Civil Court of the City of New York, Kings County

97213/2007

Plaintiff’s Counsel:

Law Offices of Melissa Betancourt

155 Kings Highway, 3rd Floor

Brooklyn NY 11223

Tel.: (718)336-8076

Defendant’s Counsel

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, NY 11747

Tel.: (631) 390-0011

Peter P. Sweeney, J.

In this action to recover assigned first-party no-fault benefits, both the plaintiff and defendant move for summary judgment.

Plaintiff established its prima facie entitlement to summary judgment by proving the submission of statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]). The burden then shifted to defendant to raise a triable issue of fact ( see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986] ).

In opposition to the motion and in support of its cross-motion, defendant demonstrated that after receiving the claims for assigned first-party no-fault benefits, it timely requested additional verification of the claims by sending a letter to plaintiff’s assignor on August 21, 2006, directing her to appear for an independent medical examination (IME) on a September 6, 2006. When she failed to appear for the examination, defendant sent her a second letter on September 7th, rescheduling the examination for September 20, 2006. Defendant’s submissions sufficiently demonstrated that the scheduling letters were mailed to plaintiff’s assignor on the above dates and [*2]that plaintiff’s assignor failed to appear for the examinations.

It is well settled that an insurer is required to pay or deny a claim for no-fault benefits within 30 days after the claimant provides proof of the claim (see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 278 [1997]) and that its failure to do so will preclude it from raising most defenses to the claim (see Presbyterian Hosp. in City of NY, supra, 90 NY2d at 282). An insurer may extend the 30 day period in which it has to pay or deny a claim by making a request for additional verification of the claim “within 15 business days of receipt [of one] of the prescribed verification forms” (11 NYCRR 65-3.5[b]; see also Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2nd Dept 2005]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2nd Dept 2002]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 700 [2nd Dept 2001]). If the verification is not provided 30 calendar days after the original request, “[a]t a minimum … the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call, properly documented in the file, or by mail” (11 NYCRR 65-3.6[b]). An insurer does not have to pay or deny a claim until it has received verification of all of the relevant information requested (see e.g. Montefiore Med. Ctr. v Gov’t Empls. Ins. Co., 34 AD3d 771 [2d Dept 2006]; see also Mount Sinai Hosp. v Allstate Ins. Co., 25 AD3d 673, 674 [2d Dept 2006]).

At oral argument, plaintiff’s counsel maintained, inter alia, that since defendant did not strictly comply with the time limitations set forth in 11 NYCRR 65.15[e][2], it lost the toll of the 30-day rule to pay or deny the claim. Plaintiff’s counsel pointed out that the second IME letter was mailed only 17 days after the first. She maintained that pursuant to 11 NYCRR 65.15[e][2], defendant was required to wait a full 30 days after the initial mailing of the IME request before mailing out the second request. The Court finds plaintiff’s argument to be unavailing.

In Infinity Health Products, Ltd. v Eveready Ins. Co., 67 AD3d 862, 2009 NY Slip Op 08585 [2d Dept ]), the Court recently held that it “[i]t would be inequitable to award summary judgment to the plaintiff, which ignored two verification requests, merely because the defendant, slightly prematurely, sent its second verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent” (2009 NY Slip Op 08585 at 2 [citations omitted]) The Court reasoned that “it would be incongruous to conclude that the insurance regulation regarding follow-up verification, or any other statute or rule, warrants a result which would, in effect, penalize an insurer who diligently attempts to obtain the information necessary to make a determination of a claim, and concomitantly, rewards a plaintiff who makes no attempt to even comply with the insurer’s requests…. and [that] [s]uch a result is not contemplated by the no-fault law’ or its regulations, which should be interpreted to promote the expeditious handling of verification requests and prompt claim resolution” (Id.).

The Court held that “inasmuch as the plaintiff did not respond to either of the verification requests, the 30-day period within which the defendant was required to pay or deny the claim did not commence to run . . . and that . . . plaintiff’s action [was therefore] premature” (Id.). The [*3]Court further held that “plaintiff was not entitled to summary judgment on the complaint, and the defendant’s cross motion for summary judgment dismissing the complaint should have been granted . . .without prejudice to commencement of a new action” (Id. [citations omitted]).

In this Court’s view, the holding in Infinity Health Products, Ltd. requires dismissal of the within action, without prejudice to its recommencement. Here, as in Infinity Health Products, Ltd., it would be inequitable to award summary judgment to the plaintiff, whose assignor ignored two verification requests, merely because the defendant did not strictly adhere to the time frames set forth in 11 NYCRR 65-3.6[b] for mailing out second requests for additional verification of a claim . It would be incongruous to conclude that 11 NYCRR 65-3.6[b] mandates a result that would penalize the defendant for its diligent attempts to obtain additional verification of the claims and reward plaintiff whose assignor ignored the requests.

This court recognizes that this case is not on all fours with Infinity Health Products, Ltd.. In Infinity Health Products, Ltd., the defendant sent its second written verification request a mere 3 days before the expiration of a full 30 days after the first verification request had been sent. Here, the second written verification request was sent out 13 days before the expiration of the 30 day period referred to in 11 NYCRR 65-3.6[b]. Under the facts and circumstances of this case, however, this distinction does not warrant a contrary result.

When plaintiff’s assignor failed to appear for the IME on September 6, 2009, the re-scheduling letter was mailed to her on the following day. Unlike in Infinity Health Products, Ltd., once plaintiff’s assignor failed to appear for the IME, there is no legitimate reason why defendant should have waited a full 30 days from the mailing of the first letter to mail out the re-scheduling letter. Indeed, had defendant waited a full 30 days, it would have had acted in contravention of one of the primary policies underlying the “no-fault law”; which is “to promote the expeditious handling of verification requests and prompt claim resolution” (Infinity Health Products, Ltd., supra, 67 AD3d 862, 2009 NY Slip Op 08585 at 2). Further, the Court notes that when plaintiff’s assignor failed to appear for the re-scheduled IME, 30 days had elapsed from the time that the first scheduling letter had been sent to her.

Based on the foregoing, it is hereby

ORDERED that Plaintiff’s motion for summary Judgment is DENIED; and it is further

ORDERED that defendant’s cross-motion for summary judgment dismissing the complaint is GRANTED to the extent that plaintiff’s complaint is DISMISSED without prejudice to the commencement of a new action.

This constitutes the decision and order of the court.

[*4]Dated: January 6, 2010__________________________

PETER P. SWEENEY

Civil Court Judge

Supreme Court, Kings County

15550/08

Plaintiff was represented by Jonathan Stein, Esq. of McDonnell & Adels, PLLC. Defendants were represented by Bruce Rosenberg, Esq. of Rosenberg Law, PC.

Jack M. Battaglia, J.

The Complaint of plaintiff New York Central Mutual Insurance Company seeks a declaratory judgment pursuant to CPLR 3001 that it “is under no obligation to pay any insurance claims submitted by” any of the 13 named defendants. The named defendants are John McGee, D.O., and 12 professional corporations, referred to collectively in the Complaint as the “PC Defendants”, each of which is alleged to be a “professional medical testing and treatment corporation . . . owned by Dr. John McGee, a licensed medical doctor” (Complaint, ¶ ¶ 6-17.)

Specifically, Plaintiff seeks a declaration that it

“is not legally obligated to pay any claims, outstanding or otherwise, because of Defendants’ wrongful conduct, which includes, but is not limited to, plaintiff’s assertions that:

(a) the PC DEFENDANTS are not wholly owned, and/or controlled, and/or operated by licensed physicians, as required by New York State statues [sic], regulations, and judicial precedent;

(b) the PC DEFENDANTS submitted bills seeking payment of no-fault benefits for services that were not provided;

( c) the PC DEFENDANTS have failed to provide verification requested by the plaintiffs [sic]; and

(d) the PC DEFENDANTS have failed to attend EUOs as requested by the plaintiffs [sic].” (Complaint, ¶ 13.)

The Complaint does not indicate the total “outstanding” claims or bills, either by number or total amount. There is attached, however, an Exhibit A, that is described as a chart of bills submitted to Plaintiff in 2007 that were “subject to EUO requests,” i.e., examination under oath, and perhaps other requests for bill verification, “totaling no less than $155,000 dollars.” (Id., ¶ ¶ 70-71.) The Exhibit lists 195 bills submitted by four of the 12 named PC Defendants for services purportedly rendered to 13 insureds.

In an Answer and Affirmative Defenses & Counterclaims, Defendants allege 23 “Affirmative Defenses” and 10 “Counterclaims.”

Plaintiff moved initially by Notice of Motion for an order, among other things, pursuant [*2]to CPLR 3211 (a) and (b), dismissing the Affirmative Defenses and Counterclaims. Before that motion was heard, Plaintiff moved by Order to Show Cause for, among other relief, “an immediate stay of all lawsuits and arbitrations pending against [Plaintiff], filed by Defendants.”

The Order to Show Cause, which is dated July 22, 2009 and signed by Hon. Ellen M. Spodek, includes an interim “stay,” specifically “that all no-fault lawsuits and arbitrations including, but not limited to, those set forth in Exhibit A’, annexed hereto, filed by Defendants and pending against Plaintiff, are hereby stayed pending the hearing of this motion.” This Exhibit lists 85 claims totaling $382,871.13, representing services purportedly provided to 38 insureds during the period 2005-2009 by seven of the PC Defendants, only three of which are providers named in the Exhibit A attached to the Complaint.

On the return date for the two motions, this Court refused to extend the “stay” contained in the Order to Show Cause, and the Court sua sponte raised the issue of severance, at least insofar as relief is sought against each of the 12 PC Defendants. (See CPLR 603.) “Because CPLR 603, unlike CPLR 602, does not use the words upon motion,’ it is widely assumed that the court can order a severance or separate trial sua sponte.” (Vincent C. Alexander, Practice Commentaries to CPLR 603 [McKinney’s 2006]; see also Valery A. Berger, M.D. v Liberty Mut. Ins. Co., 10 Misc 3d 139 [A], 2005 NY Slip Op 52204 [U] [App Term, 9th & 10th Jud Dists 2005]; St. Vincent’s Hosp. of Richmond v State Farm Mut. Auto. Ins. Co., 18 Misc 3d 1127 [A], 2007 NY Slip Op 52534 [U], * 3 [Sup Ct, Nassau County 2007].) The parties were requested to submit supplemental memoranda on the issue, which they did.

