Civil Court of the City of New York, Kings County

KCV29614/2005

Plaintiff by Baker, Sanders, Barshay, Grosssman, Fass Muhlstock & Newwirth

Defendant by Nicolini, Paradise, Ferretti & Sabella

Richard Velasquez, J.

In this action, plaintiff, Universal Open MRI of the Bronx, PC, seeks to recover first-party no-fault benefits in the amount of $1,842.26 from defendant State Farm Mutual Auto Ins. for health care services rendered to its assignor(s) who were allegedly injured in an automobile accident. Defendant denied plaintiff’s claims on the basis that the alleged injuries “do not arise out of an insured incident.” The trial was held before this Court on February 14, 2006. At the start of the trial, the parties stipulated to plaintiff’s prima facie case and defendant’s denial based on the ground of lack of coverage due to no true accident. Defendant State Farm presented one witness, State Farm Special Investigative Unit (SIU) investigator Don Willsey. Plaintiff did not present any witnesses.

The trial then proceeded on defendant’s defense of lack of coverage. SIU investigator Willsey testified that after receiving the file on Mr. Julio Garcia, assignor herein, he performed a preliminary investigation of the claim and tried to contact the parties involved in the alleged accident, including the insured in this case and the assignor, Mr. Garcia, with no success. In addition, he testified that as part of his preliminary investigation, he reviewed the police accident report and intended to interview the police officer who arrived at the scene, but did not as someone from his office had previously interviewed said officer. Mr. Willsey also testified that as part of his investigation, he obtained information from the National Insurance Crime Bureau (NICB) which serves as a clearing house for data from insurance companies concerning claims made against insurance policies, and State Farm’s Frequency Tracking System, an internal database of all claims made against State Farm policies. As for State Farm’s Frequency Tracking System, he testified that data from prior losses may be retrieved using an individual’s name, social security number, address, date of birth, and vehicle identification number (VIN), to determine any connection between the parties involved in the current claim with prior claims against State Farm. His research concluded that: “the owner of claimant vehicle had a prior claim history; owner and driver of the vehicle were not insured.”

Plaintiff objected to defendant offering this information into evidence and, after voir dire of Mr. Willsey, moved to preclude this testimony on several grounds including [*2]hearsay. This Court ruled in plaintiff’s favor on the hearsay objection to the admittance into evidence of Frequency Tracking System results. Mr. Willsey further testified that he received the file for investigation “shortly” after the alleged accident, sometime in September or October of 2002. When cross-examined about the gap in time (approximately four months) between the incident in question and his receipt of the Garcia file, he stated that a prior investigator had been assigned to the case.

Mr. Willsey also testified that he attempted to interview the parties involved in the incident, but was unable to do so. Having had no success in interviewing the parties, Mr. Willsey recommended to his attorney that Examinations Under Oath (EUO) be scheduled for the parties involved in the incident. According to Mr. Willsey, none of the parties involved in the alleged accident appeared for EUO’s.

Based on all of these factors together with the fact that the insured’s vehicle was not at the accident scene at the time the police arrived, Mr. Willsey determined that the accident was staged and therefore it was not a covered accident. Thus, he recommended the subject claim be denied.

DISCUSSION

Generally, an insured seeking to recover for a loss under an insurance policy has the burden of proving that a loss occurred and also that the loss was a covered event within the terms of the policy. A.B. Medical Services, PLLC v. State Farm Mutual Automobile Ins. Co., 7 Misc 3d 822, 795 NYS2d 843 [Civ. Ct. Kings County 2005] citing Gongolewski v. Travelers Ins. Co., 252 AD2d 569, 675 NYS2d 299 [2d Dept. 1998]. Whatever the risk or loss covered, it has long been the insured’s burden to prove coverage under the policy. A.B. Medical Services, id. at 825. In an action for first-party no-fault benefits, an insured’s proof is relatively simple a properly completed claim by the provider of medical services or supplies makes out a prima facie showing of coverage. Amaze Medical Supply Inc., v. Eagle Ins. Co., 2 Misc 3d 128 (A), 754 NYS2d 918, 2003 NY Slip. Op. 51701[U][App. Term, 2d and 11th Jud. Dists.]. As in the related area of “medical necessity”, the plaintiff’s prima facie showing establishes a “presumption of coverage”. A.B. Medical Services, id at 825. Once the plaintiff makes a prima facie showing, the burden of explanation or of “going forward with the case” falls upon the defendant. Mount Sinai Hosp. V. Triboro, 263 AD2d 11, 699 NYS2d 77 [2d Dept., 1999].

No-fault insurance policies cover only vehicular accidents. A deliberate collision is not a covered accident. State Farm Mutual Automobile Ins. Co. V. Laguerre, 305 AD2nd490, 759 NYS2nd 531 [2nd Dept.2003]; Allstate Insurance Co.v. Massre, 14 AD3rd 610, 789 NYS2d 206 [2nd Dept. 2005]. When a collision is an intentional act, not an accident, there is no coverage “regardless of whether the intentional collision was motivated by fraud or malice.” Government Employees Ins. Co. v. Shaulskaya, 302 AD2nd 522, 523, 756 NYS2nd 79 [2nd Dept. 2003].

Standard of Proof in Summary Judgment Context

The law is well settled in a no-fault summary judgment context that the insurer need only demonstrate to the court that it had a “founded belief” that the alleged accident was intentionally caused in order to survive a summary judgment motion by plaintiff-provider. Amaze Medical Supply Inc. V. Lumbermens Mutual Cas. Co., 10 Misc 3d 127(A), 809 NYS2d 480 (Table), 2005 WL 3115289 citing Central Gen. Hosp. V. Chubb Group of Ins. Cos., 90 NYS2d 195, 199 (1997). However, defendant-insurer’s founded belief is usually [*3]not enough to obtain judgment on its own. To win on its summary judgment motion, defendant must make a prima facie “lack of coverage” showing and if plaintiff does not come forward to rebut defendant-insurer wins. Central Gen. Hosp., id at 199; A.B.Medical Services, PLLC, supra at 825. In addition, this Court recognizes that for the purposes of summary judgment motions, parties are permitted, within limits, to rely on otherwise inadmissible information. Zuilkowski v. Sentry Insurance A Mutual Company, 114 AD2d 453, 494 NYS2d 363 [1985]. However, what is admissible at this stage of litigation will not necessarily be admissible at trial.

Standard of Proof at Trial

At trial, the question remains just how much “admissible evidence” the defendant-insurer must produce to satisfy its evidentiary burden where nonpayment of a no-fault claim is based on a collision being a non-covered event. The second question concerning this Court is whether the elements of fraud must be proved where a claim has been denied based on 11 NYCRR 65-3.8 (e)(2) “circumstances of the accident not covered by no-fault”.

There have been several recent well-reasoned decisions regarding the standards of proof for “fraud” or “no true accident”, as well as a discussion of whether allegations of fraud are necessary in the context of a no-fault denial based on “no true accident”. Three of these decisions have been particularly helpful in analyzing the complexities involved in no-fault cases where the defense against payment of claims is lack of coverage based on allegations of fraud or that the collision was intentionally caused: A.B. Medical Services, PLLC v. State Farm Mutual Automobile Ins. Co., supra ; JSI Expert Service v. Liberty Mutual Ins. Co., 7 Misc 3d 1009(A), 801 NYS2d 235 [Civ. Ct., Kings County 2005]; and V.S. Medical Services, P.C. v. Allstate Insurance Company, 11 Misc 3d 334, 2006 WL 16289 [Civ. Ct., Kings County 2006]. After thorough review and consideration of each of these opinions, this Court has decided that it must determine first whether the tort of common law fraud must be proved where a denial is based on 11 NYCRR§65-3.8(e)(2) “circumstance of the accident not covered by no-fault”; and second, the standard of proof for a staged accident, or “no true accident”.

Should Fraud be Litigated in a No-Fault Trial?

In JSI Expert Service v. Liberty Mutual Ins. Co., supra , the defense raised for nonpayment of claims was fraud.^[FN1] There, citing Rudman v. Cowles Communications, 30 NY2d 1 (1972), Judge Bailey-Schiffman found that “proof of fraud must be made by clear and convincing evidence.” Indeed, the standard of proof for the tort of common law fraud has long been viewed as requiring proof beyond a preponderance of the evidence as will be discussed below. This Court is concerned, however, that proving the elements of common law fraud by clear and convincing evidence where nonpayment of a no-fault claim is based on a collision being an intentional act, is not what 11 NYCRR §65-3.8 envisioned.

The intent of the no-fault law as found at 70A NY Jur.2d Insurance § 1774 (updated March 2006) is as follows:

The purposes of this statute were to remove a vast majority of claims arising from [*4]vehicular accidents from the sphere of common-law tort litigation, and to establish a quick, sure and efficient system for obtaining compensation for economic loss suffered as a result of such accidents. [emphasis added].

Our Court of Appeals has upheld the constitutionality of the No-Fault law and in so doing stated, inter alia: …”it was concluded in all reports that the tort system was plagued by long delays in claim payment. The tort system places an inordinate strain on the State’s court systems and judicial resources. The No-Fault law sought to cure these ills by guaranteeing prompt and full compensation for economic losses…and to reduce the long delays experienced under judicial procedures and to lessen the burden on our State Courts.” Montgomery v Daniels, 38 NY2d 41, 378 NYS2d 1, 340 NE2d 444 [1975].

A review of the elements of the tort of common law fraud demonstrates why proving fraud by clear and convincing evidence in a no-fault trial is inconsistent with the purposes of No-Fault law, and why it is not necessary to allege fraud as a defense for refusal to pay a no-fault claim.

To sustain a cause of action based on actual fraud, the plaintiff had to establish that (1) the defendant made material representations that were false, (2) the defendant knew the representations were false and made them with the intent to deceive the plaintiff, (3) the plaintiff justifiably relied on the defendant’s representations, and (4) the plaintiff was injured as a result of the defendant’s representations. Cerbanono v.Price, 7 AD3d 479, 775 NYS2d 585 [2d Dept. 2004]. (See also, Giurdanella v. Giurdanella, 226 AD2d 342, 640 NYS2d 211; Matter of Garvin, 210 AD2d 332, 620 NYS2d 400).

Clearly, proving these elements (and proving them by clear and convincing evidence) will consume a significant amount of trial time and could be very costly.

Clear and Convincing Standard vs. Preponderance of the Credible Evidence

While common law fraud must be proved by clear and convincing evidence, as Judge Bailey-Schiffman found in JSI Expert Service, the standard common to most civil cases is a preponderance of the credible evidence. What, then, distinguishes civil cases where a preponderance of the credible evidence standard of proof is sufficient, and those where the issue to be decided must meet the clear and convincing standard?

The case of In the Matter of Father Philip K. Eichner v. Dillon, 73 AD2d 431, 426 NYS2d 517 [2d Dept. 1980] sheds light on the distinction between the two types of civil cases. In Eichner, a priest brought a proceeding to have a religious brother (in a chronic vegetative state) declared incompetent, and to obtain judicial approval for withdrawal of extraordinary life-sustaining measure consisting of a respirator. The Eichner court grappled with the standard of proof necessary to determine whether the Priest, Eichner, had the requisite legal authority to make the decision that life-support should be removed from the religious brother. There the court reasoned:

[W]e cannot abide by the suggestion that a preponderance of the credible evidence’ standard, common to most civil proceedings, would be sufficient here. Rather we elect the [*5]middle tier standard of proof, that of clear and convincing evidence. …[T]his standard is appropriate where the interests at stake are deemed to be more substantial than mere loss of money.’ Similarly, the clear, unequivocal and convincing standard of proof [is used] to protect particularly important individual interests in various civil cases. Id. at 523.

Eichner cites to examples of cases where “the clear and convincing evidence” standard is utilized only where the “interests at stake” are deemed more significant than ordinary”: reformation of a contract (Ross v. Food Specialities, 6 NY2d 336, 189 NYS2d 857, 160 NE2d 618); a filiation proceeding (Commissioner of Public Welfare of City of NY v. Ryan, 238 App. Div. 607, 265 NYS 286); an action based upon a claim against a deceased, (Matter of Cady, 211 App. Div. 373, 207 NYS 385); in deportation proceedings (Woodby v. Immigration and Naturalization Serv., 385 US 278, 87 S.Ct. 483, 17 L.Ed.2d 362); and for a claim of fraud (United States v. American Bell Tel. Co., 167 US 2224, 17 S.Ct. 809, 42 L.Ed. 144).

