Civil Court of the City of New York, Kings County

56006/04

Plaintiff: Alan Banniettis, Esq.

2972 Avenue X

Brooklyn, NY 11235

(718) 648-8300

Defendant: Bruno Gerbino & Soriano, LLP

By: Akwei O. Acquage, Esq.

445 Broad Hollow Road

Suite 220

Melville, NY 11747

(631) 390-0010

Sylvia G. Ash, J.

Plaintiff brought this cause of action seeking recovery of first party no-fault benefits for medical services rendered to its assignors in connection with injuries sustained as a result of an automobile accident. Plaintiff is a health care provider and Defendant was the no-fault insurance carrier at the time the accident occurred. The amount at issue is $4,151.98. Based on the testimony and evidence adduced at trial, the Court makes the following findings of fact and conclusions of law. [*2]

At trial, the parties stipulated to the Plaintiff’s prima facie case and the timely denial of the claim. The Defendant asserted that Plaintiff was not entitled to recover for the services rendered, specifically, the performance of EMG and NCV studies of the upper extremities.

The only issue before the Court was whether these studies were medically necessary.

At trial, the Defendant bears the burden of production and the burden of persuasion for its claim of lack of medical necessity of the treatment or testing for which payment is sought (see Nir v. Allstate Insurance Company, 7 Misc 3d 544, 796 N.Y.S. 2d 857 [Civ. Ct. Kings Co. 2005]; Expo Medical Supplies , Inc. v. Clarendon Insurance Company, 12 Misc 3d 1154(A), 819 N.Y.S. 2d 209 [Civ. Kings Co. 2006]; A.R. Medical Art, P.C. v. State Farm Mutual Automobile Insurance Company, 11 Misc 3d 1057(A), 815 N.Y.S.2d 493 [Civ. Ct. Kings Co. 2006]; A.B. Medical Services, P.L.L.C. v. New York Central Mutual Fire Insurance Company, 7 Misc 3d 1018(A), 801 N.Y.S. 2d 229 [Civ. Ct. Kings Co. 2005]).

To sustain its burden of proof, Defendant presented two witnesses, Dr. Jeffery Perry and Dr. Patrick Corcoran, whom the parties stipulated to be experts in the field of Physical Medicine and Rehabilitation & Pain Management.

Dr. Perry testified that in preparing his peer review report, he reviewed the treating physician’s report as well as the EMG and NCV reports. That it was his medical opinion that the EMG and NCV tests were not medically necessary because said tests are usually performed to (a) impact the care that the patient would receive (b) impact the results of the patient’s treatment ( c) when you are not sure of the course of treatment to take and (d) when there is a decline in the patient’s neurological performance. Dr. Perry stated that in this case, there was nothing in the patient’s records to indicate that the patient had a prior medical condition and that it was his opinion that the treating physician did not need to do the test or utilize the performance of the test to impact the care and treatment which the patient was already receiving. He further stated there was no indication that the patient had underwent radiological studies of any kind, which would have necessitated the performance of the test.

On cross examination, Dr. Perry acknowledged that a patient’s prior trauma and treatment is relevant for diagnosis and treatment and that the patient’s treating physician is always in the best position to prescribe care and treatment for the patient. However, where there is no mention of any prior trauma or medical condition, if a patient came to him with the same complaints as the patient herein, he would not have ordered the subject tests. Dr. Perry testified that as a treating physician, he has done EMGs on patients where payment had been denied based on the reviewing physician deeming the tests to be medically unnecessary. That in such cases, when necessary, he would provide additional information to the reviewing physician to explain his rationale for ordering the tests. Dr. Perry further stated that as a reviewing physician, if he gets a letter from the treating physician explaining the rationale for the tests, the vast majority of times, he would alter his opinion. [*3]In this case, Dr. Perry stated that the records he received and reviewed were sufficient for him to form a medical opinion of lack of medical necessity.

Dr. Patrick Corcoran testified that he also reviewed the treating physician medical records as well as the EMG and NCV reports. He stated that the records revealed that the patient was a 24 year old female, with no prior medical problems, who was involved in an automobile accident on January 21, 2001. That the patient’s symptoms were evidence of radiculopathy which is an indication that something is wrong with the root of the nerve. That the treating physician did not need the EMG and NCV studies to prevent an injury, to make a diagnosis or to formulate a treatment plan. That the records revealed that the treating physician had all the information needed to form a diagnosis and that the results of the electro-diagnostic studies were the same as the conclusion drawn from the patient’s physical examination.

On cross examination, in answering the question whether he inquired from the treating physician if the patient had a prior medical condition, Dr. Corcoran responded that there was no mention in the patient’s records of a prior medical condition and that there is a saying in medicine that “If you didn’t write it, you didn’t do it.” Dr. Corcoran concluded that based on the treating physician’s report and the physical examination, it was clear that the subject tests were not medically necessary. Dr. Corcoran further stated that he had sufficient information from the records provided to form a medical opinion of lack of medical necessity.

It is well settled that the function of the No-Fault Law is to expedite payment of claims (See 1973 NY Legis Ann, at 298). The Court of Appeals have found that “the regulations are written to encourage prompt payment of claims, to discourage investigation by insurers and to penalize delays.” (see Dermatossian v. New York City Tr. Auth., 67 NY2d 219 [1986]; Zydyk v. New York City Tr. Auth., 151 AD2d 745 [2d Dept. 1989]; Fifth Avenue Pain Control

Center v. Allstate Insurance Company, 196 Misc 2d 801, 766 N.Y.S. 2d 748 [2003]. Upon receipt of a claim, the insurer is required by both statute and regulation to pay or deny a claim within 30 days of receipt of the claim (see NY Ins. Law §5106(a); 11 N.Y.C.R.R. §65-3.8(a)(1)). An insurer may extend this 30-day period if, within 15 business days after receipt of the claim, the insurer sends a request for verification (see 11 N.Y.C.R.R. §65-3.5(b)). The 30-day period does not begin to run until all demanded verification is received (see N.Y.C.R.R. §65-3.8(a)(1)). Where the claim asserted is for payment for medical services, and the documents requested in the verification process are the patient’s medical records, to put the onus on a Defendant to request additional verification will unnecessarily prolong the time within which a determination can be made by the insurer as to whether a claim should be paid or denied. The Defendant insurer is not obligated to seek further verification where its medical expert testified that there was sufficient information to form an opinion (see Amaze Med. Supply Inc. V. Travelers Prop. Cas. [*4]Corp., 7 Misc 3d 128[A], 2005 Slip Op 50452[U] [App Term, 2d & 11th Jud Dists]; All County Open MRI & Diagn. Radiology P.C. v. Travelers Insurance Co., 11 Misc 3d 131(A), 815 N.Y.S. 2d 493, 2006WL 543132 (N.Y.Supp.App.Term)[2006]).)

To meet its burden, at a minimum, the Defendant must establish a factual basis and medical rationale for its asserted lack of medical necessity of Plaintiff’s services (see CityWide Social Work & Psy. Serv. P.L.L.C. v. Travelers Indemnity Co., 3 Misc 3d 608, 777 N.Y.S.2d 241, 2004 NY Slip Op. 24034 [Civ. Ct., Kings County 2004]; Nir v. Allstate Insurance Company, supra; A.B. Medical Services, P.L.L.C. v. New York Central Mutual Fire Insurance Company, supra). At trial, the defense that a claim was not medically necessary must be supported by sufficient factual evidence or proof and cannot simply be conclusory (see Williamsbridge Radiology & Open Imaging v. Travelers Indemnity Company, 14 Misc 3d 1231 (A), 2007 NY Slip Op. 50224(U)) In the case at bar, both Defendant’s medical experts were very specific and detailed in explaining the basis for their medical opinion of lack of medical necessity. Both doctors testified that their opinion was based on the information contained in the medical reports received from the Plaintiff. That there was no mention in said medical reports that the patient had any prior trauma or medical condition to warrant performance of the tests, and that they had sufficient information from the records they reviewed, to form a basis of lack of medical necessity.

The issue before this Court is whether the tests ordered were medically necessary. As stated above, the burden is on the Defendant to establish that the tests in question were not medically necessary. This determination is made after a review of the patient’s medical records by the Defendant’s reviewing medical expert. It is therefore important that the patient’s entire medical records be submitted for review. In most cases, the Defendant’s medical expert do not examine or have any personal contact with the patient. The opinion contained in the Defendant’s medical expert’s peer review report is based primarily on a review of the patient’s medical records received from the Plaintiff. The Plaintiff is aware that the records submitted to the Defendant’s medical expert would be used as the basis for determining whether the tests ordered were medically necessary. Therefore, it is incumbent on the Plaintiff to submit the patient’s entire records including the patient’s medical history and all ancillary information used by the treating physician to make the determination that the tests ordered are medically necessary for the treatment and care of the patient.