Generally, “[s]everance is inappropriate where . . . there are common factual and legal issues involved in the . . . causes of action, and the interests of judicial economy and consistency of verdicts will be served by having a single trial.” (See Naylor v Knoll Farms of Suffolk County, Inc., 31 AD3d 726, 727 [2d Dept 2006]; see also Curreri v Heritage Prop. Invt. Trust, Inc., 48 AD3d 505, 507-08 [2d Dept 2008].) Appellate courts in the Second Department have had several occasions to apply these general standards to first-party no-fault claims of the type that are the subject of the instant action, although almost always on a defendant/insurer’s motion to sever.

The Second Department has upheld severance of claims for first-party no-fault benefits where the claims were for services rendered to as few as five insureds. (See Mount Sinai Hosp. v Motor Veh. Acc. Indem. Corp., 291 AD2d 536, 536-37 [2d Dept 2002]; see also Sunshine Imaging Association/wny MRI v Government Employees Ins. Co., 2009 NY Slip Op 6984, * 1- * 2 [4th Dept Oct. 2, 2009] [severance upheld/14 insureds]; compare Hempstead Gen. Hosp., 134 AD2d 569, 569-70 [2d Dept 1987] [denial of severance upheld/29 “claims”].) The Second Department has required severance of no-fault claims for 47 insureds. (See Poole v Allstate Ins. Co., 20 AD3d 518, 519 [2d Dept 2006].) “[I]t was an improvident exercise of discretion to deny the motion to sever, since a single trial of all the claims would prove unwieldy and confuse the trier of fact.” (Id.) [*3]

Appellate Term for the Second and Eleventh Judicial Districts has both upheld and required severance of no-fault claims for as few as three insureds. (See Astoria Quality Med. Supply v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 144, 144 [App Term, 2d & 11th Jud Dists 2008] [severance upheld]; Metro Med. Diagnostics, P.C. v Motor Veh. Acc. Indem. Corp., 6 Misc 3d 136 [A], 2005 NY Slip Op 50238 [U], * 1 [App Term, 2d & 11th Jud Dists 2005] [severance required]; see also Ladim DME, Inc. v GEICO Gen. Ins. Co., 15 Misc 3d 139 [A], 2007 NY Slip Op 50997 [U], * 1- * 2 [App Term, 2d & 11th Jud Dists 2007] [severance required/5 insureds]; Valery A. Berger, M.D. v Liberty Mut. Ins. Co., 2005 NY Slip Op 52204 [U], * 1- * 2 [severance upheld/14 insureds].) “In light of the recent trend in cases involving the severance of no-fault causes of action under similar circumstances, . . . the particular facts herein relating to each claim are likely to raise few, if any, common issues of law or fact, even if the . . . insurance policies are identical.” (Metro Med. Diagnostics, P.C. v Motor Veh. Acc. Indem. Corp., 2005 NY Slip Op 50238 [U], at *1.)

In Civil Court of the City of New York, which has seen most of the first-party no-fault actions that have buried the trial courts of limited jurisdiction, a directive was issued by the Administrative Judge, Hon. Fern A. Fisher, directing the clerk “to reject any no-fault summons and complaint filed in the court which contains either multiple plaintiffs or multiple assigned claims unless an affirmation is filed with the papers signed by the attorney for the plaintiff, . . . outlining the reason for the joinder”; and directing Civil Court judges “to review the reasons for joinder of multiple plaintiffs or assigned claims whenever a case appears before them.” (Directives and Procedures, Severance of No-fault Plaintiffs or Assigned Claims, August 3, 2006.)

Here, again, the list of pending actions and arbitrations names 38 insureds who assigned 85 claims for first-party no-fault benefits to one or more of seven PC Defendants. This Court has little doubt that, were those 85 claims the subject of a single action by the providers against Plaintiff for payment, severance would be required. The only difference here is that Plaintiff is seeking a declaratory judgment that payment need not be made, asserting defenses to payment that it could assert, and undoubtedly has asserted, in the pending proceedings. To the extent, therefore, that Plaintiff’s contentions here as grounds for relief require the same type of individualized factual determinations, as would be required in a provider’s action for payment, severance would be required.

Three of the four grounds for relief asserted by Plaintiff – – that the PC Defendants “submitted bills seeking payment of no-fault benefits for services that were not provided,” “failed to provide verification requested,” and “failed to attend EUOs as requested” – – are defenses routinely asserted in provider actions for payment, and, most importantly, will require determination in accordance with the facts and attendant legal consequences particular to each insured, if not each bill for services. At the least, therefore, unless these grounds for relief are discontinued in this action, there must be severance. Because there are multiple providers as well as multiple insureds, no resulting action should include more than five insureds. [*4]

The remaining ground for relief asserted by Plaintiff, i.e., that the PC Defendants “are not wholly owned, and/or controlled, and/or operated by licensed physicians, as required by New York State statues [sic], regulations, and judicial precedent,” is different, because the focus is on the provider itself, and not the insured or any claim for benefits. As to this ground as to each PC Defendant, therefore, severance might not be required, or even warranted, notwithstanding that the number of insureds would require or justify severance as to other grounds for non-payment. (See Midwood Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 14 Misc 3d 131 [A], 2007 NY Slip Op 50052 [U], * 2 [App Term, 2d & 11th Jud Dists 2007].)

This ground, which has come to be known as the “fraudulent incorporation” defense (see id.), is founded on the Court of Appeals opinion in State Farm Mutual Automobile Insurance Co. v Mallela (4 NY3d 313 [2005].) Answering a certified question from the Second Circuit, the Court held that “insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises to which patients have assigned their claims.” (Id. at 319.) The Court relied on a regulation of the Superintendent of Insurance stating, “A provider of health care services is not eligible for reimbursement [of first-party no-fault benefits] if the provider fails to meet any applicable New York State licensing requirement.” (See id. at 320-22; 11 NYCRR § 65-3.16 [a] [12].) The Business Corporation Law “prohibit[s] non-physicians from sharing ownership in medical service corporations.” (See id. at 320 [footnote omitted]; Business Corporation Law § 1507.)

“State law mandates that professional service corporations be owned and controlled by licensed professionals . . . , and that licensed professionals render the services provided by such corporations.” (One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738, 740 [2d Dept 2008 [citing Business Corporation Law § § 1503 [a], 1504 [a], 1507, 1508].) In an action by insurers of automobile insurance policies alleging that professional medical service corporations “were fraudulently incorporated in the names of licensed healthcare professionals while, in fact, the PCs were owned, operated, and controlled by unlicensed persons and their management companies in violation of applicable statutes and regulations” (see id. at 739], the plaintiffs successfully opposed a motion for summary judgment by a licensed physician and one of the PCs by submitting “sufficient evidentiary proof to raise an issue of fact as to whether [the PC] was actually controlled by a management company owned by unlicensed individuals in violation of the Business Corporation Law” (see id. at 740 [emphasis added].) The physician and PC had made a prima facie showing on their motion with evidence that the physician was the sole shareholder of the PC, “performed or oversaw all medical services provided by” the PC, and was the sole signatory on the PC’s bank account. (See id.)

No appellate court has given further meaning to the “actual control” requirement, or has otherwise elaborated on the concept of “fraudulent incorporation,” in the four-plus years since Mallela was decided. Which is not to say that the courts have not been dealing with issues raised by the decision; as of this writing, Mallela has been cited in approximately 100 published opinions of New York trial and appellate courts, the latter mostly from Appellate Term for the Second and Eleventh Judicial Districts, and in 13 published decisions of federal courts in the [*5]Southern and Eastern Districts. An appellate opinion might recite that an insurer “set forth detailed and specific reasons for believing that plaintiff may be ineligible to recover no-fault benefits as a fraudulently incorporated professional service corporation” (see Sharma Med. Servs., P.C. v Progressive Cas. Ins. Co., 24 Misc 3d 139 [A], 2009 NY Slip Op 51591 [U] [App Term, 2d & 11th Jud Dists 2009]), but not repeat or summarize those reasons for the benefit of trial judges.

Trial judges, nonetheless, struggle with fundamental questions raised by Mallela, such as whether a finding of “fraudulent incorporation” requires a finding of “fraud.” (See Andrew Carothers, M.D., P.C. v Bruno, Gerbino & Soriano, LLP, 2009 NY Slip Op 29413, * 6- * 8 [Civ Ct, Richmond County 2009] [Sweeney, J.].) Several published trial court opinions provide insight into the court’s identification and assessment of various factors, such as the ultimate disposition of the profits of the professional practice, without offering, probably wisely, any standard or threshold, quantitative or qualitative, of “actual control.” (See id. at * 1- * 6; AIU Ins. Co. v Deajess Med. Imaging, P.C., 2009 NY Slip Op 29079, * 3- * 8 [Sup Ct, Nassau County 2009] [Bucaria, J.]; Lenox Neurophychiatry Med., P.C. v State Farm Ins. Co., 22 Misc 3d 1118 [A], 2009 NY Slip Op 50178 [U], * 2- * 4 [Civ Ct, Richmond County 2009] [Levine, J.]; Utica Natl. Ins. Group v Luban, 22 Misc 3d 1107 [A], 2008 NY Slip Op 52610 [U], * 3- * 4 [Sup Ct, Queens County 2008] [Kitzes, J.]; A.B. Med. Servs. PLLC v Travelers Ind. Co., 20 Misc 3d 509, 510-14 [Dist Ct, Nassau County 2008] [Goodsell, J.]; Montgomery Med., P.C. v State Farm Ins. Co., 12 Misc 3d 1169 [A], 2006 NY Slip Op 51116 [U], * 4- * 5 [Dist Ct, Nassau County 2006] [Marber, J.]; Devonshire Surgical Facility v GEICO, 14 Misc 3d 1208 [A], 2006 NY Slip Op 52450 [U], * 2- * 3 [Civ Ct, NY County 2006] [Jaffe, J.]; see also Matter of Total MRI Mgt. LLC v Greenfield Imaging Assoc. Imaging, LLP, 11 Misc 3d 1062 [A], 2006 NY Slip Op 50367 [U], * 7 [Sup Ct, Nassau County 2006] [Austin, J.].)

