(a), in the Nassau County District Court there shall be “full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof“. The words “material and necessary” should be interpreted liberally to “require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test to determine if the information sought is material and necessary is one of usefulness and reason” (see, Allen v. Crowell-Collier Publishing Co., 21 N.Y.2d 403, 406- 407 [1969]; see also U S Ice Cream Corp. v. Carvel Corp., 190 A.D.2d 788, 593 N.Y.S.2d 861 [2d Dept 1993]). The term “necessary” has been construed to mean “needful” rather than “indispensable” (see, Allen v. Crowell-Collier Publishing Co., 21 N.Y.2d 403, supra). “[I]f there is any possibility that the information was sought in good faith for possible use as evidence-in-chief or in rebuttal or for cross-examination, it should be considered ‘evidence material … in the prosecution or defense'” (In re Comstock’s Will, 21 A.D.2d 843, 844, 250 N.Y.S.2d 753, 755 [4th Dept 1964]). However, the Allen case makes clear that disclosure extends to all relevant information calculated to lead to relevant evidence, not just information that can be used as evidence in chief (see, CPLR 3101, Siegel, Practice Commentaries McKinney’s Cons. Laws of NY, Book 7B, CPLR c3101:7, at 18 citing West v. Aetna Casualty and Surety Co., 49 Misc.2d 28, 266 N.Y.S.2d 600 [1965] mod’d. 28 A.D.2d 745, 280 N.Y.S.2d 795 [3d Dept 1967]; see also Wiseman v. American Motor Sales, Corp., 103 A.D.2d 230, 479 N.Y.S.2d 528 [2d Dept 1984]). “If the data elicited is within the broad scope of CPLR 3101(a) as construed in the Allen case, the excursion should be called a ‘relevant inquiry’. That would leave [the term] ‘fishing expedition’ to describe the inquiry that goes beyond that extended compass … ” (Siegel, Practice Commentaries McKinney’s Cons. Laws of NY, Book 7B, CPLR c3101:8, at 18). Furthermore, matters relating to disclosure lie within the broad discretion of the trial court, as it is in the best position to determine what is material and necessary (see, Allen v. Crowell-Collier Publishing Co., supra; see also, Anderson v. Cornell University, 225 A.D.2d 946, 638 N.Y.S.2d 852 [3d Dept 1996]).

Applying the principles established in the Allen case to the issue of an insurance carrier’s right to an EBT of a medical provider in a no-fault case, the Court finds that provided certain conditions are met by an insurance carrier, the carrier is entitled to an EBT of a medical provider. The Court of Appeals has clearly held that, pursuant to the no-fault regulations, in a case in which no additional verification is timely sought, an insurance carrier must pay or deny a claim of no-fault [*11]benefits within thirty (30) days from the receipt of a claim or be precluded from interposing a defense to the denial of the claim, with limited exceptions (see, Presbyterian Hospital v. Maryland Casualty Co., 90 N.Y.2d 274 [1997]). In the case of a defense of “medical necessity”, the Courts have held a medical provider is precluded from raising a defense of “medical necessity” where the denial was not timely and that summary judgment in favor of the medical provider is appropriate in such situations, provided the plaintiff submits proper proof of the claim and the amount of the loss (see, Presbyterian Hospital v. Maryland Casualty Co., supra.; Rombom v. Interboro, 186 Misc.2d 847, 721 N.Y.S.2d 474 [NY Sup App Term 2000]). Thus, when the insurance carrier has failed to issue a timely denial, no further discovery, which includes an EBT of the medical provider, is permissible on any defense, except if the insurance carrier’s defense falls within limited exceptions. The limited exceptions set forth in the Presbyterian case are where untimely denials are of no consequence because the insurer is not required to pay the claim and where the claim is ultimately deemed invalid (see, Presbyterian v. Maryland, supra). Such situations include, inter alia, fraud and a lack of coverage defense based upon a belief that the alleged injury does not arise out of the insured accident (see, Central General Hospital v. Chubb Group of Insurance Companies, 90 N.Y.2d 195 [1997]; Mount Sinai Hospital v. Triboro Coach, Inc., 263 A.D.2d 11, 699 N.Y.S.2d 77 [2d Dept 1999]).