No-Fault Regulation 11NYCRR 65-3.8(e)(2)

No-fault regulations provide for a denial of a claim for the following reasons:

(1) no coverage on the date of accident;

(2) circumstances of the accident not covered by no-fault; or

(3) statutory exclusions pursuant to section 5103(b) of the insurance law. Id. at 11 NYCRR 65-3.8 (e).(emphasis added)

If an insurer has a “founded belief” that the alleged accident was not a true accident, it can deny the claim based on 11 NYCRR 65-3.8(e)(2). At trial, the insurer must show, through admissible evidence, facts and circumstances leading a trier of fact to conclude that more likely than not, the circumstances of the collision are not covered by no-fault. If this threshold is reached, the burden shifts to the plaintiff to rebut the defendant’s case. Nowhere in the no-fault statute or regulations is there a requirement that in order to prevail on denial of a claim pursuant to 11 NYCRR 65-3.8(e), common law fraud must be proved. In fact, as Judge Jack Battaglia in A.B. Medical Services, PLLC v. State Farm Mutual Automobile Insurance company, supra , and Judge Arlene Bluth in V.S. Medical Services, P.C. v. Allstate Insurance Company, supra , point out: “Damages resulting from a deliberate collision are not covered by no-fault insurance regardless of the existence of fraudulent motivation.” V.S. Medical Services, Id. At 3. Judge Bluth goes on to state: “Put another way, the no-fault policy only covers accidents; it does not cover deliberate incidents. It does not matter whether the incident was a deliberate mugging, an attempted murder, a product of road rage, or a cold calculated scheme to defraud the insurance company. If it was deliberate, it is not a covered incident under the no-fault policy.”

While our appellate courts commonly invoke the term “fraud” when discussing the defense of “staged accident”, it is a “lack of coverage” they are discussing not necessarily fraud. It seems to make no difference why the incident occurred. If it were made to happen, then it is not an accident and therefore not a covered accident. See State Farm V. Laguerre, 305 AD2d 490, 491, 759 NYS2d 531 [2d Dept. 2003].

In the instant matter, defendant contends that the evidentiary burden for defeating a summary judgment motion “founded belief” (incident was staged) should apply in a trial context. This Court disagrees. As mentioned earlier, to win on its own summary [*6]judgment motion, defendant must make a prima facie “lack of coverage” showing and if plaintiff does not go forward to rebut, then summary judgment is granted to defendant-insurer. Central General Hospital v. Chubb Group of Ins. Co.,90 NY2d 195, 199 [1997].. Moreover, this court is concerned that “fact or founded belief” as the evidentiary burden in no true accident cases contravenes the intent of the No-Fault insurance law. Such a minimal showing would allow routine denial of claims by insurers and open the floodgates to permit insurers who have not timely denied a claim to use a “no true accident” defense (understanding that the standard of proof is minimal) and defeat the primary purposes of the no fault law.

As far as the shifting burdens of proof in a no-fault staged accident or intentional collision case, Judge Jack Battaglia provides an excellent analysis in A.B. Medical Services. The bottom line is that in a “staged accident” case, the defendant has the burden of “coming forward” with proof in admissible form that a staged accident occurred; The plaintiff bears the burden of persuasion and rebutting defendant’s evidence, or the plaintiff “succumbs”. This Court finds that the standard of proof is “preponderance of the evidence”, often defined as the existence of the “fact” being more probable than its non-existence. After all the evidence has been presented, the trier of fact must decide whether the evidence preponderates in favor of the plaintiff or defendant.

CONCLUSION

In this trial, defendant failed to come forward with proof in “admissible form” to establish the “fact” or the evidentiary “foundation” to buttress its belief that the injuries alleged by the assignor did not arise from an insured accident. Defendant failed to adduce sufficient admissible evidence to rebut the presumption of coverage that attaches to the plaintiff’s properly completed claim form.

While SUI investigator Willsey’s testimony is entitled to some weight (see Travelers Indemnity Co. V. Morales, 188 AD2d 350, 351, 591 NYS2d 27 [1st. Dept. 1992], it is clear to this Court that much of the information that SUI investigator Willsey relied upon in his testimony was hearsay and was not admissible due to the lack of appropriate foundation. The defendant sought to introduce information obtained from the National Insurance Crime Bureau (NICB) in establishing its case of intentional collision, but failed to lay any foundation or make any showing that would support the admissibility of this information.

In addition, Mr. Willsey testified that as part of his investigation, he utilized State Farm’s Frequency Tracking System to determine any prior loss history of any of the parties and/or any of the vehicles involved in the present incident. His search revealed that the owner of claimant vehicle had a prior claim history with State Farm and that the owner and driver were not insured. Again, this Court concluded that without the requisite foundation, this information is inadmissible hearsay.

Defendant also asserts an inference of intentional collision should be made by the alleged failure to cooperate by the assignor and /or other parties involved in this incident and the fact that the insured vehicle was not at the scene of the accident at the time police arrived. The fact that the vehicle was not at the scene of the accident is not determinative of anything. Even though defendant-insurer may wish to use failure to cooperate as one indicia of “no true accident” instead of as a defense, it did not offer any admissible evidence as to plaintiff’s assignors’ failure to cooperate.

Based upon the testimony at trial and the acts discussed above, this Court [*7]concludes that the defendant has failed to come forward with evidence of a staged accident or that the loss giving rise to this action was intentional, and thus the burden of persuasion was never shifted to plaintiff. Accordingly, judgment for plaintiff in the sum of $1,842.26, together with statutory interest and attorney’s fees. This constitutes the decision and order of the Court.

Dated: May 11, 2006 ________________________________

RICHARD VELASQUEZ, J.C.C.

Footnotes

Footnote 1:“Defendant denied plaintiff’s claims on the basis that [w]e do not provide coverage for any insured’ who has made fraudulent statements or engaged in fraudulent conduct in connection with the accident or loss for which coverage is sought under this policy.'” JSI Expert Service, id at 237.

Civil Court of the City of New York, Kings County

41550/05

Delores J. Thomas, J.

In this action brought to recover no-fault benefits, plaintiff moves for summary judgment in the sum of $3,383.38 plus statutory interest together with statutory attorney’s fees.

The No-Fault Law provides for payments for medical services provided to a person injured as a result of an accident arising out of the use or operation of a motor vehicle. To recover first-party benefits, a claimant must demonstrate a prima facie entitlement to summary judgment by setting forth proof that it submitted a claim, the fact and amount of losses sustained, and that payment of benefits is overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept]).

In support of its motion, plaintiff submits an assignment of benefits form, denial of claim forms, and an affidavit from defendant’s billing manager, Yelena Medvedik, stating that the [*2]carrier issued denials more than thirty days after receipt of the bills. The court finds plaintiff has established its prima facie entitlement to summary judgment. Therefore, the burden shifts to defendant to demonstrate a triable issue of fact to withstand summary judgment (see Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]).

An untimely denial precludes defendant from interposing most defenses including the defense of lack of medical necessity (Amaze Med. Supply, Inc. v. Eagle Insurance Co., 2 Misc 3d 139 [A], 2004 NY Slip Op 050279 [U] [App Term, 2d & 11th Jud Dists]). However, an untimely denial does not preclude a defendant from asserting the defense that the injuries do not arise out of a covered accident or a defense premised on staged accident fraud (see Central General Hosp. v. Chubb Group of Insurance Cos., 90 NY2d 195 [1997]; Matter of Metro Med. Diagnostics v. Eagle Insurance Co., 293 AD2d 751 [2002]). To withstand summary judgment, the insurer must come forward with proof in admissible form to establish the basis for its belief that there is no coverage (see Mount Sinai Hospital v. Triboro Coach, Inc., 263 AD2d 11 [2d Dept 1999]). A “founded belief” cannot be based upon unsubstantiated hypotheses and supposition (see A.B. Medical Services v. Eagle Ins. Co., 3 Misc 3d 8 [App Term, 2d & 11th Jud Dists 2003]).

The denial of claim forms state as the reason for denial: “Our investigation, including the results of a low impact study conducted by this company, has shown that the injuries you allege are not related to the motor vehicle accident of March 23, 2003, and are inconsistent with a collision of this nature. Therefore, our company hereby denies your entire no-fault claim based on the fact that the personal injuries do not arise out of the auto accident referred to above. The medical necessity of services provided has not been established.” To support its claim of a lack of causal nexus between the accident and the injuries allegedly sustained in the accident of March 23, 2003, defendant submits the affidavit of Alfred Cipriani, a technical consultant employed by SEA Limited, a consulting company which prepared an accident analysis report (low impact study) for defendant. The accident analysis report accompanies the affidavit (Exhibit F, annexed to Affirmation in Opposition).

Plaintiff maintains defendant’s proof does not constitute competent evidence sufficient to defeat its motion. Plaintiff argues Mr. Cipriani’s affidavit is not in admissible form as it was executed in Maryland, before a Maryland notary, and fails to comply with CPLR 2309 (c). Furthermore, plaintiff states defendant has failed to offer any evidence that the automobile collision was based on fraud.

One opposing a motion for summary judgment must produce evidentiary proof in admissible form sufficient to raise a triable issue of fact. Here, in opposition to the motion, defendant relies upon an affidavit that is signed and notarized outside of New York and an accident analysis report which is annexed to the affidavit. The low impact study itself is unsworn and appears to incorporate hearsay evidence such as a Police Accident Report and refers to a transcript of a recorded statement of assignor Tumarov which is not annexed to the report.

Pursuant to CPLR 2309 (c):

“An oath or affirmation taken without the state shall be treated as if taken within the state if it is accompanied by such certificate or certificates as would be required to entitle a deed acknowledged without the state to be recorded within the state if [*3]such deed had been acknowledged before the officer who administered the oath or affirmation.”

In Ford Motor Credit Company v. Prestige Gown Cleaning Services (193 Misc 2d 262 [Civ Ct, Queens County 2002]) the court noted the distinction between “a certificate of authentication which certifies the identity and authority of the person who took the acknowledgment of proof” and a certificate of conformity which “certifies that the manner in which the acknowledgment or proof was taken conforms with the laws of the appropriate jurisdiction.” An affidavit that is signed and notarized outside New York State is required to be accompanied by a certificate of conformity (see Discover Bank v. Kagan, 8 Misc 3d 134 [A], 2005 NY Slip Op 51171 [U] [App Term, 2nd & 11th Jud Dists]; Citibank (S.D.) N.A. v. Suen, 11 Misc 3d 126 [A], 2005 NY Slip Op 52262 [U] [App Term, 2d & 11th Jud Dists]; Boai Zhong Yi Acupuncture Services v. New York Central Mutual Fire Ins. Co., 8 Misc 3d 1011 [A], 2005 NY Slip Op 51058 [U] [Civ Ct, Queens County]).

Therefore, this court concurs with plaintiff and finds defendant has failed to submit any competent evidence to support its defense that the injuries are not related to the accident. The affidavit is insufficient pursuant to CPLR 2309 (c). The Accident Analysis Report is inadmissible on its own or as an attachment to the affidavit.

Accordingly, plaintiff’s motion for summary judgment is granted. The clerk is directed to enter judgment in favor of plaintiff in the sum of $3,383.38 together with statutory interest and attorney’s fees.

This constitutes the decision and order of the Court.

Dated:Brooklyn, New York

March 30, 2006

DELORES J. THOMAS

Judge Civil Court

Civil Court of the City of New York, Kings County

36916/03

Arlene P. Bluth, J.

Plaintiff’s instant motion for summary judgment calls upon this Court to clarify what facts a first-party No-Fault plaintiff must set forth in order to establish that its claim is “overdue.”

Plaintiff argues that “overdue” means “not paid,” and so the affidavit in support of the motion must only state that the bills have not been paid. Defendant urges that a bill is “overdue” only if it has not been paid or properly denied, and so the affidavit in support of plaintiff’s motion must so state. [*2]For the following reasons, this Court agrees with defendant, and since plaintiff’s motion did not address the denials, plaintiff has failed to fulfill its burden and the motion is denied.