Without a specific factual context, this Court will not offer more. It is clear from a review of the published opinions, particularly the only one that follows a trial on the issue ( see Andrew Carothers, M.D., P.C. v Bruno, Gerbino & Soriano, LLP, 2009 NY Slip Op 29413), that the inquiry is highly fact-intensive. Here, except for the respective places of business and respective dates of incorporation of the PC Defendants, the Complaint is absent of individualized or particularized allegations; rather, the Complaint speaks conclusorily throughout of the “PC Defendants.” Of substantial importance for the present motions, except for the allegations that each of the PC Defendants is “owned by Dr. John McGee, a licensed medical doctor” (Complaint, ¶ 6-17), there is virtually nothing to connect any one of the PC Defendants to any one or more of the others. Each of the practices operate at a different location, and except for two of the PCs that were incorporated on May 11, 1998, the other 10 were incorporated at different dates from March 1, 2001 through May 2, 2007. (Id.) There is nothing to suggest, moreover, that Dr. McGee’s relationship with each of the PC Defendants is the same, other than that he “owns” each of them.

In an action instituted by over 20 insurance companies against “three groups of defendants each comprised of some licensed defendants, provider defendants, and management [*6]defendants,” in which the insurers seek, in part, “a declaratory judgment concerning fraudulent incorporation,” Supreme Court granted a defense motion to the extent of severing “the causes of action against each group of defendants.” (See Autoone Ins. Co. v Manhattan Hgts. Med., P.C., 24 Misc 3d 1228 [A], 2009 NY Slip Op 51662 [U], * 7- * 8 [Sup Ct, Queens County 2009] [Markey, J.].) The court determined that “each group of defendants operated separately from other groups , . . . [that] the plaintiffs did not demonstrate that there is a logical connection between the activities of each,” and that “combining the multitude of claims by the numerous plaintiffs against three groups of defendants is likely to cause juror confusion.” (See id. at * 8.)

Here, again, there is nothing to link any one of the PC Defendants to any one or more of the others, except for the common ownership by Dr. McGee, which in and of itself does not establish “fraudulent incorporation” (see Great Wall Acupuncture v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 136 [A], 2008 NY Slip Op 51529 [U] [App Term, 2d & 11th Jud Dists 2008] [plaintiff’s owner was sole shareholder of not less than 20 professional service corporations].) The potential for juror confusion remains a factor in a declaratory judgment action (see State Farm Mut. Auto. Ins. Co., 25 AD3d 777, 778-779 [2d Dept 2006].) In the absence of evidence that Dr. McGee’s relationship with two or more of the PC Defendants is the same, there is no possibility of inconsistent verdicts. There should be at least sufficient factual allegations to meet the requirement for permissive joinder that the claims for relief “aris[e] out of the same transaction, occurrence, or series of transactions or occurrences” (see CPLR 1002 [a].)

Indeed, here, there is not sufficient information available for the Court to determine whether the action may continue against more than one of the PC Defendants in a single action. For the present, the Court will allow the action to proceed under this index number against Dr. McGee and three of the PC Defendants, of Plaintiff’s choosing, provided that an amended complaint contain sufficient allegations to permit joinder. If, moreover, in addition to “fraudulent incorporation,” Plaintiff seeks relief on any of the other grounds alleged in the Complaint, the separate action(s) may seek that relief with respect to the claims made by no more than five insureds.

As to Plaintiff’s motion for a “stay,” it must be treated as a motion for preliminary injunction. (See St. Paul Travelers Ins. Co. v Nandi, 15 Misc 3d 1145 [A], 2007 NY Slip Op 51154 [U], * 7 [Sup Ct, Queens County 2007].) “The party seeking a preliminary injunction must demonstrate a probability of success on the merits, danger of irreparable injury in the absence of an injunction and a balance of equities in its favor.” (Nobu Next Door, LLC v Fine Arts Hous., Inc., 4 NY3d 839, 840 [2005].) In actions similar to this one, i.e., seeking a declaration as to “fraudulent incorporation,” trial judges have granted the injunction based upon evidentiary showings by the respective plaintiffs. (See Autoone Ins. Co. v Manhattan Hgts. Med., P.C., 2009 NY Slip Op 51663 [U], at * 3); St. Paul Travelers Ins. Co. v Nandi, 2007 NY Slip Op 51154 [U], at * 7.)

Here, there may be a question as to whether, even as a pleading, the Complaint sufficiently alleges “fraudulent incorporation” (see Autoone Ins. Co. v Manhattan Hgts. Med., [*7]P.C., 2009 NY Slip Op 51662 [U], at * 4; CPLR 3013; CPLR 3016 [b]; CPLR 3211 [a] [7]); and, even if it does, there is no evidentiary support for injunctive relief.

The Court sua sponte orders severance of the causes of action alleged in the Complaint; within sixty (60) days from the date of this Decision and Order, Plaintiff shall serve an amended complaint that complies with this Decision and Order, particularly as to number of defendants and insureds.

Plaintiff’s motions are denied, with leave to renew after joinder of issue on an amended complaint, and otherwise in accordance with this Decision and Order.

November 25, 2009___________________

Jack M. Battaglia

Justice, Supreme Court

[*1]

Civil Court of the City of New York, Kings County, September 22, 2009

APPEARANCES OF COUNSEL

Melissa Betancourt, Brooklyn, for plaintiff. Law Office of Teresa Spina, Woodbury, for defendant.

{**25 Misc 3d at 1099} OPINION OF THE COURT

Lisa S. Ottley, J.

Plaintiff commenced this action against the defendant to recover first-party no-fault benefits pursuant to section 5106 of the Insurance Law and Regulations of the New York State Insurance Department (11 NYCRR) § 65-1.1 et seq., for medical services rendered. Plaintiff is seeking judgment in the amount of $796.46, which represents two bills in the amounts of $16.46 and $780.

Plaintiff moves for an order granting summary judgment as a matter of law, on the grounds that assignor, Kiara Francisco, assigned her “no fault” benefits to plaintiff pursuant to the terms of the insurance policies sold by defendant, and the timely submission of invoices and/or bills to defendant in accordance with the New York State Insurance Law. Defendant opposes plaintiff’s motion and cross-moves for an order granting summary judgment on the grounds that the claims for no-fault benefits were timely denied based upon lack of medical necessity and fees charged in excess of the workers’ compensation fee schedule.

After careful review of the moving papers, supporting documentation and opposition thereto, the court finds as follows: [*2]

Pursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, within 30 days after a claimant submits proof of the facts and the amount of loss sustained, an insurer is required to either pay or deny a claim for insurance coverage of medical expenses arising from a motor vehicle accident. (See 11 NYCRR 65-3.8 [a] [1]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 200 [1997]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 16 [2d Dept 1999]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002].)

Based upon a review of the supplemental documents submitted by the plaintiff, the court finds that the plaintiff has{**25 Misc 3d at 1100} established its prima facie case as to the mailing of its claims for no-fault benefits. The plaintiff has annexed an affidavit of its billing manager, as well as proof of mailing. In addition, the court finds that the defendant has established its prima facie case as to the mailing of its timely denials. The affidavit of defendant’s claims representative, Leonard Delgiudice, sets forth the insurer’s standard office practice and procedure, which establishes a presumption of mailing. (See Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001].)

Plaintiff argues that defendant improperly denied one bill in the amount of $780, and partially paid the other bill, and that defendant improperly applied the fee schedule. Plaintiff further states that defendant’s moving papers were insufficient, because defendant failed to attach an affidavit explaining how the fee schedule is applied. Plaintiff also argues that defendant’s papers are defective because of the incorrect caption of the case and index number, as well as the fact that the affirmation of the attorney is signed by someone other than the affiant.

The court has thoroughly reviewed and considered the arguments of the parties’ attorneys. First, the court finds it necessary to address the plaintiff’s arguments concerning the defendant’s attorney’s affirmation. Although the attorney affirmation has the correct provider’s name, it has the incorrect index number, as well as the assignor name. In addition, the affirmation starts out with the name of Anthony N. Kobets, as the attorney affirming under the penalties of perjury, but the signature name is that of Kristie Hack, Esq.

As a result of the improper caption, index number and attorney signature the plaintiff argues the papers are defective. Therefore, the question is whether or not the defects as argued by plaintiff would warrant summary judgment being granted in favor of plaintiff on these grounds. This court answers in the negative. In all likelihood, the papers were used in a similar case, inasmuch as the improper caption has the same provider, and is a boilerplate attorney affirmation, and unfortunately was not reviewed with the sharpest of eyes, in order to pick up the typographical errors. The defects in an attorney affirmation should not warrant summary judgment being granted in favor of plaintiff. An affirmation of an attorney has no probative value. The affirmation itself, which is purported to be that of one person, but signed by another is worthless and a nullity. (See A.B. Med. Servs. v CNA Ins. Co., 2 Misc 3d 138[A], 2004 NY Slip Op 50265[U] [App Term, 2d & 11th Jud Dists 2004].){**25 Misc 3d at 1101} However, the defendant’s [*3]cross motion cannot and does not stand alone on an attorney affirmation. The supporting document to the cross motion must come from a person with actual knowledge of the facts to the case. The supporting affidavit to defendant’s cross motion which is of probative value is that of Leonard Delgiudice, an employee of GEICO. The court has, without giving consideration to the attorney affirmation, made its determination based upon the supporting affidavit of Mr. Delgiudice, and the annexed documents to the cross motion such as the peer review and denials. Thus, the court finds plaintiff’s arguments that the papers are defective to be without merit, in light of the fact that the motions can be decided without the attorney affirmation which is of no probative value.

It is well established that a medical provider must limit its charges to those permitted by approved fee schedules. (See Goldberg v Corcoran, 153 AD2d 113 [2d Dept 1989]; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43 [2d Dept 2004]; King’s Med. Supply v Allstate Ins. Co., 2 Misc 3d 127[A], 2003 NY Slip Op 51681[U] [App Term, 9th & 10th Jud Dists 2003].) The fees for services and procedures are governed by the workers’ compensation fee schedule insurance regulation (11 NYCRR 68.1) and durable medical goods fees are governed by the New York Medicaid fee schedule (11 NYCRR part 68). An insurer who raises this defense will prevail if it demonstrates that it was correct in its reading of the fee schedules unless the plaintiff shows that “an unusual procedure or unique circumstance justifies the necessity” for a charge above the scheduled fee. (11 NYCRR 68.4.)

An insurer can only preserve a fee schedule defense by first complying with the rule requiring the insurer to pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim. (See Jamil M. Abraham M.D. P.C. v Country-Wide Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50388[U] [2d & 11th Jud Dists 2004].)