If an insurance carrier has made a timely denial, based upon “medical necessity”, then its objective in seeking an EBT of the medical provider is not a means of harassing the medical provider, but rather the insurance carrier is trying to obtain relevant information on its defense of “medical necessity”. Certainly in cases where an insurance carrier timely denied the no-fault claim based upon the ground of “medical necessity”, the carrier is entitled to explore why the medical provider or treating physician determined the treatment to be necessary. However, if an insurance carrier seeks an EBT of a medical provider to inquire about the “medical necessity” of the treatment provided to the plaintiff’ s assignor when the insurance carrier has failed to timely deny the medical provider’s claim, then the motive for such request is questionable. The Court must also add, although not raised in the plaintiff’s papers, even if an insurance carrier has timely denied the medical provider’s claim based on “medical necessity”, a carrier’s motive for taking an EBT of a medical provider who performs scientific or objective testing of its assignor, due to a determination of “medical necessity” by the assignor’s treating physician, must also be questioned.

Furthermore, the Court rejects the plaintiff’s contention that the issues concerning “medical necessity” for treatment in no-fault cases are simple, thereby obviating the need for an EBT of the medical provider (see, Albatros Medical PC v. GEICO, 196 Misc.2d 656, 766 N.Y.S.2d 309 [NY City Civil Ct 2003]). In Albatros, the Court held that a medical provider is required to submit to an EBT in a no-fault case.

Lastly, any argument by the plaintiff that an EBT of a medical provider in some cases outweighs the potential award is unpersuasive. The Insurance Law allows a medical provider to arbitrate its no-fault claim and take advantage of the simplified procedures involved in arbitration (see, Ins. Law §5106[b]; 11 NYCRR 65.17). Thus, the plaintiff had a less inconvenient and less expensive forum in which to resolve its dispute. The plaintiff did not opt to arbitrate its claim. [*12]Rather, the plaintiff elected to proceed by way of litigation in the Nassau County District Court and thus it must comply with the discovery procedures set forth in the CPLR and the UDCA (see, UDCA §1101[a]; CPLR 3101; see also, Albatros Medical P.C. v. GEICO, supra. [“Plaintiff having elected to proceed by way of litigation in the courts, must comply with CPLR Article 31. In rejecting the expeditious and economical option of arbitration, plaintiff cannot now seek to use the rules of arbitration in the courts.”].

Accordingly, this Court holds that, provided certain conditions are met by an insurance carrier, a carrier is entitled to an EBT of a medical provider pursuant to the UDCA and the CPLR. A condition precedent to such EBT in cases involving the issue of “medical necessity” is a showing by the insurance carrier, that it issued a timely denial of the no-fault claim, based on the ground of “medical necessity”. In contrast, an insurance carrier is entitled to an EBT on a fraud ground and/or a lack of coverage ground, whether or not a timely denial was issued.

In view of the foregoing, the plaintiff’s motion for a protective order vacating the defendant’s notice of an EBT of the medical provider shall be granted on any case in which there was not a timely denial based upon “medical necessity”, unless the insurance carrier, in good faith can set forth a defense of fraud or lack of coverage.

Within thirty (30) days of the date of this decision, on all forty-eight (48) cases, the defendant shall provide this Court with a showing of a timely denial, based on “medical necessity” or submit an affirmation setting forth in good faith a need for the EBT, based upon a defense of fraud or lack of coverage. Such EBTs shall be scheduled within thirty (30) days of such showing. As it has in the past, this Court will entertain the option of holding such EBTs at the medical provider’s offices so as to reduce the inconvenience to such provider.