Plaintiff argues that both Defendant’s medical experts acknowledged that a patient’s medical history would impact his or her care and treatment. That Defendant’s medical experts should have requested additional information from the Plaintiff to ascertain whether the patient had a history of prior trauma or medical condition. That if Defendant’s medical experts had information on the patient’s medical history, their opinion would have been different. The Court finds that the Defendant should not have to question whether there are additional records or information of the patient that would assist the Defendant in forming a medical opinion as to whether the tests performed were medically necessary. That the Defendant should not have to question whether the information received are the complete records of the patient in question. [*5]

The Court notes that contrary to the Plaintiff’s contention, this is not a case where the reviewing doctors considered the information in their possession insufficient to formulate a medical necessity determination (see Amaze Medical Supply Inc. v Allstate Insurance Co., 12 Misc 3d 142(A), 824 N.Y.S. 2d 760; Hempstead Turnpike Open MRI and Imaging v. Progressive Insurance Company, 12 Misc 3d 137(A), 824 N.Y.S.2d 763, 2006 WL 1865021)). On the contrary, it is the Defendant’s contention that the medical records received contained sufficient information to enable them to form a medical opinion on the issue at bar. It is also Defendant’s contention that the fact that there was no mention in said records of the patient’s medical history, established that either the patient did not have a prior medical history or that said history was not a factor that was considered in determining the patient’s treatment and diagnosis. The Court credits Defendant’s testimony and finds that Plaintiff’s rationale is inconsistent with the legislative intent that no-fault claims be expeditiously paid.

Plaintiff presented no witnesses at trial. Therefore, based on the unrebutted testimony of Defendant’s medical experts and the peer review report, it is this Court’s finding that Defendant has met its burden of establishing lack of medical necessity. Where the Defendant insurer presents sufficient evidence to establish a defense based on lack of medical necessity, the burden shifts to the Plaintiff who must then present its own evidence of medical necessity (see Prince Richardson on Evidence §3-104, 3-202 [Farrell 11th ed]; Delta Medical Supplies, Inc. v. NY Central Mutual Insurance Co., 14 Misc 3d 1231 (A) [2007]). By failing to produce any witness(es) at trial, Plaintiff has failed to meet its burden.

Accordingly, the Plaintiff’s complaint is hereby dismissed. This constitute the Decision and Order of the Court.

February 25, 2008__________________________

SYLVIA G. ASH, J.C.C.

Civil Court of the City of New York, Kings County

073321/06

Counsel for Movant-Defendant:

Short & Billy, P.C.

217 Broadway, Suite 300

New York, NY 10007

Tel.: (212) 732-3320

Counsel for Cross-movant-Plaintiff:

Ilona Finkelshteyn, P.C.

2503 65th Street

Brooklyn, NY 11204

Tel.: (718) 382-1266

Peter Paul Sweeney, J.

Upon the foregoing papers, the motion and cross-motion are decided as follows:

In this action to recover assigned first-party no-fault benefits, plaintiff Friendly Physician, P.C. moves for summary judgment and defendant Progressive Insurance Company cross-moves to compel discovery. In opposition to plaintiff’s motion, defendant argues, among other things, that plaintiff did not establish its entitlement to summary judgment inasmuch as the no-fault claim forms underlying the action were not submitted in admissible form.

To prevail on its motion, plaintiff had the burden to demonstrate by admissible proof that the no-fault claim forms underlying the action were submitted to the defendant and that payment of no-fault benefits is overdue (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 [2nd Dep’t 2004]; AVA Acupuncture, P.C. v. GEICO General Ins. Co.,17 Misc 3d 41[App. Term, 2d & 11th Jud. Dists]; Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128(A), 2003 NY Slip Op 51701(U), 2003 WL 23310886 [App. Term, 2d & 11th Jud Dists] ). To meet this burden, plaintiff was required to establish the admissibility of the no-fault claim forms by demonstrating that they are business records within the meaning of CPLR 4518[a] (see [*2]e.g., Dan Medical, P.C. v. New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44, 46 [App Term, 2nd & 11th Jud Dists 2006]; Great Wall Acupuncture v. New York Central Mut. Fire Ins. Co., 14 Misc 3d 142(A), 2007 NY Slip Op. 50364(U)[App Term 2d & 11th Jud Dists]; Bath Med. Supply, Inc. v. Allstate Ins. Co.,16 Misc 3d 135(A), 2007 NY Slip Op. 51602(U) [App Term, 2nd & 11th Jud Dists] ). To do this, plaintiff was required to submit an affidavit or other admissible proof demonstrating that the claim forms were made in the regular course of business and reflect a routine, regularly conducted business activity, needed and relied on in the performance of the functions of the business, that it was the regular course of business to make the claim forms, in other words, that they were made pursuant to established procedures for the routine, habitual, systematic making of such a record, and that the claim forms were made at the time of the acts, transactions, occurrences or events described therein, or within a reasonable time thereafter (see People v. Cratsley, 86 NY2d 81, 89 [1995]; People v. Kennedy, 68 NY2d 569, 579-580 [1986]; Williams v. Alexander, 309 NY 283, 286 [1955] ).

To lay the foundational elements through an affidavit, the affiant must aver that he or she had personal knowledge of the business practices and procedures pursuant to which the claim forms were made (see Dan Medical, P.C., 14 Misc 3d at 46, citing Hefte v. Bellin, 137 AD2d 406, 408 [1st Dep’t 1988]; Dayanim v. Unis, 171 AD2d 579 [1st Dep’t 1991]; Midborough Acupuncture, P.C. v. New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132(A), 2006 NY Slip Op. 51879(U), 2006 WL 2829993 [App. Term, 2d & 11th Jud Dists]. The affidavit must also demonstrate that the preparer of the claim forms had actual knowledge of the events recorded therein or that he or she obtained knowledge of those events from someone with actual knowledge of them and who had a business duty to relay information regarding the events to the preparer (see Capasso v. Kleen All of America, Inc., 43 AD3d 1346 [4th Dep’t 2007], citing Alexander, Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C4518:1; Matter of Leon RR, 48 NY2d 117, 122-123 [1979]; see also Johnson v. Lutz 253 NY 124, 128 [1930]; Toll v. State, 32 AD2d 47, 49 [3rd Dep’t 1969] ).

Applying these principles, the court finds that the affidavit submitted by plaintiff to show that the no-fault claim forms are business records was woefully insufficient. No details were set forth in the affidavit as to how the claim forms were generated. Certainly, there was no showing that they were made in the regular course of business or that it was the regular course of plaintiff’s business to make the claim forms.

The affidavit does not indicate that the preparer of the claim forms had actual knowledge of the events recorded therein, nor does it indicate that the preparer obtained knowledge of those events from someone with actual knowledge of them and who was under a business duty to report them to the preparer.

Finally, the affidavit did not demonstrate that the affiant possessed personal knowledge of plaintiff’s office practices and procedures. The court refuses to speculate that the affiant had such knowledge simply because the identified herself as plaintiff’s billing manager.

At oral argument, plaintiff’s counsel argued that the holding in Infinity Health Products, Ltd. v. New York Central Mutual Fire Insurance Company, 17 Misc 3d 130(A), 2007 NY Slip Op. 51984(U) [App Term, 2nd & 11th Jud Dists] supports its position that the affidavit at issue is sufficient to demonstrate the admissibility of the no-fault claim forms. In Infinity Health [*3]Products, Ltd., supra., the Appellate Term affirmed an order which awarded summary judgment to a plaintiff medical supplies provider, stating: “[f]or the reasons stated in Dan Medical, P.C. v. New York Central Insurance Co. ( Misc 3d , 2007 NY Slip Op [App Term, 2nd & 11th Jud Dists], decided herewith, the judgment is affirmed (emphasis added).” Plaintiff’s counsel maintained that the affidavit at issue in Infinity Health Products, Ltd. was virtually identical to the affidavit at issue here.

Whether the affidavit in Infinity Health Products, Ltd. is virtually identical to the one now before the court is of no moment. In the Dan Medical, P.C. case ^[FN1] cited by the court in Infinity Health Products, Ltd., the court stated: “[i]nasmuch as defendant raised no issue in the court below or on appeal with respect to plaintiff’s establishment of its prima facie case, we do not pass on the propriety of the implicit determination of the court below with respect thereto (id.).” Thus,it is apparent that in both Infinity Health Products, Ltd., supra. and Dan Medical, P.C., supra, the court never passed on whether the plaintiff established its prima facie entitlement to summary judgment. Thus, Infinity Health Products, Ltd. can not be viewed as appellate approval for the proposition that the affidavit before the court is sufficient to establish the admissibility of the no-fault claim forms.

