[*1]

Civil Court of the City of New York, Kings County, May 23, 2005

APPEARANCES OF COUNSEL

Israel, Israel & Purdy (W. Matthew Iler of counsel), for plaintiff. Picciano & Scahill (Patrick Morale of counsel), for defendant.

OPINION OF THE COURT

Eileen N. Nadelson, J.

This action arose pursuant to the provisions of New York’s No-Fault Insurance Law.

Plaintiff submitted a claim to defendant insurer for first-party benefits for an MRI it performed on its assignor’s knee pursuant to a prescription written by a chiropractor. Defendant timely denied the claim based on a peer review by a chiropractor, alleging that the MRI was not medically necessary.

At trial, the question arose as to whether this claim for an MRI of the assignor’s knee performed by plaintiff pursuant to a prescription written by a licensed chiropractor may be recovered under the No-Fault Law from an insurer. Defendant insurer alleges that chiropractors are not permitted to prescribe MRIs for the knee, and therefore any prescription written by a chiropractor for a part of the human body it is not permitted to treat is automatically medically unnecessary. After research and argument, the court finds this is an issue of first impression.

The basic questions presented in this case concern whether a given diagnostic tool is medically necessary regardless of the medical professional who orders it and the degree of inquiry, if any, a medical supplier must perform regarding the authority of the prescribing doctor to write the prescription in question in order to recover first-party no-fault benefits.

Chiropractors are licensed in this state pursuant to the New York State Education Law. Under section 6551 (1) of the Education Law, the profession of chiropractic is defined as “detecting and correcting by manual or mechanical means structural imbalance, distortion, or subluxations in the human body for the purpose of removing nerve interference and the effects thereof, where such interference is the result of or related to distortion, misalignment or subluxation of or in the vertebral column.”

This section of the statute continues to enumerate various restrictions imposed on chiropractors with respect to the methods of treatment they may employ and the diseases and malfunctions they may or may not treat, as well as the nature of the medicines and medical supplies they may prescribe. The court notes that this portion of the Education Law does not mention the use or prescription of MRIs.

In Bako v Decaro (2002 NY Slip Op 50271[U], *4 [Civ Ct, Richmond County 2002]), the court stated that a licensed chiropractor may use “for diagnostic purposes those clinical laboratory services which are contained within the required coursework of all registered doctoral programs in chiropractic in the State.” The court further noted that the study of MRIs is part of the core curriculum at chiropractic schools licensed in the State of New York. In its decision, the court concluded that section 6551 of the Education Law does not prevent chiropractors from using MRIs as a diagnostic tool. In this case the chiropractor whose bills were in question analyzed MRIs ordered by a neurologist on an area of the patient’s body that went beyond the vertebral column.

In a case of first impression, the court in ABC Med. Mgt. v GEICO Gen. Ins. Co. (3 Misc 3d 181 [Civ Ct, Queens County 2003]) held that a medical equipment supplier can recover no-fault first-party benefits for prescriptions written by a chiropractor.

Based on the provisions of the Education Law and the two above-cited cases, the court concludes that, as a general rule, a medical supplier may recover first-party no-fault benefits for prescriptions for MRIs written by a chiropractor. However, this conclusion does not answer the immediate question, which relates to an MRI prescription written by a chiropractor for a part of the human body not within his licensed ability to treat.

As part of its case-in-chief, defendant called a chiropractor as its expert witness who testified that chiropractors do not prescribe MRIs for a patient’s knee because that joint is not within a chiropractor’s area of expertise and training. Usually, the chiropractor will refer the patient to an orthopedist for treatment and diagnosis of a knee who may then, in turn, order an MRI of the knee. Evidence at trial indicated that the prescribing chiropractor referred the patient to a physician who examined the knee but did not prescribe an MRI.

Defendant’s expert further testified that a chiropractor will use an MRI of the knee as a diagnostic tool because, although vertebral problems do not cause symptoms in the extremities, the opposite is not true, and a problem in a patient’s knee may result in symptoms appearing on the vertebral column. This witness also testified that chiropractors do prescribe MRIs for the vertebral column. [*2]

Based on the testimony of defendant’s expert witness, the court concludes that it is not unusual for a chiropractor to prescribe an MRI of the vertebral column or to use an MRI of a patient’s knee prescribed by another medical specialist as a means of diagnosing a patient’s problem. Therefore, simply because chiropractors do not prescribe MRIs of the knee does not mean that such a diagnostic tool is not medically necessary in a given instance. The court notes that no evidence was proffered that the MRI in question was of no assistance to the treating chiropractor.

The only issue remaining, therefore, is whether there is a legal duty imposed on the medical supplier or provider to investigate the authority of the author of the prescriptions it fills in order to receive first-party no-fault benefits for the services it provides.

This court could find no legal authority on point, either legislative or judicial. The court notes that this situation is different from those in which the provider or supplier is not licensed or authorized to perform the services being billed, for which recovery under the No-Fault Law does not lie. (Valley Physical Medicine & Rehabilitation v New York Cent. Mut. Ins. Co., 193 Misc 2d 675 [App Term, 2d Dept 2002].) In the instant case the assignee supplier is licensed to perform the services rendered, and there is no dispute as to the fact that the services were performed.

Based on the specific facts presented in this case, the court concludes that it was not unreasonable for plaintiff to prepare an MRI prescribed by a licensed chiropractor and that there is no evidence that this MRI was not medically necessary as a diagnostic tool. Therefore, plaintiff may seek recovery for the services it rendered from its assignor’s insurer. This is not a situation in which the prescription would be so unusual or extraordinary so as to raise questions of the authority of the prescribing doctor which might impose a duty of inquiry.