Notwithstanding the foregoing, in those cases where a disclosure stipulation has been entered into between the parties providing for the examination under oath of the plaintiff (to wit: in index numbers 15828/01; 15846/01; 24320/02; 32041/02; 32047/02; 32058/02; 32059/02; 32067/02; 32077/02; 32087/02; 32097/02 and 32115/02), the Court will not disturb the parties’ agreement. Such agreed upon deposition shall proceed and be held within forty five days (45) from the date of service of a copy of this decision and Order upon the plaintiff’s counsel.

(2)An Insurance Carrier in a No-Fault Action May Serve Interrogatories and Conduct an EBT of a Medical Provider, Provided Said Disclosure Devices are Not Repetitive.

The plaintiff claims that the insurance carrier’s request for an EBT is merely duplicative of the interrogatories already requested and the plaintiff’s answers to the interrogatories provide the insurance carrier with all the information that it requires for the defense of the instant claim. The insurance carrier claims that the interrogatories are mainly directed to the issues of the plaintiff’s licensing and billing particulars. The insurance carrier further claims that while documents are attached to the plaintiff’s interrogatories, a number of these documents are useless without an EBT [*13]of the medical provider who prepared the documents.

CPLR 3130 makes interrogatories and depositions mutually exclusive without leave of Court if interrogatories are served, in actions for damages for (1) injury to property, (2) personal injury or (3) wrongful death based solely on a cause of action for negligence. No such statutory restriction applies in a no-fault case. However, the Courts will not tolerate unwarranted repetitive uses of disclosure devices, such as multiple depositions or interrogatories (see, Blittner v. Berg and Dorf, 138 A.D.2d 439, 525 N.Y.S.2d 858 [2d Dept 1988]). Moreover, although the CPLR generally permits a party to utilize interrogatories and depositions, a party should complete one discovery device before conducting another one (see, Zlatnick v. GEICO, supra. and the cases cited therein — “Only when the first chosen discovery device does not satisfactorily yield information can a party utilize the other discovery device,” Id.). Thus, an insurance carrier should not be entitled to serve interrogatories and an EBT notice in a “knee-jerk” reaction to every no-fault lawsuit without demonstrating why responses to written interrogatories were somehow lacking.

In the instant cases, it is not clear whether the EBT demand and the interrogatories were served upon the plaintiff at the same time. The plaintiff apparently has answered all of the interrogatories. The defendant’s interrogatories consisted of twenty-four (24) questions. The interrogatories demanded answers and required documents to be attached. Contrary to the defendant’s contentions, questions four (4) through nine (9) are not merely licensing and billing questions. These questions request, inter alia, what diagnostic tests were performed and any notes and reports taken concerning the medical treatment.

Although questions four (4) through nine (9) are directed at the medical treatment of the plaintiff’s assignor and may indeed be duplicative of questions asked of a medical provider at an EBT, said EBT would certainly encompass additional questions on the issue of “medical necessity”and on the medical treatment provided to the plaintiff’s assignor. Thus, this Court does not find the deposition of the medical provider to be merely repetitive of the interrogatories. Furthermore, in these cases, the defendant’s counsel asserts that an EBT of the medical provider is necessary to explain the documents (i.e., notes and records) attached to the plaintiff’s interrogatories. Thus, in the cases before this Court, unlike the Zlatnick case, the insurance carrier has articulated the problem with the plaintiff’s responses to the defendant’s interrogatories and demonstrated the need for an EBT.

Accordingly, the plaintiff’s motion for a protective order, vacating the defendant’s notice for an EBT on the grounds of a repetitive use of a disclosure device is denied. However, repetition of questions may, in an appropriate circumstance, result in sanctions for frivolous conduct.