In sum, inasmuch as plaintiff did not demonstrate that the no-fault claim forms annexed to the motion were business records within the meaning of CPLR 4518[a], plaintiff did not establish its entitlement to summary judgment. Accordingly, the motion must be denied regardless of the sufficiency of the opposition papers (see Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985] ).

For the reasons stated above, it is hereby

ORDERED that plaintiff’s motion for summary judgment is DENIED; and it is further

ORDERED that defendant’s cross-motion, which plaintiff did not oppose, is GRANTED solely to the extent that plaintiff is directed to serve answers to defendant’s interrogatories within 45 days of the service of this order with notice of entry.

This constitutes the decision and order of the court.

Dated: December 3, 2007____________________________________

PETER P. SWEENEY

Civil Court Judge

Footnotes

Footnote 1:The Dan Medical, P.C. case cited in Infinity Health Products, Ltd. should not be confused with the seminal case of Dan Medical, P.C. v. New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44, 829 N.Y.S.2d 404 [App Term, 2nd & 11th Jud Dists 2006] which held that a plaintiff in an action to recover no-fault benefits must submit the underlying no-fault claim forms in admissible form to prevail on a motion for summary judgment.

Civil Court of the City of New York, Kings County

075350/05

Sylvia G. Ash, J.

Plaintiff brought this action seeking recovery of first party no-fault benefits for medical services rendered to its assignors. Plaintiff is a health care provider and Defendant was the no-fault insurance carrier at the time the accident occurred. The amount at issue is $1,791.00. Based on the testimony and evidence adduced at trial, this Court renders the following findings of fact and conclusions of law.

The parties stipulated to Plaintiff’s prima facie case and Defendant’s timely denial of the claim. The only issue to be decided by the Court is whether the magnetic resonance imaging (MRI) tests of Plaintiff’s assignor’s cervical and lumbar spine were medically necessary. Defendant bore the burden of proof on this issue. Therefore, Defendant had the burden to establish by admissible evidence its belief that the services rendered were not medically necessary (11 NYCRR 65.15). If the Defendant sustains this burden, the burden of persuasion shifts back to Plaintiff to submit rebuttal evidence that the services rendered were medically necessary (see, A.B. Medical Services, PLLC v. State Farm Mut. Auto. Ins., Co., 7 Misc 3d 822, 795 N.Y.S. 2d 843; V.S. Medical Services, P.C. v. Allstate Insurance Co., 11 Misc 3d 334; PDG Psychological, P.C., v. State Farm Insurance Co., 12 Misc 3d 1183(A); Citywide Social Work & Psy. Serv. V. Travelers Indem. Co., 3 Misc 3d 608 [Civ. Ct. Kings Co., 2004]; Elm Medical P.C. v. American Home Assurance Co., 2003 NY Slip Op. 51357 (U), 2003 WL 22471156 [Civ. Ct., Kings Co., 2003] Delta Medical Supplies, Inc. v. NY Central Mutual Insurance Co., 14 Misc 3d 1231(A), 836 N.Y.S.2d 492, 2007 NY Slip Op. 50241(U); Williamsbridge Radiology & Open Imagining v. Travelers Indem. Co., 14 Misc 3d 1231(A), 836 N.Y.S. 2d 496, 2007 NY Slip Op. 50224(U)).

At trial, Defendant called Dr. Michael N. Berke, a Chiropractor, as its chief and primary witness. Dr. Berke testified that based on his examination of the assignor and review of the medical records he found no objective findings of spasm, no positive orthopedic tests or radicular complaints to justify the MRIs. The Plaintiff called Dr. Michael Walsh, a Neurologist, as its rebuttal witness. Dr. Walsh testified that he reviewed the treating physician’s medical report and that based on the assignor’s complaints, the MRIs were medically necessary. [*2]

The parties have submitted post trial memorandums. Defendant argued that Dr. Berke examined the assignor one day after the cervical MRI and three days prior to the lumbar MRI; that the assignor had no complaints of radiating pain at that examination; that based on Dr. Berke’s examination and his review of the medical report of the treating physician, Dr. Abbot, the MRIs were not medically necessary at the time when they were performed. Dr. Berke stated that his opinion is based on what is reasonable and customary in the medical field as well as his twenty (20) years of practice as a Chiropractor.

The Plaintiff argued that the assignor’s complaints included radiated

pain from the neck to the head, to the arms and the left lower extremity. ` Dr. Walsh testified that the Spurling test was positive, that there was restricted range of motion and spasm in the cervical spine, that the MRI test is considered as the goal standard to determine injury to the cervical and lumbar spine and therefore, the MRIs were appropriate to determine any possible permanent injury to the spine.

In determining whether services are not medically necessary, the Court is concern with proof demonstrating that the services were not reasonable in light of the patient’s injury, subjective and objective evidence of the patient’s complaints of pain, and the goals of evaluation and treatment of the patient (see, Fifth Avenue Pain Control Center v. Allstate Ins. Co., 196 Misc 2d 801, 766 N.Y.S. 2d 748, [Civ. Ct., Queens Co., 2003]). When a treating physician prescribes necessary medical services, that patient should receive those services promptly without the need of committee or board approval (see, New York Neurology Associates, PC, v. Allstate Insurance Company, 2003 NY Slip Op. 51297( U) citing Tudor v. Metropolitan Life Insurance Co., 143 Misc 2d 180). A review of the history behind No-Fault Law clearly demonstrates a preference for expedient review of claims with an eye towards benefitting the insured (see Fifth Avenue Pain Control Center v. Allstate Ins. Co., supra). Therefore, any uncertainties concerning the reasonableness of the services are to be resolved in favor of coverage (New York Neurology Associates, PC, v. Allstate Insurance Company, supra).

Here, the Court finds that the Defendant’s medical evidence demonstrated that the services were not medically necessary. However, Plaintiff has sufficiently rebutted Defendant’s medical testimony and has demonstrated the medical necessity of its claims. Dr. Walsh testified that based on the assignor’s age, complaints of back and neck pain and the findings of various objective tests, it was medically necessary to perform the MRI to determine if there was structural damage to the assignor’s cervical and lumbar spine.

Accordingly, judgment is entered in favor of the Plaintiff in the amount of $1,791.00 with statutory interest, costs and attorney fees.

This constitutes the Decision and Order of the Court.

Dated: November 27, 2007_____________________________Sylvia G. Ash, J.C.C.

Civil Court of the City of New York, Kings County

044270/04

For Plaintiff: Gary Tsirelman, P.C.

For Defendant: McDonnell & Adels, P.C.

Eileen N. Nadelson, J.

On September 12, 2005, this court granted Plaintiff’s Motion for Summary Judgment on default, awarding Plaintiff $635.00 for first party No-Fault insurance benefits. The judgment was filed and entered on September 16, 2005.

On or about February 13, 2006, Defendant filed a request for a Declaratory Judgment in the Supreme Court to have that court declare that Plaintiff’s assignors had staged the accident subject to the No-Fault claims. Plaintiff was neither named in the Declaratory Judgment nor notified of its pendency.

On March 15, 2006, the Supreme Court granted Defendant’s Declaratory Judgment on the default of the named assignors and issued a stay of all proceedings. The court’s order stated that Defendant had no duty to pay claims for No-Fault benefits to the named assignors and that the accident subject to these claims was to be deemed “intentionally staged fraudulent and therefore uncovered event.”[sic]

On March 30, 2006, Plaintiff, who was never served with a copy of the Supreme Court order, served Defendant with the Notice of Entry of the Civil Court’s order of September 12, [*2]2005. On May 3, 2006, Plaintiff proceeded to enter judgment on the default, and on May 12, 2006, Defendant’s new counsel advised Plaintiff of the Supreme Court stay. On July 27, 2006, the Civil Court clerk entered the Default Judgment against Defendant.

On September 14, 2006, Defendant filed this instant Order to Show Cause to enforce the Supreme Court stay and to vacate the Notice of Entry of the Civil Court Default Judgment. In its papers, Defendant asserts that Plaintiff is collaterally estopped from enforcing the Default Judgment based on the Supreme Court’s Declaratory judgment.

In support of its assertion, Defendant cites Mulverhill v. State, 257 AD2d 735, 682 NYS2d 478 (3d Dept. 1999), which states, in pertinent part:

The doctrine of collateral estoppel…precludes a party from re-litigating in a

subsequent action or proceeding an issue clearly raised in a prior action or

proceeding and decided against that party or those in privity…. Only two

elements need be established; first, that the identical issue was necessarily

decided in the prior action and is decisive in the present one, and, second,

that the party to be precluded had a full and fair opportunity to contest the

prior determination.

