Civil Court of the City of New York, Kings County

99743/09

Attorneys for Plaintiff QUALITY PSYCHOLOGICAL SERVICES

Law Offices of Melissa Betancourt

155 Kings Highway, 3rd Floor

Brooklyn, NY 11223

Attorneys for Defendant HARTFORD INSURANCE COMPANY

Iseman, Cunningham, Riester & Hyde, LLP

2649 South Road, Suite 230

Poughkeepsie, NY 12601

Harriet Thompson, J.

Motion Cal No.Motion Seq. #

Papers Submitted to Special Term

on2/15/12,

DECISION/ORDER

Recitation, as required by CPLR §2219 (a), of the papers

considered in the review of this Motion

PapersNumbered

Notice of Motion ………………………………. ..1-2; 3-4

Order to Show Cause and Affidavits Annexed _____________

Answering Affidavits .._____5_____

Replying Affidavits ._____6________

Exhibits _____________

Other …………………………………………………._____________

PROCEDURAL HISTORYThis Civil Court action was commenced in or about September 21, 2009, by the service of [*2]a Summons and Endorsed Complaint to recover first-party No-Fault benefits as a result of alleged injuries arising out of an automobile accident which occurred on July 25, 2008. In or about November 17, 2009, the Defendant interposed a Verified Answer which contained various applicable and inapplicable affirmative defenses.

The Defendant moves this Court for summary judgment pursuant to CPLR §3212 by Notice of Motion returnable on August 16, 2011 on the grounds that the Plaintiff failed to submit to two properly scheduled Examinations Under Oath (hereinafter “EUO”), a condition precedent to insurance coverage and a violation of the Insurance regulations, precluding recovery of the medical claim. On the return date, the attorneys, by written agreement, adjourned the motion to February 15, 2012 for the parties to engage in motion practice.

The Plaintiff, in opposition, attacks the admissibility and credibility of the Defendant’s affidavits. The Plaintiff seeks to persuade this court that the certificate of conformity affirmed by ALAN CHANDLER, ESQ. does not contain the language “under the penalties of perjury” pursuant to CPLR §2106 and therefore, is inadmissible. The Plaintiff also argues that the out-of-state affidavit of NANCY ALPIZAR is missing a certificate of conformity altogether and is void as a matter of law. Additionally, Plaintiff argues that the affidavits do not establish proper and timely mailing of the EUO notices and denials since it contains various factual discrepancies. The Plaintiff also argues that the Defendant failed to establish that EUO requests were properly mailed since the certified mail return receipts are absent from the motion; the Defendant failed to schedule the EUO’s in the county where the Plaintiff resides and therefore, it is palpably improper; and the Defendant failed to properly rebut the prima facie case of the Plaintiff and accordingly, the Plaintiff is entitled to judgment as a matter of law.

In reply, and in further support of the Defendant’s motion for summary judgment, the Defendant challenges the Plaintiff’s argument that the certificate of conformity of ALAN CHANDLER, ESQ. is defective for failure to swear “under the penalties of perjury” pursuant to CPLR §2106 and asserts that the certificates of conformity for the out-of-state affidavits are proper. The Defendant further reiterates that the affidavits of the Defendant’s Claims Representative and the Defendant’s Mailing Courier Representative are sufficient to establish the timely mailing of EUO letters and denials of the claim (NF-10) and lastly, argues that the request for a specific witness affiliated with the Plaintiff (Dr. Herbert Fischer, Ph. D., the treating physician) to appear for the EUO outside of the Plaintiff’s county was waived due the lack of any objections to the requests.

The Plaintiff, by Notice of Cross Motion, returnable on February 15, 2012, also seeks summary judgment. The Plaintiff contends that it has established its prima facie case through the submission of the proper proof of claim in the form of a health care services application (NF-3) that was properly generated and timely mailed to the Defendant in the ordinary course of business, the claim was received by the Defendant and the Defendant failed to make payment within thirty (30) days of receipt as required by No-Fault Insurance Law and regulations or to take any action to properly toll the time constraints imposed by 11 NYCCRR §65.

Both parties appeared by their attorneys and after oral argument, this Court reserved decision for a final disposition. [*3]

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The following facts are uncontroverted. Justas Kalvaitis was treated by the above named Plaintiff for alleged injuries between August 26, 2008 and September 29, 2008 for the total sum of $1,341.14. The bills for the above services were received by the Defendant on September 29, 2008.

In order to establish its prima facie case, the Plaintiff must prove that the proper notice of claim for the medical services provided to the assignor was mailed to the Defendant and received by the Defendant, and that payment of the No-Fault benefits were neither paid or denied within thirty (30) days of receipt. Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742, 774 NYS2d 564 (2nd Dept., 2004) [plaintiff hospital made a prima facie showing of their entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue]; see also Westchester Med. Center v. Liberty Mutual Ins. Co., 40 AD3d 981, 837 NYS2d 210 (2nd Dept.-, 2007); Insurance Law 5106(a).

The No-Fault Law requires the insurance carrier to either pay or deny the claim for No-Fault benefits within thirty (30) days from the date of receipt of the claim. Insurance Law, §5106(a); 11 NYCRR §65.15(g)(3). Within ten (10) business days after the receipt of the NF-2, the insurer must send verification forms to the insured or the provider. In the regulations, after receipt of the completed verification, the insurer may seek “additional verification” or further proof of claim from the insured or assignee within fifteen (15) days thereof. 11 NYCRR 65§ 3.5(b). The insurer may seek additional verification in the form of an independent medical examination (IME) within thirty (30) days from the date of the initial medical bills (11 NYCRR65.3.5(d)), or as in this case, if the insurer requires an EUO of the insured or provider to establish such proof of claim, the EUO must be based upon “the application of objective standards so that there is specific objective justification supporting the use of such examination”. Such standards are subject to review by the Insurance Department. 11 NYCRR §65-3.5(e). The regulations direct that the insured or provider be informed that the use of either the IME or EUO by the insurer require the insurer to reimburse the affected party for “any loss of earnings and reasonable transportation expenses.”

If any additional verification has not been provided to the insurer within 30 calendar days after the original request, the insurer shall, within ten (10) calendar days, “follow-up” with the noncompliant party by either telephone call or by mail. 11 NYCRR § 65.3.6 (b). At that time, the insurer must notify the claimant or their representative of the basis for the delay of the claim by “identifying, in writing, the missing verification and the party from whom it was requested.”

The prescribed thirty (30) day time line to pay or deny a claim is tolled until the insurer has received proper verification of all relevant information requested of the injured party or provider. 11 NYCRR 65.15(d), (g), (7); St. Vincent Hospital of Richmond v American Tr. Ins. Co., 299 AD2d 338, 750 NYS2d 98 (NY A.D., 2002). The burden does not shift to the insurer to pay or deny the claim until the required party has complied with the verification request.

Of course, in reality, the insurer does not always act timely. In this judicial department, the Appellate Division in Keith v. Liberty Mutual Fire Ins. Co., 118 AD2d 151, 503 NYS2d 441 (1986) determined that 11 NYCRR 65.3.8(j), which describes the process of deviation from the rules which [*4]reduces the thirty calendar days for regulatory noncompliance, that “[a]lthough the clock does not begin to run on the thirty-day calendar requirement until the insurer receives all of the necessary verification … the insurer’s lack of diligence in obtaining the verification may reduce the thirty-day period even before verification is obtained. In that case, the insurer was four business days late in requesting the verification and thus, the insurer’s thirty-day calendar days to pay or deny the claim must be reduced by four days, leaving 26 days.”

According to Judge Hagler, in Inwood Hill Med v. Allstate, 3 Misc 3d 1110 (A), 787 NYS2d 678 (NY Civ. Ct., 2004), a thorough and excellent analysis of the No-Fault regulations, the thirty (30) day rule does not apply to requests for additional verification within the prescribed time frame and this court concurs. He states that “the inconsistency may be resolved by stating that the insurer’s time is not reduced where it sought the additional verification request late but within the prescribed thirty calendar days (i.e. more than fifteen business days and up to twenty-nine days which would not effectively reduce the thirty days to zero). Where the insurer either seeks additional verification requests or even provides a time to respond outside the thirty calendar days, the proverbial clock has run and there is no need to resort to the 11 NYCRR 65-3.8(j) counting requirement. A contrary interpretation of the regulation would run counter to the clear wording of Insurance law §5106(a) providing for the strict 30-day rule. See Karciscs v. Merchants Mutual Ins. Co., 49 NY2d 451, 426 NYS2d 454 (N.Y, 1980).”

An EUO permits the insurer to question the injured party or its assignee regarding the claim. As Judge Hirsh aptly stated in Dynamic Medical Imaging, P.C. v State Farm Mutual Auto Ins., 29 Misc 3d 278, 905 N.Y.S.2d 880 (Dis. Ct. Nassau) “while an EUO has been treated by the courts as a condition precedent to coverage, the no-fault regulations treat the EUO as a form of verification. Thus, where a carrier properly demands an EUO “…the verification is deemed to have been received by the insurer on the day the examination was performed. 11 NYCRR 65-3.8(a)(1).” In addition, it has been held that the appearance at a properly demanded EUO is a condition precedent to an insurance carrier’s liability to pay no-fault benefits (Five Boro Psychological Services, P.C. v. Progressive Northeastern Ins. Co., 27 Misc 3d 141(A), 91 NYS2d 692 (N.Y.Supp. App. Term, 2010)).

As the Defendant correctly states in the instant motion, all automobile insurance policies with No-Fault endorsements in our state contain the prescribed language of the Insurance Regulations. Specifically, 11 NYCRR 65-1.1 provides that “[u]pon request by the Company, the eligible injured person or that person’s assignee or representative shall:…(b) as may reasonably be required to submit to examination under oath by any person named by the Company and subscribe same…..”

Moreover, 11 NYCRR 65-3.5 (c) states that “[t]he insurer is entitled to received all items necessary to verify the claim directly from the parties from whom such verification was requested.” Lastly, as also correctly argued by the Defendant, 11 NYCRR-1 provides that “[n]o action shall lie against the Company, unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage.” After all, the goal of the insured or provider is to get paid and each must act in good faith and cooperate with the insurer to achieve that purpose. So even if the insured believes it can not or should not comply with the insured’s request, the insured has a duty to communicate with the insurer about that request. See Dilon Med. Supply Corp. v. Travelers Ins. Co., 7 Misc 3d 927, 796 NYS2d 872 (NY Civ Ct, Kings County, 2005). [*5]

The most significant substantive issue before this court is whether the affidavits of mailing meet the requirements of the No-Fault law to establish proper proof of mailing of the EUO notices and the denials. Surprisingly, there are a significant number of cases that tackle, what at first blush appears, seemingly a simple issue. It is essential that we examine the legal criteria adopted by the courts for establishing proper mailing.

The common law doctrine of presumption of regularity is still alive in New York State despite arguments to the contrary. Generally speaking, a letter or notice that is properly stamped, addressed and mailed is presumed to be received by the addressee. News Syndicate Co. v. Gatti Paper Stock Corp., 256 NY 211, 176 NE 169 (NY, 1931); New York New Jersey Products Dealers Coop v. Mocker, 59 AD2d 970, 399 NYS2d 280 (NY A.D., 3d Dept., 1977). A simple denial of receipt has been held insufficient to rebut this presumption. Countrywide Home Loans, Inc. v. Brown, 305 AD2d 626, 760 NYS2d 200 (NY AD2d Dept., 2003) . See also Precision Dev. V. Hartford Fire Ins. Co, 10 Misc 3d 1055(A), 809 NYS2d 483 (NY Sup., 2005) where the court precluded recovery on a payment bond issued by the Defendant based on the failure of the Plaintiff to comply with the notice requirements of the State Finance Law. The court would not allow the Plaintiff’s to rely on this common law presumption of regularity to prove receipt of the required notice based on the legislative mandate that the notice of claim by the contractor be made by personal delivery or by registered mail. Conversely, the No-Fault regulations, namely, 11 NYCRR 65-3.5(a) state that once the insurer receives the NF-2 application for benefits, the insurer “[s]hall forward to the parties those prescribed verification forms it will require prior to payment of the initial claim.” As Judge Tapia recently stated in Hastava & Aleman Assoc. P.C. v. State Farm Mut. Auto Ins. Co., 24 Misc 3d 1239(A), 899 NYS2d 59 (Civ. Ct., Bx Ct., 2009) “the regulation uses “forward” to describe the manner in which notification is to be effected. The only kink is determining what constitutes sufficient “notice” because the regulation does not specify the mailing procedure by which to notify the injured party.” In that case, the court determined that the mailing of a letter by certified mail, return receipt requested is entitled to the same presumption of receipt as regular first-class mail in the absence of the signed returned receipt”. Furthermore, “satisfying No-Fault policy conditions does not have to be compromised at the expense of challenging mailing procedures because proof of mailing of verification letters via regular USPS is enough to create a presumption of receipt. In addition, the use of certified mail does not create a more demanding presumption of mailing and receipt beyond that of a letter that was properly mailed. The regulations make no distinction between sending a letter via regular mail or via certified mail.”

The presumption of receipt may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed. Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 776 (2001); Nassau Ins Co. v. Murray, 46 NY2d 828, 414 NYS2d 117 (1978); Matter of Francis v. Wing, 263 AD2d 432, 694 NYS2d 29 (NY A.D. 1st Dept., 1999); Azriliant v. Eagle Chase Assoc., 213 AD2d 573, 575, 624 NYS2d 238 (NY AD2d Dept., 1995); Phoenix Ins. Co v. Tasch, 306 AD2d 288, 762 NYS2d 99 (NY AD2d Dept., 2003); Matter of Colyar, 129 AD2d 946, 947, 515 NYS2d 330 (NY AD3d Dept., 1987). Therefore, affidavits that merely state that the bills were mailed within the statutory time period have been held insufficient to establish proof of actual mailing. Comprehensive Medical v. Lumbermens Mutual Ins. Co., 4 Misc 3d 133(A) (App. Term 9 & 10th Jud. Dists, 2004). [*6]

The burden is on the insurer to present an affidavit of an employee who personally mailed the verification/denial, or on the other hand, an affidavit of an employee with personal knowledge of the office’s mailing practices and procedures. Such individual must describe those practices or procedural in detail, explicitly denoting the manner in which she/he acquired the knowledge of such procedures or practices, and how a personal review of the file indicates that those procedures or practices were adhered to with respect to the processing of that particular claim (emphasis added).

By demonstrating its routine and reasonable office procedures, the Defendant meets its burden of proof that the notices were mailed to the plaintiff and were received. The burden then shifts to the plaintiff to rebut the presumption of receipt. Abuhamra v. New York Mut. Underwriters, 170 AD2d 1003, 566 NYS2d 156 (NY A.D. 4th Dept., 1991); Residential Holding Corp. v. Scottsdale Ins. Co., supra. It is worthy of repetition that the denial of receipt, standing alone, is insufficient to rebut the presumption. Indeed, “[i]n addition to a claim of no receipt, there must be a showing that the routine office practice was not followed or was so careless that it would be unreasonable to assume that the notice was mailed. Nassau Ins Co. v. Murray, 46 NY2d 828, 414 NYS2d 117 [1978]; See also Badio v. Liberty Mutual Fire Ins. Co., 12 AD23d 229, 785 NYS2d 52 (App. Div., 1st Dept., 2004).

Having discussed the frame work of the insurance law and regulations to lay the proper foundation for our analysis in the case at bar, the court makes the following findings of facts and conclusions of law.

The Plaintiff submitted a proof of claim in the form of a health care services application (NF-3) for reimbursement for health care services rendered to the assignor, JUSTAS KAVAITIS, in the amount of $1,341.14 for dates of services from 8/26/2008-9/16/2008.

The affidavit of STEVEN HAYDEN, an employee in the Special Investigation Unit since 1999 at Hartfort, informs the court that there was an ongoing investigation into the operation and management of the provider, QUALITY PSYCHOLOGICAL SERVICES, P.C., independent of this case. This case is yet another case that has delved into the operation and billing practices of the Plaintiff. The affidavit of STEVEN HAYDEN states that the Defendant commenced the investigation to verify bills submitted by the Plaintiff, [s]pecifically, Hartford initially questioned the fact that nearly all clinical findings of QUALITY PSYCHOLOGICAL SERVICES, P.C., were identical from patient to patient and the frequency and duration of their psychological testing and treatment appeared to be excessive. He further states that…”the bills and records…not only appeared to be boilerplate, but also incomplete and inaccurate information was provided”. Additionally, …in many records submitted…references were made to a patient’s age or sex, which was inconsistent with the other information submitted by the patient, including their no-fault application or personal identification (HAYDEN affidavit at ¶3 and ¶4). As significant, he affirmed that the Defendant “…learned that in a majority of instances these patients had not had psychological problems or complaints, yet the records submitted by QUALITY PSYCHOLOGICAL indicated otherwise and during the investigation…[he] learned that many patients actually never received treatment and/or testing billed by QUALITY PSYCHOLOGICAL to Hartford” ( HAYDEN affidavit at ¶5 and ¶6).

The court finds that the prior investigation and the investigation of this particular case produced ample evidence to warrant such a demand for the EUO and such demand was fair, [*7]reasonable and in accordance with the above insurance regulations. Based on the above findings, it is the opinion of this court that the Defendant properly sought the EUO of the treating physician, Herbert Fischer, Ph. D. to investigate the claim.The court also finds no impediment, statutorily or otherwise, for the insurer to demand the appearance of the treating physician of the Plaintiff corporation at the EUO particularly since the regulations provide that the insurer may insist on the appearance of “any person named by the Company”. 11 NYCRR 65-1.1. Moreover, since the treating physician is responsible for the actual treatment of the patient, such individual would have exclusive knowledge of the course of treatment of the assignor including but not limited to the patient’s logs, narrative reports, testing, diagnoses, prescriptions, file memoranda and the like. Although the Plaintiff argues that is was palpably improper for the Defendant to schedule the EUO outside of the county of the Plaintiff, this claim is without merit. Since the Plaintiff did not object, in writing or orally, to the EUO notice, the court finds that the Plaintiff waived any objection to the content and scope of the EUO request. Dilon Med. Supply Corp. v. Travelers Ins. Co., supra.