(3/4)An Insurance Carrier Involved in Civil Litigation for the Recovery Of No-Fault Benefits is Not Precluded From Requesting an EBT of a Medical Provider Because the Insurance Carrier Failed to Request an Examination Under Oath or Additional Verification as Permitted Under the New York Compilation of Codes Rules and Regulations. [*14]

The plaintiff asserts that an insurance carrier waives its right to an EBT of the medical provider under the New York Compilation of Codes, Rules and Regulations [hereinafter “NYCRR”], when an insurance carrier fails to request an examination under oath (hereinafter “EUO”) of a medical provider within thirty (30) days of receipt of the plaintiff’s no-fault claim. The plaintiff further claims that the defendant is trying to frustrate the purpose of the no-fault law by treating the plaintiff as an adversary in violation of the NYCRR. Moreover, the plaintiff claims that the insurance carrier waives its right to an EBT because it was required to request any additional verification from the plaintiff, including documentation concerning “medical necessity”, within ten (10) business days (for documentation) or thirty (30) calendar days (for an examination) of receipt of the claim by the insurance company. The defendant’s position is that the plaintiff’s arguments are frivolous with simply no basis in law.

Prior to April 5, 2002, the NYCRR did not require an injured person or assignee to attend an “EUO’ (see, 11 NYCRR former 65.12; Medical Soc. of State of NY, Inc. v. Levin, 185 Misc.2d 536, 712 N.Y.S.2d 745 aff’d. 280 A.D.2d 309, 723 N.Y.S.2d 133 [1st Dept 2001]). The current regulations, 11 NYCRR 65-1.1, effective April 5, 2002, do require a claimant to submit to an “EUO” “as may reasonably be required”. This Court is not certain what regulation was in effect at the time of all of these claims. Regardless, however, of what regulation was in effect, any argument that an insurance carrier’s failure to request an “EUO”or to seek additional verification under the NYCRR, thereby precludes an insurance carrier from requesting an EBT of a medical provider in a no-fault litigation, is without merit (see, Albatros Medical P.C. v. GEICO, supra). The new regulations cannot be used for any claim retroactively to require an EUO (see, Bronx Medical Services P.C. ex rel. Rivera v. Lumbermans Mutual Cas. Co., 2003 WL 21402045, 2003 Slip Opinion 51022(u) [Appellate Term, June 2003]). Moreover, under the new regulation, there is no discovery prohibition if litigation is chosen by a medical provider to recover no-fault benefits. Once again, the Court must state that the plaintiff elected to proceed by way of litigation in the Nassau County District Court and thus, it must comply with the discovery procedures set forth in the CPLR and the UDCA (see, UDCA §1101[a]; CPLR 3101; see also Albatros Medical P.C. v. GEICO, supra).

Accordingly, the portion of the plaintiff’s motion for a protective order, vacating the defendant’s notice of EBT, based upon the grounds that the insurance carrier failed to request an EUO or additional verification as permitted under the NYCRR is denied, as without merit.

(5)The Burden of Proving “Medical Necessity” Does Not Affect the Defendant’ s Right to Request an EBT of A Medical Provider.

The plaintiff claims that it does not have to prove “medical necessity” and that “medical necessity” is an affirmative defense to be proved by the defendant. The plaintiff further claims that no “medical necessity” questioning should be allowed until the defendant is compelled to produce a rebuttal witness who can authoritatively testify as to a lack of “medical necessity”. The defendant claims that the issue of “medical necessity” is an issue in the case, regardless of who bears the burden. [*15]

The Appellate Term has held that the burden of establishing whether a medical test performed by a medical provider on the injured party was a “medical necessity” is on the medical provider (see, Shtarkman Neurologist, P.C. as assignee of Marian Copeitiro v. Allstate Insurance Company, 2002 WL 32001277, 2002 Slip Op. 505684 [Appellate Term, 9th and 10th Jud Dists 2002]). Notwithstanding the above, a party may obtain disclosure regardless of which party has the burden of proof as to the issues sought to be disclosed (see, CPLR 3101; see also, Baxter v. Orans, 63 A.D.2d 875, 405 N.Y.S.2d 470 [1st Dept 1978]).

Accordingly, the portion of the plaintiff’s motion for a protective order for vacatur of the defendant’s notice of EBT, upon the ground that the defendant has the burden of proving “medical necessity”, is hereby denied without merit.