Plaintiff opposes Defendant’s arguments. The Declaratory Judgment was brought against Plaintiff’s assignor to have the alleged accident deemed a staged event not covered by the No-Fault law. Plaintiff maintains that it cannot be collaterally estopped to enforce the No-Fault award because Plaintiff was not a party to the Supreme Court action and therefore had no opportunity to defend against Defendant’s assertions.

In analyzing the definition of collateral estoppel as stated above, this court believes that the requisite elements to hold Plaintiff estopped in the instant proceeding may not exist. First, the No-Fault action preceded the Declaratory Judgment action, and therefore the issue is not being re-litigated in a subsequent proceeding. Second, Defendant was not named in or notified of the Declaratory Judgment action, and therefore had no opportunity to contest the determination. And third, even though Plaintiff stands in privity with the persons named in the Declaratory Judgment, that decision was rendered on default of those persons. The court has no information as to the reason for such default, which could, in fact, be lack of service. If such be the case, that would negate the assumption that they were afforded the opportunity to contest and simply chose to decline.

However, regardless of our analysis of the collateral estoppel argument, this court lacks the jurisdiction to review the decision of the Supreme Court. Any argument Defendant may posit with respect to the underlying appropriateness of the Supreme Court decision must be made before that tribunal. At this point this court is obligated to give full effect to the Declaratory Judgment insofar as it stays all proceedings arising out of the alleged accident with respect to the instant assignor. Since the Entry of Judgment was filed after the Declaratory Judgment was [*3]issued, this court must find the Entry of Judgment of the No-Fault Summary Judgment to be a nullity. This is true even though Plaintiff acted innocently and without knowledge of Declaratory Judgement.

Having determined that the Entry of Judgment is a nullity, the court is faced with the fact that the Summary Judgment in favor of Plaintiff still stands since it predates the Declaratory Judgment. As a consequence, should the stay eventually be lifted, the judgment could be entered at that time. Therefore, this court feels compelled in the interests of efficient administration of justice to determine whether Defendant has provided sufficient grounds to vacate its default of the original No-Fault Motion for Summary Judgment.

Section 5015 of the CPLR provides the grounds upon which a default may be vacated. Simply stated, in order for a defaulting party to have the judgment vacated, within one year of entry of judgment, it must provide the court with a reasonable excuse for its default and evidence of a meritorious defense. In the instant case Defendant has provided absolutely no reason why it never appeared for the argument on the Summary Judgment motion. However, the Supreme Court’s decision on the Declaratory Judgment, even though rendered on default, does provide some evidence of a meritorious defense.

In F & C General Contractors Corp. v. Atlantic Mutual Mortgage Corp., 202 AD2d 629, 612 NYS2d 871 (2d Dept. 1994), the Appellate Court stated that “it is well established that, independent of statutory provisions, the court rendering a judgment, in its inherent power and control over its own proceedings, may vacate that judgment where it appears that substantial justice will be served and injustice prevented thereby.” In this case the court did not adhere to the one year statutorily imposed time limit.

Further, in Lane v. Lane, 175 AD2d 103, 572 NYS2d 14 (2d Dept. 1991), the Appellate Court exercised its discretion in permitting a person not even a party to the underlying action to bring a motion to vacate a judgment. The person seeking the vacatur was directly impacted adversely by the judgement he sought to vacate. The court stated that the default judgment was vacated in the interests of justice because “substantial justice will be subserved and injustice prevented.”

With respect to the instant motion, this court feels obligated to exercise its discretion in favor of vacating its initial Default Judgment in the interests of the efficient administration of the judicial system. As a general principle, the court prefers issues to be decided after a full hearing on the merits rather than by default. This is especially true in the instance of No-Fault claims in which assertions of staged accidents have become commonplace. Despite the fact that Defendant did not appear for oral argument on the Summary Judgment motion, the court notes that Defendant did submit opposition papers in which it posited the argument that the accident that was subject of the claim was staged and therefore not a covered event. This court would prefer to err on the side of caution and justice to make sure that fraudulent claims are not given the imprimatur of judicial sanction simply because a party fails to appear for oral argument. [*4]

Therefore, after deliberating on all of the arguments presented by both sides, the court grants Defendant’s motion to the extent of vacating the Entry of Judgment based on the Supreme Court stay, and further vacates its initial Default Judgment because the Supreme Court order, along with the facts alleged in Defendant’s opposition papers to the original motion, raise a question of fact that precludes summary judgment. CPLR 3212, See generally Gilson v. Metropolitan Opera, 5 NY3d 574, 807 NYS2d 558 (2005). In reaching this conclusion, the court is not making a determination of the collateral estoppel effect of the Declaratory Judgment on Plaintiff; rather it is simply denying Plaintiff’s Motion for Summary Judgment because questions of fact exist.

This constitute the decision and order of the court.

Dated: November 23, 2007

__________________________

EILEEN N. NADELSON, J.C.C.

[*1]

Civil Court of the City of New York, Kings County, November 6, 2007

APPEARANCES OF COUNSEL

Edward Shapiro, P.C., Wantagh (Kim Rasin of counsel), for plaintiff. De Martini & Yi, Williston Park (Dana M. Koos of counsel), for defendant.

{**17 Misc 3d at 950} OPINION OF THE COURT

Genine D. Edwards, J.

{**17 Misc 3d at 951}At the outset of this trial to recoup no-fault benefits, the parties stipulated that plaintiff’s prima facie case was established, the defendant’s denial of claim forms were mailed on the date indicated on each denial, the peer review report and the documents reviewed were in evidence, and that the defendant’s witness was an expert. The defendant proffered the testimony of its peer review physician, John P. Russo, D.C.; the plaintiff did not proffer any witnesses.

After the bench trial of this matter, in conjunction with a case with the index number 19685/06, regarding assignor Connie Brady, this court, via correspondence dated August 7, 2007, required the parties to submit posttrial memoranda with respect to plaintiff’s motion in limine regarding the time for scheduling an examination under oath. Plaintiff’s memorandum was due on September 11, 2007 and defendant’s memorandum was due on October 11, 2007. Plaintiff failed to provide a memorandum, therefore the defendant did not provide a memorandum, but instead requested that plaintiff’s motion in limine be denied for failure to comply with this court’s briefing schedule.

The plaintiff orally argues that the defendant’s request for an examination under oath did not toll defendant’s time to pay or deny plaintiff’s claims because the examination under oath was scheduled more than 30 days after receipt of the claim. Plaintiff relies on Insurance Department Regulations (11 NYCRR) § 65-3.5 (d) and S & M Supply v State Farm Mut. Auto. Ins. Co. (4 Misc 3d 130[A], 2004 NY Slip Op 50693[U] [App Term, 9th & 10th Jud Dists 2004]). Defendant counters that Regulations § 65-3.5 (d) only relates to medical examinations, while subdivision (e) instructs as to examinations under oath. The defendant argues that subdivision (e) does not direct a date certain or a specific time to schedule the examination under oath; the subdivision only discusses a reasonable time and place for such examination.

After due deliberation of the evidence and arguments asserted, this court finds that the plaintiff’s contentions are correct. Although case law directly on point could not be found, this court must be guided by the legislative intent to resolve no-fault matters expeditiously. (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co. (90 NY2d 274 [1997]; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2d Dept 2006]; New York Hosp. Med. Ctr. of Queens v Motor Veh. Acc. Indem. Corp., 12 AD3d 429 [2d Dept 2004]; Fair Price Med. Supply [*2]Corp. v Travelers Indem. Co., 9 Misc 3d 76 [App Term,{**17 Misc 3d at 952} 2d & 11th Jud Dists 2005]; Metropolitan Radiological Imaging v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 675 [Civ Ct, Queens County 2005].) Therefore, the defendant was bound to conduct the examinations under oath within the same time period imposed for the medical examinations, to wit, “within 30 calendar days from the date of receipt of the prescribed verification forms.” (11 NYCRR 65-3.5 [d]; Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50526[U] [App Term, 2d & 11th Jud Dists 2005]; S & M Supply, supra.)

However, the plaintiff failed to offer any evidence as to when it received the verification forms. Thus, this court cannot determine whether the examinations were scheduled within the requisite time period. Therefore, plaintiff’s motion is denied.