The claim for $183 was partially paid by the insurer, in the amount of $167.04 leaving a balance of $16.46. As stated above, the claim was denied on two grounds: lack of medical necessity and fee schedule. The denial shows the reduction of the provider’s charge of $38.50 for the positioning cushion/pillow being reduced to $22.04, thereby leaving the balance of $16.46. Inasmuch as the defendant has failed to proffer sufficient evidence to establish as a matter of law that amounts charged in said claims were in excess of the amounts permitted by the fee{**25 Misc 3d at 1102} schedule, plaintiff is entitled to summary judgment on its claim for $16.46.

Defendant failed to proffer sufficient evidence to establish as a matter of law the amounts charged for said claims were in excess of the amounts permitted by the fee schedule. The affidavit of Leonard Delgiudice fails to address how the fees were applied, and how the charged amount by the provider was in excess of 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].)

Next, this court will address the remaining bill in the amount of $780, which was denied in full. The provider’s claim for no-fault benefits in the amount of $780 was denied [*4]based upon lack of medical necessity. The explanation annexed to the denial, “attachment 1” of exhibit “C” to defendant’s cross motion, indicates that the denial is based upon an independent medical examination. There was a service for $630 and one for $150. The “EOB” (explanation of benefits) code is “SSS” and explained in the denial as “supplies have been found not to be medically necessary.”

Lack of medical necessity is a defense to an action for recovery of no-fault benefits, and may be asserted by the insurer provided that there has been a timely denial of the claim. (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 200 [1997].)

As stated above, the court finds that the defendant has established the timely mailing of its denial of plaintiff’s claims for no-fault benefits.

In opposition to defendant’s cross motion and in support of its motion for summary judgment plaintiff argues that defendant’s peer review is inadmissible because of the doctor’s stamped signature. Plaintiff contends that the peer review does not comply with CPLR 2106, due to defendant’s failure to submit proof that the doctor himself stamped his signature.

The Appellate Term has consistently held that a peer review report which bears an electronic stamp of the peer review signature is not in admissible form pursuant to CPLR 2106. (Radiology Today, P.C. v GEICO Ins. Co., 20 Misc 3d 70 [App Term, 2d Dept 2008]; Vista Surgical Supplies, Inc. v Travelers Ins. Co., 14 Misc 3d 128[A], 2006 NY Slip Op 52502[U] [App Term, 2d & 11th Jud Dists 2006].) However, in the case before{**25 Misc 3d at 1103} this court, the defendant has annexed as part of exhibit “D,” which is the peer review of Dr. Andrew R. Miller, an affirmation of Dr. Miller which states in paragraphs 4 and 5 thereof the following:

“4. I alone have the ability to apply the signature and no other individual, either under my employ or otherwise has the authority or ability to apply the signature.

“5. When my electronic signature is applied I am affirming, under the penalties of perjury, the truthfulness, accuracy and correctness of my report and will swear under oath, in a court of law or in arbitration, if asked to do so.”

It is this court’s opinion that the affirmation of Dr. Andrew Miller, which indicates that the peer review report has an electronic stamped facsimile of his signature that is in fact his and was applied by him and not by anyone else, is sufficient to establish that the signature has been acknowledged by Dr. Miller as his own. As such, the court deems the peer review to be in admissible form.

Therefore, inasmuch as the plaintiff has failed to raise an issue of fact to negate the peer review report of Dr. Andrew Miller, summary judgment should be granted in favor of the [*5]defendant. (See Crossbridge Diagnostic Radiology, P.C. v Progressive Ins. Co., 20 Misc 3d 143[A], 2008 NY Slip Op 51761[U] [App Term, 2d & 11th Jud Dists, 2008]; Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co., 19 Misc 3d 130[A], 2008 NY Slip Op 50535[U] [App Term, 2d & 11th Jud Dists 2008].)

Accordingly, plaintiff’s motion for summary judgment is denied in part and granted in part. The clerk of the court is hereby directed to enter judgment in favor of plaintiff and against defendant in the amount of $16.46, plus statutory cost, interest and attorneys fees.

Accordingly, plaintiff’s motion for summary judgment on its claim for $780 is hereby denied. Defendant’s cross motion is denied in part and granted in part, and the cause of action for no-fault benefits in the amount of $780 is dismissed.

Civil Court of the City of New York, Kings County

039163/07

Genine D. Edwards, J.

In this action, plaintiff seeks to recover first-party no-fault benefits from defendant in the amount of $6,040.24, for medical services allegedly provided to its assignor, Flor A. Barrietos-Mercado. Defendant now moves for summary judgment, arguing that the underlying insurance policy was retroactively cancelled and deemed void ab initio. Plaintiff has no written opposition to the motion.

BACKGROUND

Plaintiff allegedly rendered medical services to Barrietos-Mercado for injuries resulting from an automobile accident on May 2, 2001. Barrietos-Mercado assigned her no-fault benefits concerning such services to plaintiff. In turn, plaintiff submitted a bill in the amount of $6040.24 to defendant but the bill was not paid. Consequently, plaintiff commenced this action.

On or about February 25, 1999, defendant issued an insurance policy to Barrietos-Mercado. The insurance application listed Barrietos-Mercado’s residential and registration addresses as

“1402 79th Street, North Bergen, New Jersey 07047.” See Exhibit C-2. It also included the following statement:

Applicant’s Certification: I declare and certify:

1) Certify that the zip code on this application is the zip code of my residence . . . .

4) I have personally read and received a copy of this application. To the best of my knowledge and belief all statements contained in this application are true.

5) I understand that if I obtained this insurance through fraud or misrepresentation, my policy will be voided. I understand that the Assigned Company will not pay claims if the policy is voided.

Id.

After the accident, defendant conducted an investigation which revealed that “32-38 83rd Street, 1st Floor, East Elmhurst, New York 11370” was Barrietos-Mercado’s actual address. Due to the misrepresentation in the insurance application, defendant, on June 7, 2007, returned Barrietos-Mercado’s premium check and retroactively cancelled the insurance policy.

[*2]THE LAW

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence in admissible form to demonstrate the absence of any material issues of fact. St. Claire v. Empire Gen. Contr. & Painting Corp., 33 AD3d 611, 821 NYS2d 471 (2d Dept. 2006). See also Alvarez v. Prospect Hosp., 68 NY2d 320, 508 NYS2d 923 (1986). The motion shall be supported by an affidavit from a person with knowledge of the facts. See CPLR 3212(b). Once the moving party satisfies these standards, the burden shifts to the adverse party to demonstrate the existence of evidence, in admissible form, sufficient to require a trial. See Katona v. Low, 226 AD2d 433, 641 NYS2d 62 (2d Dept. 1996); De Santis v. Romeo, 177 AD2d 616, 576 NYS2d 323 (2d Dept. 1991).

Retroactive cancellation of an automobile insurance policy is permitted under New Jersey law but prohibited under New York law. Compare Palisades Safety & Ins. Ass’n v. Bastien, 175 N.J. 144, 814 A.2d 619 (N.J. 2003) (policy void ab initio because insured misrepresented his marital status), and Rutgers Cas. Ins. Co. v. LaCroix, 194 N.J. 515, 946 A.2d 1027 (N.J. 2008) (“When a named insured has engaged in conduct that has resulted in the voiding of an automobile insurance policy, courts have employed the rescission remedy to deny that insured the right to claim PIP benefits under the void policy.”) with Eagle Ins. Co. v. Singletary, 279 AD2d 56, 717N.Y.S.2d 351 (2nd Dept. 2000) (“New York law does not allow retroactive cancellation.”), and A.B. Med. Servs. PLLC v. Commercial Mut. Ins. Co., 12 Misc 3d 8, 820 NYS2d 378 (App. Term, 2d Dept. 2006) (automobile insurance policy may not be retroactively cancelled on ground that insured obtained policy through fraud or misrepresentation). This conflict of law, although arising in the context of a motor vehicle accident, must be resolved by the conflict of law rules relevant to contracts, not torts. Eagle Ins. Co., 279 AD2d at 58 (citing Zurich Ins. Co. v. Shearson Lehman Hutton, Inc., 84 NY2d 309, 618 NYS2d 609 (1994)). The “center of gravity” or “grouping of contacts” inquiry determines which state has the most significant contacts with the dispute. See Careplus Med. Supply, Inc. v. Selective Ins. Co. of America, 2009 NY Slip. Op. 29109 (App. Term, 9th & 10th Jud. Dists. 2009). Generally, Courts look at the place of contracting, the place of negotiation and performance of the contract, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties to determine which state has the most significant contacts with the dispute. See id; Eagle Ins. Co., 279 AD2d at 59; Li-Ellie Service, Inc. v. AIU Ins. Co., 23 Misc 3d 1112(A), 2009 NY Slip. Op. 50719(U) (Civ. Ct. New York County 2009).

THE FINDINGS

New Jersey law applies to this action. The insurance policy involves a company doing business in New Jersey, and an individual representing at the time the contract was entered into that she is a resident of New Jersey and that the car would be garaged in that state.Thus, the validity of the making and cancellation of the contract must be determined under New Jersey law.

Under New Jersey law, no-fault benefits are unavailable when it is sought as part of an insured’s first-party claim for benefits under his or her own policy of insurance declared void because of material misrepresentations made to the insurer. Palisades Safety & Ins. Ass’n, 175 N.J. at 148. See also Remsden v. Dependable Ins. Co., 71 N.J. 587, 367 A.2d 421 (N.J. 1976); Lovett v. Alan Lazaroff & Co., 244 N.J. Super. 510, 582 A.2d 1274 (N.J. Sup. Ct. App. Div. 1990).

A misrepresentation, made in connection with an insurance policy, is material if, when made, “a reasonable insurer would have considered the misrepresented fact relevant to its [*3]concerns and important in determining its course of action. In effect, materiality [is] judged according to a test of prospective reasonable relevancy.” Longobardi v. Chubb Ins. Co. of N.J., 121 N.J. 530, 542, 582 A.2d 1257 (1990). As we have stated, “[t]he right rule of law . . . is one that provides insureds with an incentive to tell the truth. It would dilute that incentive to allow an insured to gamble that a lie will turn out to be unimportant.” Id. at 541-42, 582 A.2d 1257. Accordingly, our test for materiality “encourages applicants to be honest.” Mass. Mut. v. Manzo, 122 N.J. 104, 115, 584 A.2d 190 (1991) (explaining that misrepresentation is material if it “naturally and reasonably influence[s] the judgment of the under-writer in making the contract at all, or in estimating the degree or character of the risk, or in fixing the rate of premiums”) (citation omitted). Palisades Safety & Ins. Ass’n, 175 N.J. at 148-49.