In this action, plaintiff New York Craniofacial Care, P.C. seeks to recover first-party No-Fault benefits in the amount of $12,253.28, plus statutory interest, costs, and attorneys fees, for healthcare services allegedly rendered to its assignors, Maria Vega, Christopher A. Mendez, Daniel Rodriguez, Marsha Rasin, and Julio Suazo. According to the attorney’s affirmation in support of this motion, plaintiff seeks summary judgment only on the claims pertaining to Ms. Vega, Ms. Rasin, and Mr. Suazo, for the sum of $6,122.75. Plaintiff argues that its claims were submitted to defendant, have not been paid, and are now overdue. Defendant opposes the motion on the grounds that plaintiff has not made out its prima facie case, and that, in any event, defendant timely denied the claims pertaining to Ms. Rasin and Mr. Suazo and settled the claims pertaining to Ms. Vega.

A healthcare provider in a No-Fault case for first-party benefits establishes its prima facie entitlement to summary judgment as a matter of law by submitting proof in admissible form demonstrating that the prescribed statutory claim form, setting forth the fact and amount of the loss sustained, was submitted to the defendant, and that payment of no-fault benefits is overdue. See 11 NYCRR § 65-3.8(a)(1),(c); Careplus Med. Supply, Inc. v Allstate Ins. Co., 9 Misc 3d 128(A), 2005 NY Slip Op 51525(U), [App Term, 2nd & 11th Jud Dists]; Contemp. Med. Diag. & Treatment, P.C. v GEICO, 6 Misc 3d 137(A), 800 NYS2d 344 [App Term, 2d and 11th Jud Dists 2005]. Specifically, subsection 65-3.8(a)(1) of the regulations provides that “No-Fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim . . .” 11 NYCRR § 65-3.8(a)(1). Subsection 65-3.8(c) then states: “Within 30 calendar days after proof of claim is received the insurer shall either pay or deny the claim in whole or in part.” Id. at § 65-3.8(c).

The provider must make out its case in its own moving papers by setting forth the facts entitling the movant to summary judgment. Only if the plaintiff makes out its prima facie case does the burden shift to the defendant to raise a triable issue of fact. See Cugini v System Lumber Co., Inc., 111 AD2d 114, 489 NYS2d 492 [1st Dept 1985]; Victor Gribenko, M.D., P.C. et al. v Allstate Ins. Co., 10 Misc 3d 139(A) [App Term, 2nd & 11th Jud Dists 2005]; A.B. Med. Servs., P.L.L.C. et al. v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 127(A), 801 NYS2d 229 [App Term, 2nd & 11th Jud Dists 2005].

In support of this motion, plaintiff submits two affidavits. In the first, Fenelly Olivares states that he is the person responsible for submitting plaintiff’s No-Fault claims and that he personally mailed the subject claims to defendant on April 3, May 15, and May 23 of 2002. Thus, his affidavit establishes that the claims were submitted to defendant. See Comprehensive Mental v. Lumbermans Mut. Ins. Co., 4 Misc 3d 133(A) [App Term, 9th & 10th Jud Dists 2004]; Amaze Medical Supply Inc. v. Allstate Ins. Co., 3 Misc 3d 133(A) [App Term, 2nd & 11th Jud Dists 2004].

The second affidavit is from Rachael Newton, the person responsible for handling and tracking whatever response is forthcoming from the insurers on the claims. Ms. Newton states that “[d]efendant did not pay plaintiff’s claims that are the subject of this lawsuit within thirty (30) days. [*3]Accordingly, plaintiff’s claims are now overdue and owing.” Although Ms. Newton would know, her affidavit is absolutely silent as to whether plaintiff received any denials, and if so, on which of the claims. These are material omissions because if defendant timely issued a valid denial of plaintiff’s claims, plaintiff would not be entitled to summary judgment simply because the claims remained unpaid. A claim that has been timely (and validly) denied is not due. Of course, if it is not due, it cannot be overdue. If, on the other hand, plaintiff had shown in its moving affidavit that there were no denials, or that the denials were late or otherwise invalid and thus a nullity, plaintiff’s claims would be overdue, and plaintiff would be prima facie entitled to judgment. None of those facts, however, may be gleaned from Ms. Newton’s affidavit.

At oral argument, plaintiff’s counsel urged that plaintiff need not mention anything about denials at all. Rather, counsel argued, all that is necessary is for plaintiff to state that the claims have not been paid and thus are overdue. In support of her argument, counsel relied upon the language of subsection 65-3.8 (a)(1), quoted above, which defines an overdue claim as one that has not been paid within 30 days of submission. See 11 NYCRR § 65-3.8(a)(1). This Court, however, believes that 11 NYCRR § 65-3.8(a)(1) cannot be read in a vacuum. Subsection 65-3.8(c) makes clear that the 30-day rule entails a failure to pay or deny the claim within 30 days. To wit, “[w]ithin 30 calendar days after proof of claim is received the insurer shall either pay or deny the claim in whole or in part.” 11 NYCRR § 65-3.8(c). The problem with plaintiff’s counsel’s approach is that it invites providers to bring disingenuous summary judgment motions alleging that their claims are overdue even when they are well aware that they received valid, timely denials.

Plaintiff’s counsel correctly noted that the Appellate Term routinely uses the phrase “that payment of no-fault benefits is overdue” when enumerating the elements of plaintiff’s prima facie case. See, e.g., PDG Psychological, P.C. v Utica Mut. Ins. Co., 2006 NY Slip Op 50246(U) [App Term, 2nd & 11th Jud Dists]; Ocean Diagnostic Imaging, P.C. v Allstate Ins. Co., 10 Misc 3d 145(A) [App Term, 2nd & 11th Jud Dists 2006]; Ocean Diagnostic Imaging, P.C. v AIU Ins. Co., 10 Misc 3d 139(A) [App Term, 9th & 10th Jud Dists 2005]. In the Court’s view, however, that phrase is merely a shorthand for “that the claim has not been paid or denied within 30 days.” Indeed, some Appellate Division cases make that connection clearer. For example, in Mt. Sinai Hospital v Allstate Insurance Co., the Second Department opined that “sufficient evidentiary proof was submitted to establish, prima facie, that the defendant, Allstate Insurance Company . . . did not pay or deny Mount Sinai’s claim for no-fault medical payments within 30 days as required by 11 NYCRR 65-3.8(c).” Mt. Sinai Hosp. v Allstate Ins. Co., 2006 NY Slip Op 00490, —- NYS2d —- [2nd Dept]. Similarly, in Nyack Hospital v General Motors Acceptance Corp., the Second Department found that the plaintiff had “established its prima facie entitlement to summary judgment by demonstrating that the defendants received the subject billing forms, and failed to either pay or deny the claim within the requisite statutory time frame.” Nyack Hosp. v Gen. Motors Acceptance Corp., 2005 NY Slip Op 10107, 808 NYS2d 399, 402 [2nd Dept]. Since a claim is overdue only if it has been neither paid nor properly denied, and plaintiff states only that its claims were not paid, plaintiff has not made out its prima facie case.

By its holding, this Court is not increasing the burden of a plaintiff healthcare provider moving for summary judgment in a No-Fault case. Indeed, once the plaintiff sets forth that its claim has not been paid or timely denied, the defendant must still come forward with competent [*4]proof to rebut that assertion in order to defeat the motion. All this Court is requiring is that the plaintiff make clear in its moving papers that it is entitled to judgment on its claims. The fact that the plaintiff’s claims have not been paid does not, in and of itself, entitle the plaintiff to summary judgment as a matter of law.

The Court recognizes that a statement that “the claim has not been paid or timely denied” is boilerplate, and the absence of such a statement may seem like a mere technicality. But it is not. Every statement in an affidavit is sworn to under the penalties of perjury. If the affiant knows that there was a timely denial of the unpaid claim, then it would be perjurious to state that “the claim has not been . . . timely denied.” Indeed, under that circumstance, it would be improper for the provider to seek summary judgment based on untimeliness of the denial, although it would be free to move based upon some other ground.

By requiring plaintiff to set forth the basis of its entitlement to summary judgment, the Court is merely holding plaintiff to the requirements of CPLR Section 3212. Although amended and recodified over the years, the essence of the moving plaintiff’s burden has not changed since the enactment of Rule 113 of the Rules of Civil Practice, Section 3212’s predecessor, over 85 years ago: Someone with personal knowledge must swear or affirm both to the material facts which entitle plaintiff to judgment and must also address the known defenses. Under Rule 113, the plaintiff had to affirmatively “stat[e] . . . his belief that there is no defense to the action.” ^[FN1] Under CPLR Section 3212(b), the affidavit in support “shall show that there is no defense to the cause of action or that the cause of action or defense has no merit.” CPLR § 3212(b). What the difference may be between “stating” (Rule 113) and “showing” (3212(b)) is an interesting question (see Farrell v Shelby Mut. Ins. Co., 18 Misc 2d 459, 461,189 NYS2d 66 [Sup Ct, Erie County 1959]), but the Court need not determine it here because this plaintiff neglected any mention of a defense at all. Ms. Newton’s affidavit neither states nor shows that there is no defense or that the defenses have no merit. Indeed, since proper denials would constitute a defense to the action, plaintiff’s failure to address whether the claims were denied makes the moving affidavit not only insufficient but disingenuous as well.

Ms. Newton’s affidavit is deficient in several other respects as well. First, according to plaintiff’s counsel’s affirmation, the instant motion relates only to the claims for three of the five assignors in this case, yet the affidavit fails to set forth this material fact. Second, the affidavit fails to specifically reference which of the seven claims from the three assignors it addresses, or the amounts thereof. Third, the affidavit does not make clear whether the ground for the motion is the same, or different, for each of the seven claims from the three assignors. When a suit combines [*5]multiple claims and/or assignors, it is incumbent upon the moving party to identify in the affidavit each claim and/or assignor to which the motion is directed, and the reason the movant is entitled to judgment upon each one. See Smith v City of New York, 288 AD2d 369, 370, 733 NYS2d 474 [2d Dept 2001] (denying summary judgment motion where proponents “fail[ed] to specifically address each separate claim” with appropriate proof). Rather than do so here, plaintiff submitted an affidavit that could have been attached to any motion for summary judgment between these parties.^[FN2]

Based on all of the foregoing, the Court finds that plaintiff has not made out its prima facie case for entitlement to summary judgment as a matter of law. Therefore, the Court need not reach the sufficiency of defendant’s opposition.

Accordingly, plaintiff’s motion is denied.

This is the Decision and Order of the Court.

Dated:

ARLENE P. BLUTH

Judge, Civil Court

ASN by_______ on ________

Footnotes

Footnote 1: Rule 113, which first came into effect in 1921, provided as follows: “Summary Judgment. When an answer is served in an action to recover a debt or liquidated demand arising, 1. On a contract, express or implied. . . the answer may be struck out and judgment entered thereon on motion, and the affidavit of the plaintiff or any other person having knowledge of the facts, verifying the cause of action and stating the amount claimed, and his belief that there is no defense to the action; unless the defendant by affidavit, or other proof, shall show such facts as may be deemed, by the judge hearing the motion, sufficient to entitle him to defend.”

Footnote 2: The affidavit states: “This Affidavit is being submitted in support of NEW YORK CRANIOFACIAL PC’s application for a judgment against ALLSTATE INS. CO.” (emphasis in original).

Civil Court of the City of New York, Kings County

106648 / 04

Jack M. Battaglia, J.

Plaintiff appeared by Gary Tsirelman, Esq, Greg Lansky, Esq., and Massimiliano Valerio, Esq. of Gary Tsirelman, P.C.; Defendant appeared by Robert B. Brown, Esq. and Samuel K. Rubin, Esq. of Picciano and Scahill, P.C.

A licensed acupuncturist is entitled to recover assigned first-party no-fault benefits based upon the “prevailing fee [for licensed services] in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established” by the Superintendent of Insurance. (See 11 NYCRR §68.5[b].) The provider bears the burden of coming forward with evidence of the “prevailing fee” in its geographic location, while the insurer has the burden of coming forward with evidence that the provider’s fee is not “consisten[t] with charges permissible for similar procedures.”

Power Acupuncture, PC is seeking to recover from State Farm Mutual Automobile Insurance Company the total unpaid balance on six bills submitted to the insurer, which amount the parties have stipulated to be $800.24. Each of the bills describes the service rendered as “acupuncture”, and seeks compensation at the rate of $100.00 for each treatment session. The insurer paid on each bill at the rate of $42.84 per session, staing that “[t]his base fee was calculated according to the New York Workers’ Compensation Board Schedule of Medical Fees. (New York Workers’ Compensation Board Schedule of Medical Fees, Page 9.)”