Since the parties stipulated that plaintiff’s prima facie case was established, the defendant now has the burden of producing the existence of a material issue of fact. The defendant fails at its burden. There is not one scintilla of evidence to prove that the defendant timely mailed the verification requests. (Mega Supply & Billing, Inc. v AIU Ins. Co., 15 Misc 3d 132[A], 2007 NY Slip Op 50687[U] [App Term, 2d & 11th Jud Dists 2007]; Wei Wei Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 14 Misc 3d 144[A], 2007 NY Slip Op 50394[U] [App Term, 2d & 11th Jud Dists 2007]; Oleg Barshay, D.C., P.C. v State Farm Ins. Co., 14 Misc 3d 74 [App Term, 2d & 11th Jud Dists 2006]; Dilon Med. Supply Corp. v State Farm Mut. Auto. Ins. Co., 13 Misc 3d 141[A], 2006 NY Slip Op 52266[U] [App Term, 2d & 11th Jud Dists 2006]; Fair Price Med. Supply Corp. v General Assur. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50256[U] [App Term, 2d & 11th Jud Dists 2005].) Hence, defendant’s time to pay or deny the plaintiff’s claims was never tolled.

Assuming, arguendo, that the defendant met its initial burden of timely mailing, this court finds that the defendant’s expert’s testimony was unpersuasive. Dr. Russo testified that the equipment was not against accepted medical protocol, but he would not have recommended the equipment in these cases. This evidence fails to prove that the durable equipment prescribed to Debra and Connie Brady was not medically necessary.

Accordingly, judgment is in favor of the plaintiff in the amount of $822 for each case, as well as statutory interest and attorney’s fees.

[*1]

Supreme Court, Kings County, September 24, 2007

APPEARANCES OF COUNSEL

Mitchell N. Kaye P.C. (Craig DeMeo of counsel), for Wilda Norgaisse and others, defendants. Picciano & Scahill, P.C. (Mary Ann Candelario-Jones of counsel), for Marie Mirville, defendant. McDonnel & Adels, P.C. (Robert J. Schwerdt of counsel), for plaintiff.

{**17 Misc 3d at 601} OPINION OF THE COURT

Francois A. Rivera, J.

By order to show cause dated May 11, 2007, defendants Wilda Norgaisse, Alonzo Colbert, and Alex Cheure (hereinafter defendant movants)^[FN*] jointly move this court pursuant to CPLR 5003-a for an order directing that plaintiff State Farm Mutual Automobile Insurance Company pay defendant, Wilda Norgaisse, the amount of $25,000 plus interest from September 29, 2005 in accordance with their stipulation of settlement. Plaintiff opposes the order to show cause.

On June 29, 2006, plaintiff commenced the instant action by filing a summons and verified complaint with the Kings County Clerk’s office (KCC). The complaint consists of 68 allegations of fact in support of four causes of action for declaratory judgment. Plaintiff alleges the defendants attempted to defraud plaintiff by staging an accident. As a result of the fraud, plaintiff alleges it is entitled to a declaration that its policy with defendant Marie Mirville is null and void and that it has no duty to provide coverage under the policy for any claims for personal injury, no-fault benefits, or uninsured motorist benefits made by or in behalf of any person or entity.

Defendants Wilda Norgaisse, Alonzo Colbert, and Alex Cheure joined issue by their verified answer, filed on May 11, 2007 with the KCC. The answer contained four affirmative defenses and no counterclaims.

Undisputed Facts

The following facts are undisputed. On or about September 26, 2004, State Farm issued a policy, No. 109 96060-c26-32, for a 1996 Hyundai Sonata to Marie Mirville, 28 Dewitt Place, [*2]No. 1, New Rochelle, New York, 10801; said policy affording minimum liability limits of $25,000/$50,000.

Said policy was purchased by State Farm’s insured, Marie Mirville, from a broker named John W. Goon, 4512 Church Avenue, Brooklyn, New York, 11203. On November 9, 2004, approximately six weeks after the issuance of said policy, State Farm’s insured, Marie Mirville, while operating the insured{**17 Misc 3d at 602} Hyundai, was involved in an automobile collision at Rogers Avenue and Linden Boulevard within the confines of the 67th Precinct in Kings County.

In relation to this collision, a claim was made against the aforesaid policy by Marie Mirville. Said claim lists injuries to the driver of the adverse vehicle, Barry Mamadou, and the claimants, Wilda Norgaisse, and Alonzo Colbert.

On or about September 29, 2005, a release was executed by the claimant Wilda Norgaisse and forwarded to State Farm the following day. Predicated upon this release and prior to the commencement of any action, State Farm issued a check, dated October 18, 2005, in the name of their insured, Marie Mirville, in connection with the underlying loss of November 9, 2004, payable to Wilda Norgaisse, in the amount of $25,000.

On or about October 20, 2005, State Farm stopped payment on the aforesaid check. State Farm alleges that after conducting an investigation, it believes the underlying accident was staged and that it is therefore entitled to disclaim coverage.

Defendants bring this order to show cause requesting that the court order State Farm to honor its settlement agreement and pay Wilda Norgaisse $25,000 plus interest retroactive to September 29, 2005, the date she executed the release.

Motion Papers

Defendant movants’ order to show cause consists of an affirmation of their counsel, Patrick J. McGrath, and seven annexed exhibits. Exhibit A is a New York City Police Department accident report (MV-104AN) of the November 9, 2004 collision. Exhibit B is a release signed by defendant Wilda Norgaisse, releasing and discharging codefendant Marie Mirville from all actions for personal injury related to the November 9, 2004 collision. Exhibit C is a check dated October 18, 2005 from State Farm to Wilda Norgaisse in the amount of $25,000. Exhibits D and E are the summons and complaint and verified answer in an earlier action brought by the movants against Marie Mirville in Kings County Supreme Court under index number 34455/05. Exhibits F and G are the summons, complaint and verified answer of the instant underlying action.

Plaintiff’s affirmation in opposition consists of an affirmation of its counsel, Robert Schwerdt, and 13 annexed exhibits. Exhibit A is Marie Mirville’s policy declarations. Exhibit B is the same MV-104AN annexed in the movants’ paper as exhibit A. Exhibit C is State Farm’s auto claim service record of the{**17 Misc 3d at 603} November 9, 2004 collision. Exhibit D is a copy of the same check annexed in the movants’ papers as exhibit C. Exhibits E and F are affidavits signed on March 24, 2006 from State Farm investigators Grace Peters and Maria Castaneda. Exhibit G is a letter, dated February 14, 2006, from Thomas Mansfield, an investigator for New York Automobile Insurance Plan (NYAIP) to Robert Murray, a coordinator for NYAIP. Exhibit H is an Internet search result using the name Marie Mirville. Exhibit I is an Internet search result using the name Wilda Norgaisse. Exhibits J and K are MV-104ANs of automobile collisions that occurred on August 31, and October 16, 2004. Exhibit L is a letter, dated November 1, 2005, from Peter Crescenti, president of International Claims Service and Investigations, Inc. to Grace [*3]Peters, a State Farm investigator followed by a copy of the MV-104AN of the November 9, 2004 collision. Exhibit M is an MV-104AN of an automobile collision that occurred on December 14, 2004.

Defendant movants submitted an affirmation of their counsel in reply to plaintiff’s opposition papers.

Law and Application

There are two specific statutes dealing with enforcement of agreements that should be analyzed in connection with the instant motion, namely, CPLR 2104 and 5003-a. In simple terms, defendant movants seek specific performance of a settlement agreement via the procedural vehicle of an order to show cause and the substantive law of CPLR 5003-a. Defendant movants’ counsel concedes the inapplicability of CPLR 2104 to their motion but argues that CPLR 5003-a does apply and may be extended to authorize the relief they seek.

CPLR 2104 provides as follows:

“An agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered. With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk.”

The Court of Appeals has made a strong statement that the formalities of CPLR 2104 must be met as a prerequisite to{**17 Misc 3d at 604} judicial enforcement of out-of-court stipulations of settlement (Bonnette v Long Is. Coll. Hosp., 3 NY3d 281 [2004]; see generally, Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C2104:2, at 761-764). Unless a stipulation of settlement complies with CPLR 2104, it is not enforceable as a stipulation. As both plaintiff and defendant movants have stated in their affidavits, there was no pending action at the time of the agreement to settle.

“CPLR 2104 refers to ‘parties’ and ‘matter[s] in an action’ . . . Before the actual service of a summons there is no action, and the disputants have not yet become parties to one. The CPLR itself is intended to ‘govern the procedure in civil judicial proceedings’ . . . Neither the CPLR in general nor section 2104 in particular have application to the conduct of prospective litigants before a proceeding commences” (Cohen v Coleman, 110 Misc 2d 419, 422 [Sup Ct, Queens County 1981]).

As previously mentioned, when State Farm issued a check to Wilda Norgaisse, they were not parties to any action. Defendant movants argue that notwithstanding the strict statutory language which limits applicability of CPLR 5003-a to actions already commenced, the force and intent of the statute is to promote prompt payment of settlement agreements. They contend that this impetus should be sufficient to authorize judicial enforcement of agreements made prior to commencement of an action.