To establish its prima facie case, the Defendant relies on the affidavit of SARA LOMNICKY. SARA LOMNICKY, at the time of this claim, was a No-Fault Claims Specialist with the Defendant’s No-Fault Department located at 8 Farm Springs Road in Farmington, Connecticut. She states that she has knowledge of Defendant’s mailing procedures used in connection with written requests for EUO’s and/or the production of other documents, as well as the mailing of any denial of claim forms based upon her eight (8) years of employment experience at Hartford. She specifically states that “based on my personal knowledge of the preparation and mailing of the documents at issue in this matter under claim number YXHAF65085”, the EUO notices to the assignor were sent by certified mail (SARA LOMNICKY affidavit at ¶4). She explicitly describes the mailing procedures of the Defendant in paragraphs 15 (a)-(o). Based upon her knowledge of Defendant’s mailing practices and procedures and her review of the file in the instant matter, SARA LOMNICKY informs the court that the Defendant received the medical bills on September 29, 2008 and this fact is undisputed by the Plaintiff. The first EUO letter was mailed on October 3, 2008, within the prescribed fifteen (15) business days after the receipt of the claims, seeking an EUO on October 28, 2008. Then, when the Plaintiff failed to provide the documentary evidence demanded by the verification or appear for the EUO on October 28, 2008, the insurer on November 5, 2008, within ten (10) calendar days after that request, issued a “follow-up” notice for an EUO on November 26, 2008. The EUO request was in compliance with the insurance regulations by identifying the missing verification which the assignor was required to provide to comply with the insurance policy. The letter highlights that ” the policy of insurance under which [your] claim is made requires claimants to cooperate with our investigation, produce the demanded documents and [to] testify [at] an examination under oath. The EUO notice demands ten enumerated documents from ¶1- ¶10 which the Plaintiff was duty bound to produce at the EUO, since as stated above, the Plaintiff waived all objections.

On December 2, 2008, the Defendant issued a timely denial for payment of the health care services performed by the Plaintiff based on the grounds that the Plaintiff failed to appear at two scheduled EUO’s. The Defendant attaches the denial of claim form as Exhibit A-3 which explicitly states that “all benefits are denied for failure to cooperate in the claims investigation, policy condition violated and failure to appear for Examinations Under Oath on October 28, 2008 and November 26, 2008.” Furthermore, it also states that the insured or her representative did not [*8]comply with the insurance policy “without a reasonable excuse” and the insurer would reconsider its position should the assignor or representative provide a reasonable excuse for noncompliance. The Plaintiff has not offered any “reasonable excuse” for noncompliance with the insurance policy or the law.

The Defendant also proffers the affidavit of NANCY ALPIZER, a Supervisor with Pitney Bowes, to complete the practices and procedures of the Defendant insurer’s mailing procedures. She affirms that a courier from her company picks up the mail from the Defendant’s Farmington, Connecticut office every weekday at 3:00 p.m. and at 4:30 p.m. and delivers the mail to the US Post Office on that same day. All of the mail that is picked up on a particular day is delivered to the US Post Office on the same day. The court finds this affidavit reliable and is ample proof of the completion of the mailing practices and procedure of the Defendant particularly since Pitney Bowes is a nonparty witness that has no stake in this litigation notwithstanding the contractual relationship with the Defendant.

Lastly, the Defendant provides the affirmation of JOSHUA E. MACKEY, ESQ., the attorney responsible for conducting the proposed EUO of Herbert Fisher, Ph.D. JOSHUA E. MACKEY affirms he was present in his office prepared to take the EUO of the Plaintiff on both dates and no one affiliated with Plaintiff’s office appeared on either date. He also attests that the Plaintiff did not supply the various documents requested to verify the medical services, to wit: patient questionnaire, charts, handwritten notes, memoranda, any referrals, medical treatment, testing and examinations.

The above evidentiary proof submitted by the Defendant is sufficient to demonstrate timely and proper mailing of all EUO letters and the denials. By demonstrating its routine and reasonable office procedures, the Defendant meets its burden of proof that the notices were mailed to the Plaintiff and were received. The burden now shifts to the Plaintiff to rebut the presumption of receipt and to raise a triable issue of fact. Abuhamra v. New York Mut. Underwriters, supra; Residential Holding Corp. v. Scottsdale Ins. Co., supra. The opposition papers of the Plaintiff as well as the supporting attorney affirmation, party affidavit and documentary evidence annexed to the Plaintiff’s cross motion do not contain any factual claims that the EUO notices were not received and is devoid of any claim of any fatal defect(s) in their content; neither do they assert in any manner that the routine office practice was not followed or was so haphazard that it would be completely unreasonable to assume that the notice was mailed and received by the Plaintiff. Therefore, the Plaintiff having failed to meet its burden, this court finds that all of the notices and denials were timely received by the Plaintiff.

Although this irrefutable proof has been produced by the Defendant, the Plaintiff argues that the lack of the certified mail receipt is fatal to the Defendant’s case. This contention is without merit. The lack of the certified mail receipts is insignificant in this case. The certified mail receipts are superflorous and the court will not infer any negative inference from their absence; the Defendant, through irrefutable admissible evidence in the above affidavits and supporting documents, established proper and timely mailing of the EUO notices and the denials.

Does the Plaintiff raise any issue of fact that would warrant the denial of summary judgment for the insured? The answer is in the negative. The Plaintiff’s papers do not raise any issue of fact; it contains only the affirmation of the attorney for the Plaintiff. As the Court of Appeals has firmly held an affidavit or affirmation from a party’s attorney who lacks personal knowledge of the facts [*9]is of no probative value and is insufficient to support an award of summary judgment; in our case, to defeat an award for summary judgment (see Zuckerman v. City of New York, 49 NY2d 557 [1980]; Amaze Med. Supply, Inc. v. Allstate Ins. Co., 3 Misc 3d 133(A), [App Term, 2nd & 11th Jud. Dists, 2004]; Wisnieski v. Kraft, 242 AD2d 290, 6691 NYS2d 46 [NY A.D., 2d Dept., 1997]; Lupinsky v. Windham Constr. Corp., 293 AD2d 317, 739 NYS2d 171 [NY A.D., 1st Dept., 2002]). Thus, even when the attorney has affirmed that a review of the file and records of his client is the basis of his knowledge, the Appellate Courts have consistently determined that it is insufficient to defeat a motion for summary judgment. (See Park Health Ctr. v. Green Bus Lines, Inc., App. Term., 2d & 11th Jus. Dists., 2002 NY Slip Op. 40029[U]) in which the court found that “[t]he defendant’s attorney submitted an opposing affirmation, based on his knowledge which was “obtained from a reading of the files,” wherein he alleged that the NF-2 form was not in the certified mailing and asserted that defendant first received a completed no-fault application on April 10, 1995, was insufficient to defeat summary judgment. In the absence of an affidavit from one with personal knowledge of the facts, the defendant’s attorney’s affirmation is insufficient to establish the existence of a triable issue of fact (Drug Guild Distribs. v 3-9 Drugs, 277 AD2d 197, 715 NYS2d 442 [NY AD2d Dept., 2000]). See also Drug Guild Distribs. v 3-9 Drugs, supra, where the Appellate Division held that “an affidavit of [the Defendant] president and an affirmation of counsel, that it never ordered or received these goods, and that the invoices, receipts, and account statement produced by the plaintiff were fraudulent” were insufficient to defeat summary judgment. ” The defendant’s conclusory denial of the transactions is insufficient to counter the facts established by the plaintiff’s documentary evidence”. See also Park Health Center v. Green Bus Lines, Inc., (2002 WL 416484, 2002 NY Slip Op. 40029(U).

Furthermore, the affidavit of VICTORIA SIMKINA, the Supervisor of Billing for QUALITY PSYCHOLOGICAL SERVICES, P.C., as described in the cross motion, was submitted only to attest to the mailing practices and procedure of her employer of the claim forms. Her affidavit and that of the attorney never rebuts the presumption of receipt of the EUO notices and denials. In fact, neither sworn statement allege that the EUO notices were not received and that the mailing practices and procedure was not properly implemented by the Defendant.

We the substantive issues established in this case, this court shall examine the alleged defects claimed by the Plaintiff in the Defendant’s papers. The Plaintiff asserts that the certificate of conformity by ALAN CHANDLER, ESQ. accompanying the affidavit of SARAH LOMINKY should be deemed fatally defective because it was not sworn to under the “penalties of perjury” pursuant to CPLR Rule §2106. The Plaintiff also argues that the affidavit of NANCY ALPIZER is void since it lacks a certificate of conformity altogether. This court has conducted substantial research involving this issue with our civil cases and found no statutory authority or case authority to support the proposition that the lack of the words “under penalty of perjury” makes the certificate of conformity inadmissible.

Rule §2106 provides in relevant part that “the statement of any attorney admitted to practice in the courts of the state,…authorized to practice law in the state, who is not a party to an action, when subscribed and affirmed by him to be true under the penalties of perjury, may be served or filed in the action in lieu of and with the same force and effect as an affidavit”. Plaintiff’s reliance on this provision is misplaced. This rule is limited to professionals licensed in our state and permits them [*10]to submit affirmations instead of affidavits.

The applicable section of the CPLR is §2309(a) and ( c). A certificate of conformity is an acknowledgment that a legal document conforms to the law of the place where it is taken. CPLR Section 2309(c) in conjunction with RPL Sections 299 and 311, allows an oath or an affirmation taken outside of the state administered by any person authorized to take acknowledgments of deeds under the real property law. CPLR Section 2309(c ) states that “an oath or affirmation taken without the state shall be treated as if taken within the state if it is accompanied by such certificate or certificates as would be required to entitle a deed acknowledged without the state to be recorded within the state if such deed had been acknowledged before the officer who administered the oath or affirmation.”

CPLR §2309 thus adopts the requirements of RPL§299 and §311, which govern acknowledgment of deeds and authentication of acknowledgments outside the state. RPL 299 (3) specifically designates a notary public as a person eligible to acknowledge deeds outside of the state of New York. RPL §311(5) describes the limitations for a certificate of authentication “…except as provided in this section, no certificate of authentication shall be required to entitle a conveyance to be read in evidence or recorded in this state when acknowledged or proved before any officer designated in section two hundred ninety-nine or in section three hundred one of this chapter to take such acknowledgment or proof.”

As Professor David I. Siegel states in NY Practice, (2d ed), this oath …as long as it is , it will be backed, at least theoretically, by the perjury penalties in the Penal Law, which defines “oath” to include “an affirmation and every other mood authorized by law of attesting” to what is said. This affirmation, by the way, is a form of oath, duly taken before one qualified to administer an oath, and should not be confused with the “affirmation” authorized by CPLR 2106.”

In this case, the statements of both witnesses were sworn to before a notary public and then subsequently, the attorney affirmed that the “oath” was performed in accordance with the laws of the state of Connecticut. The “affidavit of merit” for NANCY ALPIZAR is a certificate of conformity. The Court’s review of the content of the “affidavit of merit” reveal that it is a certificate of conformity; it was merely given the wrong title in the caption.

This court has also reviewed the case precedent cited by Hartford Insurance Company and is in accord. The absence of a proper certificate of conformity is not fatal to this motion but is “a mere defect in form which can be given nunc pro tunc effect once properly acknowledged.” (JP Morgan Chase Bank, N.A. v. S.I. Wood Furniture, 34 Misc 3d 1214(A), 946 NYS2d 67 [Sup. Ct, Kings County, 2012]); Hall v ELRAC, 79 AD3d 427, 913 NYS2d 37 [NY A.D. 1st Dept., 2010]; Betz v. Daniel Conti, Inc., 69 AD3d 545, 892 NYS2d 477 [NY AD2d Dept., 2010]; Matapos Tech. Ltd. v Compania Andina De Comercio Ltd., 68 AD3d 672 , 891 NYS2d 394 [NY A.D. 1st Dept., 2009]; Moccia v Carrier Car Rental, Inc. 40 AD3d 504, 837 NYS2d 67 [NY A.D. 1st Dept., 2007]; Smith v Allstate ins. Co., 38 AD3d 522, 832 NYS2d 587 [NY A.D. 2nd Dept., 2007]; Falah v Stop & Shop Cos. Inc., 41 AD3d 638, 838 NYS2d 639 [NY AD2d Dept., 2007)]; Sparaco v Sparaco, 309 AD2d 1029, 765 NYS2d 6683 [NY AD3d Dept., 2003]; Nandy v Albany Med. Ctr. Hosp., 155 AD2d 83, 548 NYS2d 98 [NY AD3d Dept., 1989]; see also Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, C2309:3 at 348). [*11]

As important, our courts, pursuant to CPLR §2001, have the authority, at any stage of an action, to permit a mistake, omission, defect or irregularity, to be corrected and disregarded, upon such terms as may be just if a substantial right of a party is not prejudiced.

In our case, the Plaintiff has not disputed the authenticity of the notary public or the substance of the certificate of conformity. The Plaintiff has also not made any allegations of any prejudice or undue hardship resulting from this defect and the record in this action does not support any finding of prejudice or hardship to the Plaintiff. As Judge Demarest so aptly stated in JP Morgan Chase N.A. v S.I. Wood Furniture Corp., supra, “inasmuch as the content of the documents submitted, as opposed to their form, is what is critical to the determination of this motion, [Plaintiff] cannot be permitted to seize upon any technical requirements of CPLR 2309(c) to create delay and avoid [dismissal]) see Falah, 41 AD3d at 639; Smith, 38 AD3d at 523; Nandy, 155 AD2d at 834). Consequently, this Court deems the two certificates of conformity executed by ALAN J. CHANDLER, ESQ. dated June 30, 2011 admissible and any defect therein disregarded.

The court has reviewed the other claims by the Plaintiff of alleged factual discrepancies’ and finds that they are without merit.

For all of the reasons described above, the Plaintiff’s motion for summary judgment is denied, the Defendant’s motion for summary judgment is granted and the complaint is dismissed with prejudice.

A courtesy copy of this decision and order shall be mailed by the court to both parties.

The Defendant shall submit a judgment of dismissal to the Clerk of the Court and upon issuance thereof, shall serve a copy of the judgment and this order and decision with notice of entry on the Plaintiff within 45 days thereafter.

This constitutes the decision and order of this court.

_________January 15, 2013____________________________________________________________

DateHON. HARRIET THOMPSON

Judge of the Civil Court

Civil Court of the City of New York, Kings County

126179/09

Attorneys for Plaintiff GBI Acupuncture, P.C. and Liberty Chiropractic P.C.

Law Offices of Melissa Betancourt

155 Kings Highway, 3rd Floor

Brooklyn, NY 11223

Attorneys for Defendant Esurance Ins. Co.

Law Offices of Michael G. Nashak

15 Metrotech Center, Floor 19

Brooklyn, NY 11201

Harriet L. Thompson, J.

Motion Cal No.Motion Seq. #

Papers Submitted to Special Term

on3/27/12,

DECISION/ORDER

Recitation, as required by CPLR §2219 (a), of the papers

considered in the review of this Motion

PapersNumbered

Notice of Motion ………………………………. ..1-2, 3

Order to Show Cause and Affidavits Annexed _____________

Answering Affidavits ..___4_______

Replying Affidavits ._____________

Exhibits _____________

Other …………………………………………………._____________

This action was commenced in or about December 3, 2009 by the service of a Summons and Complaint to recover first-party No-Fault benefits as a result of alleged injuries arising out of an [*2]alleged automobile accident which occurred on May 12, 2009. In or about March 11, 2010, the Defendant interposed a Verified Answer by its attorney which contained various affirmative defenses to the underlying complaint.

PROCEDURAL HISTORY

The Defendant, by Notice of Motion, moves this Court pursuant to CPLR§3212 for summary judgment dismissing the complaint. The Defendant contends that the complaint lacks merit because the Assignor, after service of timely and proper notices of four independent requests for examinations under oath (hereinafter referred to as “EUO”), at four different addresses to the assignor and two notices to her attorney, she and her attorney failed to appear. The Defendant proffers three supporting affidavits; to wit: ERIN SCHABE, the Claim Representative who attests to the receipt of the medical bills from the assignee, and the timely mailing of the denials based on the aforementioned breach of the insurance policy; JASON FORTIER as Claims Manager who attests to the mailing practices and procedures of the Defendant and assures this court that the proper procedures were employed by the Defendant to assure that the denials were timely and properly mailed in accordance with said practices and procedures, and were not returned to the Defendant as undeliverable; MICHAEL G. NASHAK, ESQ., the Managing Attorney for the Brooklyn Staff Counsel Office that attests to the proper business practices and procedures employed by his office in mailing, scheduling and conducting EUO’s in the ordinary course of business of his law office; MERCEDES ROMERO, his assistant clerk that attests to drafting and scheduling the EUO notices and having them signed by the aforesaid managing attorney, the mailing the EUO notices by regular mail or certified mail, return receipt requested, “where indicated”, confirming the EUO appearances, awaiting the arrival of the claimant and notifying the Managing Attorney and the Defendant of the appearance or nonappearance of the claimant at the EUO. The Defendant asserts that the failure of the Plaintiff to provide additional verification by the failure to appear for an EUO is a breach of an express condition precedent of the insurance policy and state regulations, and accordingly, the Plaintiff is not entitled to payment of No-Fault benefits under the policy. Consequently, the Defendant claims that there are no triable issues of fact and judgment should be granted in its favor.

In opposition to the Defendant’s motion, the Plaintiff attacks the sufficiency of the affidavit of each of the above named individuals, namely the lack of specificity of the time of mailing in ERIN SCHABE’S affidavit; the defective affirmation of MICHAEL G. NASHAK, ESQ., which excludes the state and county on the affirmation and lack of a legally sufficient caption of this case and argues that the affirmation neglects to specify that he was present in the office on the date of the alleged nonappearance by the assignor; the affidavit of MERCEDES ROMERO that lacks the proper index number for the case, proper legal caption and the name of the court. In addition, Plaintiff contends that MERCEDES ROMERO cannot attest to the nonappearance of the assignor on August 19, 2010 and September 10, 2009 because she did not work at that scheduled location. Further, the Plaintiff claims that the Defendant neglected to annex a letter dated August 19, 2009 to prove the proper number of EUO requests mandated by case authority and the insurance regulations to prove noncompliance with the insurance policy; the affidavit of MERCEDES ROMERO and MICHAEL G. NASHAK, ESQ., do not contain any certificate of mailing as alleged in their affidavits and thus, lack credibility; the EUO letters do not comport with the insurance regulations insomuch that the 3rd [*3]EUO letter and 4th EUO letter are only twelve (12) days apart; and the Defendant failed to establish that the EUO letters dated July 29, 2009 and September 4, 2009 were sent to the assignor and to her attorney.