At a trial, of sorts, held on September 16 and September 28, 2005, each party presented one witness. Power Acupuncture offered the testimony of Elyse Josephs, a licensed acupuncturist, who described generally the theory and practice of acupuncture, the training and licensing requirements for acupuncturists, and the certification requirements for physicians and chiropractors who render acupuncture services. (See, generally, Education Law §§8211, 8216[3].) State Farm offered the testimony of Donna Frederick, one of its claims representatives, who described the insurer’s practice of paying for acupuncture services rendered by licensed acupuncturists at the rate provided in the Workers’ Compensation Board fee schedule for [*2]acupuncture services rendered by a physician.

The parties recognized at trial that the resolution of their dispute depended essentially on an interpretation and application of the No-Fault Law (see Insurance Law §5102 et seq.) and the Superintendent of Insurance’s implementing regulations. Specifically, the issue is whether a licensed acupuncturist is entitled to be paid based upon the “prevailing fee” charged by acupuncturists for licensed services, or based upon the fee provided for payment of acupuncture services rendered by a physician. The parties agreed to submit briefs arguing their respective views of the law and regulations. They also agreed, for this case only, that, if the Court determined that Power Acupuncture is entitled to be paid based upon the “prevailing fee”, the fee shall be deemed to be $100.00 per session. This Court has since held in another case that the provider bears the burden of coming forward with evidence as to the “prevailing fee”. (See AVA Acupuncture P.C. v Elco Administrative Services Co., 10 Misc 3d 1079[A], 2006 NY Slip Op 50158[U], *6-*8 [Civ Ct, Kings County].)

Section 5102(a)(1) of the No-Fault Law defines “basic economic loss” as including “[a]ll necessary expenses incurred for…professional health services”, “subject to the limitations of” §5108 of the Law. (See Insurance Law §5102[a][1].) Section 5108 provides that the Superintendent of Insurance “shall promulgate rules and regulations implementing and coordinating the provisions of” the No-Fault Law and the Workers’ Compensation Law “with respect to charges for the professional health services specified in” §5102(a)(2), “including the establishment of schedules for all such services for which schedules have not been prepared and established by the chairman of the workers’ compensation board.” (See Insurance Law §5108[b].) But the “charges for services specified in” §5102(a)(1) “shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board.” (See Insurance Law 5108[a].)

Under the statute, therefore, if a charge for a covered “professional health service” is found in a Workers’ Compensation schedule, that is the permissible charge under the No-Fault Law; but, if there is no charge for the service found in a Workers’ Compensation schedule, the charge is to be determined by the regulations of the of the Superintendent of Insurance. Some uncertainty arises, however, because the No-Fault Law speaks in terms of covered services, whereas the Workers’ Compensation schedules establish fees according to the licensed status of the provider. As will appear, acupuncture services rendered by a certified physician are compensated at a different fee under the Workers’ Compensation schedules than acupuncture services rendered by a certified chiropractor, and, most importantly for present purposes, there is no coverage under the Workers’ Compensation schedules for acupuncture services rendered by a licensed acupuncturist.

The Superintendent’s no-fault regulations are not entirely successful in dissipating any uncertainty, as this action illustrates. They provide, in the first instance, that “[c]harges for [professional health] services shall be covered pursuant to schedules promulgated under section 5108 of the Insurance Law and Part 68 of this Title (Regulation 83).” (See 11 NYCRR §65-[*3]3.16[a][6].) In Part 68, the Superintendent adopts the “existing fee schedules prepared and established by the chairman of the Workers’ Compensation Board”, and, “[i]f a fee schedule has been adopted for a licensed health care provider, the fee for services provided shall be the fee adopted or established for that licensed health care provider.” (See 11 NYCRR §68.1[a], [b][2].) A “licensed healthcare provider” is defined as a “licensed healthcare professional acting within the scope of his or her license or an entity properly formed in accordance with applicable law and acting within the scope of its license.” (11 NYCRR §68.1[b][3].)

When acupuncture services are rendered by a certified physician or chiropractor, the determination of the permissible charge is relatively clear. There is a Workers’ Compensation Medical Fee Schedule and a Workers’ Compensation Chiropractic Fee Schedule (as well as schedules for podiatry and psychology.) The respective fee schedules provide a “unit value” or “relative value” for described services and a “conversion factor” for each of four geographic regions. The permissible charge is determined by multiplying the relative value for the service by the conversion factor, which is a monetary amount identified by the zip code of the provider. Both the Medical Fee Schedule and the Chiropractic Fee Schedule describe four acupuncture services, two with electrical stimulation and two without, two for the initial 15 minute “one-on-one contact with the patient” and two for additional 15 minutes of contact. The relative values are the same for each of the services in both the Medical Fee Schedule and the Chiropractic Fee Schedule.

A physician, however, will be entitled to a higher fee for each of the described services, because the conversion factors for physicians range from $6.49 to $8.45 across the four regions, whereas those for chiropractors range from $4.44 to $5.78. For example, when the relative value for an initial 15 minute contact for acupuncture without electrical stimulation rendered by a physician, i.e. 3.55, is multiplied by the conversion factor for physicians in Region IV (where Power Acupuncture is located), i.e. $8.45, the permissible charge is $30.00, whereas when the same relative value is multiplied by the conversion factor for chiropractors in Region IV, i.e. $5.78, the permissible charge is $20.52. The difference presumably reflects the relative market values for the services in various geographic areas.

But what about acupuncture services rendered by a licensed acupuncturist, for whom there is no “dedicated” Workers’ Compensation fee schedule. In a section of the regulations titled “[e]stablishment of certain health provider schedules”, the Superintendent of Insurance “establishes fee schedules for professional health services referred to in” §5102(a)(1) “for which schedules have not been prepared and established by the chairman of the Workers’ Compensation Board.” (11 NYCRR §68.2[a].) Those schedules are to be found in Appendix 17-C. (See id.) In Appendix 17-C, the Superintendent establishes fee schedules for various dental, social work, therapy, optometric, and thermographic services, but not for any acupuncture services.

In a section titled “[h]ealth services not set forth in schedules”, the Superintendent prescribes the method for determining the permissible charge for such services, first for when the Superintendent “has adopted or established a fee schedule applicable to the provider” (see 11 [*4]NYCRR §68.5[a]), and then for when the Superintendent has not done so (see 11 NYCRR §68.5[b]). For our purposes, the Superintendent has not “adopted” a fee schedule applicable to licensed acupuncturists, since none has been established by the chairman of the Workers’ Compensation Board, and the Superintendent has not as yet “established” a fee schedule applicable to licensed acupuncturists, as was done in Appendix 17-C for other providers that were not covered by a Workers’ Compensation Fee Schedule.

In such circumstances “the permissible charge for such service shall be the prevailing fee in the geographic area of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent.” (11 NYCRR §68.5[b].) Indeed, in two opinions, dated, respectively, January 5, 2004 and October 6, 2004, the Office of General Counsel of the New York State Insurance Department reaches the same conclusion. (See also Great Wall Acupuncture, P.C. v Geico General Ins. Co., 8 Misc 3d 1019(A), 2005 NY Slip Op 51199[U], *2 [Civ Ct, Kings County].)

State Farm argues nonetheless that the statute and regulations “are clear that where there is a scheduled service (acupuncture) but an unscheduled provider (licensed acupuncturist) the provider is limited to the fee identified for the scheduled service absent a showing of unusual procedures or unique circumstances.” (See Defendant’s Trial Memorandum of Law, at 7.) In doing so, State Farm characterizes the Insurance Department’s opinions as “erroneously perpetuat[ing] a mistake and application of [its own] regulation.” (See id., at 14-15.) In this latter regard, State Farm’s position is clearly and seriously at variance with the mandate that we give deference to the opinions of the Superintendent. (See Medical Society of State v Serio, 100 NY2d 854, 863-64 [2003].)

On its own merits, moreover, State Farm’s argument ignores the reasonably clear fabric of the Superintendent’s regulations, as well as its own failure, if not inability, to explain why, assuming its position were correct, the licensed acupuncturist should be compensated according to the conversion factor for a physician rather than for a chiropractor. The proposition is not self-evident, either logically or legally, and there was no evidence at trial to support it.

It is true, no doubt, that, even under the applicable regulation, the insurer may “review” the acupuncturist’s charges “for consistency with charges permissible for similar procedures already adopted or established by the superintendent.” (See 11 NYCRR §68.5[b].) For a number of reasons, however, that qualification to payment on a “prevailing fee” basis cannot help State Farm here. First, that is not the basis on which Power Acupuncture’s charges were reduced, as stated in State Farm’s denials. It is clear from the denials that the “fee was calculated according to the…Schedule for Medical Fees”, and, as has been demonstrated, that was wrong. More importantly, neither in the denials nor at trial was there any showing that, even ignoring the identity and status of the practitioner, the acupuncture services that were rendered were “similar” to the services described in the fee schedule and associated with the particular relative value used in the calculation. [*5]

State Farm contends that “the claimant would have the burden to show that the reduction is not consistent with the fees for such scheduled services.” The contention is inconsistent with both the structure and clear meaning of the governing regulation, which states that the permissible charge “shall be the prevailing fee”, only “subject to review by the insurer.” (See 11 NYCRR §68.5[b].) Whatever effect might be given the results of the insurer’s “review”, the insurer that denies or reduces payment based upon such a review must bear the burden of, at least, coming forward with evidence that the provider’s fee is not “consisten[t] with charges permissible for similar procedures.” (See id.)

To the extent that State Farm is contending that, generally, the fee for a service described in any fee schedule can never be higher than the maximum fee that would be permissible for any provider for whom there is such a schedule, or that, specifically, a licensed acupuncturist is never permitted a fee for any service described in the physician’s fee schedule that is higher than the fee permitted for the physician, those contentions are not supported by either the statute or current regulations. The statute provides only that, when there is an applicable Workers’ Compensation fee schedule, the fee for no-fault benefits may not exceed the amount determined by that schedule, “except where the insurer or arbitrator determines that unusual procedures or unique circumstances justify the excess charge” (see Insurance Law §5108[a]); and, when there is no such applicable fee schedule, the Superintendent need only “consult[]” and “coordinat[e]” with the chairman of the Workers’ Compensation Board in establishing an appropriate fee (see Insurance Law §5108[b]). Although the Superintendent may well have the authority to promulgate regulations that would provide as State Farm contends, that authority has not been exercised.

Specifically, the statute that authorizes a certification program for physicians and others who are not licensed acupuncturists, is subject to the proviso that “such certified acupuncturists do not represent themselves as licensed acupuncturists.” (See Education Law §8216[3].) The statute clearly reflects at least an assumption that the acupuncture services rendered by a certified physician and those rendered by a licensed acupuncturist are not the same. On this record, that statutory assumption is enough to require rejection of State Farm’s practice of automatically reducing bills submitted by licensed acupuncturists to the fees permissible for certified physicians.

Given the conclusions required by this record to resolve this case, it is both unnecessary and inappropriate for the Court to address Power Acupuncture’s other arguments concerning, what it calls, the “Review Clause”, including the questions raised concerning its constitutionality and its meaning and application. (See Post-Trial Memorandum, at 15-32.) The Court notes, moreover, that, although it may have the jurisdiction to pass on most, if not all, of those questions in the context of an action seeking payment of one or more bills, such an action does not appear to this Court to be the most appropriate vehicle for a full exploration and considered resolution of those questions. [*6]

It appears to this Court that those healthcare providers and insurers regularly participating in no-fault first-party benefits litigation have chosen litigation strategies that involve litigating and relitigating the same issues in hundreds, if not thousands, of actions before different Civil Court and District Court judges, crowding out the types of actions the limited-jurisdiction courts were designed to resolve. The Court recognizes and appreciates that, in this action, the parties took a somewhat different tack, and have clearly expended significant effort to brief a wide range of questions that are raised by the statute and regulations as they apply to the services rendered by licensed acupuncturists. It seems true, nonetheless, that a broader-scoped proceeding in Supreme Court one in which a number of providers and insurers might participate would be a more appropriate forum for resolution of the constitutional and other questions raised by this, and other, no-fault actions.

The Court has noted Plaintiff’s counsel’s request for an attorney fee in excess of the limitations generally applied to no-fault disputes. (See 11 NYCRR §65-4.6.) And, again, the Court recognizes the effort made by counsel for both parties. But this case has not been resolved on the issues that attracted much of Plaintiff’s counsel’s attention. In the world of no-fault, moreover, where the parties do not want for creativity in raising new questions for the courts to resolve, there is a real risk that the exception to the limitations will render the rule meaningless.