If there were any wrongdoing, it would be the action of the chiropractor, not the plaintiff nor the plaintiff’s assignor. Consequently, there would be no reason to preclude recovery under the No-Fault Law.

Judgment for plaintiff in the amount of $878.67 plus statutory interest, costs and attorneys’ fee.

Civil Court of the City of New York, Kings County

63796/2003

Milagros A. Matos, J.

Facts

Plaintiffs medical providers A.B. MEDICAL SERVICES P.L.L.C. (“A.B. Medical”), LVOV ACPUNCTURE P.C.( “LVOV”), and SOMUN ACUPUNCTURE, P.C. (“Somun”), Assignees of SERGEY MINHUK, instituted this action to recover first party no-fault benefits from defendant insurer NEW YORK CENTRAL MUTUAL FIRE INSURANCE COMPANY (“insurer”). LVOV and Somun were denied payment by defendant insurer for acupuncture treatments performed on the patient/insured Sergey Minhuk. The claims for unpaid acupuncture services by LVOV and Somun were settled at trial, and the actions by LVOV and Somun were discontinued against defendant insurer.

A.B. Medical was denied payment by defendant insurer for psychotherapy sessions and neurological testing performed on the patient/insured Sergey Minhuk. The patient was injured in an automobile accident on May 25, 2002. In June and July, 2002, Dr. Jeffery Schwartz, a doctor at A.B. Medical, examined the patient and conducted Electromyography and Nerve Conduction Velocity (EMG/NCV) tests and Somatosensory Evoked Potential (SSEP) tests to determine whether the patient suffered nerve injury from the accident. In July and August, 2002, Dr. Alexander Braver, a doctor at A.B. Medical, performed psychotherapy sessions on the patient.

At the time the services were rendered, the patient Sergey Minhuk was insured under a no-fault insurance policy issued by defendant. The no-fault benefits were properly assigned to A.B. Medical, who submitted claim forms to defendant totaling $6,150.11. Defendant insurer made a partial payment to A.B. Medical in the amount of $1972.08 due to a late denial of claim, leaving a balance of $4,187.03. Defendant denied the remaining claims based upon a denial form and peer review report stating that the sessions and tests were not medically necessary. Before trial the parties stipulated that the only issue for determination by the court was whether the diagnostic testing was medically necessary as defined by Insurance Law § 5102[a][1], and [*2]thus whether or not defendant properly denied payment of the claim. The bills at issue are as follows:

Psychotherapy

8/7/02 bill for diagnostic interview ($218.35) performed on 5/30/02 and 8 psychotherapy sessions ($960.00) performed on 5/31/02-7/31/02 totaling $1,178.35;

7/23/02 bill for a psychotherapy session performed on bill date for $156.32;

9/17/02 bill for 2 psychotherapy sessions performed on 8/7/02 and 8/14/02 totaling $240.00;

Neurology

8/12/02 bill for SSEP testing performed on 6/13/02 totaling $604.24;

8/13/02 bill for EMG/NCV, motor nerve and reflex testing performed on 7/11/02 totaling $1,999.12.

The court conducted a full trial of this matter on March 22, 2005. At trial, both sides presented the testimony of physicians. For the psychotherapy bills, defendant presented Dr. Martin Lipschutz, the doctor that had authored the peer review report upon which the denial was based. Dr. Lipschutz testified that the psychotherapy sessions were not medically necessary due to insufficient information on file justifying ongoing psychotherapy sessions. Plaintiff did not present a witness on the psychotherapy bills, but claimed that Dr. Lipschutz did not adequately review available records to determine lack of medical necessity.

For the Neurology bills, defendant presented Dr. Peter Gastaldi, a chiropractor. He found that the tests were medically unnecessary because the treating doctor provided no objective or subjective findings warranting neurological testing for this patient. Plaintiff presented Dr. Jason Schwartz, the treating neurologist. Dr. Schwartz testified that EMG/NCV testing and SSEP testing is appropriate when there is a diagnostic suspicion of further nerve damage and also to localize such damage.

Discussion

At trial, defendant must establish a factual basis and medical rationale for the lack of medical necessity of plaintiff’s services in order to sustain its burden of proof. (Nir v. Allstate Ins. Co., ___ NY2d___, 2005 WL 562739 [Civ Ct, Kings County 2005]; see also Citywide Social Work & Psy. Serv. P.L.L.C. v. Travelers Indemnity Co., 3 Misc 3d 608, 2004 NY Slip Op 24034 [Civ Ct, Kings County 2004]; Inwood Hill Medical P.C. v. Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 NY Slip Op 50565[U][Civ Ct 2004].) Defendant’s medical rationale may be insufficient if not supported by evidence of the “generally accepted medical/professional practice.” (Nir v. Allstate Ins. Co., 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 values that define its calling.” (Citywide Social Work & Psy. Serv. P.L.L.C. v. Travelers Indemnity Co., 3 Misc 3d at 616, supra.)

1. Psychotherapy sessions

Defendant’s peer review doctor, Dr. Lipschutz, testified that the limited information [*3]presented by patient’s treating physician did not justify the need for a psychiatric referral. Dr. Lipschutz testified that the psychotherapy was unwarranted because of A.B. Medical’s “generic” paperwork, which lacked sufficient details of the accident, patient’s symptoms, social factors behind treatment, or objective findings by the treating physician. On cross examination, plaintiff showed that A.B. Medical’s paperwork detailed the accident, the patient’s psychiatric history, current medical condition, medications, social history, results of the physical examination, and diagnosis. Dr. Lipschutz could not support his assertion, that plaintiff’s paperwork was inadequate and therefore psychotherapy sessions were medically unnecessary, with any evidence that plaintiff’s paperwork deviated from generally accepted practice, standards, or values in the field. Therefore, Dr. Lipschutz’ opinion and defendant’s medical rationale to deny payment for lack of medical necessity are insufficient to sustain defendant’s burden of proof.