There is no doubt that Barrietos-Mercado’s statements influenced how defendant analyzed the risk and ultimately assigned the premium associated to the insurance policy. Consequently, her statements were material misrepresentations that warranted the retroactive cancellation of Barrietos-Mercado’s insurance policy.

Plaintiff, a health-care provider, stands in the shoes of its assignor. It acquires no greater rights than that of its assignor. Lech v. State Farm Ins. Co., 335 N.J. Super. 254, 762 A.2d 269 (N.J. Super. Ct. App. Div. 2000) (“While an assignee’s rights can be no greater than those of the assignor, neither can they be any less.”); accord A.B. Med. Servs. PLLC, 12 Misc 3d at 11 (“We hold that only innocent third-parties who are injured are protected . . . and not a health care provider who deals with the assignor-insured at its peril in accepting an assignment of the insured’s no fault benefits.”). As a result, plaintiff may not recover first-party no-fault benefits from defendant.

Accordingly, defendant’s motion for summary judgment is granted. Plaintiff failed to demonstrate the existence of evidence, in admissible form, sufficient to require a trial. The action is dismissed.

This constitutes the decision and order of this Court.

Date: June 3, 2009________________________

Genine D. Edwards

Judge of Civil Court

[*1]

Civil Court of the City of New York, Kings County, March 31, 2009

APPEARANCES OF COUNSEL

Sylvain R. Jakabovics, Brooklyn, for plaintiff. Freiberg & Peck, LLP, New York City, for defendant.

{**24 Misc 3d at 521} OPINION OF THE COURT

Peter P. Sweeney, J.

{**24 Misc 3d at 522}In this action to recover assigned first-party no-fault benefits, both plaintiff and defendant moved for summary judgment. In opposition to plaintiff’s motion and in support of its cross motion, defendant argued, inter alia, that the action is premature and should be dismissed because plaintiff did not provide the medical reports which it had requested as additional verification of the claims. The novel question presented is whether plaintiff, in response to defendant’s requests for additional verification of the claims, was obligated to do more than just inform defendant that it was not in possession of the medical reports that had been requested.

Factual Background

The facts are essentially undisputed. Plaintiff D & R Medical Supply is a provider of medical equipment. Plaintiff submitted admissible proof in support of its motion for summary [*2]judgment demonstrating that it had submitted to the defendant two claims for assigned first-party no-fault benefits for medical equipment that it had provided to its assignor. The claims were submitted on July 9, 2007 and July 25, 2007.

By letter dated July 23, 2007, defendant acknowledged receipt of the first claim. In the letter defendant stated as follows: “[a] report from the referring physician is required with comment regarding the medical necessity of the medical equipment.”

Plaintiff responded to defendant’s letter by its own letter, dated July 26, 2007, stating:

“We are in receipt of your letter dated July 23rd, 2007. Unfortunately D & R Medical Supply, Inc. is unable to provide you with referring physician report and/or any medical records that you are requesting for the above named patient. This type of documentation is not in our possession. We are medical supply company and provide supplies in accordance to the doctor’s prescription. Please request it directly from the medical provider.”

Defendant mailed a second copy of its July 23, 2007 letter to the plaintiff on August 24, 2007.

By letter dated August 11, 2007, defendant acknowledged receipt of the second claim and again stated that “[a] report from the referring physician is required with comment regarding the medical necessity of the medical equipment.” Plaintiff again informed defendant that it did not have such a report in its possession. On September 13, 2007, defendant mailed a second copy of its August 11, 2007 letter to the plaintiff.{**24 Misc 3d at 523}

To date, plaintiff has not provided the defendant with a report from any physician attesting to the medical necessity of the equipment at issue; for its part, defendant neither paid nor denied the claims at issue.

On its motion for summary judgment, plaintiff’s position is that it submitted its bills to the defendant who neither paid nor denied the claims pursuant to the No-Fault Law and regulations. In defense, and on its own cross motion, it is defendant’s position that the action on these claims is premature and must be dismissed. According to the defendant, the 30-day period within which it had to pay or deny the claims had not begun to run, inasmuch as plaintiff has yet to provide defendant with the reports of the referring physicians that had been timely requested as additional verification for each of the claims.

Analysis

Plaintiff established its prima facie entitlement to summary judgment by proving the submission of statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary [*3]Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]). The court notes that the affidavit submitted by plaintiff’s billing manager demonstrated that the annexed claim forms constituted evidence in admissible form (see CPLR 4518; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d Dept 2006]). The burden thus shifted to defendant to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Defendant failed to meet this burden.

There is no merit to defendant’s argument that the statutory time period within which it had to pay or deny the claim was tolled due to plaintiff’s failure to provide it with the materials it had requested as additional verification of the claims. Assuming that the letters sent to plaintiff by defendant constituted valid initial and follow-up demands for additional verification of the claims, plaintiff unequivocally advised defendant that it was not in possession of the medical reports that defendant was seeking. Certainly, there is no evidence before the court suggesting that these materials were ever in plaintiff’s care, custody or control.

Even under the liberal discovery provisions embodied in article 31 of the CPLR, a party to a lawsuit is required to produce only those items “which are in the possession, custody or control of the party” (CPLR 3120 [1] [i]; see generally Saferstein{**24 Misc 3d at 524} v Stark, 171 AD2d 856 [2d Dept 1991]; Corriel v Volkswagen of Am., 127 AD2d 729, 730 [2d Dept 1987]; Lear v New York Helicopter Corp., 190 AD2d 7, 11 [2d Dept 1993]). While the no-fault regulations provide that an “insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested” (11 NYCRR 65-3.5 [c]), this should not be construed as requiring a provider to provide materials over which it has no control. A contrary construction would violate the core objective of the No-Fault Law: “to assure claimants of expeditious compensation for their injuries through prompt payment of first-party benefits without regard to fault and without expense to them” (Dermatossian v New York City Tr. Auth., 67 NY2d 219, 225 [1986]) and would frustrate one of the main purposes of the regulatory scheme, which is “to provide a tightly timed process of claim, disputation and payment” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 281 [1997]; see also New York Hosp. Med. Ctr. of Queens v Motor Veh. Acc. Indem. Corp., 12 AD3d 429, 430 [2d Dept 2004]). Imposing upon a medical provider the obligation to provide an insurer with materials that are not in its care, custody or control would also be illogical.

Finally, it is worth noting that defendant had a means of obtaining the materials it was seeking as additional verification of the claims. The no-fault regulations, particularly 11 NYCRR 65-3.5 (c), entitle an insurer to receive items necessary to verify a claim directly from persons others than applicants for no-fault benefits (see Doshi Diagnostic Imaging Servs. v State Farm Ins. Co., 16 Misc 3d 42 [App Term, 2d Dept 2007]). In Doshi Diagnostic Imaging Servs., the appellate court held that the insurer acted within its rights when it sought medical necessity verification from the prescribing physician rather than from the plaintiff MRI provider and that the insurer’s request for verification to the prescribing physician tolled the statutory claim determination period (id. at 43-44). Pursuant to the holding in Doshi Diagnostic Imaging Servs., defendant could have requested the medical reports from the [*4]referring physicians, whom plaintiff had identified in the claim forms. Indeed, the court in Doshi Diagnostic Imaging Servs. suggested that the no-fault regulations would also allow an insurer to seek verification of a claim directly from the referring physician where the plaintiff applicant was a medical equipment provider who merely fills prescriptions, as is the case here (id. at 44).{**24 Misc 3d at 525}

The court has considered defendant’s remaining arguments in opposition to plaintiff’s motion and in support of its cross motion and finds them to be without merit.

Accordingly, it is hereby ordered that plaintiff’s motion for summary judgment is granted and plaintiff may enter judgment against the defendant in the amount of $2,448.13, together with interest and attorneys fees as provided for under the No-Fault Law, plus costs; and it is further ordered that defendant’s cross motion for summary judgment is denied.

Civil Court of the City of New York, Kings County

116467/04

Genine D. Edwards, J.

Plaintiff commenced this action to recover no-fault benefits from the defendant, for acupuncture services performed by its licensed acupuncturist to its assignor, Alan Yensi. A bench trial ensued.

At the outset, the parties stipulated that the plaintiff proved its prima facie case and the defendant timely denied the claims. In addition, the bills and denials were admitted into evidence. Plaintiff rested. At that point the burden of production shifted to the defendant to prove the basis of its denial. Before defendant called its witness, it made a motion to dismiss, based upon Great Wall Acupuncture v. Geico Gen. Ins. Co., 16 Misc 3d 23, 842 N.Y.S.2d 131 (App. Term, 2d Dept. 2007); Ava Acupuncture, P.C. v. Geico Gen. Ins. Co., 17 Misc 3d 41, 844 N.Y.S.2d 570 (App. Term, 2d Dept. 2007), contending that an insurer is entitled to remit payment at the chiropractic rate indicated in the Workers’ Compensation Fee Schedule. The plaintiff argued in opposition that the defendant was required to reveal its procedures for choosing the rate and the calculation of the amount. This Court reserved its decision.

The defendant’s claim representative testified that the Workers’ Compensation Fee Schedule is the tool used to pay healthcare providers. Since that schedule does not address licensed acupuncturists, the defendant compared the educational and licensing requirements and found that the chiropractic requirements are closest to the licensed acupuncturist. Therefore, the plaintiff was paid at the chiropractic rate. On cross-examination the claim representative testified that he was not the representative who denied the plaintiff’s claims, but indicated that the representative processed and issued the claims in accord with defendant’s policies and procedures, including using the Workers’ Compensation Fee Schedule.

After due deliberation of the credible evidence submitted, this Court finds that the defendant shouldered its burden of producing a proper grounds for denying full payment of the no-fault benefits based upon the Workers’ Compensation Fee Schedule. Great Wall Acupuncture, 16 Misc 3d at 23; Ava Acupuncture, P.C., 17 Misc 3d at 41; Ops Gen. Counsel NY Ins. Dept. 10-06-04. The plaintiff did not rebut this defense.

[*2]Accordingly, judgment in favor of the defendant and the complaint dismissed.

This constitutes the decision and order of this Court.

Dated: March 6, 2009

________________________

Genine D. Edwards

Judge of the Civil Court

Civil Court of the City of New York, Kings County

131695/07

Plaintiff:

Sylvain R. Jakabovics, Esq.

2630 Ocean Avenue, Suite A-3

Brooklyn, NY 11229

Defendant:

Law Offices of Moira A. Doherty

50 Charles Lindbergh Boulevard, Suite 400

Uniondale, New York 11553

Genine D. Edwards, J.