CPLR 5003-a (a) states in relevant part:

“When an action to recover damages has been settled, any settling defendant . . . shall pay all sums due to any settling plaintiff within twenty-one days of tender, by the settling plaintiff to the settling defendant, of a duly executed release and a stipulation discontinuing action executed on behalf of the settling plaintiff.”

Before 1992, the law imposed no general time limit within which the sum agreed to in the settlement of an action had to be paid. Effective June 30 of 1992, CPLR 5003-a enacted a time limit (L 1992, ch 269). The consequence of not paying the stated amount of the settlement on time is that costs and disbursements will now be added to it, along with interest. If the settlement is substantial, the interest can quickly become so, too. Furthermore, the judgment may be entered with no further notice to the defendant. The purpose of CPLR 5003-a is to encourage{**17 Misc 3d at 605} prompt payment of settlements by having defendants face not only the prospect of additional costs by their tardiness but also the entry of judgment against them without an opportunity to be heard (see generally David D. Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR 5003-a, at 121-123).

The court, however, may not stray from the unequivocal statutory constraints expressed in CPLR 5003-a. The CPLR itself, and CPLR 5003-a in particular, applies to actions. It may not be invoked to seek judicial enforcement of an agreement made before an action commences. Therefore CPLR 5003-a and 2104 are inapposite to the instant motion for the exact same reason.

It is noted that the defendant movants did not plead a counterclaim alleging breach of the agreement or demanding specific performance of the agreement. In the absence of a cause of action for breach of contract seeking specific performance, defendant movants may lose the opportunity to ever obtain the remedy they seek. The court does not and will not deem the instant order to show cause to be a summary judgment motion pursuant to CPLR 3212. Defendant movants are not precluded from seeking leave of the court to amend their answer to include such a claim and then moving for summary judgment thereafter. However, judicial enforcement of the stipulation by the instant order to show cause is denied.

Footnotes

Footnote *: Defendant movants’ counsel in the first paragraph of his affirmation states that he is the attorney for Wilda Norgaisse, Alonzo Colbert, and Alex Cheure. However, in the second paragraph he advises that these three defendants as well as Marie Mirville affirm through counsel their support of the motion. The court deems the inference that Marie Mirville is one of the movants to be an error and will disregard it pursuant to CPLR 2001.

Civil Court of the City of New York, Kings County

97323/04

Lila P. Gold, J.

This Order to Show Cause was brought by the defendant in Special 1 in order to clarify the Court’s Decision and Order dated May 16, 2006 granting Plaintiff’s motion for summary judgment.

The Decision and Order dated May 16, 2006 granted judgment for Plaintiff in the amount of $1714.00 plus statutory interest, attorneys’ fees and costs/fees of $65.00.

Defendant made payment to Plaintiff upon receipt of the Order in the amount of $2,460.16 and $557.03. Plaintiff claims that approximately $450.00 of the judgement amount has not been paid. The discrepancy in the amount due to Plaintiff is the based upon the date from which interest, and attorneys’ fees thereon, begin to accrue. It is Defendant’s position that interest should be calculated from the filing of the summons. Plaintiff’s contends that interest should be calculated from thirty (30) days after Defendant received Plaintiff’s bills for no-fault benefits.

This court is asked to determine at what point interest begins to accrue on an untimely denial and/or improper denial under the no-fault regulations. It is plaintiff’s contention that interest on untimely and/or improper denials received by an assignee/medical provider should begin to accrue 30 days after an insurer receives a proper proof of claim. Defendant argues that interest should not accrue until the no-fault claimant requests arbitration or institutes a lawsuit. Plaintiff and Defendant both presented a civil court decision, East Acupuncture, P.C. v. Allstate Ins. Co., 2005 NY Slip Op 25242, 2 (NY Misc. 2005), which was directly on point regarding this issue. Plaintiff based their position on the holding in East Acupuncture, P.C. (Id.) that interest is to accrue from the thirtieth day after submission of a bill if the Defendant issues a late or improper denial. Defendant’s papers respectfully submitted that the court in East Acupuncture, P.C. erred in its decision.

Subsequent to Defendant’s filing of the Order to Show Cause, the Appellate Term of the Supreme Court for the 2nd and 11th Districts reversed the order of the J. Matos entered June 28, 2005. East Acupuncture, P.C. v. Allstate Ins. Co., 2007 NY Slip Op 27109 (NY Misc. 2007). In this decision, the Appellate Term concluded that “the regulations, read as a whole in accordance with the rules of construction, the deference to be accorded the Superintendent’s assertion of intent, and the undesirable consequences of exempting assignees from the limitation imposed by 11 NYCRR 65-3.9 (c), lead to the conclusion that the reference to “applicant” in 11 NYCRR 65-[*2]3.9 (c) includes an eligible injured person’s assignee.” East Acupuncture, P.C. (Id.) Therefore, concluding that interest does not begin to accrue on an untimely denial and/or improper denial under the no-fault regulations until the no-fault claimant requests arbitration or institutes a lawsuit.

Based upon the foregoing, interest did not begin to accrue on this claim until the filing of the summons.

Accordingly, Defendant’s Order to Show Cause is hereby granted. Marshal’s Notice of Levy and Sale is vacated, Defendant has satisfied the underlying order in this matter dated May 16, 2006.

This opinion constitutes the decision of the Court. A copy of this decision will be mailed to the parties.

Dated:May 30, 2007

____________________________

Lila P. Gold, J.C.C.

Civil Court of the City of New York, Kings County

047582/06

Attorney for Plaintiff:

Ilona Finkelshteytn, Esq.

2503 65th Street

Brooklyn, New York 111204

Attorney for Defendant:

Jaffe & Nohavicka

40 Wall Street – 12th Floor

New York, NY 10005

Alice Fisher Rubin, J.

Plaintiff commenced this action against the defendant to recover first party no-fault benefits pursuant to CPLR 5106(a) of the Insurance Law and Regulation of the New York State Insurance Department (11 NYCRR Sect. 65-1.1 et. seq.), for medical services rendered.

Plaintiff moves for summary judgment as a matter of law on the grounds that the claimants assigned their “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, were not denied or paid within 30 days, pursuant to the New York State Insurance Law. Defendant cross-moves for summary judgment and opposes plaintiff’s motion on the grounds that the denial was timely and based upon the

revocation of the assignment by the assignor, Richard Proctor.

The rule governing summary judgment requires the proponent of a summary judgment motion to make a prima facie showing of entitlement to summary judgment as a matter of law, offering sufficient evidence to eliminate any material issues of fact from the case” (Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]; Tortello v. Carlin, 260 AD2d 201 [1st Dept., 1999]). The burden of proof, as well as persuasion rests with the proponent of the summary judgment motion. Once the burden is satisfied, the opponent of the motion must produce sufficient evidence, in admissible form, establishing the existence of a triable issue of fact. [*2]

Pursuant to both the Insurance Law and the regulations promulgated by the Superintendent of Insurance, an insurer is required to either pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim. (See, Insurance Law 5106[a]; 11 NYCRR 65.15[h]). Failure to pay benefits within the 30-day requirement renders the benefits “overdue,” and all overdue payments bear interest at a rate of 2% per month. In addition, the claimant is entitled to recover attorney’s fees where a “valid claim or portion” was denied or overdue. See, Presbyterian Hospital in the City of New York v. Maryland Casualty Company, 90 NY2d 274, 660 N.Y.S.2d 536 (1997).

A plaintiff ordinarily establishes the submission of the claim forms by demonstrating that proof of proper mailing, which gives rise to the presumption that the claim forms were received by the addressee. The presumption may be created either by proof of actual mailing or by proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed. See, Residential Holding Corp., v. Scottsdale Ins. Co., 286 AD2d 679 [2001].

The plaintiff has annexed the affidavit of Kristina Meledina, billing manager, of the assignee, which makes reference to the plaintiff’s standard office mailing practices and/or procedures. The affidavit is sufficient to establish plaintiff’s mailing of its claim forms.

In addition, the court finds that the plaintiff has established its prima facie case, inasmuch as the defendant’s denial of claim forms which are annexed to defendant’s opposition papers as Exhibit “A,” as well as plaintiff’s moving papers, establish the dates of defendant’s receipt of the claim forms. See, PDG Psychological, P.C., (Jones) v. Utica Mut. Ins. Co., 11 Misc 3d 128[A], 2006 NY Slip Op. 50246[U][AT 2nd & 11th Jud. Dists.].