The Plaintiff, by Notice of Cross Motion, moves this Court pursuant to CPLR §3212 for summary judgment asserting that the Plaintiff timely and properly mailed the prescribed bills and assignment of benefit form for No-Fault benefits; the Defendant received the bills and assignment of benefits form; the Defendant did not timely deny the bills; and the bills remain unpaid and are overdue. The Plaintiff presents the affidavit of YAKOV SIMKHAEV, the Supervisor of Billing for both assignors, that attests to the office practices and procedures for generating and mailing of their No-Fault claims and verification, and receipt of the denials. She describes the business practice and procedures of the office of the Plaintiff from the initial office visit of the claimant to the creation of the medical bills generated in the ordinary course of business. She states that she personally mailed the bills by first class mail with a certificate of mailing; and affirms that payment is overdue on the bills.

FINDING OF FACTS AND CONCLUSION OF LAW

This court is cognizant of the reality that many lawyers invariably seize every opportunity to assert the right to victory by summary judgment based on “technical” or “procedural” irregularities in the pleadings. More often than not, these claims are often obscure and insignificant to the ultimate outcome of the litigation.

Having this prospective in mind, lets look to the law, specifically, CPLR §104 that states that the Civil Practice Law and Rules shall be liberally construed to secure the just, speedy and inexpensive determination of every civil judicial proceeding. This section of the law was intended to liberalize court procedures and do away with unnecessary and burdensome motion practice. The courts in this state, where at one time, “formal precision was the sovereign talisman…” have long ago held that “the rule of strict construction of statutes in derogation of the common law principles [are] inapplicable”. Schneider v. Schneider, 17 NY2d 123, 127, 269 NYS2d 107, 216 NE2d 318, 320 (1966). One of the few areas that the courts continue to enforce procedural conservatism is with provisional remedies. Valentine Dolls, Inc. v. McMillan, 25 Misc 2d 551, 202 NYS2d 620 (1960).

With the same principles at the forefront, careful attention should also be given to a companion provision of the CPLR, namely, Section 2001 which maintains that “at any stage of an action the court may permit a mistake, omission, defect or irregularity to be corrected, upon such terms as may be just. This section is supportive of the policy in this state that just determination shall be based on matters of substance, not form and to the ultimate end of justice, that slight mistakes or irregularities shall not invalidate legal proceedings.

As significant, there are other related provisions in the CPLR that should also be reviewed to this end. CPLR 5512(a) and 5520 make express provision for similar relief in connection with omissions or defects in taking appeals. Looking to CPLR §3026 which expressly mandates that pleadings shall be liberally construed and that defects in pleadings shall be ignored if a substantial right of a party is not prejudiced. The reader is urged to generally review the Practice Commentaries in the CPLR under these respective statutory provisions; also see Siegel, New York Practice §6, et [*4]seq. (2nd ed.)

These statutes are routinely enforced by our courts and more recently, the Appellate Division, Second Department, reaffirmed the underlying policy of the judiciary in an election law case where the court found that the Supreme Court properly amended the caption to designate an individual, who was originally denominated as the respondent to the petitioner on the grounds that the “defects, mistakes, and irregularities in pleadings are to be ignored by the court absent a showing of prejudice; see also MacKay v. Johnson, 54 AD3d 428, 863 NYS2d 85 [2008]; and Hoot Croup, Inc. v. Caplan, 9 AD3d 448, 779 NYS2d 922 [2004] finding in a case where the plaintiff properly commenced the action in the Supreme Court, Dutchess County and the summons and complaint incorrectly bore a “County Court, Dutchess County” caption, that this ministerial error provided no basis for disturbing a money judgment granted for plaintiff by way of summary judgment. “Defects, mistakes, and irregularities in pleadings are to be ignored by the court absent a showing of prejudice” (First Wis. Trust Co. v Hakimian, 237 AD2d 249 [1997]; see CPLR 104, 2001, 2101 [f]; 3025 [c]; 3026). In that case, the defendant failed to demonstrate that he incurred any prejudice as a result of the incorrect caption on the summons and complaint. Indeed, he timely answered the complaint and opposed the motion for summary judgment.

Additionally, the court has evaluated the case of Maximum Physical Therapy, P.C. v. Allstate Ins. Co., 8 Misc 3d 1021(A), 803 NYS2d 19 [NY Civ. Ct., 2005) relied upon by the Plaintiff to declare the above named affidavits a nullity and finds the Plaintiff’s claim without merit. This case stands for the proposition that the affirmation of an attorney without personal knowledge has no probative value and can not expressly raise a triable issue of fact to defeat a motion for summary judgment. In that case, the court found that the affidavit of plaintiff’s corporate officer was also insufficient since “the affidavit fails to indicate the specific sources of his knowledge (e.g. business records or other documents he may have researched or reviewed or persons with whom he consulted) (Barraillier v. City of New York, 12 AD3d 168 [1st Dept. 2004] and contains conclusory allegations regarding his personal knowledge (Wechsler v. People of State of NY, 13 AD3d 941 [3d Dept. 2004]). Mr. Dianalan’s affidavit contains no recitations of fact particular to this action, such as one or more of the following: the specific corporate office held (i.e., president, treasurer, secretary, etc.), the date or dates of service, the services or supplies allegedly provided, date or dates of mailing, or amount outstanding. Rather, Mr. Dianalan’s affidavit contains boilerplate language about the authenticity of non-specified bills and assignment from a non-specified assignor which was witnessed either by him or someone on his staff in his office on an unspecified date (see e.g. Vista Surgical Supplies Inc. v. Utica Mutual Ins. Co., 7 Misc 3d 833 [Civ Ct, Kings County 2005]).”

The court specifically left the technical defects in the affidavit last for consideration. For our purposes here, these irregularities were dictum and not the law of the case. The Court opined that the affidavit of the corporation officer is “defective as to form to the extent of one or more of the following: the affidavit contains no caption, no venue, no opening statement and the signature is not at the bottom of the document, but is on the top of a page isolated by itself, making it appear to the court that was separate and not a part of the body of the document. Each paper used in a case should have a caption which consists of the name of the court and the venue of the action, its title, and, to the right of the title, what the paper is (e.g., affidavit in support of motion, affirmation in support of motion) (see Siegel, NY Practice § 205 at 324 [3d ed]). An affidavit should ordinarily [*5]begin with a recitation of venue (the state, county, and city in which it is made) and contain an opening statement (i.e., “John Smith, being duly sworn, deposes and says”). The signature of the affiant in an affidavit should appear at the bottom of the statement, as opposed to being isolated on the last page, separate and apart from the entire body of the document (see Mellinkoff’s Dictionary of American Legal Usage 17 [1992]). Moreover, to facilitate the clear presentation of the matters set forth in the affidavit, so that, allegations might easily be referenced in subsequent legal papers, the affidavit should contain separate, numbered paragraphs for each factual allegation (see generally Phillips v. Girdich, 408 F3d 124 [2d Cir 2005)].”

In this case, the affirmation of MICHEAL G. NASHAK, ESQ. and MERCEDES ROMERO do contain a caption of the case, albeit, irregular and does not contain the typical formal recitation of the caption. The irregularities in both sworn statements do not render them inadmissible for the purposes of this motion. It is the opinion of this court that although the Judge Lane in Maximum Physical Therapy, P.C. v. Allstate Ins. Co., supra, offered instructive criticism of the procedural abnormalities in Defendant’s papers, his decision did not rely on those procedural irregularities to deny the Plaintiff motion but instead the substantive content of the papers. This pragmatic jurist shall not elevate form over substance; such defects like in the instant case, are of such an inconsequential nature that the CPLR, specifically, §3026 gives broad discretion to this court to ignore them particularly since the Plaintiff has not offered any rationale indicative of prejudice in any manner or form. Accordingly, this court shall ignore these minor procedural infractions and not even offer to amend them for they bears no harmful consequences . As the practice commentaries urge all practioners, the liberal construction of all papers in a court action is intended to discourage useless pleading attacks by placing the burden on the attacker to show prejudice as well as failure of compliance. See, Connors, Practice Commentaries, McKinney’s Cons. Laws of NY, CPLR 3026:4-6.

Continuing on to the substantive elements of the respective supporting affidavits beginning with ERIN SCHABE, the Claim Representative, this court finds sufficient the detailed explanation based on her personal knowledge and job responsibilities of the business practices and procedures implemented by her office on receipt of a bill for medical services by the Defendant. She is the employee that puts the denials in the envelopes and puts the mail in the proper receptacles in the office for pick up by the Post Office, and attests that the mail (denials or verification) to this specific provider were not returned.

The affidavit of JASON FORTIER employed at the Defendant’s office since 2006, bridges any alleged gaps in the mailroom procedures for the insertion of the denial or verification in the envelope by the Claims Representative and/or Adjuster to its travel from that individual’s desk though the office to the mailroom. As the supervisor of the mailroom, this court is persuaded that he has knowledge of the practices and procedures of that department and sufficiently describes the process including the method, time and date that the mail is picked up by the Post Office employees for delivery to the actual Post Office daily. Unlike the affidavit in Maximum Physical Therapy, P.C. v. Allstate Ins. Co., supra, the instant affidavit states the specific sources of his knowledge (he is the supervisor of the mailroom employees) and does not contain conclusory allegations regarding his personal knowledge (Wechsler v. People of State of NY, 13 AD3d 941 [3d Dept. 2004]). He also attests that the business practices were followed in this case and his review of the record of this case [*6]do not support any claim that it was not followed in this instance.

Contrary to the contentions by the Plaintiff, this court need not know the time that the mail was put into the receptacle; the specific time is irrelevant; what is relevant is whether the practice and procedure employed by the Defendant was consistently followed daily at around 4:00 p.m. when the mail (denials/verifications) is deposited in the custody and control of the US Post Office employee that were generated that day by the Claims Representative. Moreover, JASON FORTIER also attests that any mail that is processed after 4:00 p.m. by the Claims Representatives is mailed the following business day. So, there are specific times that the mail goes out each day and the court finds no omission or ambiguity in the mailing procedures of the Defendant.

Since the Defendant has established the method employed for the generation of the denials and the mailing procedures for their office, this Court shall address the EUO requests from the Defendant.

It has been firmly established that an insurer does not have to pay or deny a claim until all demanded verification has been provided. St. Barnabas Hosp. v. American Transit Ins. Co., 57 AD3d 517 ( 2nd Dept., 2008); New York & Presbyterian Hosp. v. Allstate Ins. Co., 31 A.D3d 512 (2nd Dept., 2006). Verification extends the time for the insurer to pay or deny a claim by permitting the insurer to demand and obtain information needed to establish proof of the claim so the insurer can properly determine whether the claim should be paid or denied. Fair Price Medical Supply Corp. v. Travelers Indemnity Co., 10 NY3d 556 (2008). Delay letters have been confused with verification and verification is often obscure. In Ocean Diagnostic Imaging P.C. v. Citywide Auto Leasing Inc., 8 Misc 3d 138 (A), 2005 Slip Op 51314[U], the Appellate Term Second Department held that “an insurer may not rely on a letter, even if denominated a verification request, that merely informs a claimant that a decision on the claim is delayed pending an investigation, and without specifying a particular form of verification and the person or entity from whom the verification is sought, to toll the 30-day claim determination period.” See also the recent matter of Superior Oxygen & Othro Supplies, Ltd. v. Auto One Ins. Co., 2012 NY Slip Op 50348(U).

Unlike the affidavits in Maximum Physical Therapy, P.C. v. Allstate Ins. Co., supra, the affirmation of MICHAEL G. NASHAK, ESQ. and affidavit of MERCEDES ROMERO are inopposite. Not only do they contain sufficient factual claims, they are also based on their personal knowledge of the facts. The sworn statements of both the attorney and the paralegal are not conclusory but describe in sufficient detail the assignment of the cases for the purposes of scheduling and conducting EUO’s. The paralegal, MERCEDES ROMERO, prepares the letter on the dates of the letters, annexed as Exhibits “I”, “J”, “K” and “M”, and has the managing attorney sign the letter(s). She places them in the envelopes and mails them either by regular mail or certified mail, return receipt requested. An examination of each letter reveals that some were sent by regular mail and others by certified mail which contain the certified mail number on the letter. Even if the letter dated August 19, 2009 is not annexed to the motion papers, the exclusion of that letter has no significance because it would be superfluous. Three EUO letters, dated June 3, 2009 (Exhibit “I”), July 30, 2009 (allegedly misdated and should be June 30, 2009) (Exhibit “J”) and July 17, 2009 (Exhibit “K”), had already been mailed to the claimant at four different addresses and then two EUO letters, dated July 29, 2009 (Exhibit “L”) and September 4, 2009 (Exhibit “M”) were sent to her attorney by facsimile and regular mail. [*7]

The Plaintiff never rebuts by admissible evidence, the presumption of receipt of the EUO notices by any affidavit of a person with actual knowledge of the case. In fact, the Plaintiff’s opposition papers contain only an affirmation from the attorney. As the Court of Appeals has firmly held an affidavit or affirmation from a party’s attorney who lacks personal knowledge of the facts is of no probative value and is insufficient to support an award of summary judgment (see Zuckerman v. City of New York, 49 NY2d 557 [1980];Amaze Med. Supply, Inc. v. Allstate Ins. Co., 3 Misc 3d 133(A), [App Term, 2d and 11th Jud Dists 2004]; Wisnieski v. Kraft, 242 AD2d 290 [2d Dept 1997]; Lupinsky v. Windham Constr. Corp., 293 AD2d 317 [1st Dept 2002]). Thus, even when the attorney has affirmed that a review of the file and records of his client is the basis of his knowledge, the Appellate Term has consistently determined that it is insufficient to defeat a motion for summary judgment motion. (see Park Health Ctr. v. Green Bus Lines, Inc., 2002 NY Slip Op. 40029[U]) in which the court found that “[t]he defendant’s attorney submitted an opposing affirmation, based on his knowledge which was “obtained from a reading of the files,” wherein he alleged that the NF-2 form was not in the certified mailing and asserted that defendant first received a completed no-fault application on April 10, 1995 was insufficient to defeat summary judgment. In the absence of an affidavit from one with personal knowledge of the facts, the defendant’s attorney’s affirmation is insufficient to establish the existence of a triable issue of fact (Drug Guild Distribs. v 3-9 Drugs, 277 AD2d 197, 715 NYS2d 442). Likewise, in Drug Guild Distribs. v 3-9 Drugs, supra, the Appellate Division held that “an affidavit of [the Defendant] president and an affirmation of counsel, that it never ordered or received these goods, and that the invoices, receipts, and account statement produced by the plaintiff were fraudulent” were insufficient to defeat summary judgment. “The defendant’s conclusory denial of the transactions is insufficient to counter the facts established by the plaintiff’s documentary evidence”. See also Park Health Center v. Green Bus Lines, Inc., (2002, WL 416484, 2002 NY Slip Op. 40029(U).

As the Defendant correctly states in the instant motion, all automobile insurance policies with No-Fault endorsements in our state contain the prescribed language of the Insurance Regulations, specifically, 11 NYCRR 65-1.1 that provides that “[u]pon request by the Company, the eligible injured person or that person’s assignee or representative shall:…(b) as may reasonably be required to submit to examination under oath by any person named by the Company and subscribe same…..” Moreover, 11 NYCRR 65-3.5 ( c) states that “[t]he insurer is entitled to received all items necessary to verify the claim directly from the parties from whom such verification was requested.” Then, lastly, as correctly stated by the Defendant, 11 NYCRR-1 provides in pertinent part as follows: [n]o action shall lie against the Company, unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage. In applying these general statutory and policy requirements to this case without the necessity of the numerous cases that have firmly established precedent for the mandatory compliance of provides to respond to EUO requests, the court finds these additional facts.

The Defendant acknowledged receipt of the bills on the following dates: June 26, 2009 (DOS-5/19/2009-5/19/2009 and DOS 5/19/2009-6/15/2009); June 30, 2009 (DOS-5/19/2009-6/22/2009); July 30, 2009 (DOS-6/22/2009-7/15/2009); and July 30, 2009 (DOS-6/23/2009-7/15/2009). The corresponding notices for the EUO to the assignor were on June 3, 2009, June 30, 2009, July 17, 2009; and then to her attorney on July 29, 2009 and September 4, 2009. All of the EUO requests were timely as well as their responding denials. To follow the statute, the Defendant [*8]additional verification on June 3, 2009 for EUO on June 26, 2009, with the follow up request on June 26, 2009 for EUO on July 14, 2009 were sufficient. But the Defendant goes further, the third request for July 17, 2009 for EUO on July 30, 2009. The latter was adjourned by the Plaintiff’s assignor’s attorney so the Defendant send the fourth request dated July 29, 2009 for the EUO for August 19, 2009 and then the fifth request based on the nonappearance of counsel and his claimant, dated September 4, 2009 for EUO for September 10, 2009. A little common sense is sometimes not so common; if the attorney made a request for an adjournment, it stands to reason that his client received the EUO notice. Since he was subsequently notified twice, and he and the claimant did not appear, the Defendant offered more than ample opportunity for compliance with the policy and the law.

Lastly, the court finds that it is not fatal that the affirmation of the Defendant’s attorney did not explicitly state that he was in the office on the date of the no-show for the EUO. He affirmed that the notices were properly mailed and that the assignor failed to appear. The paralegal attests the she awaited the arrival of the claimant and notified the managing attorney and the Defendant of the nonappearance of the claimant at the EUO. Notwithstanding the fact that MERCEDES ROMERO is not employed by the other office where the EUO was scheduled, namely on August 19, 2010 and September 10, 2009, the other EUO no- shows after notice to assignor and then to two additional notices to her attorney, is sufficient to establish that the assignor failed to comply with the insurance regulations and policy. It is glaring to this court that the Plaintiff assignor and her attorney did not appear for five (5) properly and timely scheduled EUO’s and have not proffered even one excuse or explanation for the lack of cooperation with the insurer.