Judgment is awarded to Plaintiff for $800.24, with statutory interest and attorney fees, plus costs.

March 20, 2006__________________________

Judge, Civil Court

[*1]

Civil Court of the City of New York, Kings County, March 7, 2006

APPEARANCES OF COUNSEL

Marylou A. Paolucci, Smithtown, for plaintiffs. Bruno, Gerbino, & Soriano, LLP, Melville, for defendant.

OPINION OF THE COURT

Karen Rothenberg, J.

In this action to recover no-fault first-party benefits for services provided to its assignor for an accident that occurred on December 8, 2000, plaintiffs establish a prima facie entitlement to summary judgment by proof that they submitted to defendant the statutory claim forms, setting forth the fact and the amount of the losses sustained ($4,427.36, $2,490.78, $1,945.56, $505.50, $208.25, and $500) and that payment of no-fault benefits was overdue (see A.B. Med. Servs. PLLC v Country-Wide Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50255[U] [App Term, 2d & 11th Jud Dists 2005]). The burden then shifts to the defendant to rebut plaintiffs’ prima facie case by the submission of proof in admissible form sufficient to raise a triable issue of fact (see A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86[*2][App Term, 2d & 11th Jud Dists 2004]).

In regard to the claim of G.A. Physical Therapy in the amount of $208.25, defendant submits evidence of an arbitral award in its favor which denied no-fault benefits to this claimant for a bill dated March 21, 2001. There is no dispute that this is the same bill being litigated in this action. The prior arbitral award should be accorded res judicata effect against plaintiff in this action. It is well settled that res judicata and collateral estoppel are applicable to arbitration awards, including those rendered in disputes over no-fault benefits, and will bar relitigation of the same claim or issue (see Matter of Ranni [Ross], 58 NY2d 715 [1982]; Monroe v Providence Washington Ins. Co., 126 AD2d 929 [3d Dept 1987]). While defendant did not move for summary judgment dismissing this claim on these grounds, the court has authority to grant summary judgment to a nonmoving party if justified by the record. (CPLR 3212 [b].) Accordingly, plaintiff, G.A. Physical Therapy P.C.’s claim for $208.25 is dismissed.

In regard to the bills for services rendered by A.B. Medical Services PLLC, Daniel Kim’s Acupuncture P.C., and Royalton Chiropractic P.C., defendant submits evidence that in December 2001, prior to the commencement of this litigation, plaintiffs submitted these claims to the American Arbitration Association (AAA). Defendant also submits evidence that in August 2003 it received notification from AAA that plaintiffs withdrew these claims with prejudice. Defendant argues therefore that plaintiffs are precluded from maintaining these actions. In reply, plaintiffs’ counsel contends that it was plaintiffs’ intention to withdraw the claims with prejudice only from arbitration and without prejudice to litigation. Counsel’s argument is without merit. Regardless of their intentions, plaintiffs are bound by their election to arbitrate their claims and are precluded from maintaining this litigation.

Pursuant to Insurance Law § 5106 (b) “[e]very insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits . . . to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.” Once the election is made to arbitrate a claim for first-party no-fault benefits, the right to litigate future claims arising out of the same accident is foreclosed (see Roggio v Nationwide Mut. Ins. Co., 66 NY2d 260 [1985]). In Roggio (supra), the Court of Appeals dismissed the plaintiff’s complaint for first-party benefits holding that a claimant, denied recovery in arbitration as to certain medical bills, cannot then resort to the courts to seek recovery of later medical bills that arise out of the same accident. The Court’s rationale being to prevent claimants “flit[ting] between forums for the resolution of issues or items of damage arising from a single injury . . . [which] would represent an intolerable drain on our resources for dispute resolution, senselessly prolonging controversies and inviting inconsistent adjudications.” (Roggio at 263.) The Court further reasoned that by providing claimants “an option to litigate after disappointments in arbitration [would] obviously [be] inconsistent with [the] legislative purpose” of the No-Fault Law. (Roggio at 264.)

After Roggio, courts have invariably held that the election to arbitrate a claim for first-party benefits, waives the right to litigate all subsequent claims that arise out of the same [*3]accident (see Cortez v Countrywide Ins. Co., 17 AD3d 508 [2d Dept 2005]; Gaul v American Employers’ Ins. Co., 302 AD2d 875 [4th Dept 2003]; Gibeault v Home Ins. Co., 221 AD2d 826 [3d Dept 1995]).

In Roggio, and the other cited cases, the issue involved litigation of subsequent claims after an arbitral award on an initial claim. In this matter the issue involves litigation of claims originally submitted to arbitration where no arbitral award was made. Nevertheless, in this judicial district, at least, it appears that once the claim is submitted to arbitration, it must be adjudicated in that forum. In Rockaway Blvd. Med. P.C. v Progressive Ins. (2003 NY Slip Op 50938[U] [App Term, 2d & 11th Jud Dists 2003]), the plaintiff’s claim at arbitration was dismissed without prejudice to plaintiff renewing its application for arbitration upon production of a proper assignment. Instead, the plaintiff commenced litigation of the claim. The court, citing Roggio, dismissed the complaint and held that “once a claimant chooses arbitration, it cannot resort to the courts.” (At *2.)

In light of the above, this court is reluctant to limit Roggio to its precise facts. Accordingly, once a claim for first-party benefits is submitted to arbitration, the claimant is bound by that election and cannot reopt for litigation, even if the merits of the matter were not reached. Accordingly, while defendant did not move to dismiss these claims, the court, after review of the record, is awarding summary judgment to the defendant dismissing these plaintiffs’ claims for bills in the amounts totaling $4,427.36, $2,490.78, and $505.50.

The remaining bills submitted by D.A.V. Chiropractic P.C. in the amounts of $189.54, $302.12, and $1,999.12, and Square Synagogue Transportation Inc., in the amount of $500, were not the subject of a prior arbitration. As to these bills, defendant’s denials, except for the bill in the amount of $1,999.12, are untimely on their face. Defendant contends that these claims were properly denied based upon the assignors’ failure to attend independent medical examinations (IMEs). Defendant however, fails to produce competent proof in admissible form that it made timely verification requests for IMEs, extending the 30-day period within which it must pay or deny the claims (see Ocean Diagnostic Imaging P.C. v New York Cent. Mut. Fire Ins. Co., 9 Misc 3d 138[A], 2005 NY Slip Op 51772[U] [App Term, 2d & 11th Jud Dists 2005]). The affidavit of defendant’s no-fault claims representative, Cathy Symonds, is deficient and fails to establish that requests for IMEs were timely mailed to the assignors (see Careplus Med. Supply Inc. v Gen. Assur. Co., 7 Misc 3d 126[A], 2005 NY Slip Op 50429[U] [App Term, 9th & 10th Jud Dists 2005]). Even assuming that defendant submitted proper proof of mailing of the initial IME requests, defendant has failed to demonstrate that it complied with a timely follow-up request (see New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2d Dept 2002]). In light thereof, defendant is precluded from asserting its defense of the assignors’ nonappearance at scheduled IMEs for these three claims. In regard to the bill in the amount of $1,999.12, it is undisputed that defendant timely denied the claim. This denial, like the others, was based upon the assignors’ nonappearance for IMEs. Although the denial was timely, the defendant’s failure to follow up its request for verification, makes the denial “ineffective to avoid preclusion” (see King’s Med. Supply Inc. v Kemper Auto & Home Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50450[U], *3 [App Term, 2d[*4]& 11th Jud Dists 2005]).

Based on the foregoing, plaintiffs’ motion for summary judgment is granted in part and denied in part. Judgment shall be entered in favor of plaintiffs, D.A.V. Chiropractic P.C. in the amounts of $2,490.78 and Square Synagogue Transportation in the amount of $500, plus statutory interest and attorney’s fees as provided by Insurance Law § 5106 (a) and the regulations promulgated thereunder, as well as costs and disbursements. Defendant is awarded summary judgment dismissing the remainder of the claims.

Civil Court, Kings County

33911/02

Karen Rothenberg, J.

Defendant State Farm Mutual Auto Ins. Co. (hereinafter “State Farm”) moves pursuant to CPLR 3211(a)(5) to dismiss the plaintiffs’ actions on the grounds that plaintiffs are collaterally estopped from maintaining the actions in light of a declaratory judgment entered in Supreme Court. After review of the papers submitted herein, this court hold that collateral estoppel is not applicable and the plaintiffs are not bound by the declaratory judgment.

In 2002, plaintiffs, as assignees of Marie Paul and Estella Amilcar, commenced these actions to recover first-party no-fault benefits for medical services provided to the assignors for an accident that occurred on February 21, 2001. On March 12, 2003, State Farm commenced a declaratory judgment action in Supreme Court, Kings County for a determination that it was not obligated to provide coverage for the accident. These assignors, but not the assignees, were among the persons served in the declaratory judgment action. State Farm moved for a default judgment against the parties based upon their failure to appear, and said motion was granted by order of the Hon. Laura Jacobson entered in the Clerk’s Office of the Supreme Court on April 12, 2004. The default order provided that “State Farm Mutual Auto Ins. Co. has no obligation to provide UM, SUM or PIP benefits to the …. passengers, Estella Amilcar [and] Marie Paul…”, and [*2]stated that the “loss of 2-21-01 was intentional and therefore an uncovered event.”

Defendant argues that the declaratory judgment should be entitled to collateral estoppel effect, thereby precluding plaintiffs from maintaining these actions for no-fault benefits. Collateral estoppel, or issue preclusion, may be applied in a subsequent action to prevent a party or those in privity, from relitigating an issue decided in a prior adjudication. (see Ryan v New York Tel. Co., 62 NY2d 494, 478 N.Y.S.2d 823). In order to invoke collateral estoppel it must be shown that (1) there was a full and fair opportunity to contest the decision that is alleged to be dispositive in the present action and (2) the issue in the present proceeding is identical to that decided in the prior proceeding. (see Langdon v. WEN Management Co., 147 AD2d 450, 537 N.Y.S.2d 603).

For collateral estoppel to be applied, it must be established that plaintiffs, who were not parties to the previous action, are privy to the prior judgment. (see Green v. Santa Fe Industries, Inc., 70 NY2d 244, 519 N.Y.S.2d 793). The determining factor is the point in time when the relationship between the party to the prior litigation and the person(s) claimed to be a privy is formed. In the assignor-assignee context, “privity must have arisen after the event out of which the estoppel arises.” Gramatan Home Investors Corp., v. Lopez, 46 NY2d 481 at 486, 414 N.Y.S.2d 308 at 312. As the Court of Appeals in Gramatan, cited supra, explained:

“an assignee is deemed to be in privity with the assignor where the action

against the assignor is commenced before there has been as assignment. In

that situation, at the time the assignee succeeded to the rights of the assignor, the subject matter of the assignment was then embroiled in litigation and was

subject to the claims of the third parties and the assignee is charged with notice

that his rights to the assignment are subject to competing claims. Conversely

an assignee is not privy to a judgment where the succession to the rights affected

thereby has taken place prior to the institution of the suit against the assignor.”

(Gramatan Home Investors Corp., v. Lopez, supra, at 486; 312.)

In the instant situation, since assignments were made prior to the commencement of the declaratory judgment action against the plaintiffs’ assignors, plaintiffs are not bound by the terms of the judgment. Moreover, in light of the fact that the declaratory judgment was obtained by default, there was no actual litigation on the merits, and therefore there is no identity of issues between this action and the prior determination in the declaratory judgment action. (see Zimmerman v. Tower Ins. Co., 13 AD3d 137, 788 N.Y.S.2d 309; Chambers v. The City of New York, 309 AD2d 81, 76 N.Y.S.2d 708).

In light of the foregoing, the defendant’s motion is denied in its entirety.

This constitutes the decision/order of the court.

March 3, 2006 ———————————————————-

DateJudge, Civil Court

Civil Court, Kings County

98035/04

Delores J. Thomas, J.

Plaintiff, a medical services provider, seeks to recover $2,143.90 in fees for services it provided to assignor Nato Seselia for EMG/NCV test.

Defendant denied payment on the basis that the tests were medically unnecessary.