In this action, plaintiff seeks to recover no-fault benefits from the defendant. Plaintiff now moves for summary judgment and defendant cross-moves for the same relief.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence in admissible form to demonstrate the absence of any material issues of fact. St. Claire v. Empire Gen. Contr. & Painting Corp., 33 AD3d 611, 821 NYS2d 471 (2d Dept. 2006). See also Alvarez v. Prospect Hosp., 68 NY2d 320, 508 NYS2d 923 (1986). The motion shall be supported by an affidavit from a person with knowledge of the facts. See CPLR 3212 (b). If the moving party fails to make such a showing, the motion must be denied, irrespective of the sufficiency of the opposing papers. See De Santis v. Romeo, 177 AD2d 616, 576 NYS2d 323 (2d Dept. 1991). Once the movant provides sufficient proof the burden of production rests on the adverse party to demonstrate the existence of a triable issue of fact. See Katona v. Low, 226 AD2d 433, 641 NYS2d 62 (2d Dept. 1996).

Plaintiff established a prima facie case as to the creation and mailing of the subject bill, in the amount of $1,104.00. Defendant, however, persuasively contends that plaintiff’s lawsuit is premature since the plaintiff failed to comply with outstanding verification requests. Defendant properly proved timely service of its initial verification request for an invoice, CPT codes and medical records. In response, plaintiff provided an invoice, but failed to provide proper CPT codes and medical records. Defendant sent a second and third verification request, acknowledging receipt of plaintiff’s invoice, but indicating that the proper coding and medical records were still [*2]outstanding. There was no further response from the plaintiff. Although plaintiff’s affiant indicated that it was his duty to handle verification requests and responses, he never asserted that he or anyone else did so in this matter.

This Court finds that the burden rests with the plaintiff to properly verify its claim. Plaintiff cannot simply rest on its laurels and ignore a verification request. See Lenox Hill Radiology and MIA P.C. v. Global Liberty Insurance, 20 Misc 3d 434, 858 NYS2d 587 (Civ. Ct. New York County 2008). Defendant did all it could do by sending two follow-up requests. Since the plaintiff desires to be paid, the onus is on it to ensure that the defendant has all of the required information to verify and pay the claim. Plaintiff completely ignored its burden and commenced this action prematurely.

Furthermore, it should be noted that, whether the plaintiff possesses the verification requested or it is in the hands of the referring physician, plaintiff cannot shift its obligation to verify a claim to the defendant.

Accordingly, the complaint is dismissed.

This constitutes the decision and order of this Court.

Dated: February 26, 2009

____________________________

Genine D. Edwards

J.C.C.

Supreme Court, Kings County

5647/06

Plaintiff Attorney:Lawrence N. Rogak, LLC

Defendant Attorney:Brooke Lombardi, Esq.

Subin Associates LLP

Yvonne Lewis, J.

Counsel for Long Island Insurance Company has petitioned this court for a tripartite order to restore this action to the active calendar on the grounds that it was ministerially marked disposed by clerical error, amend the petition to include the affirmative defenses of fraud and lack of capacity to contract (renewal policies) since the insured is deceased, and grant it summary judgment on the basis of newly discovered evidence heretofore concealed by the respondent; to wit, the respondent, the pedestrian victim of a hit and run on November 16, 2005, intentionally failed to disclose (to the petitioner/insurer) that his father, who died on July 10, 2001, was the named insured under the insurance policy through which he asserts his claims for no-fault and uninsured motorist benefits and continued to renew bi-annually despite his passing. In addition, the petitioner notes that the subject policy itself provides, in salient part, that it may not be assigned without its written consent; that upon the death of the named insured, coverage will be provided for the legal representative (a role which the respondent has not established for himself herein) only with respect to the legal representative’s responsibility to maintain or use the covered vehicle; and, that the coverage will extend only until the end of the policy period, in this instance April 28, 2002. The petitioner notes further that Couch on Insurance, 3d Ed., §29:13 clearly provides that there is no contract to renew in the absence of a clear intent to that effect; that

“. . .because contract requires mutual assent of parties and meeting of minds, no contract can be formed between insurer and decedent (citing, Von Hillman v. colonial Penn Ins. Co., 19 Kan. App.2d 375, 869 P2d 248[1994]); and, that “a representative of a deceased insured’s estate has no authority to renew the policy in the insured’s behalf without informing the insurer of the insured’s death.”

As further evidence of the respondent’s duplicity, the petitioner notes that in December 2006, he cashed a partial premium refund with the “obviously” forged signature of his father, and that in an examination under oath conducted on May 16, 2008, the respondent testified that his [*2]father (who died on July 10, 2001) was the policyholder, furnished his father’s current address, and advised that he never owned a car and that he drove his father’s.

Counsel for petitioner furnished a supplemental affirmation in support of his request for summary judgement on the basis of the October 10, 2008 Appellate Division, Fourth Department case of Geico Ins. Co. v. Battaglia, 2008 NY Slip Op 07736, which held that the subject Insurance Company had “. . .established as a matter of law that its policy, as renewed, was void ab initio based on the material misrepresentation with respect to the [insured’s] status, i.e., that [the insured] was deceased” (referencing, Matter of Mercury Ins. Group v. Ocana, 46 AD3d 561). Counsel also notes that his initial October 11, 2007 motion to stay the arbitration had been denied without prejudice for his inadvertence in not having included a complete copy of the subject policy in his moving papers.

In opposition, counsel for Israel Greenfield, the respondent herein, asserts that the motion to restore should be denied inasmuch as the court repeatedly set motion schedules for petitioner to file orders to show cause on the ground of the insured’s undisclosed death, failed to adhere to the same, and instead filed the instant motion for summary judgment on the same ground. In addition, counsel argues that the request to amend the petition must also be denied as untimely inasmuch as CPLR §3024( c) clearly provides that a motion to correct pleadings shall be served within twenty days after service of the challenged pleading. Furthermore, counsel urges this court to deny the petitioner’s motions for a permanent stay of arbitration and for summary judgment as moot given that an arbitration hearing was held on September 10, 2008, the petitioner had a full and fair opportunity to participate therein, and the plain fact that an arbitrator’s award may not be vacated unless it is found that the arbitrator’s award lacked a rational basis (citing, Matter of Prudential Pro. & Cas. Ins. Co. v. Carleton, 145 AD2d 492 [2d Dept., 1988]). So too, CPLR Rule 3211 provides for dismissal of an action on the ground that an arbitration award has been rendered.

Respondent additionally argues that the petitioner’s allegation of fraud and lack of capacity to have renewed the subject insurance policy does not meet the separate standards for a stay of arbitration which requires a prima facie showing of non-coverage and summary judgment that necessitates a demonstration as to the absence of material issues of fact. To the contrary, the respondent maintains that though his father was the named insured he is nonetheless covered under the subject policy as a listed driver and hence an additional named insured on which basis he continued to renew the said policy rather than the imputed intent to wilfully conceal, deceive, misrepresent, or mislead that the petitioner alleges. The respondent also argues that his unfamiliarity with the terms of the policy and any requirement to disclose his father’s death is attributable solely to the fact that he was merely an additional insured and not a party to the initial contract; hence, a mistake or oversight, not fraud.

The petitioner has also moved this court, pursuant to CPLR 7511, for an order to vacate the arbitration award in the matter sub judice on the ground that there was no valid agreement to arbitrate. In fact, the petitioner asserts that the American Arbitration Association proceeded with its scheduled arbitration on September 10, 2008 despite having been advised that a request for a permanent stay of arbitration had been made to this court. In addition, the renewed policy under which the petitioner sought no-fault and uninsured motorists benefits was void ab initio (prior to the date of the subject accident) due to the policyholder’s unreported death. The petitioner also [*3]notes that its request for a temporary restraining order to stay the mentioned arbitration was denied by this court, following which on October 15, 2008, the respondent (son of the decedent policyholder) was awarded $100,000.00.

In opposition, the respondent asserts that none of the CPLR 7511 grounds for vacatur of an arbitration award has been met by the respondent who participated in the process by submitting discovery materials in connection therewith; to wit, respondent has not established that his rights were prejudiced by corruption, fraud, or misconduct in procuring the award; partiality of the arbitrator; the arbitrator exceeded his powers; the arbitrator failed to make a final and definite award; or a procedural failure that was not waived. In addition, the respondent contends that petitioner’s failure to have moved for a stay of arbitration prior to its conduct renders the present motion therefor untimely (citing, Bevona v. Valencia, 191 AD2d 192, 594 NYS2d 223 [1st Dept., 1993]) as does his participation in said proceeding via the discovery materials submitted and reviewed by the arbitrator who also gave the petitioner thirty days post arbitration to submit documentation in support of its contentions which identically undergird its motions for summary judgment and to vacate. Furthermore, the respondent notes that the purported affidavit in support of the petitioner’s motion to vacate is fatally defective in that its president’s signature is absent therefrom. In any event, the respondent argues that the failure to have apprised the insurer of the insured’s death in no way increased the former’s risk such that it can be said that the policy would not have been renewed in the respondent’s name. In this vein, the respondent asserts that cancellation of an automobile insurance policy may be prospective only, even if the application is deceptive or fraudulent (citing, Aetna Cas. & Surety Co. v. O’Connor, 8 NY2d 359; Matter of Liberty Mutual Ins. Co. v. McClellan, 127 AD2d 767; Middlesex Ins. Co. v. Carrero, 103 AD2d 694; and Teeter v. allstate Ins. Co., 9 AD2d 176, Aff’d 9 NY2d 655), and argues that “an insurer should not be permitted to raise fraud, which should have been discoverable upon a reasonable inquiry, as a basis for denying coverage to innocent third parties injured in an accident” (citing New Hampshire Indemnity Co. v. Flores, 2002 NY Slip Op 40024 [1]).

In addition to opposing the petitioner’s motion to vacate, the respondent has moved, pursuant to CPLR §7510, to confirm the above mentioned arbitration award decided on October 20, 2008. In support of that request, the respondent reasserts the fact that no stay had been in effect on September 10, 2008 when the arbitration was held, and that the petitioner’s request for a temporary restraining order on October 3, 2008 was denied. In addition to remaking its arguments in opposition to vacatur, the respondent notes that CPLR §7510 makes it clear that the court shall confirm such an award within one year after its delivery unless the same is vacated or modified upon a ground specified in CPLR §7511, none of which has been met by the petitioner, as discussed above.