Therefore, in our case, despite the creative arguments in the opposition papers to this summary judgment motion by the attorney for the Plaintiff, they are unavailing and cannot defeat summary judgment by the Defendant. As important, the opposition papers themselves are patently defective. The opposition papers should contain separate, numbered paragraphs for each factual allegation as was noted in Maximum Physical Therapy, P.C. v. Allstate Ins. Co., supra, ironically relied on by the Plaintiff. These opposition papers reminds this court of the old adage “the pot cannot call the kettle black”. Although this court has overlooked this procedural irregularity and addressed the most pertinent of the Plaintiff’s claims, the absence of an affidavit by a person with actual knowledge does not constitute evidence in admissible form and accordingly, has failed to raise any triable issues of fact.

For all of the reasons stated above, the Plaintiff’s motion for summary judgment is denied and the motion by the Defendant for summary judgment is granted in its entirety and the complaint is dismissed with prejudice.

A courtesy copy of this decision and order shall be mailed by this court to the attorneys for the respective parties.

The Defendant shall serve a copy of the Order and Decision with Notice of Entry on the Plaintiff within thirty (30) days of the date of the entry of this Order by the Clerk of the Court and shall file proof of service thereof with the Clerk of the Court.

This constitutes the Decision and Order of this court. [*9]

December 26, 2012

Supreme Court, Kings County

21836/11

Plaintiff Attorney: Lester Herzog, 1729 E. 15th Street, Brooklyn, NY 11229

Defendant Attorney: Smith Mezure Director Wilkins Young & Yagerman, PC, 111 John Street, New York, NY 10038

David Schmidt, J.

The following papers numbered 1 to 11 read on these motions:

Papers Numbered

Notice of Motion/Order to Show Cause/

Petition/Cross Motion and

Affidavits (Affirmations) Annexed1-2, 3-4, 5-6

Opposing Affidavits (Affirmations)7-9

Reply Affidavits (Affirmations)10-11

Affidavit (Affirmation)

Other Papers

Upon the foregoing papers in this action seeking supplementary uninsured/underinsured motorist (SUM) coverage under a policy of insurance issued by defendant Geico General Insurance Company (Geico or defendant), plaintiffs Sarah H. Orman and Gidon Orman (plaintiffs) move, pursuant to CPLR 3211 (b), to dismiss four of Geico’s affirmative defenses. By order to show cause, Geico moves to vacate plaintiffs’ note of issue and [*2]certificate of readiness, and to strike this matter from the trial calendar. Geico separately cross-moves, pursuant to CPLR 3211 (a) (7),

to dismiss plaintiffs’ second cause of action alleging that it breached its implied covenant of good faith and fair dealing.

Background

Plaintiff Sarah Orman (plaintiff) was involved in a car accident which took place on October 23, 2007 in Woodmere, New York. While plaintiff was making a left turn, plaintiffs’ vehicle was struck in the rear by the vehicle owned and operated by Maximino Luna. According to the police report and the deposition testimony of plaintiff in the underlying action (Orman v Luna, Index No. 12108/09), Mr. Luna attempted to stop before the collision but was unable to do so. At the time of the accident, Mr. Luna had an Allstate automobile insurance policy with limits of $25,000 per person and $50,000 per accident. Plaintiffs held a policy with Geico which included SUM coverage with $50,000/$100,000 policy limits. It is not disputed that plaintiff is a “covered person” under the terms of the policy.

In August, 2008, Geico was awarded 100% in arbitration and plaintiffs’ deductible of $500 was refunded to them.

In October, 2009, plaintiffs sent Geico a formal notice of their intention to make a claim, with accompanying correspondence. Geico acknowledged receipt of the claim by letter dated November 5, 2009, and advised plaintiffs to notify it if they received a policy limit settlement offer from Allstate that was less than their “UIM” limit. Plaintiffs’ counsel advised Geico, by letter dated November 13, 2009, that Allstate had not yet tendered its policy and that the underlying action was being litigated, although it had not been placed on the trial calender.

On October 6, 2010, plaintiff was deposed in the underlying action.

In March, 2011, Allstate advised plaintiffs’ counsel that it was offering the $25,000 policy limits for settlement of the bodily injury claim for plaintiff as a result of the accident.

By letter dated June 20, 2011, plaintiffs’ counsel advised Geico that Allstate had tendered its policy of $25,000. In addition, counsel attached a copy of Allstate’s tender, a copy of the declaration pages of the policy and an affidavit of “no excess” coverage, signed by Mr. Luna. Counsel also requested Geico’s permission, in writing, to accept Allstate’s tender.

By letter dated June 21, 2011, plaintiffs’ counsel provided Geico with a package of medicals, photos and other documents, and again requested Geico’s permission to accept Allstate’s tender.

By letter dated June 23, 2011, Geico advised plaintiffs’ counsel that “you have GEICO’s permission to settle your client’s Bodily Injury claim with the adverse tort carrier, Allstate, insurer of Maximino Luna.” Geico also advised plaintiffs’ counsel that in order to evaluate an underinsured motorist bodily injury claim, it required “medical specials” documenting plaintiff’s injuries and a written authorization to obtain a copy of plaintiff’s no-fault file.

By letter dated June 25, 2011, Allstate advised plaintiff and her attorney that a settlement check was issued to plaintiff in the amount of $25,000.

On August 30, 2011, referring to his August 15, 2011 conversation with Geico’s claims examiner, plaintiffs’ counsel advised Geico that plaintiffs would not accept anything less than [*3]the full $25,000 SUM coverage limits; that as of that date, Geico had not contacted him; and that he was in the process of drafting pleadings to commence a direct action against Geico. Counsel also stated that plaintiffs would be including a cause of action for bad faith, “in view of the fact that Geico refused to pay $25,000, where the economic damages alone, exceed one million dollars – without even considering the personal injuries and pain and suffering.”

By letter dated September 15, 2011, Geico advised plaintiffs’ counsel that plaintiffs’ SUM policy limit was $50,000/$100,000; that it was “always willing to negotiate any claim in good faith;” and that, based upon alleged economic damages, it requested all medical authorizations, MRI films, the no-fault file and employment records so that it could properly evaluate plaintiffs’ claim. Geico further stated that it would contact counsel upon completion of its review.

By letter dated September 26, 2011, plaintiffs’ counsel again advised Geico that plaintiffs would not accept anything less than the full $25,000 SUM coverage limits, and that in response, “[the claims examiner] … stated that Geico, at present, is unwilling to tender same.” Plaintiffs’ counsel further stated that in view of the above, he enclosed six authorizations and informed Geico that an action against Geico had been commenced.^[FN1]

On that same date, (September 26, 2011) plaintiff commenced this action, alleging a cause of action for breach of contract, a cause of action alleging bad faith, and a cause of action for loss of consortioum. As relevant here, the second cause of action states:

“That defendant’s refusal and/or neglect to pay its policy limits when requested to do so, was not made in good faith in view of all relevant circumstances.

That in refusing and/or neglecting to pay its policy limits, defendants considered only its own interests, without also taking into consideration the interests of its insured.

That the defendant’s refusal and/or neglect to pay plaintiff amounted to gross disregard for its insured’s interests; by failing to place the interests of its insured on equal footing with its own interests.”

Plaintiffs’ seek $100,000 in damages each for the first and second causes of action, and unspecified damages for the third cause of action.

On October 25, 2011, Geico answered the complaint and asserted various affirmative defenses including, as relevant here, that plaintiff did not sustain serious injury or non-economic loss under Insurance Law §§ 5102 and 5014.

Subsequently, plaintiffs move to dismiss four of Geico’s affirmative defenses, plaintiff cross-moved to dismiss Geico’s serious injury affirmative defense, and Geico moved to vacate the note of issue and certificate of readiness. [*4]

Discussion

Plaintiffs move, pursuant to CPLR 3211 (b), to dismiss four of defendant’s affirmative defenses. “A party may move for judgment dismissing one or more defenses, on the ground that a defense is not stated or has no merit” (Mazzei v Kyriacou, 98 AD3d 1088, 1088-1089 [2012], quoting CPLR 3211 [b]). “When moving to dismiss or strike an affirmative defense, the plaintiff bears the burden of demonstrating that the affirmative defense is without merit as a matter of law” (id., [internal quotation marks and citations omitted]). “In reviewing a motion to dismiss an affirmative defense, the court must liberally construe the pleadings in favor of the party asserting the defense and give that party the benefit of every reasonable inference” (id., [internal quotation marks and citations omitted]). “However, where affirmative defenses merely plead conclusions of law without any supporting facts,’ the affirmative defenses should be dismissed pursuant to CPLR 3211 (b)” (Bank of Am., N.A. v 414 Midland Ave. Assoc., LLC, 78 AD3d 746, 750 [2010], quoting Fireman’s Fund Ins. Co. v Farrell, 57 AD3d 721, 723 [2008]).

Here, with respect to defendant’s second affirmative defense, plaintiffs have established that they obtained personal jurisdiction over defendant through documentary evidence. In this regard, plaintiffs have annexed the proof of service, a fee receipt and an acknowledgment from the New York State Insurance Department, confirming that defendant was served with the plaintiffs’ summons and verified complaint on September 27, 2011 pursuant to Insurance Law § 1212. Further, defendant does not oppose this branch of plaintiffs’ motion.

With respect to defendant’s seventh affirmative defense – that plaintiffs’ failed to properly notify defendant of their intent to make an “UM/UIM claim” – as indicated above, plaintiffs sent a Notice of Intention to Make Claim and accompanying correspondence to defendant by letter dated November 30, 2009. Thus, plaintiffs have sustained their burden of demonstrating that this defense is without merit as a matter law because it does not apply under the factual circumstances of this case (Tenore v Kantrowitz, Goldhamer & Graifman, P.C., 76 AD3d 556, 557-558 [2010]). Moreover, defendant does not oppose this branch of plaintiffs’ motion.

Based upon the foregoing, these branches of plaintiffs’ motion to dismiss defendant’s second and seventh affirmative defenses are granted.

As to that branch of plaintiffs’ motion to dismiss defendant’s sixth affirmative defense – asserting that plaintiffs failed to meet conditions precedent to warrant “UM/UIM” benefits – plaintiffs argue that defendant fails to elaborate which conditions precedent they failed to meet. In particular, plaintiffs contend that they fulfilled the three condition precedents necessary to receive UIM/SUM benefits, namely: (1) they sent defendant a Notice of Intention to Make a Claim, (2) defendant admitted exhaustion of Mr. Luna’s policy limits, and (3) that in its June 23, 2011 letter, defendant granted plaintiffs permission to settle with Allstate for its policy limits, set forth two requirements to pursue the underinsured claim, and never stated that plaintiffs failed to meet any conditions precedent.

In opposition to this branch of plaintiffs’ motion, defendant argues that it did not admit [*5]that Mr. Luna’s policy limits were exhausted, but only conceded that Allstate tendered an insurance policy with limits of $25,000 to the plaintiffs.^[FN2] Specifically, defendant argues that there “may have been other applicable insurance policies that plaintiff did not attempt to reach,” and essentially argues that the “affidavit of excess” signed by Mr. Luna is incompetent because it does not reference the accident date and makes “sweeping statements with nothing to support the claims.” Further, defendant asserts that it should be given the opportunity “to explore whether Mr. Luna had other applicable insurance at the time of the accident [and that] [] [i]f so, plaintiff would have failed to meet a pre-condition of bringing this supplementary underinsured motorist claim.”

As plaintiffs’ state in their reply, defendant’s contention that Mr. Luna may have additional coverage is speculative. Moreover, defendant does not dispute that it had the opportunity to determine whether Mr. Luna had any applicable insurance at the time of the accident. Further, defendant has failed to demonstrate that Mr. Luna’s sworn affidavit of excess is incompetent. As noted above, Mr. Luna affirmed that he was not covered under another applicable insurance policy. Although his affidavit does not contain the date of the accident, it contains his policy number, which corresponds to the policy number on the copy of his policy/declaration pages showing the coverages that were on the policy at the time of loss of “10[-]23[-]2007,” as affirmed by an Allstate Claim Support representative in a notarized statement (Plaintiff’s Notice of Motion, Exh. G).

In addition, Mr. Luna’s affidavit was provided to defendant by plaintiffs’ counsel on June 20, 2011 – before defendant gave plaintiffs permission to settle plaintiff’s bodily injury claim with Allstate – which contains the name of the underlying action as well as the claim number for the accident. Finally, as noted immediately above, defendant gave plaintiffs permission to settle with Allstate, and the record does not indicate that defendant advised plaintiffs at any time that it failed to comply with any conditions precedent. Where, as here, an affirmative defense merely pleads conclusions of law without any supporting facts, it should be dismissed.Based on the foregoing, this branch of plaintiffs’ motion to dismiss defendant’s sixth affirmative defense is granted.

Plaintiffs also move to dismiss defendant’s third affirmative defense that plaintiffs did not sustain a serious injury under Insurance Law § 5102 or sustain economic loss under Insurance Law § 5104. Plaintiffs argue that the serious injury threshold does not apply in this action for two reasons. First, plaintiffs contend that is not an action “against another covered person,” since Geico, the defendant, does not qualify as a “covered person” under Insurance Law § 5012 (j). In this regard, section j of Insurance Law § 5102, entitled “Definitions,” provides that:

” Covered person’ means any pedestrian injured through the use or operation of, or any owner, operator or occupant of, a motor vehicle which has in effect the financial security required by article six or eight of the vehicle and traffic law or which is referred to in subdivision two of section three hundred twenty-one of such law; or any other person entitled to first party benefits.” [*6]

Second, plaintiffs assert that this is not an action for “personal injuries” to which the “serious injury” threshold requirement applies under Insurance Law § 5104 (a); rather it is a breach of contract action in which the serious injury threshold is not applicable. Stated otherwise, plaintiff argues that she is not alleging that defendant was negligent in the use or operation of a motor vehicle; rather she contends that this action relates strictly to defendant’s contractual liability based on its “SUM/UIM endorsements.” In this regard, Insurance Law § 5104 (a), entitled “Causes of action for personal injury,” provides, in pertinent part, that:

“(a) Notwithstanding any other law, in any action by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state, there shall be no right of recovery for non-economic loss, except in the case of a serious injury, or for basic economic loss…” (emphasis added).

Despite the foregoing arguments, plaintiffs concede that “[f]or the sake of full disclosure . . . in Raffellini (v State Farm Mutual Automobile Insurance, 9 NY3d 196 [2007]), the Court of Appeals sided with the Fourth Department (against the Second Department) and found that the serious injury’ [no] [f]ault threshold does apply in the SUM/UIM context.” Nevertheless, plaintiffs go on to state that Raffellini “was strictly predicated on the proper interpretation of two implicitly contradictory provisions of Insurance Law § 3420, that the court “did not consider [their] legal arguments predicated on §§ 5102 and 5104,” and “[t]herefore, notwithstanding the holding in Raffellini, the courts are not foreclosed from considering the same issue on alternate grounds.”

Plaintiffs also contend that even assuming that they are required to demonstrate that they sustained serious injury in order to obtain their SUM coverage, they have already done so do by demonstrating that they sustained over a million dollars in economic damages,^[FN3] and that plaintiff has a “medically determined injury or impairment” which prevented her from “performing substantially all of the material acts that constituted her usual and customary daily activities for not less than ninety days during the one hundred eighty days immediately following the accident.”

This branch of the plaintiffs’ motion must be denied. In Raffellini (9 NY3d at 205), the Court of Appeals held that in an action by an insured against its insurer for supplementary uninsured/underinsured motorist coverage, the plaintiff must prove that he or she sustained a serious injury. The court held that Insurance Law § 3420 (f) (2), which “addresses additional optional personal injury coverage that can be purchased by a policyholder [i.e. SUM coverage],” is an extension of Insurance Law § 3420 (f) (1), the statute which “mandates that insurers provide uninsured motorist coverage in every New York motor vehicle liability policy,” and which conditions payment of mandatory uninsured motorist benefits on a finding that the insured suffered a serious injury as defined in Insurance Law § 5102 (d) (emphasis added) (id. at 200). Thus, the court ruled that the serious injury exclusion of Insurance Law § 3420 (f) (1) applies to supplementary benefits (Insurance Law [*7]§ 3420 [f] [2]), and that therefore an insured must prove serious injury in order to receive supplementary benefits (id. at 204).

Plaintiffs nevertheless argue that the Court of Appeals in Raffellini did not consider their arguments under Insurance Law § 5104 and 5012 (j), and thus may consider them now. This argument must be rejected. As an initial matter, these arguments were raised before the Supreme Court and the Appellate Division, Second Department. Although these courts granted plaintiffs’ motion to strike the insurance company’s serious injury defense, in part, on these grounds, the Court of Appeals came to the opposite conclusion based upon the same facts.

Moreover, the claim that the Court of Appeals did not consider plaintiffs’ arguments under Insurance Law §§ 5104 (a) and 5102 (d) must be rejected since the court relied upon Insurance Law § 5104 in coming to its conclusion. Specifically, the court was unpersuaded that the placement of the serious injury exclusion in Insurance Law § 3420 (f) (1) but not in 3420 (f) (2) reflected a “legislative determination to restrict the serious injury exclusion to mandatory benefits.” In this regard, the court held that:

“such a distinction would not be consistent with the policy underlying supplementary benefits, which are designed to give insureds the same level of protection that would have been available to others under the policy if the insureds were the tortfeasors who caused personal injuries. When an insured injures someone in a motor vehicle accident, the injured party is subject to the serious injury requirement in the No-Fault Law and cannot sue for noneconomic loss unless the serious injury threshold is met (see Insurance Law § 5104 [a]). Since the purpose of supplementary coverage is to extend to the insured the same level of coverage provided to an injured third party under the policy, the insured must also meet the serious injury requirement before entitlement to supplementary benefits. If this were not the case, the insured would receive coverage more comprehensive than that available to a third party injured by the insured (emphasis added).