Even if this Court were to find that Dr. Lipschutz’ opinion was properly supported by evidence of generally accepted practice, his opinion would hold little weight. The short period of time invested, 25 minutes, to review records, come to a conclusion, and complete a report reveals that Dr. Lipschutz did not sufficiently consider the medical necessity of the services provided to the patient. Dr. Lipshutz testified that he reviewed 14 records in preparing his peer review report, including: initial consultation reports, psychotherapy session notes, rehabilitation evaluations, the treating physician’s evaluation, a police accident report, a letter of medical necessity, a narrative report regarding psychological testing, a psychological evaluation, a prescription for medical supplies, MRIs of the right knee, lumbosacral spine, and cervical spine, and electrodiagnostic study reports. He testified that in less than 25 minutes he reviewed the above-mentioned records, came to a conclusion as to the medical necessity of the patient’s psychotherapy sessions, and wrote an extensive three-page peer review report. Plaintiff asserted and this Court agrees that this amount of time is insufficient to carefully determine and detail that a patient does not need the medical services provided by the treating doctor.

Finally, Dr. Lipshutz testified that the psychiatric evaluation performed on 5/30/02 may have been performed by an unlicensed social worker, not a psychiatrist. Although an unlicensed master’s level clinician may not perform psychotherapy sessions, even if supervised by the licensed psychologist (See NYS Educational Law §§ 7600-7606), Dr. Lipschutz’ could not definitively testify that this was the case. On cross-examination, Dr. Lipschutz testified that he did not know what degree of involvement Dr. Braver, the treating psychologist, had in the evaluation. Therefore, defendant could not properly deny payment for the 5/30/02 psychiatric evaluation on that basis.

2. Neurological testing

Defendant offered the testimony of its expert witness, Dr. Gastaldi, a chiropractor. He testified that the electrodiagnostic testing performed by plaintiff would not have served to substantiate the doctor’s findings from the initial physical examination of the patient. Dr. Gastaldi testified that it is 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. Therefore, the doctor testified, the electrodiagnostic tests were medically unnecessary. [*4]

Plaintiff’s witness Dr. Schwartz, the patient’s treating doctor, rebutted the peer review doctor’s testimony with contrary evidence of generally accepted practice with regard to the use of electrodiagnostic testing. He testified that EMG/NCV and SSEP testing may be utilized even if there is no “diagnostic dilemma.” The plaintiff’s doctor testified that, according to generally accepted medical practice, this testing does not only confirm a doctor’s suspicions of possible nerve damage, but may also assist in localizing the nerve injury.

Contradictory positions have been raised by the testifying witnesses supported by their own testimony of generally accepted medical practice. If the plaintiff medical provider offers evidence that its medical services were consistent with generally accepted medical practice, the defendant insurer may fail to sustain its burden of proof at trial. (Nir v. Allstate Ins. Co., ___ NY2d___, 2005 WL 562739 [Civ Ct, Kings County 2005]; see also Elm Medical P.C. v. American Home Assurance Co., 2003 NY Slip Op. 51357 [Civ Ct 2003].) Plaintiff has offered convincing evidence that the electrodiagnostic testing in this case was utilized to confirm diagnostic suspicions and localize nerve injury. In the face of such evidence, “[I]t is not for a judge to second-guess a doctor who decides that a medical test is necessary for his diagnosis and treatment.” (Alliance Medical Office, P.C. v. Allstate Ins. Co., 196 Misc 2d 268, 2003 NY Slip Op 23633 [Civ Ct, Kings County 2003]; see also Citywide Social Work & Psy. Serv. P.L.L.C. v. Travelers Indemnity Co., 3 Misc 3d 608, 2004 NY Slip Op 24034 [Civ Ct, Kings County 2004].) Defendant’s witness Dr. Gastaldi testified that certain testing listed on plaintiff’s 8/13/02 bill was redundantly billed. Dr. Gastaldi testified that the motor nerve testing, already included in the 8/13/02 bill under one No-fault billing code category, was separately billed under another category, and therefore plaintiff’s bill charged $425.88 in excess. This testimony was not controverted by plaintiff. Plaintiff’s bill of 8/13/02 for $1,999.12 is reduced by $425.88.

Conclusion

Based on the evidence, the Court concludes that defendant did not sustain its burden of proof for the lack of medical necessity of psychotherapy sessions and neurological testing provided to the patient, except for neurological testing redundantly billed on 8/13/02. Plaintiff’s total claim in the amount of $4,187.03 is therefore reduced by $425.88.

Judgment should be entered for the plaintiff in the amount of $3,761.15, plus interest and attorneys’ fees as provided by the Insurance Regulations, together with the statutory costs and disbursements of this action.

This constitutes the Decision and Order of this Court.

Dated: April 29, 2005_________________________

Milagros A. Matos, J.C.C.

Civil Court of the City of New York, Kings County

9422KCV2005

Eileen N. Nadelson, J.

Petition to Vacate a Master Arbitrator’s Award Motion for Summary Judgment

In deciding this matter the court considered the following:

Notice of Petition and annexed Affidavits and Affirmations

Exhibits

Affirmation in Opposition

Memoranda in Support and in Opposition to the Petition

This matter involves the disputed billing of $3947.96 which was denied by the arbitrator based upon the grounds of lack of medical necessity. Petitioner, the medical provider, appealed the arbitrator’s award to a Master Arbitrator, alleging that the arbitrator’s decision was arbitrary, capricious, irrational and without a plausible basis in fact. Based on that argument, Petitioner asked the Master Arbitrator to vacate the award pursuant to CPLR section 7511(b)(1). The Master Arbitrator, however, affirmed the arbitrator’s award.