In response, the petitioner reasserted its arguments in support of vacatur to the effect that the instant renewed insurance policy under which the arbitration was conducted was void ab initio as a result of the respondent having concealed the fact that his father, the policyholder, had died a little over four years prior to the subject accident.

This court agrees with the petitioner’s assertion that “because contract requires mutual assent of parties and meeting of minds, no contract can be formed between insurer and decedent (citing, Couch on Insurance, 3d Ed., §29:13 and Von Hillman v. colonial Penn Ins. Co., 19 Kan. [*4]App.2d 375, 869 P2d 248[1994]). It must also be conceded, as asserted by the respondent, that a stay of arbitration requires a prima facie showing of non-coverage and summary judgment necessitates a demonstration as to the absence of material issues of fact.

It is the respondent’s position that although his father was the named insured he is nonetheless covered under the subject policy as a listed driver and hence an additional named insured on which basis he continued to renew his father’s policy rather than the imputed intent to wilfully conceal, deceive, misrepresent, or mislead that the petitioner alleges. That the respondent was holding himself out as his father and had a fraudulent intent in renewing his father’s policy is made clear by his answers to the examination under oath wherein he identified his father as the insured, furnished his then deceased father’s current residential address, etc. and his earlier cashing of a refund check made out to his then deceased father.

In the Matter of Fireman’s Fund Insurance Company v. Freda, 156 AD2d 364, 548 NYS2d 319, the Appellate Division, Second Department, made it clear that the insurer waived any right to assert grounds not raised as a basis for denying coverage in its original letter of disclaimer in its petition to stay arbitration (citing, Insurance law §3420[d]; General Acc. Ins. Group v.Cirucci, 46 NY2d 862, 414 NYS2d 512). In said case the insurer had initially only asserted that the injured person was not a covered person and had not raised claims of untimely notice, failure to promptly send copies of legal papers, and settlement without its consent which were therefore deemed waived. The court went on to add, [h]owever, the first ground, that [the injured party] was not a “covered person,” constitutes a potentially valid basis for the denial of liability because Fireman’s Fund made no contract of insurance with the person injured in the accident (citing, United Serv. Auto. Assn. v. Meier, 89 AD2d 998, 454 NYS2d 319). Consequently, Fireman’s Fund was not required by Insurance law §3420(d) to give timely written notice of its first asserted ground for disclaiming coverage (citing, Zappone v. Home Ins. Co., 55 NY2d 131, 447 NYS2d 911; Matter of Aetna Cas. & Sur. Co. v. Facciponti, 133 AD2d 60, 519 NYS2d 3). The court thereupon remitted the matter for an evidentiary hearing to determine if in fact the injured party had been a resident of the household of the policyholder on the date of the accident as a condition precedent to arbitration.

In the instant case, there is no issue to be decided by evidentiary hearing since, assuming arguendo, that the respondent had effectively renewed the insurance policy herein, the plain fact is that he could not by any stretch of the imagination, much less contractual definition, logic, or common sense have been a resident of the decedent’s household since that is legally and factually impossible.

The issue of a stay of arbitration has been rendered moot since it was held and a decision rendered. However, an arbitrator’s award may be vacated on the grounds specified in CPLR 7511(b); to wit, (i)corruption, fraud, or misconduct in procuring the award; or (ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or (iii) an arbitrator, or agency, or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or (iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection. In the matter sub judice, this court finds that the arbitrator did exceed his power in having made an award in an instance where no coverage existed. Put another way, the arbitrator in order to have arrived at his decision was [*5]necessarily required to make a finding that the respondent was a “covered person;” i.e., a member of the insured’s household which in this instance would have called for him to “absurdly” find that the respondent was resident of a Ghost’s household. Consequently, this court hereby vacates the arbitrator’s October 20, 2008 ruling, above referenced, on the basis of irrationality and grants summary judgment to the petitioner on the issue of non-coverage inasmuch as it has been irrefutably established that the respondent was not a covered person. The petitioner and respondent’s respective motions to confirm said award and to amend are accordingly denied as moot. This constitutes the decision and order of this Court.

_________________________________

JSC

[*1]

Civil Court of the City of New York, Kings County, October 31, 2008

APPEARANCES OF COUNSEL

McDonnell & Associates for defendant. Gary Tsirelman, Brooklyn, for plaintiff.

{**22 Misc 3d at 979} OPINION OF THE COURT

Alice Fisher Rubin, J.

Plaintiff commenced this action against the defendant to recover first-party no-fault benefits pursuant to section 5102 (a) (1) of the Insurance Law and New York State Insurance Department Regulations (11 NYCRR) § 65-1.1 et seq. for medical services rendered.

Defendant moves for an order pursuant to CPLR 3212 granting summary judgment and dismissing plaintiff’s complaint on the grounds that the plaintiff’s assignor failed to appear for scheduled independent medical examinations (IMEs), or in the alternative, partial summary judgment on the grounds that the denials are timely. Plaintiff opposes the motion on the grounds that the defendant has failed to substantiate any defenses or establish that it properly denied plaintiff’s claims.

After careful review of the moving papers, supporting documents and opposition thereto, the court finds as follows:

Defendant argues that the assignor, Jose Lora, failed to appear for scheduled independent [*2]medical examinations, which is a condition precedent to coverage under the insurance policy and no-fault regulations. In support of its argument, defendant annexes as exhibit “I” to its moving papers a copy of the insurance policy. The policy states in part: “3. Medical Reports. The insured shall submit to physical examinations by physicians we select when and as often as we may reasonably require.” (Emphasis added.)

Plaintiff argues that the policy requires the assignor, Jose Lora, to appear before a physician, which pursuant to Education Law, article 131, § 6522 is defined as “[o]nly a person licensed or otherwise authorized under the article shall practice medicine.” Therefore, the defendant’s insurance policy, which plaintiff reads to be clear and unambiguous, requires that the assignor submit to an examination by a physician only, and not any other health care provider. Plaintiff contends that as a result of the IME being scheduled before a psychologist, as opposed{**22 Misc 3d at 980} to a physician, the assignor was not required to attend, and no condition precedent was violated. Plaintiff further argues that any ambiguity with the use of the term “physician” must be construed against the insurer, the drafter of the policy.

The argument raised by plaintiff appears to be one of first impression. This court has researched the issue, having read and written many no-fault decisions, and did not find a case addressing the issue of whether a policy which states “physician” means that any other health care provider is excluded, and only a physician can conduct the independent medical examination of an eligible injured person (EIP).

This court answers in the negative.

In the case before this court, the insurance company sent verification requesting that the injured party appear before an independent psychologist. The court finds that although the policy states physician, the term itself is not ambiguous where it would or should allow the EIP to circumvent the requirement of an independent examination, to determine whether the services rendered were medically necessary. The assignor was seen by a psychologist and therefore, there is no reason why a verification which requests that he appear before an independent psychologist, should not be held as a valid request when the policy states “physician.”

The general provisions of Workers’ Compensation Rules and Regulations (12 NYCRR) § 300.2 (b) (5), which address independent medical examination, examiners, and entities, sets forth the following: “Section 300.2 . . . (5) “Independent medical examiner means a physician, surgeon, podiatrist, chiropractor or psychologist who is authorized to conduct independent medical examinations as defined in paragraph (4) of this subdivision.”

The fee schedules are determined by the Workers’ Compensation Law, and the services rendered by a provider are determined under the New York no-fault fee schedule. The workers’ compensation fee schedules were adopted by the Superintendent of Insurance for use by those [*3]making and processing claims for no-fault benefits.

If there is an issue as to the fees charged by the provider, which in this case is a psychologist, a hearing would be necessary to determine how much should have been billed. The court would look to the workers’ compensation fee schedule, and the fees applicable to a psychologist, not a physician.{**22 Misc 3d at 981} Therefore, this court finds that the EIP, Jose Lora, was required to appear for the scheduled IME.

In addition, this court finds plaintiff’s argument that Dr. Yakov Burstein is not qualified to state whether EIP, Jose Lora, appeared for an IME without merit. The suggestion that a doctor is unaware of or unqualified to assert which patient or patients are scheduled to appear at a scheduled date and or time in his office, because he is without “personal knowledge,” is presumptuous.

Next, this court will address the issue of the timeliness of the verification.

The claim for no-fault benefits begins when an injured party provides notice to the insurer within 30 days after the date of the accident. (See 11 NYCRR 65-2.4 [b].) The injured party is required to submit an application for no-fault benefits, and the written proof of claim is submitted within 45 days after the date services are rendered.

Within 10 business days after receipt of the completed no-fault application, the insurer must forward verification forms for health care or hospital treatment to the injured party or that party’s assignee. After receipt of the completed verification, the insurer may seek additional verification or further proof of claim from the injured party or that party’s assignee within 15 business days thereof. (See 11 NYCRR 65-3.5 [b].) For example, the insurer may seek an independent medical examination of the injured party which must be held within 30 calendar days from receipt of the initial verification form.

In the case at bar, the defendant states that it received the claim for no-fault benefits in the amount of $1,061.63 on December 29, 2005, and an additional claim for $120 on January 9, 2006. On February 17, 2006 the defendant sent a notice to the injured party scheduling an independent medical examination for March 1, 2006. A second notice rescheduling the IME was sent on March 29, 2006 which scheduled the IME for April 10, 2006.

Plaintiff argues that the defendant’s request for verification was untimely, and therefore the statutory prescribed 30-day period within which to issue a denial of the submitted claims was not tolled, and thus the defense of failure to attend an IME has been waived. In response to plaintiff’s argument that the insurer was required to request a verification within 15 days, the defendant argues that the amendment to the statute states as follows:{**22 Misc 3d at 982} “If the additional verification [*4]required by the insurer is a medical examination, the insurer shall schedule the examination to be held within 30 calendar days from the date of receipt of the prescribed verification forms.” (11 NYCRR 65-3.5 [d].)

The time in which an insurer has to pay or deny a claim is extended only upon a proper request for verification pursuant to 11 NYCRR 65-3.5 (a). Since the defendant did not serve its verification request within 10 business days after receipt of the plaintiff’s completed application for no-fault benefits, the 30-day payment or denial period was not tolled. The initial verification request comes before the additional verification request for an independent medical examination. Section 65-3.5 (d) clearly states an IME is a request for “additional verification.” The insurer’s requests for independent medical examinations in connection with a health care provider’s claim for first-party no-fault benefits, made as an initial verification request, rather than an additional verification request, did not extend the time in which to issue a denial of the claims. Consequently, the defendant is precluded from raising the defense of lack of medical necessity, and/or failure to attend a scheduled IME.