It is evident from the facts of this case that the application of the serious injury exclusion is consistent with the policy supporting supplementary benefits. Here, plaintiff received payment for his basic economic loss through no-fault benefits. When he sued the negligent party who caused the collision, he was seeking recovery for noneconomic loss. Having obtained the $ 25,000 limit of coverage from the negligent driver’s insurer, he then sought additional noneconomic loss damages under the SUM endorsement to his State Farm insurance policy. Since a third party injured as a result of plaintiff’s negligence would have had to demonstrate serious injury to obtain noneconomic loss damages under plaintiff’s policy, it follows that plaintiff himself must prove serious injury to recover under his SUM endorsement—as Regulation 35-D requires. State Farm is therefore entitled to pursue its serious injury defense” (Raffellini, 9 NY3d at 205).

In any event, based upon the precedent of Raffellini, this court may not entertain plaintiffs’ arguments since, as indicated above, the Court of Appeals has conclusively held that an insurer is entitled to pursue a serious injury defense when sued by its insured for supplementary underinsured motorist benefits. Accordingly, this branch of plaintiffs’ motion [*8]to dismiss defendant’s third affirmative defense is denied.

Cross Motion of Defendant

Defendant cross-moves to dismiss plaintiffs’ second cause of action alleging a breach of the implied covenant of good faith and fair dealing. Defendant argues that plaintiffs cannot recover damages premised upon this cause of action because they have not pled and cannot prove the necessary allegations for bad faith. Defendant also contends that this cause of action seeks punitive damages, which are not available because breach of the implied covenant of good faith and fair dealing is not an independent tort, and because plaintiffs have not alleged that its conduct was egregious and that it was directed toward the public generally (New York Univ. v Cont’l Ins. Co., 87 NY2d 308, 316 [1995]).

In opposition, plaintiffs argue that although this state has not explicitly recognized a bad faith cause of action against a SUM insurer by its insured, the law with respect to SUM coverage is evolving in this state; that defendant has incorrectly characterized this cause of action as one solely for punitive damages so that it could argue that such a claim is not actionable; and that their complaint explicitly alleges “bad faith” as a separate cause of action.

In reply, defendant argues that plaintiffs rely upon the very case law that it had already distinguished in its cross motion; that, contrary to plaintiffs’ claim, it has cited a case which has rejected the application of general principles relating to a bad faith claim in a SUM context (Grinshpun v Travelers Cas. Co. of Conn., 23 Misc 3d 1111A, 2009 NY Slip Op 50706[U] [2009]); and that plaintiffs have conceded that they are seeking punitive damages because their counsel asserts that it is necessary to warn insurance carriers of the potential for “severe consequences” if they do not immediately tender their full SUM coverage upon request.

“In determining a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (7) . . . the pleading is afforded a liberal construction, the facts alleged are accepted as true, and the proponent of the pleading is accorded the benefit of every favorable inference” (J & D Evans Constr. Corp. v Iannucci, 84 AD3d 1171, 1171 [2011]). However, “bare legal conclusions as well as factual claims flatly contradicted by the record are not entitled to any such consideration” (Lutz v Caracappa, 35 AD3d 673, 674 [2006]). Moreover, “[i]f the facts as alleged do not fit within any cognizable legal theory, the cause of action must be dismissed” (Meltzer v Meltzer, 41 AD3d 558, 558 [2007]).

“Implicit in every contract is a covenant of good faith and fair dealing” (Elmhurst Dairy, Inc. v Bartlett Dairy, Inc., 97 AD3d 781, 784 [2012]). “This covenant embraces a pledge that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract” (511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144, 153 [2002] [internal quotation marks and citations omitted]). Further, “[w]hile the duties of good faith and fair dealing do not imply obligations inconsistent with other terms of the contractual relationship, they do encompass any promises which a reasonable person in the position of the promisee would be justified in understanding were included” (id.).

“[C]onsequential damages resulting from a breach of the covenant of good faith and fair dealing may be asserted in an insurance contract context, so long as the damages were [*9] “within the contemplation of the parties as the probable result of a breach at the time of or prior to contracting'”‘(Panasia Estates, Inc. v Hudson Ins. Co., 10 NY3d 200, 203 [2008], quoting Bi-Econony Mkt., Inc. v Harleysville Ins. Co. of N.Y, 10 NY3d 187, 192 [2008], quoting Kenford Co. v County of Erie, 73 NY2d 312, 319 [1989]; see also Stein, LLC v Lawyers Tit. Ins. Corp.,AD3d, 2012 NY Slip Op 7291, *2 [2d Dept 2012]; Hoffman v Unionmutual Stock Life Ins. Co. of NY, 51 AD3d 633, 634 [2d Dept 2008]; Meegan v Progressive Ins. Co., 43 AD3d 182, 186-187 [4th Dept 2007]; Acquista v NY Life Ins. Co., 285 AD2d 73, 80 [1st Dept 2001]; TADCO Constr. Corp. v Allstate Ins. Co., 2011 NY Slip Op 33621[U], *5 [2011]). “Courts also look at what liability the defendant fairly may be supposed to have assumed consciously, or to have warranted the plaintiff reasonably to suppose that it assumed, when the contract was made…'” (TADCO Constr. Corp., 2011 NY Slip Op 33621 [U], *5, quoting Kenford Co., Inc., 73 NY2d at 319). In addition, “[t]he nature, purpose and particular circumstances of the contract are some of the factors to be considered in determining what was in the reasonable contemplation of the parties at the time of the execution of the contract” (id., citing Rose Lee Mfg., Inc. v Chemical Bank, 186 AD2d 548, 551 [1992]). Finally, “[p]roof of consequential damages cannot be speculative or conjectural” (id., citing Ashland Mgt. Inc. v Janien, 82 NY2d 395, 403 [1993]).

Here, plaintiffs’ second cause of action seeks damages for defendant’s alleged bad faith in refusing to pay its policy limits when requested to do so, which “amounted to gross disregard for [their] . . . interests.” However, the cause of action fails to state a viable claim for breach of the covenant of good faith and fair dealing. As an initial matter, as indicated above, defendant’s assertion of a serious injury defense does not constitute bad fath. In any event, plaintiffs fail to allege that the damages they allegedly sustained were contemplated by the parties “as the probable result of a breach at the time of or prior to contracting” (Panasia Estates, Inc., 10 NY3d at 203 [internal quotation marks omitted]), nor does the record reflect that such consequential damages were reasonably contemplated by the parties (see Third Equities Corp. v Commonwealth Land Tit. Ins. Co., 2010 NY Slip Op 33462 [U], *15 [2010]). In addition, plaintiffs do not make this claim in their verified bill of particulars nor do they make this argument in opposition to defendant’s cross motion.

Further, extra-contractual damages have been awarded in cases involving insurance contracts different than the type of insurance contract involved here. For example, Bi-Economy involved a policy that included business interruption insurance which was designed to ensure that the insured had the financial support necessary to sustain its business operation in the event disaster occurred. The court held that plaintiff was entitled to extra contractual damages as a result of the defendant’s bad faith handling of plaintiff’s claim (failing to promptly adjust and pay the loss, resulting in the collapse of the business), because “the very purpose of business interruption coverage would have made [the insurer] aware that if it breached its obligations under the contract to investigate in good faith and pay covered claims it would have to respond in damages to [the insured] for the loss of its business as a result of the breach” (Bi-Economy, 10 NY3d at 195). Similarly, PanasiaEstates, Inc. involved a commercial property insurance policy covering damage to property while undergoing renovation. Rain had entered into the insured’s building resulting in extensive damage, the insurer did not investigate until several weeks later, and then denied the claim [*10]three months afterward. The court held that the insured’s claim for consequential damages based upon the insurer’s alleged failure to promptly investigate the claim was viable because such a claim could be asserted in an insurance context so long as the damages were contemplated by the parties as a probable result of the breach when they entered into the contract (see also Rodriguez v Allstate Ins. Co., 33 Misc 3d 827, 831 [Sup Ct, Kings County, 2011] [plaintiff-insured’s claim for consequential damages, namely car payments she made on a car that she was unable to use but for the defendant insurer’s alleged breach of contract, was a foreseeable consequenceof defendant’s alleged breach of contract];Carden v Allstate Ins. Co., 30 Misc 3d 479, 482 [2010] [under “Deluxe Homeowner’s Policy,” plaintiffs submitted evidence in admissible form that they suffered damages due to the delay in reconstruction of house because of defendant’s bad faith delay in settling their claim – after fire to house and damage to roof, mold developed, and plaintiffs were forced to remain out of dwelling and incur living expenses]; Handy & Harman v American International Group, Inc., 2008 NY Slip Op 32366 [U], *11 [2008] [plaintiff insured sufficiently alleged a claim for consequential damages for breach of the covenant of good faith based on insurer’s alleged failure to fully investigate its claims where purpose of environmental pollution liability policy was to “protect [the insured] from the calamity of unforseen and monumental environmental clean-up costs, and avert risk with regard to such costs and liabilities”]). Thus, in light of the nature of the contract involved here – an automobile liability insurance policy -it cannot reasonably be argued that plaintiffs contemplated receiving consequential damages as a result of defendant’s breach of its implied covenant of good faith and fair dealing

Finally, plaintiffs do not allege that they suffered any damages as a consequence of defendant’s alleged bad faith refusal to pay their claims (Grinshpun, 2009 NY Slip Op 50706[U],*4). In this regard, plaintiffs do not claim that defendant’s refusal to pay them their SUM benefits required them to incur any extra-contractual damages or prevented them from paying for needed medical and/or other living expenses. Thus, this cause of action merely alleges a denial of benefits promised under a policy of insurance (cf. Acquista, 285 AD2d at 80). As such, it is duplicative of plaintiffs’ first cause of action for breach of contract (see Jackson v AXA Equitable Life Ins. Co., 2011 NY Slip Op 32461[U], *3 [2011] [plaintiff’s third cause of action for breach of the covenant of good faith and fair dealing under a disability insurance policy duplicates plaintiff’s breach of contract claim; both claims arise from a dispute over the policy’s obligations and defendants’ satisfaction of them];Authelet v Nationwide Mutual Insurance Company, 2008 NY Slip Op 32929 [U], *3-4 [2008] [the plaintiff-insured’s cause of action alleging breach of the implied covenant of good faith and fair dealing under a homeowner’s policy pled the same conduct which was the predicate of breach of contract cause of action, i.e. the insurer’s failure to pay the full amount of the insured’s claim, and thus was duplicative of insured’s breach of contract claim]). Based upon the foregoing, plaintiffs’ second cause of action fails to state a claim for breach of the implied covenant of good faith and fair dealing. Accordingly, defendant’s motion to dismiss this cause of action is granted.

Defendant moves by order to show cause to vacate the note of issue and certificate of [*11]readiness and to strike this matter from the trial calendar. In support of its motion, defendant argues, among other things, that this action is in its inception, that only preliminary documentary discovery has been exchanged, that there have been no depositions, court conferences, or an independent medical examination of the plaintiff; and that further discovery with respect to plaintiffs’ claim for lost wages is required.

In opposition, plaintiffs assert, among other things, that discovery has already been conducted in the underlying action by Allstate and that additional discovery would be redundant.

In view of the court’s determination denying plaintiffs’ motion to dismiss defendant’s serious injury affirmative defense – requiring further discovery of plaintiffs’ injuries (alleged to be both continuing and permanent) – and in light of the fact that further discovery is required to address the issues set forth by defendant above, the court grants defendant’s motion only to the extent of directing that discovery will continue and that defendant will be permitted to move for summary judgment within 60 days after discovery is complete.

In sum, plaintiffs’ motion to dismiss defendant’s second, sixth, and seventh affirmative defenses is granted, and the motion is otherwise denied. Defendant’s cross motion to dismiss plaintiffs’ second cause of action is granted. Defendant’s application to vacate the note of issue and certificate of readiness is granted only to the extent of directing discovery to continue and to permit defendant to move for summary judgment within 60 days after discovery is complete.

This constitutes the decision and order of the court.

E N T E R

J. S. C.

Footnotes

Footnote 1:Plaintiffs’ counsel represents that “[a]ccording to the GEICO adjustor, there was a determination’ made by the carrier that the claim did not meet the No Fault threshold, and that the claim was probably not even worth $ 25G, and that ALLSTATE had overpaid” (Aff. in Opposition to Defendant’s Cross Motion to Dismiss Plaintiffs’ Second Cause of Action, ¶ 7).

Footnote 2:As indicated above, defendant advised plaintiffs’ counsel that plaintiffs “have GEICO’s permission to settle your client’s Bodily Injury claim with the adverse tort carrier.”

Footnote 3:Plaintiffs have annexed an “Analysis of Economic Loss” prepared by Leonard R. Freifelder, Ph.D., dated January 11, 2010, indicating that plaintiff’s total loss of earnings for the rest of her work life expectancy is $1,095,454 (Plaintiffs’ Notice of Motion, Exh. F).

[*1]

Civil Court of the City of New York, Kings County, October 23, 2012

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn, for plaintiff. Law Offices of Teresa M. Spina, Woodbury, for defendant.

{**38 Misc 3d at 269} OPINION OF THE COURT

Katherine A. Levine, J.

This matter^[FN*] was submitted on the unresolved issue of whether interest begins to accrue in no-fault actions at the time of filing or service of the summons and complaint, and whether the tolling of interest provisions contained in the regulations of the Superintendent of Insurance impact this determination. Here, plaintiff failed to commence the lawsuit within 30 days after receipt of defendant’s denial of claim form or payment of benefits, hence triggering the tolling of interest provisions. [*2]

Central to this determination is whether section 412 of the New York City Civil Court Act applies to no-fault actions brought in Civil Court. Section 412, entitled accrual of interest, provides:

“In any action, petition, order to show cause or other proceeding wherein interest accrues from the date of the inception of the action . . . order . . . , said entitlement to interest shall not begin to accrue until service is completed by the actual index number being properly depicted on the summons and provided to the party to be charged with the payment of interest.”

Plaintiff contends that interest accrues on the date of filing. It argues that section 412 is inapplicable because under the No-Fault Law, interest does not accrue from the “inception of the action”—i.e., when plaintiff files the summons and complaint in court—but rather 30 days after the claim or bill is submitted to the insurer. Furthermore, plaintiff contends that the tolling of interest provision removes no-fault actions from the ambit of section 412. Alternatively, plaintiff contends that the CCA is inapplicable because the provisions of the CPLR governing interest supercede the interest provisions contained in the Insurance Law and regulations.

Defendant argues that section 412 governs this matter because interest does accrue at the inception of the action, and that the date of service should trigger the accrual of interest. Defendant further argues that providers should not be allowed to obtain a windfall of interest by prolonging the time between the filing and service dates.{**38 Misc 3d at 270}

It is well established that the CPLR provisions governing interest are inapplicable to no-fault actions since Insurance Law § 5106 and the regulations promulgated thereto “supercede” the interest provisions contained in the CPLR. (Matter of Government Empls. Ins. Co. [Lombino], 57 AD2d 957, 959 [2d Dept 1977]; see Corona Hgts. Med., P.C. v Liberty Mut. Ins. Co., 32 Misc 3d 8, 10 [App Term, 2d Dept, 2d, 11th and 13th Jud Dists 2011].)

Insurance Law § 5106 (a) and 11 NYCRR 65-3.9 (a) mandate that “[first-party no-fault] benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained” (emphasis added), at which point interest shall accumulate at the rate of 2% per month on all overdue benefits. However, pursuant to 11 NYCRR 65-3.9 (c), if the plaintiff fails to request arbitration or commence an action “within 30 days after the receipt of a denial of claim form or payment of benefits . . . , interest shall not accumulate on the disputed claim or element of claim until such action is taken.” Furthermore, if a dispute has been submitted to arbitration or to the courts, “interest shall accumulate, unless the applicant unreasonably delays . . . the court proceeding.” (11 NYCRR 65-3.9 [d].)

The statutory and regulatory language therefore provides two points at which interest may start to accrue on a claim submitted by a medical services provider. If the provider commences a no-fault action within 30 days after the receipt of a denial of claim form, interest will start running on the date that the claim is overdue—30 days after the claim is presented to the defendant for payment until the claim is paid. (See LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217, 223 [2009]; Corona Hgts. Med., 32 Misc 3d at 9.) Where the defendant has not [*3]established the proper mailing of the denial of claim form, the claim is considered not to have been denied, payment of benefits is considered overdue, and interest on the claim will commence “30 days after the claim was presented to the defendant for payment” until the claim is paid. (Corona Hgts. Med., 32 Misc 3d at 10.) However, where the provider fails to commence the lawsuit within 30 days after receipt of the denial form, whether the denial is timely or not, interest is tolled until the commencement of the lawsuit. (LMK Psychological, 12 NY3d at 223.)

This court rules that either scenario falls within the scope of CCA 412. Professor David D. Siegel asserts that one of the major{**38 Misc 3d at 271} impetuses behind the promulgation of chapter 452 of the Laws of 2005, which amended sections 400 and 409 of the CCA to make commencement by filing applicable to the civil courts and added section 412, were abuses in the no-fault system. (See 164 Siegel’s Practice Review, Basic Change in Practice in Civil, District, and City Courts: “Filing” System Adopted; Summons Service No Longer Deemed “Commencement” at 1 [Aug. 2005]; 165 Siegel’s Practice Review, Reason for Insurance Law No-Fault Amendments Made as Part of Chapter 452 at 4 [Sept. 2005].) Under the old commencement by service system, no-fault providers would serve hundreds of summons and complaints without ever obtaining index numbers or filing the summons and proof of service in the clerk’s office. “This meant that the clerk’s office had nothing whatever in its files to indicate that the case was there,” and the civil court lost revenue by not collecting filing fees. (165 Siegel’s Practice Review, Calendar Crushing No-Fault Cases: Part of the Spur for Chapter 452 at 2 [Sept. 2005]; 165 Siegel’s Practice Review, Does “Bunching” of No-Fault Medical Claims Violate Rules About Permissive Joinder? at 3 [Sept. 2005].) Thus, under section 412, a medical service provider is entitled to interest only after “service is completed by the actual index number being properly depicted on the summons.” (165 Siegel’s Practice Review, The New § 412, on the Accrual of Interest at 1 [Sept. 2005].)