Petitioner, pursuant to CPLR 7511, now moves this court to vacate the decision of the Master Arbitrator as arbitrary and capricious.

Petitioner originally submitted a claim for $4,354.30 for acupuncture treatments it rendered to the allegedly injured assignor. Respondent insurer made partial payments in the amount of $406.34, and Petitioner filed a request for arbitration.

The initial arbitrator stated that he reviewed the documentation submitted which reflect [*2]that Respondent issued timely denials based on a lack of medical necessity, following a peer review and the assignor’s failure to appear for an Independent Medical Examination. In his conclusion, the initial arbitrator stated that the denials issued by the insurer were of no consequence, and that the crucial fact is the medical necessity of the treatments. The Master Arbitrator, in his affirmation of the initial decision, stated that the initial arbitrator’s statement that the timeliness of the denials was of no consequence was erroneous, but harmless error under the circumstances.

Petitioner alleges that the initial arbitrator required it to prove medical necessity which is an incorrect interpretation of its prima facie burden of proof. Petitioner states that, to meet its burden, it only has to prove that it provided services, mailed a claim, and that the claim was not paid or denied within thirty days. The Master Arbitrator disagreed, and confirmed the arbitration award.

In his decision, the Master Arbitrator states that the initial decision was neither arbitrary nor capricious, and that statutory requirements mandate that a medical provider establish the necessity of its medical treatments. Insurance Law sec. 5102, 11 NYCRR 65-1.1. Further, since the insurer did timely deny the claim, proving such necessity is part of the provider’s burden. Cf In re Regal Imaging aao Ginzberg v. State Farm Insurance Co., Index No. 7450/01 (Sup. Ct. Nassau County August 8, 2001).

CPLR section 7511((b)(iii) provides that an arbitrator’s award may be vacated if it is found that the arbitrator exceeded his power or imperfectly executed it. In Petrofsky v. Allstate Insurance Company, 54 NY2d 207, 445 N.Y.S. 2d 77 (1981), the Court of Appeals held that the role of a master arbitrator in insurance cases is to assure that the arbitrator reached a decision in a rational manner, that the decision was not arbitrary and capricious, incorrect as a matter of law, or in excess of policy limits or in conflict with other designated no-fault arbitration proceedings. Therefore, the question to be decided by this court is whether the decision of the arbitrator, as confirmed by the Master Arbitrator, was arbitrary, capricious, or incorrect as a matter of law.

In Park Radiology, P.C. v Allstate Insurance Company, 2 Misc 3d 621, 769 N.Y.S. 2d 870 (Richmond County 2003), a case involving the claim for first party no-fault benefits, the arbitrator, as in the instant case, found that the insurer failed to pay or deny the claim within the prescribed thirty day period. Nevertheless, the arbitrator found that the medical provider failed to establish a prima facie case that the tests performed were medically necessary and so denied the claim. In affirming the award, the master arbitrator cited the Petrofsky case as limiting his ability to vacate an award that is neither arbitrary nor capricious. However, the Civil Court vacated the master arbitrator’s decision and found for the medical provider, asserting that the arbitrator and master arbitrator misconstrued the law.

The law with respect to the burden of proof in first party no-fault claims was established by the court in Bonetti v. Integron National Insurance , 269 AD2d 413, 703 N.Y.S. 2d 217 (2d Dept. 2000). The Bonetti court stated that, with limited exception, an insurer is precluded from [*3]denying a no-fault claim if it fails to timely deny it. Further, an insurer is precluded from challenging the adequacy of a claimant’s proof of medical necessity if it fails to timely deny the claim for no-fault benefits. Vinings Spinal Diagnostic, P.C. v Liberty Mutual Insurance Company, 186 Misc 2d 287, 717 N.Y.S. 2d 466 (Nassau County 2000). This is true despite a contrary position taken by the New York Department of Insurance.

In a recent decision of this court, Kew Gardens Imaging aao Mary maynard v. Liberty Mutual Ins. Co., 2004 NY Slip Op. 51077(U) (Civ. Ct. Kings County 2004), the decision of a Master Arbitrator was overturned because it was determined that no rational basis existed for the arbitration decision. In that case the insurer failed to pay or deny the claim within thirty days, and the arbitrator based his conclusion on the fact that the provider failed to establish the medical necessity of the treatments. This court found that conclusion to be beyond the scope of judicial authority which precludes an insurer from raising any defense, other than lack of coverage, when it fails to deny a claim within thirty days. Insurance Law sec. 5106(a); New York Medical Center of Queens v. Country-Wide Insurance Co., 295 AD2d 583, 744 N.Y.S. 2d 201 (2d Dept. 2002). However, that case is distinguishable from the instant action.

In the case at bar the insurer did deny the claim within the statutory thirty day period. The Master Arbitrator asserted that the initial arbitrator’s conclusion that the timeliness of the denial was of no consequence was error, although harmless in the instant matter. Because Respondent did timely deny the claim, Petitioner must evidence, as part of its prima facie case, the medical necessity of its treatment. This the arbitrator determined it did not do.

An arbitration award will be upheld if it is supported by the evidence and is not arbitrary and capricious. Eagle Insurance Compnay v. First Cardinal Corp., 8 AD3d 483, 778 N.Y.S. 2d 309 (2d Dept. 2004). The arbitrator’s decision is supported by the record, and there is nothing to warrant the vacatur of the award. State Farm Mut. Automobile Ins. Co. v. Arabov, 2 AD3d 531, 767 N.Y.S. 2d 905 (2d Dept. 2003).