(6)“Special Circumstances” Do Not Exist Permitting the Plaintiff to Produce a Non-Party Medical Consultant Rather Than the Medical Provider at the EBT.

The plaintiff claims that where “special circumstances” exist, the examining party may be permitted to designate the individual to appear at an EBT. The plaintiff’s argument to support “special circumstances” is based upon an assumption by the plaintiff that the defendant’s response to the plaintiff’s EBT notice would be to produce a “claims representative”, rather than the individual(s) who actually performed the independent medical exam (hereinafter “IME”) or peer review. The plaintiff further claims that if the plaintiff must produce the medical provider for an EBT, then the defendant must produce the individual(s) who actually performed the IME or peer review at an EBT of the defendant. The defendant’s position is that the plaintiff fails to show “special circumstances” that would allow for the deposition of a non-party medical consultant. It should be noted that CPLR 3101(a)(4) is relevant to the examination of a non-party witness.

The Court is not certain whether, in the instant cases, EBTs have been requested of the insurance carrier, and/or whether the insurance carrier has objected to said EBTs. The Court is aware that in many of these cases, disclosure stipulations have been entered into providing for depositions of physicians, claims examiners and others with knowledge of the facts. As to these stipulations which have been “so ordered” by the Court, the Court will uphold the agreements. In those cases where no stipulations have been entered into, the issue of whom the insurance carrier must produce at an EBT must await a ripe issue and proper motion. The issue before this Court, on this motion, is whom may be produced at an EBT of the medical provider.

Absent compelling circumstances a party is entitled to produce the testifying witness of its choice ( see, Fernandez v. St. John’s Episcopal Hospital, South Shore Division, 70 A.D.2d 627, 416 N.Y.S.2d 638 [2d Dept 1979]). When additional persons are sought to be deposed, the examining party must carry the burden of demonstrating that the person previously deposed possessed insufficient knowledge or was otherwise inadequate (see, Fernandez v. St. John’s Episcopal Hospital, South Shore Division, supra). Thus, pursuant to the case law, the medical provider may produce the testifying witness of its choice. However, this witness must have adequate knowledge [*16]of the treatment and testing of the medical provider’s assignor. In the case of an individual medical provider, the only individual with sufficient knowledge to be deposed regarding the treatment of the assignor would be the actual medical care provider. In the case of a corporate entity, any one of the treating physicians may be produced.

In these cases, after a deposition of the plaintiff has been conducted, and in those rare cases where the defendant believes the individual produced by the corporate medical entity was insufficient, the defendant may submit an affidavit on notice to the Court requesting an additional EBT. If the facts warrant, the Court will require the plaintiff to pay for the cost of the additional EBT.

In view of the foregoing, the plaintiff’s motion requesting that a non-party medical consultant appear at the EBT for the medical provider, is denied.

(7)Court Supervised Discovery is Not Warranted in this Case.

The plaintiff requests Court ordered discovery pursuant to CPLR 3104, but sets forth no legal argument for the need for said request. The insurance carrier asserts that supervised discovery is not necessary in the instant case and would only unduly burden the Court.

CPLR 3104(a) states, in relevant part, that:

“Upon the motion of any party or witness on notice to all parties or on its own initiative without notice, the court in which an action is pending may by one of its judges or a referee supervise all or part of any disclosure procedure.”

The supervisory power, given to the Court by CPLR 3104(a) should be exercised sparingly and only when there is a “special circumstance” (see, DiGiovanni v. Pepsico, Inc., 120 A.D.2d 413, 502 N.Y.S.2d 23 [1st Dept 1986]). The Court does not find court-ordered supervision to be warranted at this time as “special circumstances” have not been shown, nor has the plaintiff even demonstrated that supervised discovery would be helpful.

(8)The Defendant is Not Entitled to Sanctions and Costs.