Professor Siegel also asserts that 11 NYCRR 65-3.9 served as the model for the legislature’s language in section 412 making the commencement of the action the point at which interest starts accruing. (165 Siegel’s Practice Review, The New § 412, on the Accrual of Interest at 1 [Sept. 2005].) The staff of the civil court, according to Siegel, “pinpointed the claim the legislature had in mind with the insertion . . . of § 412.” They found “an insurance department regulation . . . that makes the inception of the action the starting time of interest.” (Id.) The tolling provision contained in 11 NYCRR 65-3.9 (c) does not take no-fault actions outside the ambit of section 412. Section 412 merely requires that once the action is commenced by filing, the plaintiff must complete service by providing to the party charged with the payment of interest a summons with the actual index number being properly depicted upon it before interest can start accruing. This requirement merely ensures that the chaos and lack of notice which existed prior to the amendment of CCA 400 and 409 do not resurface.

Furthermore, the tenets of statutory construction mandate that the court review section 412 in light of the mischief sought{**38 Misc 3d at 272} to be remedied by the new legislation and to construe it in such a fashion as will suppress the evil and advance the remedy. (McKinney’s Cons Laws of NY, Book 1, Statutes § 95; see Matter of New York Life Ins. Co. v State Tax Commn., 80 AD2d 675 [3d Dept 1981].) Similarly, all parts of a statute are to be read and construed together in order to determine the legislative intent. Statutory words must be read in their context and words of a section should be interpreted with reference to the entire scheme. (Statutes § 97; see Matter of Jude F., 291 AD2d 165, 170 [2d Dept 2002].) [*4]

The “core objective” of the no-fault automobile insurance system was “to provide a tightly timed process of claim, disputation and payment.” (LMK Psychological Servs., P.C. at 222, citing Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 319 [2007].) Therefore, an insurer’s failure to pay or deny a claim within the requisite time period of 30 days “carries significant consequences, including the payment of attorneys’ fees and interest.” (LMK Psychological, 12 NY3d at 222.)

Plaintiffs are under a similar duty to proceed expeditiously. “[T]o do otherwise would reward a recalcitrant plaintiff with a windfall of punitive interest payments, and would contravene the legislative goal of promptly resolving no-fault claims.” (Arzu v NYC Tr. Auth., 35 Misc 3d 210, 212 [Civ Ct, Kings County 2012]; Devonshire Surgical Facility v American Tr. Ins. Co., 31 Misc 3d 1221[A], 2011 NY Slip Op 50793[U] [Civ Ct, NY County 2011].) The Superintendent of Insurance has interpreted the tolling of interest provision contained in subdivision (c) to apply, regardless of whether the particular denial at issue was untimely, so as to encourage applicants to swiftly seek to resolve any dispute (LMK Psychological Servs., 12 NY3d at 223-224; see also Canarsie Med. Health, P.C. v National Grange Mut. Ins. Co., 21 Misc 3d 791, 797 [Sup Ct, NY County 2008] [11 NYCRR 65-3.9 contains a “built-in protection against potential delay by providing that where an applicant chooses not to timely press forward to seek redress for a denial, there will be no interest penalty assessed against the insurer until such time as the applicant chooses a remedy. This is in keeping with the intent of the No-Fault Law as a whole because it seeks to encourage the parties moving forward toward a quick resolution, while not economically favoring one side or the other”]).

CCA 412’s mandate that interest commence accruing upon service similarly serves as an incentive for plaintiff to promptly{**38 Misc 3d at 273} pursue and resolve no-fault claims. It is to the plaintiff’s benefit to serve the summons and complaint as quickly as possible after filing the case in court so as to start accruing interest. These same goals are fulfilled by the tolling provision, which acts as an incentive for the provider to rapidly commence the lawsuit, even where it has failed to initiate the action within 30 days of receipt of the denial.

Since plaintiff waited over 30 days after it received a denial to initiate a no-fault action, interest shall commence accruing on the date that service of the summons and complaint was completed in accordance with CCA 412.

Footnotes

Footnote *: A number of other cases were submitted by the same parties on this exact issue. In all cases the defendant has conceded that plaintiff is entitled to judgment.

Civil Court of the City of New York, Kings County

046391/10

A P P E A R A N C E S :

ATTORNEYS FOR PLAINTIFF:

Gary Tsirelman, P.C.

65 Jay Street, Third Floor

Brooklyn, NY 11201

ATTORNEYS FOR DEFENDANT:

Iseman, Cunningham, Riester & Hyde, LLP

2649 South Road, Suite 230

Poughkeepsie, New York 12601

Katherine A. Levine, J.

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

PapersNumbered

Notice of Motion and Affidavits Annexed………….. …………………………1

Notice of Cross-Motion and Affidavits Annexed.. ………………………….

Answering Affidavits………………………………………………………………….. .2

Replying Affidavit of defendant…………………………………………………….3

Exhibits………………………………………………………………………………………..

Other: ………………………………………………………………………………………….

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

This case presents raises a new twist to previous rulings that the notification requirements for verification requests, as contained in 11 NYCRR §§65-3.5 and 3.6, do not apply to examinations under oath (“EUOs”) that are scheduled prior to the insurance company’s receipt of claim forms (“pre claim EUO”).

Defendant Hartford Insurance Co. (“defendant” or “Hartford”) seeks summary judgment [*2]based upon the assignor’s failure to appear at both a pre-claim EUO, which was adjourned on consent, and an EUO noticed and scheduled subsequent to defendant’s receipt of the claim which, under precedent, triggers strict regulatory time deadlines for compliance with verification requests. Plaintiff Lender Medical Supply, Inc. (“plaintiff” or “Lender”) opposes defendant’s motion on the grounds that since the first scheduled EUO was adjourned on consent, defendant had to request that the assignor appear for two other EUOs, pursuant to 11 NYCRR §65-3.6(b), before it could deny the claim, which it failed to do.

Lender provided medical equipment to its assignor on September 18, 2009. Hartford, by letter dated October 9, 2009, scheduled the assignor for an EUO to be held on November 10, 2009. On October 23, 2009, after it had sent the EUO request but prior to the scheduled date of the EUO, Hartford received the claim from plaintiff. Defendant granted the assignor’s request for an adjournment by letter dated November 10, 2009 and rescheduled the assignor’s EUO for November 17, 2009. After the assignor failed to appear at the rescheduled EUO, the defendant issued a denial dated December 8, 2009 based upon the assignor’s failure to appear for both EUOs.

As a condition to coverage under the revised Personal Injury Endorsement (“PIP”), “the eligible person …shall…as may reasonably be required submit to examinations under oath by any person named by the [insurer] and subscribe the same[11 NYCRR §65 – 1.1(d) [Sec. I. Conditions, Proof of Claim (b)]. Another condition to coverage under this section sets forth that an eligible person shall submit to medical examination by physicians selected by or acceptable to the insurer as often as the insurer may reasonably require.”

11 NYCRR §65-3.5 details the verification procedures to be followed after the insurer receives the completed application for no fault benefits (NYS form N-F2). The insurance regulations provide for EUOs and IMEs as part of an insurer’s “entitlement to additional verification” following receipt of a provider’s statutory claim forms. Stephen Fogel Psychological v. Progressive Casualty Ins. Co., 7 Misc 3d 18, 19 (App. Term. 2d Dept. 2004), aff’d in pert part 35 AD3d 720 (2d Dept. 2006). See also, All-Boro Medical Supplies, Inc. v Progressive Ins. Co., 20 Misc 3d 554 (Civil Ct., Kings Co,. 2008); Lumbermen’s Mutual Casualty Company v. Inwood Hill Medical P.C., et al, 2005 NY Slip Op 51101(U), 8 Misc 3d 1014(A) (Sup. Ct., NY Co. 2005). An insurer may toll the 30 day period it has in which to deny a claim by properly requesting verification within 15 days from the receipt of the proof of claim form or bill (11 NYCRR §65.3.5). See, Psych. & Massage Therapy Assoc., PLLC v. Progressive Casualty Ins. Co., 5 Misc 3d 723 (Civ Ct. Queens Co., 2004).

Where an EUO is requested as additional verification after receipt of the claim, the insurer must schedule an EUO within a reasonable time frame and as “expeditiously as possible.” Eagle Surgical Supply, Inc. v. Progressive Cas. Ins. Co., 21 Misc 3d 49, 51 (App. Term, 2d Dept. 2008). See Bayside Rehab. & Physical Therapy P.C. v. GEICO, 24 Misc 3d 542, 546 (Civil Ct., Richmond Co. 2009). If the “requested verification has not been supplied to the insurer 30 calendar days after the original receipt, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested., either by a telephone call or [*3]by mail. 11 NYCRR § 65-3.6(b). “A claim need not be paid or denied until all demanded verification is provided.” New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 569, 570 (2d Dept. 2004). See, Insurance Law § 5106(a); 11 NYCRR §§65-3.5(c), 65-3.8(a)(1).

Failure to submit a timely follow up request will void the tolling provisions of the time in which to submit a denial and will preclude a defendant from asserting the defense based on failure to produce requested verification, including failure to appear for a post-claim EUO. See, All-Boro Medical Supplies supra at 557; Kings Medical Supply Inc. v. Kemper Auto & Home Ins. Co., 2005 NY Slip Op 51450(U), 7 Misc 3d 128(A) (App. Term, 2 & 11th Dist. 2005). Therefore, in order for an insurer to predicate its denial based upon an assignor’s failure to appear for a post-claim EUO, it must prove that it sent both an original and follow up request and that the injured party failed to appear for both scheduled EUOs. See, Advanced Medical, P.C. v. Utica Mutual Ins. Co., 2009 NY Slip Op 51023(U), 23 Misc 3d 141(A) (App. Term, 2d Dept. 2009).

The detailed and narrowly construed verification procedures contained in 11 NYCRR 65-1.1(d) and 65-3.5(d) governing EUOs that are requested after receipt of a claim do not apply to EUO demands prior to the submission of a claim form. See Stephen Fogel Psychological, P.C. v. Progressive Ins. Co., 7 Misc 3d 18, 21 (App. Term, 2nd Dept. 2004). The right to an EUO prior to an insurer’s receipt of the claim is “not afforded by the verification procedures and timetables,” but rather by the mandatory personal injury protection, “which is independent of the verification procedures.” Id at 21. Furthermore, these detailed verification procedures are “not amenable to application at a stage prior to the submission of a claim form.” Id, at 21. See, Prime Psychological Services, P.C. (Ortiz) v. Nationwide Property and Cas. Ins. Co., 24 Misc 3d 230 (Civil Ct., Richmond Co. 2009) (an insurer not required to send EUO requests to the provider’s attorney for a pre claim EUO); Bayside Rehab., supra, an insurer need not notify the assignee medical services provider of pre claim IME cut off notice).

Therefore, an insurer is not obligated to send out a follow up request after an assignor failed to appears for a pre-claim EUO.^[FN1] Prime Psychological Services (Horne) v ELRAC, 2009 NY Slip Op 52579(U), 25 Misc 3d 1244(A) (Civil Ct., Richmond Co. 2009). It can properly deny the claim, retroactive to the date of loss, for the assignor’s failure to attend the one pre-claim scheduled IME so long as it mails the denial within 30 days of its receipt of the claim. Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 AD3d 720, 722 (2d Dept. 2006); Amaze Medical Supply, Inc., 2006 NY Slip Op 50909(U), 12 Misc 3d 127(A) (App. Term, 2d Dept. 2006); Prime Psychological (Horne), supra; All-Boro, supra. [*4]

Here, defendant cannot deny the claim based upon the assignor’s failure to attend the EUO that was scheduled prior to defendant’s receipt of the claim. By letter dated November 10, 2009 defendant’s attorney confirmed that at the request of the assignor’s attorney, the EUO was adjourned and that Hartford would provide his client with one final opportunity to appear for an EUO on November 17, 2009. Defendant’s consent to the adjournment vitiated its right to count the assignor’s failure to appear at the EUO as a no show. See Vitality Chiropractic, P.C..v . Kemper, 14 Misc 3d 94 (App. Term, 2d Dept. 2006)(mutually agreed upon rescheduling of initial IME is not equivalent of failure to supply requested verification.)

Furthermore, once defendant received the claim from the plaintiff, it was required to adhere to statutory and regulatory scheme of verification for the processing of no-fault claims. All-Boro Medical Supplies, supra, 20 Misc 3d at 556-557. Thus, defendant was required to send a follow-up request for an EUO pursuant to 11 NYCRR §65-3.6(b), once the assignor failed to appear for the scheduled November 17th date. Having failed to issue a follow up request, defendant could not assert, as a matter of law, the assignor’s failure to appear for the EUO as its basis to deny the claim. See, All- Boro, supra at 557.

Accordingly, defendant’s motion for summary judgment is denied and the case is to proceed to trial.

The foregoing shall constitute the Decision and Order of the Court.

Dated: May 01, 2012___________________________

Katherine A. LevineJudge, Civil Court

Footnotes

Footnote 1:Insurer could have properly denied plaintiff’s claim upon plaintiff’s failure to show up for a pre-claim EUO as a violation of a condition precedent to coverage. See Neomy Medical, P.C. v. American Transit Ins. Co., 2011 NY Slip Op 50536(U), 31 Misc 3d 1208(A)(Civ. Ct., 2011).

Civil Court of the City of New York, Kings County

CV 076337/09

Sara Pankowski, Esq.

Attorney for Plaintiff

Gary Tsirelman, PC

65 Jay Street

3rd Floor

Brooklyn NY 11201

718-438-1200

Morgan MacKay, Esq.

Attorney for Defendant

Law Offices of Teresa M. Spina

170 Froehlich Farm Blvd.

Woodbury NY 11797

516-496-5822

Reginald A. Boddie, J.

In this action, plaintiff seeks to recover assigned first-party no-fault benefits for psychological services alleged to have been provided to the subject assignor. Plaintiff seeks reimbursement for an initial interview in the amount of $194.58, evaluation of records in the amount of $67.24, five hours of psychological testing in the amount of $696.50, and explanation and interpretation of results in the amount of $103.31 (plaintiff’s bill). Plaintiff was paid for the initial interview. The remainder of the services were denied as medically unnecessary (defendant’s NF-10).

The case was tried on December 8, 2010. At trial, plaintiff and defendant stipulated in writing to plaintiff’s prima facie case, defendant’s timely denial, admission of the expert witness disclosure package, which included the peer review report and medical records reviewed, and that the only issue for trial was lack of medical necessity.

Plaintiff rested, relying on the stipulation that it had established its prima facie case. [*2]Defendant’s witness was unavailable and defendant moved to adjourn the trial to a later date to call a witness. Since defendant failed to show good cause, the application to adjourn was denied. (NY City Civ Ct Act § 1302 [a]). Plaintiff then moved for a directed verdict on the ground that defendant was not ready to proceed and could not establish its defense (CPLR 4401). Defendant opposed plaintiff’s motion and cross-moved for a judgment in its favor, relying on the stipulation that it established timely and proper denials, and that the peer review report and medical records were in evidence. The court reserved decision and the parties submitted post-trial briefs on January 2, 2012 and January 12, 2012. After consideration of the evidence and the parties’ arguments, the court denies plaintiff’s motion and grants judgment to the defendant for the reasons indicated herein.

Under New York no-fault law, plaintiff must establish its prima facie case by demonstrating submission to the defendant of a claim form, proof of the fact and amount of the loss sustained, and proof either that the defendant failed to pay or deny the claim within the requisite 30-day period, or that the defendant issued a timely denial that was conclusory, vague or without merit as a matter of law (see Insurance Law § 5106 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d, 11th & 13th Jud Dists 2011]). Here, plaintiff did not offer any evidence establishing that the denial was untimely, conclusory, vague or without merit as a matter of law. Nevertheless, as a consequence of the parties’ prima facie stipulation, the burden shifted to defendant to prove the timeliness of its denial and the defense stated therein (Amaze Med. Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 2004 NY Slip Op 24527 [App Term, 2d & 11th Jud Dists 2004]). However, because the parties also stipulated that defendant timely denied the bills, the only issue for trial was lack of medical necessity.

Defendant “bears both the burden of production and persuasion” as to its defense of lack of medical necessity (Nir v Allstate Ins. Co., 7 Misc 3d 544 [Civ Ct, Kings County 2005],citing King’s Med. Supply Inc. v Country-Wide Ins. Co., 5 Misc 3d 767, 771 [Civ Ct, Kings County 2004]); and the sole evidence presented here by defendant is the peer report and medical records which were stipulated into evidence.

To meet its burden of proof at trial on the defense of lack of medical necessity, at a minimum, defendant must establish a factual basis and medical rationale for the lack of medical necessity for the services for which reimbursement is sought (Nir, 7 Misc 3d at 546-547, [citations omitted]). To establish the factual basis, the defense must be supported by sufficient factual evidence or proof and cannot be conclusory (Nir at 547, citing Inwood Hill Med. v Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 Slip Op 50565[U] [Civ Ct, New York County 2004]). A peer review report may be found to have insufficient factual basis “…if it fails to provide specifics of the claim, is conclusory, or otherwise lacks a basis in the facts of the claim” (Nir at 547, citing Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 2004 NY Slip Op 24119 [App Term, 2d Dept 2004]).

Furthermore, the medical rationale referenced in a peer review report must be within the [*3]generally accepted medical or professional practice. “Generally accepted practice is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling” (Nir at 547, citing Citywide Social Work & Psychological Serv. PLLC v Travelers Indem. Co., 3 Misc 3d 608, 616 [Civ Ct, Kings County 2004]). A peer review report may be found insufficient when unsupported or controverted by evidence of “generally accepted medical/professional practice” (id.). However, where plaintiff rebuts the defendant’s evidence with its own demonstrating that the medical services were consistent with generally accepted medical practice, the defendant’s peer report may be accorded less weight, and the court may find that defendant failed to meet its burden (Nir at 547, citing see Elm Med. P.C. v Am. Home Assur. Co., 2003 NY Slip Op 51357[U] [Civ Ct, Kings County 2003]).