Based on the foregoing, Petitioner’s motion is denied and the Master Arbitrator’s award is affirmed.

Dated: April 18, 2005

__________________________

EILEEN N. NADELSON, J.C.C.

Civil Court of the City of New York, Kings County

105699/04

For petitioner: Gary Tsirelman, P.C., Brooklyn, NY

For respondent: Wollerstein & Futoran, New York, NY

Arlene P. Bluth, J.

Upon the foregoing cited papers, petitioner seeks to vacate a No-Fault Master Arbitrator’s Award pursuant to CPLR § 7511, and respondent seeks to dismiss the petition. For the following reasons, the petition is dismissed.

Respondent argues that this Court lacks personal jurisdiction over it because petitioner failed to properly serve the notice of petition and petition. Petitioner maintains that it properly [*2]served respondent simply by mailing the petition, via regular mail, to Maria Weissman, P.C. It is undisputed that Ms. Weissman is neither employed by respondent nor authorized to receive service of process on its behalf. In fact, Ms. Weissman is not even the attorney who represented respondent in the arbitration. In the lower arbitrator’s award annexed to petitioner’s papers, the cover page lists not Ms. Weissman but “Noreen Campbell, Esq.” as the attorney for respondent. Ms. Weissman is merely the attorney who prepared respondent’s brief before the Master Arbitrator.

Section 7502(a) of the CPLR provides: “A special proceeding shall be used to bring before a court the first application arising out of an arbitrable controversy which is not made by motion in a pending action.” The instant matter qualifies as such a “first application.” To commence a special proceeding, a party files a petition (CPLR § 304), notice of which must be served in the same manner as a summons (CPLR § 403(c)). The CPLR provides for various methods of service, but does not provide for service upon a party’s attorney. See CPLR § 308 et seq. Moreover, service of process by regular mail alone is never sufficient. Id.

Therefore, petitioner’s service on Ms. Weissman was insufficient to obtain jurisdiction over respondent. See Matter of Country Wide Ins. Co., 114 AD2d 754, 494 NYS2d 709 [1st Dept 1985]. The cases petitioner cites, including Knickerbocker Insurance Company v. Gilbert, are distinguishable, as they address the sufficiency of serving a notice to stay arbitration upon the very attorney representing the respondent in the pending arbitration. See Knickerbocker Ins. Co., 28 NY2d 57, 65, 320 NYS2d 12, 17 [1971] (describing a notice to stay arbitration as “invited by the notice to arbitrate.”). See also Green Bus Lines, Inc. v. Elliot, 102 Misc 2d 1029, 1032, 424 NYS2d 1019, 1021 [Sup Ct, Queens Cty 1980]. In contrast, this proceeding was brought to vacate an award in an already completed arbitration. Therefore, pursuant to CPLR § 403(c), the notice of petition had to be served in the same manner as a summons. See Star Boxing, Inc. v. DaimlerChrysler Motors Corp., NYLJ, Apr. 8, 2005, at 27, col 1, 2005 NY Slip Op 02669 [2d Dept].

Section 7503(c) of the CPLR specifically provides that service of an application to stay arbitration “may be made upon the adverse party, or upon the attorney if the attorney’s name appears on the demand for arbitration or the notice of intention to arbitrate.” CPLR § 7503(c). But the statute says nothing about serving a notice to vacate a Master Arbitrator’s Award on an attorney. Thus, even if Ms. Weissman’s name appeared on the demand for arbitration or the notice of intention to arbitrate something not alleged or demonstrated here petitioner’s service on Ms. Weissman was improper.

In its reply, petitioner asks this Court for leave to properly serve respondent, and that such service relate back to the date of the original service in order to comply with the 90-day statute of limitation. This Court has no discretion to override the statute of limitation. See Arnold v. Mayal Realty Co., 85 NE2d 616, 617, 299 NY 57, 60 [1949]. Therefore, petitioner’s request must be denied. [*3]

Accordingly, the petition is dismissed for lack of personal jurisdiction.

This is the Decision and Order of the Court.

Dated:

ARLENE P. BLUTH

Judge, Civil Court

ASN by__________ on __________

Civil Court of the City of New York, Kings County

32177/03

Eileen N. Nadelson, J.

On July 10, 2003, Plaintiffs submitted a Motion for Summary Judgment as providers of first party benefits under New York’s No-Fault Insurance Law. That motion was subsequently denied on November 18, 2003, because Plaintiffs failed to provide sufficient support for the requested judgment. Plaintiffs never moved to renew or reargue that decision.

On July 5, 2004, Plaintiffs submitted this instant Motion for Summary Judgment, requesting the same relief based on the same underlying claim. In the motion papers, Plaintiffs state that they are remaking the motion originally filed on July 10, 2003, based on new affidavits of the treating physicians.

The above-recited facts present to the court the issue as to whether a party may file a new [*2]Motion for Summary Judgment after an initial Motion for Summary Judgment for the same relief on the same claim was denied based on insufficient documentary support to grant that motion.

Generally, once a motion for summary judgment has been denied, subsequent motions seeking the same relief must be denied as res judicata. Smith v. Palmieri, 103 AD2d 739, 477 N.Y.S. 2d 206 (2d Dept. 1984). This may be true even if the original denial is based on a party’s failure to come forward with evidentiary facts, rather than on a full determination based on all relevant data. Johnson v. Unexcelled, Inc., 42 AD2d 529, 345 N.Y.S. 2d 1 (1st Dept. 1973). Consequently, the court must determine whether there is any legal basis for permitting Plaintiffs to remake a motion for summary judgment that has previously been denied for technical, rather than substantive, reasons.