The defense attorney claims that sanctions are necessary under 22 NYCRR 130-1.1 because the plaintiff has engaged in frivolous conduct. The plaintiff opposes the defendant’s request for sanctions and claims that it has the procedural right under the CPLR and UDCA to challenge the propriety of the defendant’s EBT demands.

22 NYCRR 130-1.1(a) provides, in pertinent part, that: [*17]

The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court, except where prohibited by law, costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney’s fees, resulting from frivolous conduct as defined in this Part. In addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.

22 NYCRR 130-1.1(c) defines conduct as frivolous if:

(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false.

Frivolous conduct shall include the making of a frivolous motion for costs or sanctions under this section. In determining whether the conduct undertaken was frivolous, the Court shall consider, among other issues, (1) the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct, and (2) whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party.

The Court does not find the plaintiff’s motion for a protective order to be frivolous, as the plaintiff’s arguments are not completely without merit, undertaken to delay or assert material factual statements that are false. Sanctions are simply not warranted in this case.

Accordingly, the defendant’s request for sanctions pursuant to 22 NYCRR 130-1.1 is hereby denied.

This constitutes the decision and order of this Court.

E N T E R:

DISTRICT COURT JUDGE

Dated:December 26, 2003

CC:Baker & Barshay, LLP [*18]

Law Offices of Teresa M. Spina

Caption endnotes:

Decision Date: December 26, 2003

Footnotes

Footnote 1: By order dated September 18, 2003, summary judgment was granted in favor of plaintiff and the defendant on the third and fourth causes of action

Footnote 2: Action discontinued by stipulation

Footnote 3: By order dated October 2, 2003, summary judgment was granted in favor of plaintiff defendant on the third through sixth and ninth and tenth causes of action

Footnote 4: By order dated September 18, 2003, summary judgment was granted in favor of the plaintiff the defendant

Footnote 5: By order dated September 22, 2003, summary judgment was granted in favor of plaintiff on the first and second causes of action, and in favor of defendant dismissing the third and fourth causes of action

Footnote 6: By order dated November 6, 2003, summary judgment was granted in favor of plaintiff the defendant on the first and second causes of action

Footnote 7: Action discontinued all assignors except Nohemy Marquez

Footnote 8: Action discontinued by letter

Footnote 9: Dismissed by Order dated December 3, 2003

Footnote 10: By order dated October 3, 2003, summary judgment was granted in favor of plaintiff defendant on the first, second, seventh and eighth causes of action

Footnote 11: By order dated September 29, 2003, summary judgment was granted in favor of plaintiff defendant on first and second causes of action

Footnote 12: “Party Benefits” are basically a reimbursement to a person for “basic economic loss” on account of personal injury arising out of the use or operation of a motor vehicle, less certain deductions prescribed by statue (Insurance Law § 5102[b]).

“First party benefits” means payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle, less:

(1) Twenty percent of lost earnings computed pursuant to paragraph two of subsection (a) of this section

(2) Amounts recovered or recoverable on account of such injury under state or federal laws providing social security disability benefits, or workers’ compensation benefits, or disability benefits under article nine of the workers’ compensation law, or medicare benefits, other than lifetime reserve days and provided further that the medicare benefits utilized herein do not result in a reduction of such person’s medicare benefits for a subsequent illness or injury.

(3) Amounts deductible under the” applicable insurance policy ” (Insurance Law § 5102[b]).

[*1]

District Court of Nassau County, December 12, 2003

APPEARANCES OF COUNSEL

Belesi & Donovan, P.C., for plaintiff. Robert P. Macchia & Associates for defendant.

{**2 Misc 3d at 638} OPINION OF THE COURT

Scott Fairgrieve, J.