The only issue at trial as the parties had stipulated to all other pertinent issues, was whether the EMG/NCV test were necessary. Therefore, defendant bore the burden of proof on this issue (see, 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]; Fifth Ave. Pain Control Center v. Allstate Ins. Co., 196 Misc 2d 801 [Civ. Ct., Queens Co., 2003]).

Testifying on behalf of defendant was Joseph Cole, board certified in physical and rehabilitation medicine. Dr. Cole testified that he reviewed plaintiff medical reports dated April 30, 2003 and May 20, 2003, police accident report and a report dated May 6, 2003 for range of motion testing. Dr. Cole testified that the EMG/NCV test performed by plaintiff were unnecessary because there was already a diagnosis. Dr. Cole testified that the test are only ordered if it would alter the diagnosis or if it was needed to determine location of nerve injury (i.e. neck or wrist). He further testified that the medical documentation reflected that the assignor was improving and there was no indication of a “diagnostic dilemma” necessitating the test.

No one testified on behalf of plaintiff in response to Dr. Cole’s testimony; instead the parties stipulated into evidence as Plaintiff’s Exhibit No.3 a Letter of Medical Necessity for NCV/EMG Test from Alexander Rozenberg, MD, FAAPMR, board certified in physical medicine and rehabilitation.

The letter indicates that the assignor presented to plaintiff’s office with complaints of neck pain with radiation from the neck to the right shoulder and arm with numbness, weakness and tingling sensation in the right shoulder and with restriction of neck movement. The assignor had been diagnosed with cervical paraspinal muscle and ligaments strain/sprain secondary to acceleration/deceleration injury.

The letter further indicates that Dr. Rozenberg ordered electromyography studies in order to determine the exact diagnosis, possible localization and extent of injury; better predict prognosis for recovery and possible residual neurologic deficits, plan possible deep electrical [*2]stimulation nerve block or medicamentous nerve block or neurosurgical evaluation if all other treatment modalities failed.

The Letter of Medical Necessity goes on to indicate that the test were done to rule out cervical radiculopathy and evaluate the extent of nerve damage. Dr. Rozenberg states in the letter that sensory nerve conduction studies are important to exclude plexopathy and mononeuropathy. He further states that the Needle EMG is an essential component of the evaluation to specifically define involved myotomes.

Plaintiff’s exhibit indicates that the Nerve Conduction studies were reported as normal. The document further indicates that the Needle EMG studies of both upper extremities and muscles showed evidence of denervation in the distribution of the right C5-6 paraspinal nerve roots. Dr. Rozenberg concluded that the findings were consistent with right cervical radiculopathy. Based upon his findings he advised the assignor to continue physical therapy and added cervical traction.

A no-fault insurer defending a denial of first-party benefits on the ground that the billed for services were not “medically necessary” must at least show that the services were inconsistent with generally accepted medical/professional practices. The opinion of the insurer’s expert, standing, alone is insufficient to carry the insurer’s burden of proving that the services were not “medically necessary” (Citywide Social Work & Psy, Serv. v. Travelers Indem. Co., 3 Misc 3d 608, 609 supra.). “Generally accepted practice” is that range of practice that the profession will follow in the diagnosis and treatment of patients in light of the standards and value that define its calling” (A.B. Med. Ser. v. New York Central Mut. Fire Ins. Co., 7 Misc 3d 1018 [A][Civ. Ct. Kings Co. 2005]; Citywide Social Work & Psy Serv. v. Travelers Indemnity Co., supra).

In A.B. Med. Serv. v. New York Central Mut. Fire Ins. Co. a similar issue regarding neurological testing was involved. Therein the plaintiff had conducted EMG/NCV tests and Somatosensory Evoked Potential (SSEP) tests to determine whether the patient suffered nerve injury from the accident. At trial, defendant’s witness testified that the test were not medically necessary because they did not serve to substantiate the doctor’s findings from the initial physical examination of the patient. The witness testified that it was generally accepted medical practice to utilize electrodiagnostic testing only to determine whether an injury to a nerve exists and nerve damage had already been diagnosed for this patient.

Thereafter the plaintiff’s medical witness, the treating doctor, testified that EMG/NCV and SEEP testing could be utilized even if there was no “diagnostic dilemma”. The doctor further testified that according to generally accepted medical practice, this testing not only confirms a doctor’s suspicions of possible nerve damage, but may also assist in localizing the nerve injury.

In the instant case, neither defendant doctor or the letter of medical necessity uses the language “generally accepted medical practice” prefacing their statements. Dr. Cole deemed the test to be unnecessary because there was no “diagnostic dilemma”, the patient was improving and from the physical examination and history it could be determined that the assignor/patient had a right-sided cervical radiculopathy and a right sided lumbar radiculopathy. He opined that if the test does not effect the treatment, there is no reason to do the test. Therefore, since the test results were normal, and did not effect the course of treatment, they were unnecessary.

The Letter of Medical Necessity from Dr. Rozenberg clearly set forth the reason he had [*3]requested the test be performed. On cross-examination after having been shown the letter (done after Dr. Cole’s peer review), Dr. Cole agreed that the test could be used to determine the conditions set forth in the letter such as plexopathy and mononeuropathy, and the localization of any nerve injury; nonetheless the maintained that the tests were unnecessary for the reasons he previously stated.

The evidence shows contradictory positions between Dr. Cole and Dr. Rozenberg. The evidence shows that Dr. Rozenberg used the electrodiagnostic testing in light of the patient’s complaints to make an exact diagnosis, to locate a possible lesion and to determine the extent of the injury and to exclude possible conditions. The fact that the results were normal to this Court’s mind is not determinative of the usefulness of the studies. In the face of a course of treatment that has not been shown to have no medical purpose or performed towards no medical objective, this Court is not prepared to second guess a treating doctor who decides that a medical test is necessary for his/her diagnosis and treatment (see also A.B. Med. Serv. v. New York Central Mut. Fire Ins. Co., supra; Alliance Med. Office, P.C. v. Allstate Ins. Co., 196 Misc 2d 268 [Civ Ct. Kings Co. 2003]; see also Citywide Social Work & Psy. Serv. P.L.L.C v. Travelers Indemnity Co., supra]). Defendant has failed to show that the test herein were inconsistent with generally accepted/professional practices and therefore medically unnecessary.

Accordingly, judgment is rendered in favor of plaintiff and against defendant in the sum of $2,143.90. This constitutes the decision and judgment of the Court.

DATED: February 27, 2006

Brooklyn, New York

DELORES J. THOMAS

Judge Civil Court

[*1]

Civil Court of the City of New York, Kings County, February 8, 2006

APPEARANCES OF COUNSEL

Baker, Strauss, Barshay & Grossman for plaintiff. Rubin & Fiorella, LLP, for defendant.

OPINION OF THE COURT

Eileen N. Nadelson, J.

This matter presents an issue of first impression with respect to civil procedure in New York. The question concerns the ability of a court to declare a mistrial sua sponte over a party’s objections when it becomes impossible for the trial judge at a bench trial to continue hearing the matter.

The instant action was commenced as a first-party claim for benefits under New York’s No-Fault Insurance Law. Although the original claim involved multiple bills, during the proceedings all but one bill were settled out by the parties. After the close of plaintiff’s case-in-chief, during a recess in the proceedings for the end-of-year holidays, the presiding judge was informed by the Office of Court Administration (OCA) that she was being reassigned from civil to criminal court, and that all pending matters were to be turned over to the supervising judge of the civil court for reassignment to other judges. This reassignment was unexpected and unanticipated.

Because evidence had already been heard, the judge was given permission to remain in civil court for an extra week to complete the trial; however, despite the best efforts of all the participants, it was impossible to conclude the case. The trial judge was then required by OCA to assume her duties in the criminal court. A mistrial was then declared by the court.

CPLR 4402 states that “[a]t any time during the trial, the court, on motion of any party, may order a continuance or a new trial in the interest of justice on such terms as may be just.”

In the instant matter, neither party moved for a new trial or a mistrial, and the determination that a mistrial was necessary was made by the court. With respect to motions for mistrials, the law is clear that the decision as to whether or not to grant a new trial lies in the [*2]discretion of the court, when it appears that owing to some accident or surprise, defect of proof, unexpected and difficult questions of law, or like reason, a trial cannot proceed without injustice to a party. (Matter of Bank of N.Y. v Assessor of Vil. of Bronxville, 4 Misc 3d 1014[A], 2004 NY Slip Op 50874[U] [Sup Ct, Westchester County 2004].) Unfortunately, there are no judicial decisions, with regard to civil law matters, that provide guidance as to which circumstances would require or permit a court to declare a mistrial on its own initiative. However, there are several criminal law cases that do address this knotty problem.

In People ex rel. Brinkman v Barr (248 NY 126 [1928]), the New York Court of Appeals permitted the court to declare a mistrial when the judge before whom a criminal case was pending became too ill to appear in court or continue the trial. The request for the mistrial came from the judge himself. Therefore, it appears a judge’s physical incapacity may be a valid basis for the court to declare a mistrial.

In Matter of Romero v Justices of Supreme Ct., Queens County (237 AD2d 292 [2d Dept 1997]), the court was permitted to declare a mistrial when a juror failed to return for deliberations and could not be contacted. The appellate court stated that the trial court could not reasonably be required to order an indefinite continuance, but was justified in concluding that there was no acceptable alternative to a mistrial. In this instance, because the trier of fact was unavailable to complete the trial, a mistrial was deemed to be the appropriate course of action.

Pursuant to Federal Rules of Criminal Procedure rule 25, if by reason of death, sickness or other disability the judge before whom a jury trial has commenced is unable to proceed with the trial, any other judge regularly sitting in or assigned to the court, upon certifying familiarity with the record, may proceed with and finish the trial.

New York has no rule comparable to this federal rule. However, according to section 21 of the Judiciary Law, a judge “shall not decide or take part in the decision of a question, which was argued orally in the court, when he [or she] was not present and sitting therein as a judge.”

This section of the Judiciary Law has been interpreted, with respect to criminal matters, to prohibit a substitution of judges at hearings where testimony is presented, not to a jury, but to the court, and the substituted judge is called upon to render a decision based on an evaluation of testimony which he or she did not hear. (See, e.g., People v Cameron, 194 AD2d 438 [1st Dept 1993].) Consequently, it would appear that the Judiciary Law would prevent a substitution of judges after evidence has begun at a nonjury trial. (People v Thompson, 158 Misc 2d 397 [Sup Ct, Queens County 1993].) [*3]

In the instant case, because it is a bench trial, it would be seemingly improper for a substituted judge to render a decision based on evidence he or she did not hear, given by witnesses whose credibility he or she could not evaluate. Therefore, because a different judge could not be allowed to continue the trial, the only question is whether the trial judge’s reassignment constitutes a sufficient unexpected disability to warrant the declaration of a mistrial.

At least one court has determined that the fact that the court’s term was shortly to end did not require the declaration of a mistrial, because there were several other courses of action available. (That court failed to enumerate exactly what those courses of action might be.) That court stated that in order to declare a mistrial, a court must find a manifest necessity not founded upon its own convenience. (Matter of Delcol v Dillon, 173 AD2d 704 [2d Dept 1991].) This case is distinguishable from the instant matter, in which the trial judge requested to remain with the case but was unable to do so because of administrative exigencies.

In the case at bar, the trial judge was able to stay her reassignment for one week, which the parties asserted would be a sufficient amount of time in which to conclude the presentation of all of the evidence. Unfortunately, the parties were mistaken, and the trial could not be completed within this time frame. No other judge could be substituted, it was not possible for the judge to further delay her duties in a different court, although she was willing to do so, and an indefinite continuance until the judge might be reassigned back to civil court would be impracticable. As a consequence, in the interests of justice, the court had no alternative but to declare a mistrial.

[*1]

Civil Court of the City of New York, Kings County, January 3, 2006

APPEARANCES OF COUNSEL

Alden Banniettis, Brooklyn, for plaintiff. Tell, Cheser & Breitbart, L.L.P., for defendant.

OPINION OF THE COURT

Arlene P. Bluth, J.

When defending a claim for first-party no-fault benefits, an insurer may raise at any time the defense that the alleged injuries do not arise out of an insured incident. What must the insurer present at trial when asserting that the injuries are the result of an accident staged in furtherance of an insurance fraud scheme? As explained more fully below, this court holds that the term “fraud” as used in that context is a red herring. This is because it does not matter whether the accident was staged in furtherance of an insurance fraud scheme or was deliberately caused under some other circumstances. The relevant inquiry is whether the collision was a true accident—that is, was it unintentional? Quite simply, if it was not an accident, then it falls outside the scope of the no-fault policy.