Section 3212 of the CPLR establishes the rules for the proof necessary to support a motion for summary judgment. Secion 3212(b) states that

A motion for summary judgment shall be supported by affidavit, by a copy

of the pleadings and by other available proof, such as depositions and written

submissions.

Courts have held, and prudent practice demands, that if a movant, in preparation of a motion for summary judgment, cannot assemble sufficient proof to dispel all questions of material fact, the motion should simply not be submitted. Seefeldt v. Johnson, 13 AD3d 1203, 787 N.Y.S. 2d 594 (4th Dept. 2004). Further, courts may exercise their discretion in rejecting supporting papers that are untimely submitted. Moore v. Long Island College Hospital, 273 AD2d 365, 714 N.Y.S. 2d 683 (2d Dept. 2000).

However, if circumstances arise in which facts essential to justify or oppose a motion may exist but cannot be then stated, the court may order a continuance to permit affidavits to be obtained. CPLR sec. 3212(f). To grant such a continuance, it must be demonstrated by the party requesting such relief that further discovery may lead to the relevant evidence. Wyllie v. District Atty. of County of Kings, 2 AD3d 714, 770 N.Y.S. 2d 110 (2d Dept. 2003).

The courts also permit a party to move to renew or reargue a motion for summary judgment to correct the failure to include proof in evidentiary form in the original motion upon a showing of law office failure and absence of prejudice to the opposing side. Campbell v. Cloverleaf Transp., Inc., 5 AD3d 169, 773 N.Y.S. 2d 50 (1st Dept. 2004). To grant a motion to renew or reargue, the movant must proffer a sufficient excuse as to why a necessary affidavit was not included in the original papers. Brignol v. Warren Elevator Service Co., Inc., 240 AD2d 354, 657 N.Y.S. 2d 768 (2d Dept. 1997).

In the instant case, Plaintiffs never requested a continuance of their original motion, nor did they seek to renew or reargue the denial of that motion. Rather, Plaintiffs simply waited half a year and submitted a new motion that included the affidavits missing from the original papers. [*3]The affidavits now submitted are affidavits from the treating physicians who are the Plaintiffs in this action. No excuse is offered as to why the affidavits were not included with the first papers.

Courts have refused to permit a party to renew or reargue the denial of a motion for summary judgment based on more detailed affidavits than were originally submitted when such elaboration is not based on newly found information and no reasonable justification was given for not including the affidavits in the first instance. Stoklas v. Auto Solutions of Glenville, Inc., 9 AD3d 780, 780 N.Y.S. 2d 215 (3d Dept. 2004). When the inadvertence involved in not including necessary affidavits appears to be the lack of realization of the need for such affidavits rather than mere law office error, the courts refuse to permit a reargument of the denial of a summary judgment motion. Foitl v. G.A.F. Corporation, 64 NY2d 911, 488 N.Y.S. 2d 377 (1985).

It would fly in the face of judicial logic to permit a party to submit a new motion for summary judgment when that party would not be able to reargue the denial of an earlier motion seeking the same relief. Therefore, based on the foregoing, Plaintiffs’ Motion for Summary Judgment is denied as res judicata.

Dated: April 7, 2005

__________________________

EILEEN N. NADELSON, J.C.C.

Civil Court of the City of New York, Kings County

99251/03

Eileen N. Nadelson, J.

Plaintiff medical provider instituted this action for first party benefits pursuant to New York’s No-Fault Insurance Law. Defendant insurer denied Plaintiff’s claim for benefits, alleging that the treatments provided were not medically necessary. The matter was tried before a jury.

In preparing to instruct the jury, the court discovered that there is no Pattern Jury Instruction defining the term “medical necessity,” despite the fact that several decisions have been published attempting to define the term judicially, since it is not defined by the No-Fault statute itself.

In Elm Medical, P.C. aao Tamara Feit v. American Home Assurance Company, 2003 NY Slip Op. 51357U, 2003 NY Misc. Lexis 1337 (Kings County 2003), the court adopted the definition of “medical necessity” used by the New Jersey courts:

A necessary medical expense under the [No Fault] Act is one incurred for

a treatment, procedure, or service ordered by a qualified physician based on

the physician’s objectively reasonable belief that it will further the patient’s

diagnosis and treatment. The use of the treatment, procedure, or service

must be warranted by the circumstances and its medical value must be

verified by credible and reliable evidence.

This is the same definition that was originally used by an earlier court in Medical Experise, P.C.aao Irina Moukha v. Trumbull Insurance Company, 196 Misc 2d 389, 765 N.Y.S. 2d 171 (Queens County 2003).

More recently, based on pending legislation, a modification of the New Jersey definition was promulgated: [*2]

treatment or services which are appropriate, suitable, proper and conducive to

the end sought by the professional health services in consultation with the

patient. It means more than merely convenient or useful treatment or services,

but treatment or services that are reasonable in light of the patient’s injury,

subjective and objective evidence of the patient’s complaints of pain, and the

goals of evaluating and treating the patient.

Behavioral Diagnostics aao Maria Arevalo et al. v. Allstate Insurance Company, 3 Misc 3d 246, 776 N.Y.S. 2d 178 (Kings County 2004), citing Fifth Avenue Pain Control Center v. Allstate Ins. Co., 196 Misc 2d 801, 766 N.Y.S. 2d 748 (Queens County 2003).