Plaintiff’s application pursuant to CPLR 3215, seeking entry of default judgment in favor of plaintiff against defendant Allstate Insurance Company must be denied and the action dismissed for the reasons stated herein.{**2 Misc 3d at 639}

Plaintiff Carlos R. Tauz, L.M.T., as assignee of Juan E. Lucero, seeks to recover the sum of $6,397.59 for medical services provided to Mr. Lucero pursuant to the No-Fault Law, article 51 of the Insurance Law, and the regulations of the New York State Insurance Department (11 NYCRR 65.10 et seq.). The affidavit of service states that Allstate was served with the summons and complaint on August 27, 2003 at 10:00 a.m. in Suffolk County at 888 Veterans Memorial Highway, Hauppauge, New York. A letter dated October 1, 2003 was sent to Allstate at a Nassau County address at 60 Charles Lindbergh Boulevard, Uniondale, New York 11553, stating that plaintiff would seek a default judgment against Allstate unless an answer was served within 10 days. The second page of the notice of motion provides that Allstate is located at 60 Charles Lindbergh Boulevard, Uniondale, New York 11553. However, the affidavit of service concerning the application for a default [*2]judgment was mailed to Allstate at a different Nassau County address, 1111 Marcus Avenue, Lake Success, New York.

This court has seen numerous cases involving no-fault claims where service is made at one location and other types of mailings are sent to a different location which in the opinion of the court is a deliberate attempt to cause confusion on a large insurance company with the result that a default judgment may be entered. This court will no longer tolerate this gamesmanship and will dismiss actions or refuse to enter default judgments when the law is not followed. UDCA 403 states:

“Service of summons shall be made in the manner prescribed in supreme court practice, including the optional method of service by mail authorized by CPLR 312-a, but it shall be made only within the county unless service beyond the county be authorized by this act or by such other provision of law, other than the CPLR, as expressly applies to courts of limited jurisdiction or to all courts of the state.”

Pursuant to UDCA 403, service must be made within Nassau County unless service is authorized by some other provision of law such as UDCA 404.

UDCA 404 (d) states:

“(d) Corporation or association. If service of the summons cannot be effected by personal delivery thereof within the county so as to acquire in personam jurisdiction of a corporation or unincorporated association, such corporation or association shall {**2 Misc 3d at 640}be deemed a non-resident of the county for purposes of this section.”

It is clear from reading UDCA 404 (d) that a corporation can only be served outside Nassau County if it can’t be served by personal delivery within Nassau County.

Plaintiff has demonstrated to the court that Allstate has at least two Nassau locations. This court has already ruled that service of a summons and complaint upon an insurer outside Nassau County when it has an office in Nassau County for personal delivery of pleadings is ineffective to confer jurisdiction upon the defendant insurer. (See Beverly Hills v AIG Ins. Co., 194 Misc 2d 533 [Nassau Dist Ct 2003].)

In Long Is. Garage Door Co. v Stafford (53 Misc 2d 568 [Nassau Dist Ct 1967]) plaintiff sought an order amending the summons nunc pro tunc. Service was made outside Nassau County and served in Suffolk County. The court stated that service of the summons outside Nassau County was void and deprived the court the ability to allow amendment of the summons unless service was specifically authorized. The court stated (at 569):

“A somewhat different situation presents itself here. In this case, the summons was served outside the territorial jurisdiction of this court. [*3]This can be validly done only under certain statutorily prescribed circumstances. (See UDCA, §§ 403, 404.)

“It may well be that one reason formal pleadings are required by the statute where service is made without the county is to apprise the defendant of what the jurisdictional basis for such service is, if any, and to enable him to attack jurisdiction if he were so advised.

“CPLR 320 (subd. [b]) provides that objection to jurisdiction over the person must be raised by answer or motion or it is waived.

“The court cannot act to direct an amendment of the summons unless it has jurisdiction. Certainly, a summons served outside the territorial jurisdiction of this court is void except as specifically provided for (UDCA, § 403). Even an appearance by defendant will not confer jurisdiction where personal jurisdiction is based solely upon section 404 of the UDCA if the cause does not, in fact, arise out of an act enumerated therein.

“It is incumbent upon the plaintiff to demonstrate that this court, at least prima facie, has jurisdiction here {**2 Misc 3d at 641}and that service outside the county was properly authorized.”