As a preliminary matter, the court notes that the peer review report of Michael H. Rosenfeld, Psy.D. was electronically signed and not notarized (see Rogy Medical, P.C. v Mercury Cas. Co., 23 Misc 3d 132[A], 2009 NY Slip Op 50732[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Radiology Today, P.C. v Geico Ins. Co., 20 Misc 3d 70, 71-72 [App Term, 2d & 11th Jud Dists 2008]; CPLR 2106). Despite this omission, the court is compelled to consider the report as direct evidence of defendant’s defense since the document was admitted pursuant to the parties’ stipulation; and a court may not cast aside an open-court stipulation absent proof it was entered into by “fraud, collusion, mistake, accident or other such ground” (Matinzi v Joy, 60 NY2d 835, 836 [1983]; In re Frutiger’s Estate, 29 NY2d 143 [1971]; Gage v Jay Bee Photographer, Inc.,222 AD2d 648, 649 [2d Dept 1995]). Here, no such proof was alleged or demonstrated.

The subject assignor, a thirty-seven year old female, was involved in a motor vehicle accident on January 8, 2008, and was alleged to have suffered head, neck and lower back pain, and gone home after the accident (Narrative Report at 2). The psychologist allegedly interviewed the assignor and gave her a mental status examination along with a series of self- administered checklist tests, including a Beck Depression Inventory (BDI), a Beck Hopelessness Scale (BHS), Beck Anxiety Inventory (BAI), Neuropsychological Symptom (NSC), Patient Pain Profile (P-3), and Posttraumatic Stress Diagnostic Scale (PDS) (id. at 4).

The peer review doctor, Michael H. Rosenfeld, Psy.D., a New York State Licensed Psychologist, whose report and resume were admitted into evidence, stated that he reviewed the patient’s records concerning the services provided by John R. Braun, Ph.D., as well as the reports and recommendations related thereto. In the report, he indicated:

Claimant is a 37-year-old female who alleges she was involved in a motor vehicle accident on January 8, 2008 and was evaluated by John R. Braun, Ph.D. from All Boro Psychological Services, P.C. from January 16, 2008 to January 23, 2008. The claimant received a diagnostic interview, a review of medical records, five hours of psychological testing and an explanation of results (Peer Report at 1). Claimant was the driver of a vehicle involved in a motor vehicle accident on 1/08/08 reportedly resulting in head, neck and lower back pain. There was no loss of consciousness, fractures or lacerations (id. at 2). “…[T]he initial subjective complaints included: increased general nervousness, fear of driving or riding in cars, nightmares, headaches, [*4]dizziness, irritability, etc.” (id.).

Dr. Rosenfeld stated, “Given the complaints, the initial intake was appropriate, the psychological testing was excessive, clinically unnecessary, and deviates from accepted standard practice in psychology” (id. at 2). Citing psychological reference material, Dr. Rosenfeld explained, such tests “should not be used routinely, but to address specific questions, the answer to which may alter the patient’s treatment.” He then set forth three basic criteria which, when met, establish the necessity of psychological testing within the profession, as follows:

1. The reason for testing must be based on a specific referral question or questions from the treating provider and related directly to the psychiatric or psychological treatment of the patient

2. The specific referral question or questions cannot be answered by means of diagnostic interview

3. The specific referral question or questions and testing results will have a meaningful impact on the rendering of a diagnosis and the course or outcome of treatment (id.)

He stated, in this case, none of the criteria were met and elaborated on the reasons why the administration of these tests was inappropriate; namely, that the testing would not alter the diagnosis or treatment of the patient in any meaningful way. He also stated review of the records is normally part of the initial interview and the explanation was unnecessary since the tests were not warranted (id. at 3).

Accordingly, the court finds that Dr. Rosenfeld’s peer review report sets forth a sufficient factual basis and medical rationale for the lack of medical necessity asserted in the denial. The court notes plaintiff has failed to rebut defendant’s evidence with its own testimonial or other documentary evidence (see Innovative Chiropractic, P.C. v Mercury Ins. Co., 25 Misc 3d 137[A], 2009 NY Slip Op 5232[U][App Term, 2d, 11th & 13th Jud Dists 2009], citing see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495 [App Term, 2d, 11th & 13th Jud Dists 2009]). Additionally, the court acknowledges there are circumstances where a live witness would be required to embellish defendant’s position. However, on these facts, the court finds defendant was not required to present an expert witness to provide live testimony at trial, particularly since plaintiff did not offer a witness or any evidence whatsoever on rebuttal.

Therefore, the plaintiff’s motion for a directed verdict is denied. Defendant is granted a judgment in its favor, and the complaint is dismissed with prejudice.

This constitutes the Decision and Order of the court.

Dated: January 31, 2012

Brooklyn, NY

_______________________

Hon. Reginald A. Boddie

Judge, Civil Court [*5]

Civil Court of the City of New York, Kings County

CV 061389/09

Sara Pankowski, Esq.

Attorney for Plaintiff

Gary Tsirelman, PC

65 Jay Street

3rd Floor

Brooklyn NY 11201

718-438-1200

Morgan MacKay, Esq.

Attorney for Defendant

Law Offices of Teresa M. Spina

170 Froehlich Farm Blvd.

Woodbury NY 11797

516-496-5822

Reginald A. Boddie, J.

In this action, plaintiff seeks to recover assigned first-party no-fault benefits for psychological services alleged to have been provided to the subject assignor. Plaintiff seeks reimbursement for an initial interview in the amount of $194.58, evaluation of records in the amount of $67.24, five hours of psychological testing in the amount of $696.50, and explanation and interpretation of results in the amount of $103.31 (plaintiff’s bill). Plaintiff was paid for the initial interview. The remainder of the services were denied as medically unnecessary and for fees not in accordance with the fee schedules (defendant’s NF-10). [*2]

The case was tried on December 8, 2010. At trial, plaintiff and defendant stipulated in writing to plaintiff’s prima facie case, defendant’s timely denials, admission of the expert witness disclosure package, which included the peer review report and medical records reviewed, and that the only issues for trial were lack of medical necessity and fees not in accordance with fee schedules.

Plaintiff rested, relying on the stipulation that it had established its prima facie case. Defendant’s witness was unavailable, and defendant moved to adjourn the trial to a later date to call a witness. Since defendant failed to show good cause, the application to adjourn was denied (NY City Civ Ct Act § 1302 [a]). Plaintiff then moved for a directed verdict on the ground that defendant was not ready to proceed and could not establish its defenses (CPLR 4401). Relying on the stipulation, defendant opposed plaintiff’s motion and cross-moved for a judgment in its favor on the ground that it established timely and proper denials, and that the peer review report and medical records were in evidence. The court reserved decision and the parties submitted post-trial briefs on January 2, 2012 and January 12, 2012. After consideration of the evidence and the parties’ arguments, plaintiff’s motion for a directed verdict is denied. Defendant’s motion for judgment is granted in part and denied in part for the reasons stated herein.

Under New York no-fault law, plaintiff must establish its prima facie case by demonstrating submission to the defendant of a claim form, proof of the fact and amount of the loss sustained, and proof either that the defendant failed to pay or deny the claim within the requisite 30-day period, or that the defendant issued a timely denial that was conclusory, vague or without merit as a matter of law (see Insurance Law § 5106 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d, 11th & 13th Jud Dists 2011]).

Here, plaintiff did not demonstrate the denial was untimely, conclusory, vague or without merit as a matter of law. Nevertheless, as a consequence of the parties’ prima facie stipulation, the burden shifted to defendant to prove the timeliness of its denials and the defenses stated therein (Amaze Med. Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 2004 NY Slip Op 24527 [App Term, 2d & 11th Jud Dists 2004]). Because the parties also stipulated that defendant timely denied the bills, the only issues for trial were lack of medical necessity and fees not in accordance with fee schedules.

Defendant “bears both the burden of production and persuasion” as to its defenses (Nir v Allstate Ins. Co., 7 Misc 3d 544 [Civ Ct, Kings County 2005],citing King’s Med. Supply Inc. v Country-Wide Ins. Co., 5 Misc 3d 767, 771 [Civ Ct, Kings County 2004]). To meet its burden of proof at trial on the defense of lack of medical necessity, at a minimum, defendant must establish a factual basis and medical rationale for the lack of medical necessity for the services for which reimbursement is sought (Nir, 7 Misc 3d at 546-547, [citations omitted]).

To establish the factual basis, the defense must be supported by sufficient factual evidence or proof and cannot be conclusory (Nir at 547, citing Inwood Hill Med. v Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 Slip Op 50565[U] [Civ Ct, New York County 2004]). A peer [*3]review report may be found to have insufficient factual basis “…if it fails to provide specifics of the claim, is conclusory, or otherwise lacks a basis in the facts of the claim” (Nir at 547, citing Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 2004 NY Slip Op 24119 [App Term, 2d Dept 2004]).

Further, the medical rationale referenced in a peer review report must be within the generally accepted medical or professional practice. “Generally accepted practice is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and values that define its calling” (Nir at 547, citing Citywide Social Work & Psychological Serv. PLLC v Travelers Indem. Co., 3 Misc 3d 608, 616 [Civ Ct, Kings County 2004]). A peer review report may be found insufficient when unsupported or controverted by evidence of “generally accepted medical/professional practice” (id.). However, where plaintiff rebuts the defendant’s evidence with its own demonstrating that the medical services were consistent with generally accepted medical practice, the defendant’s peer report may be accorded less weight, and the court may find that defendant failed to meet its burden (Nir at 547, citing see Elm Med. P.C. v Am. Home Assur. Co., 2003 NY Slip Op 51357[U] [Civ Ct, Kings County 2003]).

In support of its defense of lack of medical necessity, defendant proffered the peer review report of Michael H. Rosenfeld, Psy.D., a New York State Licensed Psychologist, whose report and resume were stipulated into evidence. As a preliminary matter, the court notes that the peer review report of Dr. Rosenfeld was signed and notarized on November 14, 2007, one day after the date stamped on the denial. Despite this fact, the court is compelled to consider the report as direct evidence of defendant’s defense since a court may not cast aside an open-court stipulation, as here, absent proof it was entered into by “fraud, collusion, mistake, accident or other such ground” (Matinzi v Joy, 60 NY2d 835, 836 [1983]; In re Frutiger’s Estate, 29 NY2d 143 [1971]; Gage v Jay Bee Photographer, Inc.,222 AD2d 648, 649 [2d Dept 1995]). Here, no such proof was alleged or demonstrated.

Dr. Rosenfeld stated that he reviewed the patient’s records concerning the services provided by John R. Braun, Ph.D., the treating psychologist, as well as the reports and recommendations related thereto, and found the services allegedly provided not medically necessary. The assignor was a fifty-seven year old female, involved in a motor vehicle accident on May 18, 2007, and allegedly suffered head, neck, lower back, and bilateral knee pain (Narrative Report at 2). The court notes, Dr. Rosenfeld’s peer report incorrectly lists bilateral shoulder pain among the alleged injuries and omits the head and bilateral knee pain (Peer Review Report at 2).

Dr. Rosenfeld further stated, “[t]he claimant received a diagnostic interview, a review of medical records, five hours of psychological testing and an explanation of results” (id. at 1). Claimant went to Long Island College Hospital after the accident (id. at 2). ” There was no loss of consciousness, head trauma, fractures, or lacerations” (id.). “The initial subjective complaints included: increased general nervousness, fear of driving or riding in cars, nightmares, headaches, dizziness, sleep disturbance, feeling weak and fatigued, etc.” (id.). [*4]

Dr. Braun treated claimant from August 3, 2007 to August 10, 2007 (id. at 1). He performed a mental status examination and gave claimant a series of self-administered checklist tests, including the Beck Depression Inventory (BDI), Beck Hopelessness Scale (BHS), Beck Anxiety Inventory (BAI), Neuro-Psychological Symptom Checklist (NSC), Patient Pain Profile (P-3), and Posttraumatic Stress Diagnostic Scale (PDS) (Narrative Report at 4). The doctor billed for a diagnostic interview, a review of medical records, five hours of psychological testing and an explanation of results (plaintiff’s bill).

Dr. Rosenfeld stated, “Given the complaints, the initial intake was appropriate, however, the psychological testing was excessive, unnecessary, and deviates from accepted standard practice in psychology” (Peer Review Report at 2). He reasoned that the standard practice in psychology for establishing a diagnosis and developing a treatment plan is to conduct a thorough diagnostic interview and mental status examination of the patient. He stated, “Psychological testing is never considered necessary unless there are subtle or complex issues to investigate and the diagnosis cannot be determined based upon the clinical interview/mental status examination alone (i.e., testing could be necessary to rule out mental retardation, to rule out psychosis, to rule out a mild head injury, etc.).” (Id.)

Dr. Rosenfeld further stated this case was straightforward and without subtle or complex issues to investigate; the diagnosis and treatment plan should have been based on the interview and mental status examination alone; and the psychological testing was unnecessary and inconsistent with acceptable standards of psychological practice (id.). He indicated that the review of the records was medically unnecessary because it is normally part of the initial interview, and the explanation and interpretation of results was medically unnecessary since the tests were not warranted (id. at 3).

Plaintiff failed to rebut defendant’s evidence with testimonial or other documentary evidence (see Innovative Chiropractic, P.C. v Mercury Ins. Co., 25 Misc 3d 137[A], 2009 NY Slip Op 5232[U][App Term, 2d, 11th & 13th Jud Dists 2009], citing see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495 [App Term, 2d, 11th & 13th Jud Dists 2009]). The court acknowledges there are circumstances where a live witness would be required to embellish defendant’s position. Here, the court finds defendant was not required to present an expert witness to testify at trial, particularly since plaintiff did not offer a witness or any evidence whatsoever on rebuttal. Accordingly, the court finds defendant successfully proved lack of medical necessity for four of the tests administered and the related explanation and interpretation of results.

The court limits the relief awarded because Dr. Rosenfeld’s report only meaningfully referred to and discussed four tests allegedly administered to the assignor, the BAI, BHS, BDI and PDS (see Nir, 7 Misc 3d at 548, citing Amaze, 3 Misc 3d 43). The peer review report did not discuss the NSC or P-3. Accordingly, the court finds Dr. Rosenfeld’s peer review report sets forth a sufficient factual basis and medical rationale for the lack of medical necessity of four of the six psychological services allegedly provided, the review of records, and the explanation and interpretation of results. The court finds defendant failed to meet its burden of establishing its defense of lack of medical necessity for the NSC and P-3 tests, and the relevant explanation and [*5]interpretation of results.

Finally, as to defendant’s defense of fees not in accordance with fee schedules, it was the “defendant’s burden to come forward with competent evidentiary proof’ supporting its fee schedule defenses” (Robert Physical Therapy v State Farm Mut. Auto. Ins. Co., 13 Misc 3d 172, 175 [Civ Ct, Kings County 2006] [citations omitted]). Defendant had the burden to “…proffer sufficient evidence to establish as a matter of law that the amounts charged in said claims were in excess of the amounts permitted by the fee schedule” (Rogy Med. P.C. v Mercury Cas. Co., 23 Misc 3d 132[A]; 2009 NY Slip Op 50732[U] [App Term, 2d, 11th & 13th Jud Dists 2009], [citations omitted]).

Here, defendant proffered no testimonial or documentary evidence to prove its fee schedule defense. Therefore, defendant’s fee schedule defense fails. Nevertheless, defendant proved lack of medical necessity for all but two of the services billed. Accordingly, a partial judgment is granted to plaintiff in the amount of $266.61, plus statutory interest from the date of filing, costs, and attorney’s fees. The balance of the claim is dismissed with prejudice.

This constitutes the Decision and Order of the court.

Dated:January 31, 2012 ______________________Hon. Reginald A. Boddie

Judge, Civil Court

Civil Court of the City of New York, Kings County

089993/09

Michael Weaver, Esq.

Bruno, Gerbino & Soriano, LLP

Attorneys for Defendant

445 Broad Hollow Road, Suite 220

Melville, NY 11747

631-390-0010

Law Offices of Melissa Betancourt, P.C.

Attorney for Plaintiff

155 Kings Highway, 3rd Floor

Brooklyn, New York 11223

718-336-8076

Lisa S. Ottley, J.

This action was commenced by the Plaintiff seeking payment of no-fault party benefits for services rendered on behalf of Sara Mounier pursuant to CPLR 5106(a) of the Insurance Law and Regulation of the New York State Insurance Department (11 NYCRR Sect. 65-1.1 et. seq.).

Defendant moves for an order pursuant to CPLR §3025(b), for leave to amend its Verified Answer, and upon this court granting defendant leave to amend its answer, for dismissal of the complaint pursuant to CPLR §3211(a) 5, under the doctrines of res judicata and collateral estoppel.

Discussion

Leave to amend a pleading pursuant to CPLR 3025(b) should be granted where there is no significant prejudice or surprise to the opposing party and where the proof submitted in support of the motion indicates that the amendment may have merit. See, Edenwald Contr. Co. v. City of New York, 60 NY2d 957 [1983].

Based upon the documents submitted in support of its motion for leave to amend its Verified Answer, the court hereby grants defendant’s motion to amend its Verified Answer. See, Uptodate Medical Service, P.C., v. State Farm Mutual Automobile Insurance Company , 22 Misc 3d 128(A), 880 N.Y.S.2d 227 (AT 2nd, 11th & 13th Judicial Dists., 2009).

Next, this court will address the issue as to whether defendant is entitled to dismissal of the action on the grounds of res judicata and collateral estoppel.

In the case at bar, the defendant-insurer brought an action in Supreme Court, Nassau County, seeking declaratory relief by the filing of a Summons and Complaint which the court deemed to have been duly served upon all the defendants named within the action, which failed to appear and/or interpose or serve an answer in the action. [See, Exh. “A” annexed to defendant’s moving papers herein]. By notice of motion, the defendant herein, and the plaintiff in the Supreme Court action moved pursuant to CPLR § 3215 for an order and judgment granting plaintiff the relief sought upon default, which was granted by the Hon. Anthony L. Parga, on October 1, 2010.