In these actions, plaintiff V.S. Medical Services, P.C. seeks to recover first-party no-fault benefits for medical services rendered to its assignors. At issue is $2,242.87 for treatment rendered to Carlos Gaviria and $12,997.06 for treatment rendered to Ysidro Liriano. Both assignors were involved in the same alleged accident, and plaintiff’s claims for the treatment rendered to them were all denied based on defendant’s claim that the alleged accident was staged. Therefore, since there were common questions of law and fact, the trials were held jointly before this court on November 16, 2005. Defendant Allstate Insurance Company [*2]presented three witnesses: the insured, Victor Herasme; an outside investigator, Robert J. Sasso; and a claims examiner, Sandra Pryce. Plaintiff did not present any witnesses.

In the action pertaining to assignor Ysidro Liriano (Index No. 55821/04), a prior decision/order issued by Honorable Ellen M. Spodek on March 21, 2005 denied cross motions for summary judgment and found that although plaintiff had made out its prima facie case, defendant had raised an issue of fact as to whether the accident was staged. Therefore, the trial on the claims for Mr. Liriano was limited to the issue of whether the collision was an insured incident. As to the other assignor, Mr. Gaviria, plaintiff was still required to make out its prima facie case.

Based upon the testimony and evidence introduced at trial and having had the opportunity to observe the demeanor and credibility of the witnesses’ testimony, the court finds as follows:

Findings of Fact

The assignors herein were involved in an alleged accident on May 8, 2001. One of the assignors, Mr. Gaviria, was driving, and the other, Mr. Liriano, was one of his passengers. The car, a 1985 Nissan, was owned and insured by Victor Herasme, who was defendant’s first witness. Mr. Herasme credibly testified that he frequently loaned out his car to people in the neighborhood. He testified that he had gotten into an accident with the car in or about January 2001, while he was driving; and that just prior to the accident in May 2001 which gave rise to this suit, he had lent the car to Mr. Gaviria (known to him only as “Carlos”), whom he knew casually from around the neighborhood. Mr. Herasme testified that Mr. Gaviria returned the car to him with a “small scratch”; when Mr. Herasme questioned him about it, Mr. Gaviria admitted that he had “scraped by a car” but refused to give details. Mr. Herasme also testified that he is known as Victor, that Mr. Gaviria only called him Victor, and that he was not called Jose by anyone, including Mr. Gaviria. However, when Mr. Gaviria was questioned by defendant in an examination under oath (EUO), the signed transcript of which was introduced into evidence as exhibit A, Mr. Gaviria flatly denied knowing Victor Herasme or anyone named Victor, and claimed to have borrowed the car from a man named Jose.

Defendant’s second witness was Robert J. Sasso, chief executive officer (CEO) of Above Average Investigations, Inc. He was hired by defendant to locate the following witnesses and serve them with subpoenas to testify at the trial: Mr. Gaviria (the driver and an assignor), Mr. Herasme (the owner and insured), Mr. Liriano (a passenger and an assignor), and the treating physician, Dr. Leonid Livchits. Mr. Sasso was unable to serve Mr. Gaviria, but successfully served the other three individuals. Of those, only Mr. Herasme appeared.

Finally, defendant presented Sandra Pryce, a claims representative who works in defendant’s special investigations unit. Ms. Pryce testified that she has been employed for 38 years by defendant, and for 11 years in her current position. Her job includes the review of files referred by the claims department for suspicion of fraud (meaning a noncovered incident), and making the ultimate determination of whether to pay or deny those claims after investigation. Ms. Pryce testified she was referred the file because another Allstate employee had spoken to the driver, Mr. Gaviria, who denied any involvement in an accident. (As described above, he later changed his story when questioned by defendant under oath.) Ms. Pryce testified that the investigation revealed the following facts, and based thereon she determined that the accident [*3]was staged and that the claims should be denied:

(1) In his EUO, Mr. Gaviria denied knowing Mr. Herasme, the insured and owner of the vehicle he was driving.

(2) The alleged accident occurred on May 8, 2001, just under one month after the policy was taken out on April 9, 2001, and the policy was terminated for nonpayment on June 9, 2001, just over a month later.

(3) In a similar pattern, Mr. Herasme had taken out a policy on the car on December 28, 2000, the car was involved in an alleged accident less than a month later on January 19, 2001, and that policy was terminated for nonpayment on February 27, 2001.^[FN1]

(4) In both accidents, there was minimal damage to the car, there were several passengers in the car, and no one was taken to the emergency room, although medical treatments were started later. In addition, both accidents occurred on Seventh Avenue in Manhattan—the first at 19th Street, and the second at 32nd Street.

(5) There were several inconsistencies in the EUO testimony of Mr. Gaviria, the driver, and Mr. Torres, one of the passengers (and the only one of the four passengers who appeared for an EUO). Ms. Pryce noted that they conflicted in very basic ways, including the number and gender of the passengers, whether the police witnessed the accident or were called to the scene, the purpose of the trip and destination of the car. In his EUO, Mr. Gaviria stated that besides him, there were three other people in the car, all male, and one whom he could not even identify; Mr. Torres said there were four other people, and that one was female. Mr. Gaviria said the police were on the scene to witness the accident; Mr. Torres said they were called and arrived later. Mr. Gaviria’s testimony on this point was contradicted by the police report, which Ms. Pryce reviewed as part of defendant’s file. Mr. Gaviria also said that they had been on their way to pick up the mother of one of the passengers, while Mr. Torres said they were just cruising aimlessly. Ms. Pryce credibly testified that, in her experience, these types of inconsistencies—especially as to the number and identity of people in the vehicle—are indicative of a staged accident.

Based on all of these factors, and after consultation with Hazel Johnson, the original claims representative who had forwarded the file to her, Ms. Pryce determined that the accident was staged and therefore not a covered incident, and had the subject claims denied on that basis. She also duly notified the National Insurance Crime Bureau and the New York State Insurance Fraud Bureau.

Conclusions of Law

A. “Fraud” Is Not the Issue

No-fault insurance policies only cover vehicular accidents. An accident is, by definition, unintentional; a deliberate collision is not an accident. Therefore, damages resulting from a deliberate collision are not covered by no-fault insurance. (See Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2d Dept 2005] [no coverage where claimant was injured in an intentional collision]; Matter of Government Empls. Ins. Co. v Robbins, 15 AD3d 484 [2d Dept 2005] [no [*4]coverage for claimant where collision was deliberately caused by the driver of the other vehicle]; Westchester Med. Ctr. v Travelers Prop. Cas. Ins. Co., 309 AD2d 927 [2d Dept 2003] [no coverage where wife was injured when her husband tried to kill her by deliberately driving their car over an embankment while he exited the vehicle]; Matter of Progressive Northwestern Ins. Co. v Van Dina, 282 AD2d 680 [2d Dept 2001] [no coverage where claimant was injured when she was mugged by driver of another car while loading packages into her trunk and was pulled under offender’s car].) This line of cases makes clear that even where the individual claiming benefits had no involvement in causing the collision but was merely an innocent injured party, coverage is properly denied because the collision was not an accident.

Moreover, it does not matter “whether the intentional collision was motivated by fraud or malice.” (Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522, 523 [2d Dept 2003]; see also Progressive N. Ins. Co. v Rafferty, 17 AD3d 888, 889 [3d Dept 2005] [no coverage where claimant deliberately rammed his car into person with whom he had been fighting].) While some intentional collisions are the products of insurance fraud schemes, others are not. In all such cases, it is the deliberate, nonaccidental character of the incident that makes it ineligible for no-fault coverage. Put another way, the no-fault policy only covers accidents; it does not cover deliberate incidents. It does not matter whether the incident was a deliberate mugging, an attempted murder, a product of road rage, or a cold, calculated scheme to defraud the insurance company—if it was deliberate, it is not a covered incident under the no-fault policy.

Nevertheless, our appellate courts commonly invoke the term “fraud” when discussing the defense of lack of coverage; this may be because so many cases involving allegedly noncovered incidents center on accidents purportedly staged for the purpose of generating fraudulent insurance claims. (See State Farm Mut. Auto. Ins. Co. v Laguerre, 305 AD2d 490, 491 [2d Dept 2003] [“A deliberate collision caused in furtherance of an insurance fraud scheme is not a covered accident”]; see also Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2d Dept 2002]; A.B. Med. Servs. PLLC v Encompass Ins., 10 Misc 3d 127[A], 2005 NY Slip Op 51892[U] [App Term, 2d & 11th Jud Dists 2005]; Ocean Diagnostic Imaging, P.C. v Utica Mut. Ins. Co., 9 Misc 3d 138[A], 2005 NY Slip Op 51745[U] [App Term, 9th & 10th Jud Dists 2005]; Careplus Med. Supply Inc. v Allstate Ins. Co., 9 Misc 3d 131[A], 2005 NY Slip Op 51598[U] [App Term, 2d & 11th Jud Dists 2005]; A.B. Med. Servs. PLLC v State-Wide Ins. Co., 7 Misc 3d 136[A], 2005 NY Slip Op 50785[U] [App Term, 2d & 11th Jud Dists 2005]; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]; A.B. Med. Servs. v Eagle Ins. Co., 3 Misc 3d 8 [App Term, 2d Dept 2003].) Perhaps the seminal embodiment of this formulation is the Second Department’s pronouncement that “[a] deliberate collision caused in furtherance of an insurance fraud scheme is not a covered accident.” (State Farm v Laguerre, 305 AD2d at 491.) No-fault insurers and practitioners (including the parties and their counsel in this case) have also adopted the nomenclature of fraud when litigating claims involving allegedly staged accidents. This is true even though the no-fault regulations do not mention “fraud” as a defense to payment, but rather refer only to noncovered incidents. (See, e.g., 11 NYCRR 65-3.8 [e] [2].)

Unfortunately, the “fraud” label has created the mistaken impression that the insurance [*5]company must prove that the “accident” was the product of a fraudulent motive or scheme. But the fraud label is merely a distraction, since the focus for a “lack of coverage” defense must always be whether the collision was deliberate or a true accident. That is, the court must determine whether the incident was unintentional (i.e., a true accident) or whether at least one driver intended to make contact (i.e., a deliberate event).

B. Establishing a Staged Accident Defense

In the no-fault context, the plaintiff need not prove coverage as part of its prima facie case. (See, e.g., Amaze Med. Supply Inc. v Lumbermens Mut. Cas. Co., 10 Misc 3d 127[A], 2005 NY Slip Op 51898[U] [App Term, 2d & 11th Jud Dists 2005]; Contemp. Med. Diag. & Treatment, P.C. v Government Empls. Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists 2005]; Triboro Chiropractic & Acupuncture v Electric Ins. Co., 2 Misc 3d 135[A], 2004 NY Slip Op 50215[U] [App Term, 2d & 11th Jud Dists 2004] [setting forth the elements of the plaintiff’s prima facie case, namely, that the statutory claim form, setting forth the fact and the amount of the loss sustained, was submitted to the defendant, and that payment of no-fault benefits is overdue].) Instead, the plaintiff’s prima facie case establishes a presumption of coverage. (See A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 822, 825 [Civ Ct, Kings County 2005].)

Before trial, it is well established that to defeat a plaintiff’s motion for summary judgment for first-party no-fault benefits, a defendant asserting a lack of coverage defense must set forth admissible evidence of “the fact or [a] founded belief that the alleged injury does not arise out of an insured incident.” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; St. Luke’s Roosevelt Hosp. v Allstate Ins. Co., 303 AD2d 743 [2d Dept 2003]; Diagnostic Rehab. Medicine Serv., P.C. v Farm Family Cas. Ins. Co., 7 Misc 3d 137[A], 2005 NY Slip Op 50826[U] [App Term, 1st Dept 2005]; Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists 2005].) In other words, when the defense is based on lack of coverage, to defeat plaintiff’s motion for summary judgment, the defendant must come forward with evidence in admissible form that creates an issue of fact and rebuts that presumption of coverage.