In Made-Ready Door Co. v Fox Ledge Corp. (86 Misc 2d 518 [Suffolk Dist Ct 1976]), service was made to the individual Melvin Casher by delivery of the summons and complaint to a person of suitable age and discretion at his place of employment in Suffolk and mailing same to Mr. Casher to his Nassau County residence.

The court wrote that service outside Suffolk by mailing the summons and complaint to Mr. Casher’s home in Nassau was not justified by either UDCA 403 or 404 (at 519-520):

“It is this court’s opinion that the delivery of a summons to a person of suitable age and discretion at the defendant’s actual place of business within the jurisdictional limits of the court and mailing a copy of the summons to the defendant’s last known residence outside the territorial limits of the court constitutes service outside the territorial limits of the court requiring the jurisdictional basis to be alleged in the complaint. The mere fact that a copy of the summons was delivered to the defendant’s actual place of employment is immaterial. Service could not have been completed without mailing a copy of the summons to the defendant’s last known residence outside the county. The fact that the defendant is regularly employed within the territorial limits of the court, in itself, does not justify extraterritorial service. (Roder v Goldsmith, 49 Misc 2d 882.)

“The Uniform District Court Act requires that a summons must be served within the county in which the action is brought unless otherwise authorized by, such act or provision of law other than the CPLR. (UDCA, § 403.) Section 404 of the Uniform District Court Act more specifically provides those instances when extraterritorial service may be made upon a nonresident. In these instances extraterritorial service may be made upon a nonresident. In these instances extraterritorial service may be made upon a nonresident but only if the jurisdictional basis is alleged in the pleadings. (All-State Credit Corp. v Defendants Listed in 669 Default Judgments, 61 Misc 2d 677; Henry Sash & Door Co. v Medi-Complex, 69 Misc 2d 269.)”

In Coffman v National Union Fire Ins. Co. of Pittsburgh, Pa. (60 Misc 2d 81 [Nassau Dist Ct 1969]), the automobile accident occurred {**2 Misc 3d at 642}in Queens County and the action arose out of a dispute over medical payments. The plaintiff and the defendant’s insured resided in Queens County. The defendant insurance company had a Nassau office at the time of the accident but this office was subsequently closed before service of the summons and complaint. Service was made upon the defendant in New York County.

Defendant moved to dismiss because no grounds existed under UDCA 404 for the court to exercise jurisdiction over the defendant.

The court dismissed the action because no basis existed under the criteria of UDCA 404 to sustain jurisdiction and permit service outside the county. The court further noted that the complaint failed to allege jurisdictional facts which would allow the court to invoke in personam jurisdiction over the nonresident. Based upon the foregoing, the court dismissed the action without prejudice.

In the case at bar, no justification exists to allow service upon Allstate in Suffolk when Allstate has two offices located in Nassau County by the plaintiff’s own admission. This court will not permit this type of practice to continue whereby service is made outside Nassau County and other types of notices are sent to different offices within Nassau with the apparent attempt to cause confusion with the defendant so that a default judgment may result.

The submission of a motion does not impose upon the court a ministerial duty to grant the relief sought. This court has the inherent power not to enter judgment (even on default) where jurisdiction is lacking. (See Rivera v Laporte, 120 Misc 2d 733 [Sup Ct, NY County 1983]; Weinstein-Korn-Miller, NY Civ Prac ¶ 3215.09; Howard Oil Co. v Morris, 90 Misc 2d 713 [Civ Ct, NY County 1977]; Kahn v Friedlander, 90 AD2d 868 [3d Dept 1982].)

This court is dismissing the plaintiff’s action without prejudice.

Conclusion

Service upon Allstate in Suffolk County is prohibited under UDCA 403 and 404 where Allstate has a Nassau County office. No basis has been shown in the complaint nor in the moving papers to permit long-arm service under UDCA 404. Thus the complaint {**2 Misc 3d at 643}is dismissed without prejudice to be renewed upon service authorized by UDCA 403.