Defendant opposes plaintiff’s motion and cross-moves for summary judgment on the grounds that the denial was timely, as well as the fact that the assignment was revoked by the assignor, Richard Proctor. In support of its cross-motion, the defendant annexes a copy of the letter it received from Richard Proctor, which indicates that he was in fact involved in a car accident on 6/4/05, that he was requesting to drop all claims and that he would be willing to be held responsible for all medical bills.

After careful consideration of the moving papers, supporting documents and opposition thereto, the court finds that plaintiff is entitled to summary judgment as a matter of law.

In order for a provider to receive direct payment from an insurer under the no-fault regulation, the claims must have been assigned to the provider pursuant to an assignment containing language required by the regulation (See, 11 NYCRR 65-3.11[b][2].).

Plaintiff has annexed a copy of assignment of benefits form, which was signed by the assignor, Richard Proctor on June 4, 2005. [See, Exhibit “1” to plaintiff’s moving papers]. The defendant does not argue the validity of the assignment of benefits form, and there is no indication that same was an issue which verification was requested. The applicable rules and regulations are as follows: [*3]

§65.3-11 – Direct Payments

(a) An insurer shall pay benefits for any element of loss, other than death benefits, directly to the applicant or, when appropriate, to the applicants parent or legal guardian or to any person legally responsible for necessities, or, upon assignment by the applicant or any of the aforementioned persons, shall pay benefits directly to providers of health care services as covered under section five thousand one hundred two (a)(1) of this article….Emphasis added.

(2)(d) If an assignment has been furnished an insurer, the assignor or legal representative of the assignor shall not unilaterally revoke the assignment after the services for which the assignment was originally executed were rendered. If the assignment is revoked for services not yet rendered, the assignor or leal representative shall provide written notification to the insurer that the assignee has been notified of the revocation.

The services rendered by plaintiff-provider were rendered on 6/17/05 and 6/27/05, all of which total $304.79. The assignor’s revocation letter which is addressed to defendant is dated 6/25/05. Section 65.3-11 states that the assignor may not unilaterally revoke the assignment after services for which the assignment was originally executed were rendered. Therefore, the assignor could not revoke the assignment as to those services rendered on or before 6/25/07. The regulation also states that if the assignment is revoked for services not yet rendered, the assignor or legal representative shall provide written notification to the insurer that the assignee has been notified of the revocation.

The defendant has not submitted to this court, and the record is void as to a letter from the assignor that the assignee was notified of the revocation. The letter which is annexed to defendant’s cross-motion is a letter which merely states that the assignor is “requesting to drop all claims.” The defendant’s proof is insufficient to establish its prima facie entitlement to summary judgment.

Accordingly, summary judgment is hereby awarded in favor of plaintiff and against defendant in the amount of $304.79, with interest at 2% per month from 7/22/05, costs and attorney’s fees. Defendant’s cross-motion is hereby denied.

This constitutes the order of this Court.

Court Attorney to notify.

Dated: Brooklyn, New York

March ______, 2007

______________________________

Alice Fisher Rubin, J.C.C. [*4]

Civil Court of the City of New York, Kings County

011541/05

Peter P. Sweeney, J.

Plaintiff Primary Psychiatric Health, P.C. commenced this action to recover assigned first-party no-fault benefits for psychological services that it provided to multiple assignors. The parties appeared before the undersigned for trial on November 9, 2006. At that time, the only open claims were for psychological services provided to assignors Everald Poole and Terry Johnson.

Before the trial began, the parties stipulated to the elements of plaintiff’s prima facie case. Defendant’s sole defense to the claims was that there was “no coverage at all” under its policy because neither of plaintiff’s assignors suffered a psychological injury as a result of the underlying motor-vehicle accident. Citing Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195 [1997], counsel for the defendant maintained that this defense is non-waivable and not subject to the 30 day preclusion rule.

Plaintiff rested without calling any witnesses. Defendant called two witnesses, Dr. Michael Rosenfeld and Dr. Samuel M. Rock.

Dr. Rosenfeld testified that he performed an independent psychological examination of Everland Poole on February 25, 2003 at defendant’s request. As part of his examination, he interviewed Mr. Poole to determine the nature and onset of his psychological complaints. Dr. Rosenfeld maintained that such an interview is standard practice and an essential component of a psychological examination. He further testified that he relied upon the information Mr. Poole gave him during the interview in forming his professional opinion and that psychologists routinely rely upon such information in forming professional opinions.

Plaintiff’s counsel objected and maintained that anything said by Mr. Poole during the interview was hearsay. He further maintained that since no evidence was presented demonstrating that the information provided by Mr. Poole was reliable, Dr. Rosenfeld could not rely upon such information as a basis for his opinion.

The court reserved decision and permitted Dr. Rosenfeld to testify over the objection. The parties were directed to brief the issue and the court agreed that it would consider striking Dr. Rosenfeld’s opinion testimony if plaintiff prevailed on the objection.

Dr. Rosenfeld testified that when he asked Mr. Poole to describe his psychological [*2]complaints, Mr. Poole gave him no indication that he had suffered a psychological injury. He made no complaints of suffering from any type of psychological symptomology.

Dr. Rosenfeld testified he proceed to conduct a full psychological examination of Mr. Poole and that the examination was in all respects “unremarkable.” Based upon his examination, he opined that Mr. Poole did not sustain a psychological injury as a result of the accident.

Dr. Rock was the next to testify. Dr. Rock performed an independent psychological examination of Terry Johnson at defendant’s request on April 2, 2003. He also conducted an interview of his subject as part of his examination. Plaintiff’s counsel again objected and maintained that Dr. Rock should not be allowed to base his opinion on the information he obtained from Mr. Johnson during the interview because such information was hearsay and no evidence was presented demonstrating that the information was reliable. The court again reserved decision and allowed Dr. Rock to testify over objection.

Dr. Rock testified that Mr. Johnson told him, in sum and substance, that he had no psychological complaints whatsoever following the accident. He further testified that all other aspects of his examination were within normal limits. He opined that Mr. Johnson did not suffer a psychological injury as a result of the accident.

Upon reviewing and evaluating the evidence and the memorandums of law submitted by the parties, and having had the opportunity to assess the credibility of the witnesses, the Court makes the following findings of fact and conclusions of law.

Discussion:

The covering language contained in the Mandatory Personal Injury Protection Endorsement (PIP Endorsement), obligated the defendant to “pay first-party benefits to reimburse for basic economic loss sustained by an eligible injured person on account of personal injuries caused by an accident arising out of the use or operation of a motor vehicle or a motorcycle during the policy period and within the United States of America, its territories or possessions, or Canada” (11 NYCRR 65-1.1 [emphasis added] ). While an insurer is generally precluded from raising any defense to a claim for first-party no-fault benefits where the claim was not denied within 30 days of its receipt, as here, (Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 [1997], failure to deny a claim within 30 days does not preclude an insurer from defending a claim “on a strict lack of coverage ground” (Central General Hosp. v. Chubb Group of Ins. Companies, 90 NY2d 195, 198 [1997] ). Stated differently, “the preclusion remedy does not apply to a defense of no coverage at all” (90 NY2d at 202).

Since the coverage provided by the PIP Endorsement is for “personal injuries caused by an accident arising out of the use or operation of a motor vehicle or motorcycle“, if defendant is correct in its assertion that Mr. Pool and Mr. Johnson did not sustain a psychological injury as a result of the accident, the court agrees that there would be “no coverage at all” for the claims. Defendant did not have to establish that it timely denied the claims to assert this defense.

In the instant case, after plaintiff’s prima facie case was established, defendant’s experts, Dr. Rosenfeld and Dr. Rock, presented unrebutted testimony that neither of Mr. Poole or Mr. Johnson sustained a psychological injury as a result of the underlying motor vehicle accident. The court fully credits the opinions of both psychologists and finds that there is no coverage for the claims.

The court rejects plaintiff’s contention that Dr. Rosenfeld and Dr. Rock should have been [*3]precluded from basing their professional opinions, in part, on the information obtained from plaintiff’s assignors during the independent psychological examinations. While it is true that an expert witness must generally rely on facts “in the record or personally known to the witness”(Cassano v. Hagstrom, 5 NY2d 643, 646 [1959], rearg. denied 6 NY2d 882 [1959] ), “[u]nder the professional reliability exception, material not in evidence may be used to formulate an expert’s opinion provided that the material not in evidence is of the kind accepted in the profession as a basis in forming an opinion, and the material not in evidence is accompanied by evidence establishing its reliability” (Scanga v. Family Practice Associates of Rockland, P.C., 27 AD3d 547, 548 [2nd Dep’t 2006]; citing, Hambsch v. New York City Tr. Auth., 63 NY2d 723, 726 [1984]; People v. Sugden, 35 NY2d 453, 460-461 [1974] ; Wagman v. Bradshaw, 292 AD2d 84, 85 [2nd Dep’t 2002] ). Once the predicates of the exception have been met,” hearsay testimony given by [an] expert . . . for the limited purpose of informing the [fact finder] of the basis of the expert’s opinion and not for the truth of the matters related’ is admissible” (People v Wright, 266 AD2d 246, 247 [1999], lv denied 94 NY2d 831 [1999], quoting People v Campbell, 197 AD2d 930, 932-933 [1993], lv denied 83 NY2d 850 [1994]).