Based on the published decisions of the courts, we believe that an appropriate jury instruction on the definition of “medical necessity” is:

For an expense to be considered medically necessary, the treatment, procedure, or

service ordered by a qualified physician must be based on an objectively reasonable

belief that it will assist in the patient’s diagnosis and treatment and cannot be reasonably dispensed with. Such treatment, procedure, or service must be

warranted by the circumstances as verified by a preponderance of credible and

reliable evidence, and must be reasonable in light of the subjective and objective evidence of the patient’s complaints.

Dated: April 7, 2005

__________________________

EILEEN N. NADELSON, J.C.C.

Civil Court of the City of New York, Kings County

108436/04

Ellen M. Spodek, J.

Upon the foregoing papers, petitioner T.S. Medical P.C. moves for an order, pursuant to Article 75 of the CPLR, vacating a No-Fault Master Arbitration Award.

After petitioner was denied no-fault benefits, it filed a request for arbitration. The arbitration award that was rendered on March 23, 2004 denied petitioner’s claim. Petitioner then requested a review of the arbitration award by a Master Arbitrator. The case was reviewed and the Master Arbitrator upheld the lower arbitration award. This decision was rendered on or around July 22, 2004. This petition is filed less than ninety (90) days since receipt of the Master Arbitrator Award.

The Second Department holds “[w]hen a party to a controversy is compelled by statute to submit to arbitration—and thereby loses the right of initial resort to a judicial forum—the right to review the resulting arbitration award cannot in turn be overly limited in scope, without involving a due process issue. Thus the Court of Appeals has interpreted CPLR article 75 as requiring broader review when compulsory arbitration is in issue than when the matter has a consensual origin.” (Shand v Aetna Ins. Co., 74AD2d 442, 446 (2d Dept 1980); citing Furstenberg v Aetna Casualty & Surety Co., 49 NY2d 757 [1980]; Mounty St. Mary’s Hosp. of Niagara Falls v Catherwood, 26 [*2]NY2d 493 [1970]; Caso v Cofey, 41 NY2d 153, 155 [1976]; 1 NY Jur 2d, Administrative Law §190). In the case at bar, petitioner chose to go to arbitration. Arbitration was only mandatory for the defendant thus a narrow review is required. Further, a master arbitrator’s award may be vacated if it is arbitrary and capricious, irrational or without a plausible basis. (Steinauer v. N.Y Central Mutual Fire Insurance Company, 707, N.Y.S.2d 706).

In it’s report, the arbitrator states that “Respondent’s denial for treatment in October 2001 is late and for those subsequent treatments the denial is improperly based on a nurse’s audit.” However, he concludes that the applicant had to prove medical necessity in it’s prima facie case. This position was upheld by the Master Arbitrator. It is well established that the burden is on the insurer to prove the lack of medical necessity and not on the insured to prove medical necessity in establishing their prima facie case. (Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U][App Term, 2d and 11th Jud Dists]; Damadian MRI In Elmhust, P.C. v Liberty Mutual Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U], [App Term, 9th and 10th Jud Dists]; see also A.B. Medical Services PLLC v Lumbermens Mutual Casualty Co., 4 Misc 3d 86, 87 [App Term, 2d and 11th Jud. Dists].)

The courts have consistently held that it is proper to “vacate the determinations of a master arbitrator who denied a petitioner payment for overdue no-fault benefits because it did not have rational basis.” (In the Matter of Pradip Das/N.Y. Medical Rehab P.C. v Allstate Insurance Company, 297 AD2d 321 (2nd Dept. 2002)). Clearly, in order for the decision of the Master Arbitrator to be rational it would have to comport with the established principles of law. The insurance regulations clearly enumerate the methods of review available to the Master Arbitrator including the ability to overturn an award that was “incorrect as a matter of law. “NYCRR 65.17 (a)(4). In this action, the Master Arbitrator had the power to correctly apply the law, but chose not to.

Accordingly, this Court grants the petitioner’s motion and finds that the Master Arbitrator’s award should be vacated.

The foregoing constitutes the decision and order of this court.

E N T E R,

Dated: March 31, 2005__________________

Hon. Ellen M. Spodek

[*1]

Civil Court of the City of New York, Kings County, March 24, 2005

APPEARANCES OF COUNSEL

Alden Banniettis, Brooklyn, for plaintiff. Moore & Associates, New York City, for defendant.

OPINION OF THE COURT

Arlene P. Bluth, J.

Plaintiff Dilon Medical Supply Corp. brought this action to recover first-party no-fault benefits in the amount of $1,928 plus statutory interest, costs, and attorneys’ fees for medical supplies it allegedly furnished to plaintiff’s assignor, Cuthbert Grannum, on January 29, 2004, and February 16, 2004, following an alleged accident on November 5, 2003.

The trial was scheduled before me on March 10, 2005. Since the attorneys for both parties stipulated to the facts below, there was no testimony by witnesses.

For the following reasons, the court finds for defendant Travelers Insurance Company, and dismisses plaintiff’s complaint.

Stipulated Facts

Plaintiff Dilon Medical Supply Corp., as the proper assignee of Cuthbert Grannum, submitted two bills for no-fault benefits to defendant Travelers Insurance Company. The first bill was for $837 for six items furnished to plaintiff’s assignor on January 29, 2004 (plaintiff’s exhibit 1); the second was for $1,091 for four items furnished to plaintiff’s assignor on February 16, 2004 (plaintiff’s exhibit 2). Defendant’s timely request for verification (and timely follow-up thereto) asked that plaintiff “forward a letter of medical necessity for medical supplies” in order to process the claims (plaintiff’s exhibit 3). Plaintiff received the requests but ignored them. Plaintiff did not respond because it believes the requests to be improper since plaintiff is merely a medical supply company and not a clinician capable of speaking to the medical necessity of the [*2]items furnished. Having received no response to its verification requests, defendant neither paid nor denied the claims. Plaintiff then initiated this action. Both parties subsequently moved for summary judgment. On December 21, 2004, on grounds unrelated to the issue before this court, Judge Ellen Gesmer denied both plaintiff’s and defendant’s motions for summary judgment.