The defendant moves for dismissal of this action for payment of no-fault benefits [*2]on the grounds of res judicata and collateral estoppel, inasmuch as the declaratory judgment held that no coverage existed due to the fact the loss resulted from a staged accident.

Plaintiff argues, that a declaratory judgment granted on default does not have preclusive effect, and therefore, collateral estoppel does not preclude a party from litigating the action.

Although there is case law in support of plaintiff’s argument, the cases in support of plaintiff’s argument are distinguishable from this case. As argued by defendant, in Magic Recovery Med & Surgical Supply, Inc. v. State Farm Mutual Auto Insurance Company, 27 Misc 3d 67, 901 N.Y.S.2d 774 (AT 2nd, 11 & 13th Jud. Dists., 2010), the insurance company failed to name the party in the declaratory action, therefore, the res judicata and collateral estoppel could not be granted. In EMA Acupuncture, P.C. v. Lumbermens Mutual Casualty Company, 27 Misc 3d 141, 911 N.Y.S.2d 692 (AT 2nd, 11 & 13th Jud. Dists., 2010), which was not the basis of a default declaratory judgment, but was based on whether an Order issued on default pursuant to CPLR §3216 which fails to specify whether the dismissal is with prejudice or on the merits, has a preclusive effect.

Recently, this Court in a decision by the Hon. Devin P. Cohen, denied defendant’s motion to dismiss on the ground of collateral estoppel. As in this case, the motion raised the question of the effect of a declaratory judgment order, issued on default with respect to collateral actions seeking to litigate the same issue. Judge Cohen provides a detailed analysis of the applicable law and policies underlying declaratory judgments, collateral estoppel and default judgments. See, Beford Medical Care, P.C., a/a/o Vincent Meyers v. Encompass Insurance Company, 31 Misc 3d 222, 915 N.Y.S.2d 452 [Civ. Ct., Kings Co., 2011].

Interestingly, however, the decision does not address the doctrine of res judicata. Perhaps, the defendant in that case, did not move for dismissal on the ground of res judicata.

The doctrines of res judicata and collateral estoppel are designed to put an end to a matter once it is duly decided. See, Siegel, NY Practice §442 at 747 [4th Ed.]. Res judicata, or claim preclusion, is invoked when a party, or one in privity with the party, seeks to relitigate a disposition on the merits of claims, or causes of action, arising out of the same, or series of, transactions which were raised, or could have been raised, in the [*3]

prior action. See, Matter of Hunter, 4 NY3d 260 [2005]. Res judicata applies “when a different judgment in the second [action] would destroy or impair rights or interests established by the first. See, Matter of Hunter, 4 NY3d 260 [2005]; Schuykill Fuel Corp. v. Nieberg Realty Corp., 250 NY 304.

In SZ Medical, P.C., Life Chiropractic, P.C., JH Chiropractic, P.C., New Wave Oriental Acupuncture, P.C., a/a/o Clinton Charles v. Erie Insurance Company, 24 Misc 3d 126(A), 889 N.Y.S.2d 884 [AT 2nd, 11th & 13th Judicial Dists., 2009], the court affirmed the dismissal of the case on the lower level, and held the following:

The determination as to whether there was coverage is crucial to both

plaintiffs and defendant herein, and arises out of the same transaction,

i.e., the subject accident (see e.g. Abraham v. Hermitage Ins. Co., 47

AD3d 855 [2008]; Sabatino v. Capco Trading, Inc., 27 AD3d 1019,

1020 [2006]), and a different judgment in the instant action would

destroy or impair rights or interests established by the Supreme

Court judgment (see, e.g. Schuykill Fuel Corp. v. Nieberg Realty

Corp., 250 NY at 306-307). Moreover, the record established that

defendant and the wholly owned subsidiary had the requisite privity

(see, e.g. Spasiano v. Provident Mut. Life Ins. Co., 2 AD3d 1466

[2003]). Consequently, plaintiffs were barred from relitigating the

claim pursuant to the doctrine of res judicata.

Thereafter, the First Department in Pomona Medical Diagnostics, P.C., a/a/o Jarrod Ward v. Metropolitan Casualty Ins. Co., 29 Misc 3d 138(A), 920 N.Y.S.2d 243 (1st Dept., 2010), citing SZ Medical, P.C., Life Chiropractic, P.C., JH Chiropractic, P.C., New Wave Oriental Acupuncture, P.C., a/a/o Clinton Charles v. Erie Insurance Company, 24 Misc 3d 126(A), 889 N.Y.S.2d 884 [AT 2nd, 11th & 13th Judicial Dists.], reversed the lower court’s denial of defendant’s motion for summary judgment, and held: “Contrary to plaintiff’s claim, the Supreme Court judgment is a conclusive final determination, notwithstanding that it was entered on default of plaintiff, since res judicata applies to a judgment taken by default that has not been vacated (see, Trisingh Enters., Inc., v. Kessler 249 AD2d 45 [1998]; Robbins v. Growney, 229 AD2d 356 [1996].

Herein, the plaintiff-provider, as determined by the Supreme Court, was duly served with the Summons and Complaint in the declaratory action, and therefore, judgment was entered in favor of the defendant-insurer, on October 1, 2010, due to the [*4]provider’s failure to serve and file an answer to the Summons and Complaint. There is nothing in the record to indicate that the plaintiffs, Altercare, et .al., have moved to vacate the default judgment in the Supreme Court.

Accordingly, defendant’s motion to dismiss on the ground of res judicata is hereby granted.

This constitutes the order of this Court.

Court Attorney to notify.

Dated: Brooklyn, New York

August 30, 2011

______________________________

LISA S. OTTLEY, A.J.S.C.

[*1]

Civil Court of the City of New York, Kings County, July 7, 2011

APPEARANCES OF COUNSEL

Law Office of Teresa M. Spina, Woodbury (Dominick Dale of counsel), for defendant. Gary Tsirelman, P.C., Brooklyn (Wesley Mead of counsel), for plaintiff.

{**32 Misc 3d at 716} OPINION OF THE COURT

Genine D. Edwards, J.

In the instant actions for no-fault benefits, bench trials were held on April 13, 2011 and April 14, 2011. After establishing how the bills were created and given to Israel & Israel for [*2]mailing, plaintiff’s witness, Vladmir Grinsberg, could not set forth how the bills were mailed. Mr. Grinsberg instead offered that the denial of claims indicated defendant received the bills. Plaintiff’s counsel contended that the defendant’s denial of claim forms were admissible as party admissions for the limited purpose of proving the bills were mailed and received. Defendant objected and argued that plaintiff has to lay a foundation for the admission of the denial of claim forms. Hence, a directed verdict should be rendered in defendant’s favor in all three actions.

This court requested post-trial memoranda regarding the admissibility of the defendant’s denial of claim forms as party admissions for the limited purpose of establishing that plaintiff mailed its bills to the defendant.

After due deliberation of the evidence adduced at trial, as opposed to documents annexed to a summary judgment motion, this court adheres to the Appellate Term’s ruling that denial of claim forms shall be admitted into evidence only upon the laying of a business record foundation. (Bath Med. Supply, Inc. v Utica Mut. Ins. Co., 23 Misc 3d 141[A], 2009 NY Slip Op 51030[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Bajaj v General Assur., 18 Misc 3d 25 [App Term, 2d Dept 2007].) Besides testifying that he received the denial of claim forms, Mr. Grinsberg failed to proffer any evidence to authenticate the denial of claim forms.

Accordingly, defendant’s motions for directed verdict in each of the three actions are granted because plaintiff failed to shoulder its prima facie burden.

Civil Court of the City of New York, Kings County

164656/07

Attorney for Plaintiff

Law Offices of Melissa Betancourt, P.C.

155 Kings Highway, 3rd Floor

Brooklyn, NY 11223

Attorney for Defendant

Law Offices of Daniel J. Tucker

American Transit Insurance Co.

330 West 34th St., 10th Floor

New York, NY 10001

Katherine A. Levine, J.

This motion raises the issue of whether an insurer must issue a denial within 30 days of an injured party’s failure to appear for a post claim IME. The court concludes that since a failure [*2]to appear for a post claim is a violation of a condition precedent to the contract, as opposed to a policy exclusion, a denial on this ground is not subject to the preclusion rule.

Plaintiffs Neomy Medical, P.C., Perfect Point Acupuncture, P.C., and Chiropractic Back Care, P.C., (collectively “plaintiffs”), all medical service companies, commenced this action pursuant to Insurance Law 5106(a) to recover the sum of $5,854.55 for medical services they provided to their assignor Fan fan Both (“assignor” or “Both”). Defendant American Transit Ins. Co. (“American” or “defendant”) cross moved for summary judgment based on its claim that the assignor failed to appear at an independent medical examination (“IME”)(“IME no show”).

During oral argument, defendant conceded that only some of its denials were timely; ie mailed within 30 days of receipt of claim form. Defendant contended, however, that its late denials were not fatal since failure to appear for an IME is a violation of a condition precedent to the insurance policy which vitiates the contract and makes such s violation a non- precludable defense which survives a late denial. Plaintiff countered that an IME no show is a precludable defense. The court requested briefs solely on this issue.

To grant summary judgment, “it must clearly appear that no material and triable issue of fact is presented. Forrest v. Jewish Guild for the Blind, 3 NY3d 295 (2004); Zuckerman v, City of New York, 49 NY2d 557 (1980). A plaintiff establishes a prima facie entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing form has been mailed and received, and that payment of no-fault benefits was overdue.” Mary Immaculate Hosp. v. Allstate Ins., 5 AD3d 742, 743 (2d Dept.2004); Second Medical v. Auto One Ins., 20 Misc 3d 291, 293 (Civil Ct., Kings Co.2008).

Condition Precedent

11 NYCRR 65-1.1 (d) provides for the mandatory personal injury protection endorsement (“PIP”). Under the subheading entitled “Conditions”, “Action against Company,” the regulation provides that “No action shall lie against the [c]ompany unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage.” One provision under this subheading provides that the eligible person shall submit to medical examinations by physicians selected by or acceptable to the insurer…when, and as often as, the Company may reasonably require.” 11 NYCRR §65 – 1.1(d)[Sec. I. Conditions, Proof of Claim (b)]. Another condition to coverage under this section is that an eligible person shall, as may reasonably be required, submit to examinations under oath (“EUO”) by any person named by the insurer. Id. ^[FN1]

In Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 7 Misc 3d 18, 20 (App. Term, 2d Dept. 2004) aff’d 35 AD3d 720 (2d Dept. 2006), the Appellate Term found that [*3]an insurer had the right to conduct an IME prior to its “receipt of the statutory claim form or its statutory equivalent which “under the regulations, trigger the verification process.” The right to an IME, at this juncture was not afforded by the verification procedures, as the “detailed and narrowly construed verification protocols are not amenable to application at a stage prior to submission of a claim form.” Id at 21. The court then noted the “Conditions” section in the Mandatory PIP predicates the right to commence an action against the insurer upon an eligible injured person’s (“assignor”) compliance with the terms of coverage. Fogel, supra, 7 Misc 3d at 25 (Golia, J., conc. in part and diss. in part).”Where an eligible injured person fails to submit to a reasonably requested IME, the insurance policy, by its terms…affords no coverage for the otherwise eligible injured person.” 7 Misc 3d at 25 citing to Orr. v Continental Cas. Co., 205 AD2d 599 (2d Dept. 1994) (Under New York law, the insurer has the right to declare the contract at the end where the insured breaches a term upon which the contract was conditioned). Thus, an insured’s refusal to comply with a reasonably requested IME which was not opposed or adequately refuted, constitutes a complete defense to the claim warranting dismissal. 7 Misc 3d at 25.

In affirming the Appellate Term, the Second Department found that there was no distinction between the contractual remedies available for failure to appear for pre claim as opposed to post claim IMEs and that the ” appearance of the insured for IMEs at any time is a condition precedent to the insurer’s liability on the policy.” Fogel v. Progressive Cas. Ins. Co., 35 AD2d 720, 721 (2d Dept. 2006).^[FN2]

The First Department subsequently found failure to comply with a request for an IME, whether pre-or post claim was a violation of a condition of coverage which would preclude an action against an insurer for payment of health services provided. Inwood Hill Medical, P.C. v. General Assurance Co., 10 Misc 3d 18. 20 (App. Term, First Dept. 2005).In Inwood Hill Medical, P.C. v. General Assurance Co., 10 Misc 3d 18, 20 (1st Dept. 2005), the First Department ruled that “inasmuch as attendance at a medical examination is a condition of coverage under Section 65-1.1, it follows that an eligible injured person’s failure to comply with a request for an IME precludes an action against an insurer for payment of health services provided.”

Preclusion Rule

Insurance Law § 5106(a) sets forth that no fault benefits “are overdue if not paid within 30 days after the claimant provides proof of the fact and the amount of loss sustained.” Similarly 11 NYCRR §65-3.8 c require that “(w)ithin 30 calendar days after proof of claim is received, the insurer shall either pay or deny the claim in whole or part.” See Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274, 278-79(1997) (“30 day rule”). [*4]

A timely disclaimer is not required, however, when the policy on which the claim rests does not, by its terms, cover the incident giving rise to liability. Handlesman v. Sea Insurance Co., 85 NY2d 96 (1994). “Under those circumstances, the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed. ” Mtr. Of Worcester Ins. Co. V. Bettenhauser, 95 NY2d 185, 189 ( 2000). However, a timely disclaimer is necessary when the denial of coverage is based upon a policy exclusion or a breach of a policy condition without which the claim would be covered. Id. See, Zappone v, Home Ins. Co., 55 NY2d 131 (1982),

Although there are legions of cases discussing the preclusion rule, “drawing the line” between a lack of coverage in the first instance ( requiring no disclaimer) and a lack of coverage based on a policy exclusion (requiring a timely denial) has proven to be “problematic”. Mtr. Of Worcester, supra , 95 NY2d at 189.

In Fair Price Medical v. Travelers Ins., 10 NY3d 556 (2008), the Court of Appeals further clarified when the non-preclusion rule applied. Citing to its prior decision in Central General Hospital v. Chubb Group, 90 NY2d 195 (1997), the Court cautioned that there was only one “narrow” exception to the preclusion rule for those situations where an insurance company raises the defense of lack of coverage.Fair Price, 10 NY3d at at 563. A determination as to whether a specific defense is precluded under the 30 day rule or falls within the exception entails a judgment as to whether the defense is more like a “normal exception ” from coverage such as a policy exclusion or a lack of coverage in the first instance, i.e. a defense “implicating a coverage matter.” 10 NY3d at 565.

The oft cited distinction between policy exclusions and lack of coverage was further elaborated upon in State Farm Mut. Auto Ins. V. Mallela, 4 NY3d 313 (2005). In finding that medical corporations that are fraudulently incorporated are not entitled to reimbursement the Court of Appeals pointed to 11 NYCRR 65-3.16(a)(12), which excludes from the meaning of “basic economic loss” payments made to unlicensed or fraudulently licensed providers “thus rendering them ineligible for reimbursement” 4 NY3d at 320. These revised regulations (which include the PIP) do not ” create not a new category of exclusion, but rather merely a condition precedent with which all claimants must comply in order to receive benefits under statute”. 4 NY3d at 321 citing Mtr. Of Medical Society of NY v. Serio, 100 NY2d 854.866 (2003).

In Travelers indemnity Co. v. Milan Medical, 2009 NY Slip Op. 31604U, 2009 NY Misc LEXIS 3867 (Sup. Ct. NY Co. 2009), the court found that the Mallela defense was a “coverage defense: and as such was not subject to the preclusion rule. Id at 5. See Multiquest PLLC v. Allstate Ins. Co., 17 Misc 3d 37 (App. Term, 2d Dept. 2007); Crossbay Acupuncture v. State Farm Mut. Auto. Ins. Co., 15 Misc 3d 110 (App. Term, 2d dept. 2007); Eastern Medical P.C. v. Allstate Ins. Co., 19 Misc 3d 775, 790 ( the challenged regulation in Mallela did not create a new category of exclusion but rather was “a condition precedent with which all claimants must comply in order to receive benefits.” ). The court rejected the defendant’s contention that the [*5]defense of fraudulent incorporation did not fit within the “tight restrictions of the exception to preclusion outlined in General Hospital v. Chubb, 90 NY2d 199. Chubb, like Mallela, “spoke to a threshold coverage matter” Id.

In the very recent decision of Unitrin Advantage Ins. Co. V. Bayshore Physical Therapy, 2011 NY Slip Op 1948 (App. Div., 1st Dept. 3/17/11), the First Department explicitly found that “the failure to appear for IMEs requested by an insurer…is a breach of a condition precedent to coverage under the No-Fault policy, and therefore fits squarely within the exception to the preclusion doctrine. Id at 2 citing Central General Hosp. V. Chubb, 90 NY2d 195 (1997)(defense that injured person’s condition and hospitalization were unrelated to the accident was non precludable ). The First Department justified its finding that an IME no show was a non -precludable defense on the ground that a “breach of a condition precedent to coverage voids the policy ab initio.” Thus, the failure to appear for an IME cancels the contract as if there was no coverage in the first instance and the insurer has the right to deny all claims retroactively to the date of loss, regardless of whether the denials were timely. Id.

In light of the afore-mentioned precedent, it is clear that the claimant’s failure to comply with a condition precedent to coverage voids the contract ab initio and defendant is not obligated to pay the claim, regardless of whether it issued denials beyond the 30 day period. Furthermore, since the contract has been vitiated, defendant may deny all the claims retroactively to the date of loss. In light of the above, the case is dismissed with prejudice.

This constitutes the Amended Decision and Order of the Court which replaces the Decision and Order of the Court dated March 30, 2011, which is hereby recalled and vacated.

DATED: April 7, 2011__________________________

KATHERINE A. LEVINE

JUDGE, CIVIL COURT

Footnotes

Footnote 1:Since the right to conduct EUOs and IMEs both appear in the PIP, and thus constitute conditions precedent to coverage, the case law treats both of these examinations in the same fashion.

Footnote 2: The majority found that the language mandating compliance with the terms of the coverage as a condition precedent to bringing a lawsuit applied solely to “an insureds cooperation with the post claim verification protocols with regard to IMEs.” 7 Misc 3d at 22.