Once the plaintiff’s motion for summary judgment is denied, however, there is a dearth of case law to address what showing the insurer must make at the trial to defeat the claim for first-party no-fault benefits. This court found only two published decisions addressing this issue, and they conflict with each other. In one, the court extrapolated the standard for defeating a summary judgment motion into the trial context. In A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., Judge Jack M. Battaglia of this court held that if the insurer raises a lack of coverage defense, it is its burden at trial to come forward with evidence of ” ‘the fact’ [of lack of coverage or the] ‘found[ation for its] belief’ that there is no coverage.” (A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 822, 824 [Civ Ct, Kings County 2005], quoting Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 19-20 [2d Dept 1999].) A completely different approach was taken by Judge Loren Baily-Schiffman of this court. In JSI Expert Serv. v Liberty Mut. Ins. Co. (7 Misc 3d 1009[A], 2005 NY Slip Op 50513[U] [Civ Ct, Kings County 2005]), Judge Baily-Schiffman rejected the approach of the A.B. Med. court. Instead, she focused on the fraud aspect and applied the “clear and convincing evidence” standard, the unusually high standard required to prove an independent cause of action for fraud. “This Court holds that the insurer’s defense of fraud, whether it be a staged accident or other fraud, requires [*6]proof by clear and convincing evidence.” (JSI Expert Serv. v Liberty Mut. Ins. Co., 7 Misc 3d 1009[A], 2005 NY Slip Op 50513[U], *3 [Civ Ct, Kings County 2005].)

Besides these two posttrial decisions, the issue of whether the incident was a true accident or a deliberate event also arises in another context. In cases where an insurer petitions the Supreme Court to permanently stay arbitration of a claimant’s no-fault claim on the ground that the collision was not a covered incident, the Supreme Court holds a framed issue hearing on that sole issue. In those posthearing decisions, the case law from the Second Department makes clear that whether a collision is a covered incident depends upon whether it was intentionally caused. (See Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2d Dept 2005]; Matter of Government Empls. Ins. Co. v Robbins, 15 AD3d 484 [2d Dept 2005]; Westchester Med. Ctr. v Travelers Prop. Cas. Ins. Co., 309 AD2d 927 [2d Dept 2003]; Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522, 523 [2d Dept 2003]; Matter of Progressive Northwestern Ins. Co. v Van Dina, 282 AD2d 680 [2d Dept 2001].) If the collision was an intentional occurrence, then it is outside the scope of the no-fault policy regardless of why or how it occurred or who was behind it.

That does not mean that an insurer cannot or should not put forth evidence of a fraudulent scheme in order to prove that the collision was not an accident; it does mean, however, that the insurer need not prove fraud. In Matter of Eagle Ins. Co. v Davis (22 AD3d 846 [2d Dept 2005]), the Second Department held that the Supreme Court should have considered evidence proffered on the issue of fraud, insofar as it bore on the question of whether the collision was a covered incident. “When [the insurer] raises an issue of fact as to whether the automobile collision . . . was deliberate or intentional, the issue of fraud is subsumed under the coverage issue. Evidence of such fraud should be considered in determining the broader coverage issue.” (Id. at 847 [citations omitted]; see also Matter of Government Empls. Ins. Co. v Spence, 23 AD3d 466 [2d Dept 2005].) Thus, the insurer may introduce evidence of a fraudulent scheme or motive to the extent that it is probative of the question of whether the collision was a true accident. In other words, evidence of fraud can serve as circumstantial evidence that this was not a covered incident. While “unsubstantiated hypotheses and suppositions” are not enough to make out a lack of coverage defense (see Amstel Chiropractic v Omni Indem. Co., 2 Misc 3d 129[A], 2004 NY Slip Op 50088[U], *1 [App Term, 2d & 11th Jud Dists 2004]), an insurer’s evidence of a purposeful collision will often be circumstantial. This is to be expected; in the absence of a mea culpa from one of the participants, the insurer—and ultimately the court—must examine the facts and circumstances of the incident to determine whether they give rise to an inference of lack of coverage. (See, e.g., A.B. Med. Servs., 7 Misc 3d 822.) Circumstantial evidence is sufficient if a party’s conduct “may be reasonably inferred based upon logical inferences to be drawn from the evidence.” (Benzaken v Verizon Communications, Inc., 21 AD3d 864, 865 [2d Dept 2005].)

C. Burdens of Proof at Trial

As set forth in section B above, the plaintiff need not prove coverage as part of its prima facie case. Instead, the plaintiff’s prima facie case establishes a presumption of coverage. When the defense is based on lack of coverage, therefore, the defendant need only come forward with evidence that rebuts that presumption of coverage. That is, once the plaintiff has made out its prima facie case, the burden of production (also called the burden of going forward) on the issue [*7]of coverage falls upon the defendant, and the defendant must demonstrate that it has a founded basis for believing that the alleged collision was intentionally caused. The burden of persuasion, however, remains on the plaintiff, who must prove its case by a fair preponderance of the credible evidence. (See Kalra v Kalra, 149 AD2d 409, 411 [2d Dept 1989]; Prince, Richardson on Evidence § 3-206 [Farrell 11th ed].) “[I]f the insurer carries its burden of coming forward, plaintiff must rebut it or succumb.” (A.B. Med. Servs., 7 Misc 3d at 825 [internal quotation marks and citation omitted].) How much evidence must defendant produce to satisfy its burden of production? There is no magic formula, but clearly it must be enough to rebut the presumption that the injuries were caused by a covered incident, that is, a true accident. (See Prince, Richardson on Evidence § 3-202.) After all the evidence has been presented, the court must decide whether the evidence of coverage preponderates in favor of the plaintiff, the party who bears the burden of persuasion. If the evidence weighs against the plaintiff, or is so evenly balanced that it is impossible to determine the matter, then judgment must be given for the defendant. (See Roberge v Bonner, 185 NY 265 [1906].)

D. Conclusion

Addressing the issue of plaintiff’s prima facie case, the court finds that plaintiff made out its prima facie case as to assignor Ysidro Liriano on its summary judgment motion; at trial, plaintiff made out its prima facie case as to the other assignor, Carlos Gaviria, via the admissions of defendant, through the testimony of Ms. Pryce, that it received the claims submitted for Mr. Gaviria.

In this trial, defendant came forward with sufficient evidence to rebut the presumption of coverage by showing that it had a founded belief that the injuries did not arise from a covered incident—that is, that the accident was staged because at least one driver intended to make contact.^[FN2] The court finds that the insurer, by Ms. Pryce, testified credibly that its denials of plaintiff’s claims were based, or founded, upon the results of her investigation—including the profile and claim history of the car (older model, accident shortly after insurance taking effect and policy cancelled shortly thereafter for nonpayment on two separate occasions), several passengers in the car, no emergency room treatment for any passenger, several material discrepancies in the car’s occupants’ stories as to the number and gender of people in the car, where they were going, and the driver denying knowing the owner of the car. At trial, defendant also presented Mr. Herasme’s unrebutted testimony that his car suffered only a “small scratch” in the alleged accident—an event which sent no one to the emergency room, but which allegedly resulted in over $15,000 in treatment for these assignors alone.^[FN3] Thus, the evidence produced by defendant rebutted the presumption of coverage which attached to plaintiff’s prima facie case, and shifted the burden of production back to plaintiff. [*8]

Plaintiff wholly failed to carry that burden. Plaintiff produced no evidence to rebut any of defendant’s proof; plaintiff did not even produce its assignors or any other witnesses to the alleged incident. Instead, plaintiff relied on its counsel’s vigorous cross-examination of defendant’s witnesses. The tactic did not succeed, and defendant’s credible proof stands unrefuted. Thus, based upon a fair preponderance of the evidence, this court finds that the subject collision was not a covered incident.

Accordingly, judgment is for defendant, and the complaints are hereby dismissed.

Footnotes

Footnote 1: Ms. Pryce explained that defendant was obligated to reinsure the vehicle because it was in the assigned risk pool, and due to the luck of the draw, Allstate got the vehicle twice.

Footnote 2: In this case, defendant denied the subject claims because, inter alia, the injuries were not caused by an accident. However, even if the denials were not premised upon lack of coverage, the outcome would be the same since at trial defendant established the defense of lack of coverage, and said defense is not subject to preclusion.

Footnote 3: In finding that the alleged injuries were not the result of a covered incident, this court does not suggest that fraud was committed by the medical provider with regard to the billed-for treatment, an issue not before the court in this trial.

Civil Court, Kings County

95623/04

Delores J. Thomas, J.

In this action brought by a health care provider to recover no-fault benefits as assignee of Alex Zubaty, plaintiff moves for an order granting summary judgment against defendant in the sum of $540.00 plus statutory interest together with statutory attorney’s fees.

The No-Fault Law provides for payments for medical supplies provided to a person injured as a result of an accident arising out of the use or operation of a motor vehicle. To recover first-party benefits, a claimant must demonstrate a prima facie entitlement to summary judgment by setting forth proof that it submitted a claim, the fact and amount of losses sustained and that payment of benefits is overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]).

It is undisputed that defendant did not pay or deny the claim within the required 30-[*2]day period. Plaintiff contends there was no extension of the time period through verification requests. Although defendant requested an examination under oath (EUO), unless defendant can establish that the policy in effect entitled defendant to conduct an EUO and that it made a timely and proper verification request, tolling does not occur. Policies issued on or after April 5, 2002 must contain the revised prescribed endorsement to entitle the insurer to conduct an EUO (see, SZ Medical P.C. v. State Farm Mutual Auto Ins. Co., 9 Misc 3d 139 [A], 2005 NY Slip Op 51842 [U] [App Term, 1st Dept 2005]). Here, defendant has not demonstrated any basis to toll the 30-day period.

An untimely denial precludes defendant from interposing most defenses including the defense of lack of medical necessity (Amaze Med. Supply Inc. v. Eagle Ins. Co., 2 Misc 3d 139 [A], 2004 NY Slip Op 050279 [U] [App Term, 2d & 11th Jud Dists 2004]). However, defendant is not precluded from asserting the defense that the injuries do not arise out of a covered accident or a defense premised on staged accident fraud (see, Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Metro Med. Diagnostics v. Eagle Ins. Co., 293 AD2d 751 [2nd Dept 2002]). However, to withstand a motion for summary judgment, defendant must raise a triable issue of fact (Alvarez v. Prospect Park Hospital, 68 NY2d 320 [1986]).

The denial of claim form (Exhibit A, annexed to Notice of Motion) states: “All no fault benefits denied based in part on A) the EUO; B) failure to establish proof of claim; C) failure to establish that the injuries arose out of the use and operation of the insured vehicle; and D) the treatment was not causally related to the claimed injuries.” In addition, in support of its fraud defense defendant submits the affidavit of Jeffrey Billington, claims adjuster in the no-fault department of defendant insurer. Billington does not state that he is a special insurance investigator or that he is trained in fraud detection. He asserts that plaintiff received aggressive medical treatment for a “relatively minor collision” as a basis for the EUO and to support a fraud claim. Billington concludes there is a “discernable pattern of circumstances and conduct consistent with staging of an accident.” He refers to the fact that the assignor sought treatment six days after the accident from a provider other than his personal doctor, that he was referred to get an MRI on an initial visit and that he was involved in a prior accident (four years ago) which was settled by the same attorney now representing plaintiff.

The insurer has the burden to come forward with proof in admissible form to establish the basis for its belief that there is no coverage (see, Mount Sinai Hospital v. Triboro Coach Inc., 263 AD2d 11 [2d Dept 1999]). An insurer’s “founded belief” that an accident was staged cannot be based upon unsubstantiated hypotheses and supposition (see, A.B. Medical Services v. Eagle Ins. Co., 3 Misc 3d 8 [App Term, 2d Dept 2003]). The statements made by defendant’s counsel in the affirmation in opposition, that the injuries did not arise from the accident and/or that the accident was staged, are not based on personal knowledge and are of no probative value. In addition, the Court finds the assertions made by the claims representative are insufficient to support his finding of a pattern of circumstances and conduct which constitutes fraud. Defendant’s belief that treatments were unduly “aggressive” or unnecessary might have been addressed through a defense of lack of medical necessity if there had been a timely denial. Defendant has not submitted any proof specific to the circumstances of the accident to support a “founded belief” that the accident was staged.

Accordingly, plaintiff’s motion for summary judgment is granted. The clerk is directed to enter judgment in favor of plaintiff in the sum of $540.00 together with statutory interest and attorney’s fees. [*3]

This constitutes the decision and order of the Court.

DATED: December 30, 2005

Brooklyn, New York

DELORES J. THOMAS

Judge Civil Court