Defendant demonstrated that the information provided by plaintiff’s assignors during their psychological examinations is of the kind of out-of-court material accepted in the field of psychology as a basis in forming a professional opinion. Indeed, plaintiff concedes this point. Plaintiff correctly asserts, however, that no evidence was presented demonstrating that the information provided by plaintiff’s was reliable.

In Home Care Ortho. Med. Supply, Inc. v American Manufactures Mut. Ins. Co., 2007 NY Slip Op 50302(U) [App. Term, First Dep’t 2006], the Appellate Term held that the lower court erred in precluding defendant’s expert “from testifying because his opinion [was] based, at least in part, on his review of the assignors’ medical records.” The court reasoned that “[p]laintiff may not be heard to challenge the reliability of the assignors’ medical records and reports, which, in response to defendant’s verification requests, were affirmatively relied upon by plaintiff as proof of claim” (id.); see also, Cross Continental Medical, P.C. v. Allstate Ins. Co., 822 NYS2d 356, 357 {13 Misc 3d 10} [App. Term, First Dep’t 2006] ).

In this court’s view, the holding in Home Care Ortho. Med. Supply, Inc. is consistent with the legislative policy reflected in the numerous provisions of the No-Fault Law which provide for the prompt verification and disposition of claims (Motor Vehicle Acc. Indemnification Corp. v. Aetna Cas. & Sur. Co., 89 NY2d 214, 222 [1996]; Presbyterian Hosp. in City of New York v. Maryland Cas. Co., 90 NY2d 274, 281[1997]; Dermatossian v. New York City Tr. Auth., 67 NY2d 219, 224-225 [1986]; Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 827 NYS2d 217, 220 {35 AD3d 720} [2nd Dep’t 2006] ).

In this case, the interviews conducted by defendant’s examining psychologists were essential components of the psychological examinations defendant had requested as additional verification of the claims. There is no basis to treat the information that was obtained from these interviews differently from information that defendant had obtained from the medical reports and records in Home Care Ortho. Med. Supply, Inc. In both cases, the information was obtained by the defendant in response to a verification request. The court therefore holds that the plaintiff in this case cannot challenge the reliability of the information obtained by defendant’s examining [*4]psychologists during the interviews.

In Home Care Ortho. Med. Supply, Inc., it was the plaintiff that provided the verification whereas in this case, it plaintiff’s assignors provided the verification. This distinction, in the court’s view, is irrelevant. Certainly, if plaintiff’s assignors were prosecuting this action, under Home Care Ortho. Med. Supply, Inc., they could not challenge the reliability of any verification they provided to the defendant in response to a verification request. Since an assignee “stands in the shoes” of an assignor and acquires no greater rights than its assignor (Long Island Radiology v. Allstate Ins. Co., 36 AD3d 763 [2nd Dep’t 2007]; Arena Const. Co. v. Sackaris & Sons, 282 AD2d 489 [2nd Dep’t 2007] ), logic dictates that an assignee should be estopped from challenging the reliability of verification provided by its assignor. This is especially true given the fact that the No-Fault regulations entitle insurers to obtain verification directly from eligible injured persons (11 NYCRR 65-3.5( c), 11 NYCRR 65-3.5(d); 11 NYCRR 65-1.1).

For all of the above reasons, it is hereby

ORDERED that judgment be entered in favor of the defendant dismissing the claims.

This constitutes the decision and order of the court.

Dated:March 27, 2007________________________________

PETER P. SWEENEY

Civil Court Judge

[*1]

Civil Court of the City of New York, Kings County, March 7, 2007

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City, for defendant. Gary Tsirelman, P.C., Brooklyn, for plaintiff.

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 5106 (a) of the Insurance Law and Regulations of the New York State Insurance Department (11 NYCRR 65-1.1 et seq.), for medical services rendered.

Defendant moves for an order granting summary judgment in favor of defendant based on plaintiff’s attempt to relitigate a claim which was previously dismissed by the court, and imposition of sanctions against plaintiff’s counsel for having engaged in frivolous conduct.

Plaintiff opposes the motion on the grounds that the prior action was dismissed due to plaintiff’s failure to comply with discovery demands.

The plaintiff commenced this action against the defendant to recover first-party no-fault benefits pursuant to section 5106 (a) of the Insurance Law and the regulations, in the amount of $800 for acupuncture treatment allegedly rendered to the assignor, Cindy Hall, as a result of an automobile accident which occurred on July 27, 2002. Prior to this action, the plaintiff commenced an action against defendant State Farm on behalf of the same assignor, Cindy Hall, for the same services as indicated in this action.

In the prior action, after service of the summons and complaint, issue was joined and discovery demands were made on or about January 30, 2003. On May 10, 2004, the plaintiff served a notice of trial. The defendant moved to strike the notice of trial on the grounds that discovery had not been completed. Thereafter on June 28, 2004, the defendant served a supplemental demand for discovery. On June 29, 2004, the parties appeared before the Honorable Ellen Spodek, and the attorneys entered into a stipulation which marked the case off the trial calendar, and required plaintiff to provide all discovery on or before July 29, 2004. Due to plaintiff’s failure to comply with the discovery demands as stipulated to, the defendant moved for [*2]an order to dismiss plaintiff’s complaint for failure to comply. On May 10, 2005, the parties appeared before the Honorable Robin Garson. After oral argument on the motion, the court granted defendant’s order to show cause, and dismissed the action due to plaintiff’s failure to comply with the stipulation requiring plaintiff to comply with all outstanding discovery.

Thereafter, the plaintiff commenced the action which is the subject of defendant’s motion to dismiss, pursuant to CPLR 3212. Defendant argues that the plaintiff is attempting to relitigate the same bills which were the subject of the previous lawsuit. Defendant further argues that the bills in question do not involve different dates of service than the previous bills submitted under the prior action, and therefore plaintiff is estopped from relitigating the bills in issue due to the dismissal of plaintiff’s prior action.

In opposition to defendant’s motion to dismiss, the plaintiff argues that pursuant to CPLR 205, the plaintiff can recommence the action within six months after termination. Plaintiff argues that Judge Garson’s dismissal of the prior case limited her holding to the discovery stipulation only.

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

The plaintiff timely commenced the instant action against the defendant seeking the same relief that it sought in the prior action.

“CPLR 205. Termination of action” states as follows:

“(a) New action by plaintiff. If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if the plaintiff dies, and the cause of action survives, his or her executor or administrator, may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period.”

However, this court disagrees with plaintiff’s argument that it is not precluded from commencing a new action under a new index number. The complaint was dismissed after oral argument of defendant’s motion to dismiss, on the grounds that the plaintiff failed to comply with discovery demands as per a stipulation signed by both attorneys. Plaintiff’s attempt to now argue that the discovery demands were unduly cumbersome and burdensome, and therefore plaintiff was unable to comply with said demands is too late. The arguments, as conceded to by plaintiff [*3]should have been made before the judge hearing oral argument on the motion to dismiss. Furthermore, plaintiff could have moved to reargue the motion and/or appeal the court’s decision.

In Andrea v Arnone, Hedin, Casker, Kennedy & Drake, Architects & Landscape Architects, P.C. (Habiterra Assoc.) (5 NY3d 514, 520 [2005]), the Court of Appeals held that the “neglect to prosecute” exception in CPLR 205 (a) applies not only where the dismissal of the prior action is for “[w]ant of prosecution pursuant to CPLR 3216, but whenever neglect to prosecute is in fact the basis for dismissal” (internal quotation marks omitted). The plaintiff failed to comply with discovery demands, and after repeated demands for the outstanding discovery, as well as failure to comply with a stipulation, defendant moved to dismiss the complaint, which was granted by the court.

The purpose of excluding actions dismissed for neglect to prosecute from those that can be, in substance, revived by a new filing under CPLR 205 (a) was to assure that a dismissal for neglect to prosecute would be a serious sanction, not just a bump in the road. (See, Andrea v Arnone, Hedin, Casker, Kennedy & Drake, supra; Carven Assoc. v American Home Assur. Corp., 84 NY2d 927 [1994]; Flans v Federal Ins. Co., 43 NY2d 881 [1978].)

Accordingly, defendant’s motion to dismiss is hereby granted; the complaint is dismissed in its entirety, without an imposition of sanctions.