Accordingly, defendant’s motion for summary judgment is denied, and the court finds that summary judgment is warranted in favor of plaintiff in the amount of $1,181.63 (the amount of the two claims), with statutory interest, costs and attorney’s fees.

[*1]

Civil Court of the City of New York, Kings County, November 5, 2008

APPEARANCES OF COUNSEL

Bruno Gerbino & Soriano, LLP, Melville, for defendant. Gary Tsirelman P.C., Brooklyn, for plaintiff.

{**22 Misc 3d at 724} OPINION OF THE COURT

George J. Silver, J.

In this action to recover first-party no-fault benefits, interest and attorney’s fees pursuant to New York’s Insurance Law and no-fault regulations, defendant Utica Mutual Insurance Company moves, pursuant to CPLR 3212, for an order granting it summary judgment dismissing plaintiff Allstate Social Work and Psychological Services, PLLC’s complaint on the ground that plaintiff’s assignors failed to appear for properly scheduled independent medical examinations (hereinafter IMEs) and examinations under oath (hereinafter EUOs) and thus failed to comply with conditions precedent of the insurance policy.

Chad LaPlate, defendant’s no-fault specialist, avers that defendant’s Special Investigative Unit (hereinafter SIU) investigated the motor vehicle accident that allegedly occurred on May 23, 2003 and which gave rise to the instant claims. As a result of that investigation, defendant’s SIU determined that the alleged loss was the result of an intentional act and that material misrepresentations had been made in the presentation of the claims. Defendant thereafter assigned the claims to Hudson Valley Medical Consultants (hereinafter HVMC) for the scheduling of IMEs of plaintiff’s assignors. Jennifer Harvey, an employee of HVMC, avers that HVMC is an entity that is involved in the scheduling of IMEs on behalf of insurance companies. According to Ms. Harvey, HVMC acts as an intermediary between the insurance company and the examining physician, dentist or psychologist by scheduling IME appointments and then securing the IME report from the examining doctor. Ms. Harvey avers that the psychological IMEs of the assignors were scheduled with Moses Weksler, Ph.D., for August 27, 2003. The letters scheduling the IMEs were prepared and signed by Ms. Harvey and mailed on August 15, 2003. Ms. Harvey states that it is HVMC’s procedure to have an employee prepare and print the IME scheduling letter and the address label for each scheduled IME. The employee ensures that the address label is correct, places the scheduling letter in the envelope, affixes the address label to the envelope and applies the proper postage. The envelopes containing the scheduling letters are placed in an official postal repository on a daily basis. Helen Sickler, the office manager for Moses Weksler, Ph.D., states in her affidavit that neither assignor appeared at Dr. Weksler’s Brooklyn office on August 27, 2003 and that the assignors’ nonappearances were reported to HVMC. On August 28, 2007, Ms. Harvey{**22 Misc 3d at 725} scheduled a second IME for both assignors to be held on September 11, 2003, again at Dr. Weksler’s Brooklyn office. According to Ms. Sickler, both assignors again failed to appear at Dr. Weksler’s office. On October 9, 2003 defendant issued two denials, one for each assignor, denying plaintiff’s claims due to the failure of the assignors to appear for the two scheduled psychological IMEs.

Defendant thereafter retained the law firm of Bruno, Gerbino & Soriano, LLP to schedule and conduct EUOs of defendant’s insured, the driver of the motor vehicle and the assignors. According to defendant’s attorney, EUOs were duly scheduled for October 7, 2003, October 10, 2003, October 28, 2003 and December 23, 2003. The assignors failed to attend the EUOs and on January 29, 2004 defendant issued a second set of denials based upon the assignors’ nonappearances.

In opposition, plaintiff argues that defendant has failed to establish that the assignors violated the policy conditions by failing to appear for the psychological IMEs because, under the express unambiguous terms of the insurance contract, the assignors were only obligated to submit to a medical examination by a physician. Plaintiff contends that licensed psychologists like Dr. Weksler are not physicians as the term is defined by the Education Law, therefore the assignors’ failure to appear for the scheduled IMEs was not a violation of the insurance policy and defendant’s denial of plaintiff’s claims was improper. Plaintiff raises no issue as to the sufficiency of defendant’s proof that the IME request letters were mailed by HVMC in accordance with a standard office practice and procedure and in accordance with the time periods delineated in the no-fault regulations. Nor does plaintiff challenge the sufficiency of defendant’s proof of the assignors’ nonappearances at the IMEs.

Plaintiff further contends that the EUO scheduling letters dated September 30, 2003, October 1, 2003 and October 13, 2003 are defective on their face because they failed to inform the assignors that they would be reimbursed for any loss of earnings or reasonable transportation expenses incurred in complying with the requests. Plaintiff also argues that the December 10, 2003 EUO scheduling letter is defective because the defendant improperly scheduled the EUOs to be held in Melville, New York, which plaintiff argues was not reasonably convenient to the assignors who reside in Brooklyn. In the alternative, plaintiff argues that if the language of the December 10, 2003 EUO scheduling letter is sufficient, the letter should{**22 Misc 3d at 726} be treated as a first request for additional verification. Since defendant failed to issue a follow-up request to the December 10, 2003 scheduling letter, plaintiff contends, defendant failed to comply with the follow-up verification requirements outlined in the regulations. Finally, plaintiff informs the court that it did not cross-move for summary judgment “due to insufficient time to file the motion”^[FN1] but nevertheless requests that the court search the record and grant summary judgment in its favor.

Defendant argues in reply that this court previously denied plaintiff’s motion for summary judgment. Defendant also concedes that Dr. Weksler is not a physician as defined by the Education Law but argues that the endorsement’s definition of “medical expense” includes all professional health services, not only medical services provided by physicians. Since the legislature included medical expenses for all professional health services as part of covered basic economic loss, defendant reasons, it also intended to permit any health care provider to perform IMEs.

Analysis

“Pursuant to Insurance Law § 5103 (d), the Legislature empowered the Superintendent of Insurance to promulgate regulations establishing minimum benefit standards for policies of insurance providing coverage for the payment of first-party benefits and to set standards for the payment of first-party benefits by self-insurers. Pursuant to this authority, the Superintendent promulgated Insurance Department Regulations (11 NYCRR) § 65-1.1, which sets forth the basic form of the ‘Mandatory Personal Injury Protection Endorsement’ which must be included in every owner’s policy of liability insurance issued on a motor vehicle in this state” (Alleviation Supplies Inc. v Enterprise Rent-A-Car, 12 Misc 3d 787, 790 [Civ Ct, Richmond County 2006]).

The mandatory personal injury protection endorsement (hereinafter endorsement) provides, in pertinent part, that the “eligible injured person shall submit to medical examination by physicians selected by, or acceptable to, the Company, when, and as often as, the Company may reasonably require” (11 NYCRR 65-1.1 [d] [Conditions] [Proof of Claim; Medical, Work Loss, and{**22 Misc 3d at 727} Other Necessary Expenses]).^[FN2] The appearance of the insured for IMEs at any time is a condition precedent to the insurer’s liability on the policy (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2d Dept 2006]). The term physician is not defined in the endorsement but the Education Law provides that “[o]nly a person licensed or otherwise authorized under this article shall practice medicine or use the title ‘physician’ ” (Education Law § 6522). Defendant concedes in its reply that a licensed psychologist such as Dr. Weksler is not a physician. The question then is may any health provider perform an IME of an eligible injured person or, as the endorsement appears to require, only a physician?

Though there appears to be no case law addressing the point, in an opinion letter dated March 12, 2004, the State Insurance Department answered the following question:

“When a No-Fault eligible person is being treated by a chiropractor and the person’s insurer has requested a medical examination (‘IME’) of that person in order to evaluate the medical necessity of the chiropractic services performed, must the medical examination be performed by a chiropractor, or may it be performed by a medical doctor?” (2004 Ops Gen Counsel NY Ins Dept No. 04-03-10.)

In holding that an “insurer’s medical examination of an eligible injured person to evaluate the medical necessity of health services provided by a chiropractor may be performed by a medical doctor, and need not be performed by a licensed chiropractor” (id.) the Insurance Department stated “[t]here is no requirement in the regulation that a claim denial must be based upon a medical examination conducted by a health provider of the same speciality area as the treating health provider” (id.). Implicit in the Insurance Department’s interpretation, which is entitled to great deference unless it is “irrational or unreasonable” (Matter of John Paterno, Inc. v Curiale, 88 NY2d 328, 333 [1996], quoting Matter of New York Pub. Interest Research Group v New York State Dept. of Ins., 66 NY2d 444, 448 [1985]; cf. Matter of Gaines v New York State Div. of Hous. & Community Renewal, 90 NY2d 545, 548-549 [1997]), is that an independent medical examination of an eligible injured person may be performed either by a physician, as the term is defined in the Education Law and used in the endorsement, or by any other{**22 Misc 3d at 728} licensed health provider selected by or acceptable to the insurer. It is for the court or an arbitrator to “consider the qualifications of the health provider performing the IME in determining the validity of a claim denial” (2004 Ops Gen Counsel NY Ins Dept No. 04-03-10). A contrary conclusion would frustrate the core objective of the no-fault scheme by limiting the universe of health providers who could perform IMEs, thereby delaying the processing of no-fault claims (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]).

The affidavits submitted by defendant are sufficient to establish that defendant’s initial IME requests, its follow-up IME requests and its denial of claim were mailed pursuant to a standard office practice and procedure, and that the assignors failed to appear for the IMEs (Quality Health Prods., P.C. v Progressive Ins. Co., 20 Misc 3d 143[A], 2008 NY Slip Op 51757[U] [App Term, 2d & 11th Jud Dists 2008]; Post Traumatic Med. Care, P.C. v Progressive Cas. Ins. Co., 21 Misc 3d 128[A], 2008 NY Slip Op 51954[U] [App Term, 2d & 11th Jud Dists 2008]). The court, therefore, need not address plaintiff’s arguments concerning the sufficiency of defendant’s EUO requests.

Accordingly, it is hereby ordered that defendant’s motion for summary judgment dismissing plaintiff’s complaint is granted.

Footnotes

Footnote 1: See attorney’s affirmation in opposition.

Footnote 2: Since the endorsement is promulgated by the Superintendent of Insurance, and is not drafted by the insurer, plaintiff’s argument that any ambiguity in the endorsement must be construed against the insurer is incorrect.