Conclusions of Law

The issue in this case is whether an insurer can direct a request for verification of the necessity of medical supplies to the claimant medical supplier which, it is undisputed, has no clinical expertise. The Insurance Law and the regulations promulgated thereunder provide that “[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]; see Insurance Law § 5106 [a].) An insurer may extend this 30-day period if, within 15 business days after receipt of the claim, the insurer sends a request for further verification of the claim. (11 NYCRR 65-3.5 [b].) If the demanded verification is not received within 30 days, the insurance company must issue a follow-up request within 10 calendar days of the insured’s failure to respond. (11 NYCRR 65-3.6 [b].) The 30-day period which the insurer has to either pay or deny the claim does not begin to run until all demanded verification is provided. (11 NYCRR 65-3.8 [a] [1]; see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2d Dept 2004].) With exceptions not relevant here, the insurer is precluded from issuing a denial while a verification request is outstanding. (11 NYCRR 65-3.8 [b] [3].)

Just as the insurer has a duty to speedily process claims, the claimant for benefits has a duty of cooperation in supplying information reasonably requested by the insurer to process the claim. The regulations provide that the Mandatory Personal Injury Protection Endorsement, or no-fault section, of all insurance policies contain, inter alia, the following condition: “Upon request by the [Insurance] Company, the eligible injured person or that person’s assignee or representative shall . . . provide authorization that will enable the Company to obtain medical records; and . . . provide any other pertinent information that may assist the Company in determining the amount due and payable.” (11 NYCRR 65-1.1 [d] [“Conditions”].) Upon receipt of the initial prescribed verification forms, the insurer may request “any additional verification required by the insurer to establish proof of claim.” (11 NYCRR 65-3.5 [b]; see also Westchester Med. Ctr. v Travelers Prop. & Cas. Ins. Co., 2001 NY Slip Op 50082[U], *2-3 [Sup Ct, Nassau County 2001] [“(T)he requirement that a claim be paid or denied within 30 days is conditioned upon receipt of information requested by the insurer. This information is not necessarily that which can be found on the . . . prescribed verification forms . . . but any information that the carrier finds necessary to properly review and process the claim”].)

Here, defendant timely requested a letter of medical necessity—understood by both plaintiff and defendant to mean a narrative from the injured party’s medical provider explaining why the furnished supplies were necessary—from plaintiff, the party that had submitted the claim.

The substance of defendant’s verification request was both valid and proper—not only did defendant have the right to verify the medical necessity of the supplies, it was required to do so if payment of the claims would turn on a determination of medical necessity. (See 11 NYCRR 65-3.5 [b].) Moreover, under the regulations, “[t]he insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested.” (11 [*3]NYCRR 65-3.5 [c].)

Plaintiff argues, however, that defendant’s request was improper in that it was directed to plaintiff, a mere equipment supplier with no clinical expertise. Plaintiff claims that defendant obviously knew that plaintiff would in turn have to contact either its assignor or his medical provider to obtain the letter of medical necessity. According to plaintiff, defendant should have directed its request to the treating medical provider, or, if defendant did not know the provider’s name or address, requested that information from plaintiff, or asked plaintiff for the prescriptions it had received from its assignor. In support of its argument, plaintiff cites section 65-3.5 (a) of the regulations, which provides: “Within 10 business days after receipt of the completed application for motor vehicle no-fault benefits . . . , the insurer shall forward, to the parties required to complete them, those prescribed verification forms it will require prior to payment of the initial claim.” (11 NYCRR 65-3.5 [a] [emphasis added].)

A plain reading of that provision, however, makes clear that it governs initial requests for verification by which insurers may require parties to complete the requisite forms that comprise the initial claim for benefits—that is, in setting up the injured party’s file. That is not the case here. A request for a letter of medical necessity is a request for additional verification governed by subdivision (b) of this section, and subdivision (b) does not qualify to whom requests for additional verification must be sent. Any additional verification that could be sought from plaintiff’s assignor may be sought from plaintiff^[FN*] because “[a]n assignee stands in the shoes of the assignor.” (Arena Constr. Co. v Sackaris & Sons, 282 AD2d 489, 489 [2d Dept 2001].)

Accordingly, when a claimant submits bills to an insurer for payment, the claimant, who stands in the shoes of his assignor, must deal in good faith and cooperate with the insurer if it wants to get paid. This includes responding to a proper and timely verification request, even if the claimant anticipates that it will not be able to satisfy the insurer’s request. In other words, even if the claimant believes it cannot or need not comply with the insurer’s request, the claimant still has a duty to communicate with the insurer regarding the request.

In so holding, this court follows the reasoning of the Second Department. For example, where a plaintiff medical provider found an insurer’s demands “so lacking in specificity as to be ‘unintelligible’ and that such demands were, therefore, nullities,” the Second Department refused to excuse plaintiff’s nonresponsiveness to defendant’s requests. (Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 [2d Dept 1999].) “[T]he notices clearly constituted demands for further verification of the claim within the no-fault regulatory scheme. Any confusion on the part of the plaintiff as to what was being sought should have been addressed by further communication, not inaction. Accordingly, as the plaintiff does not dispute that the demanded verification was never supplied, the 30-day period in which the defendant had to pay or deny the . . . claim never commenced and that claim is not overdue.” (Id.)

The Second Department has also dismissed no-fault actions where the plaintiff failed to respond because the insurer’s request was allegedly not on a proper form (Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 535 [2d Dept 2004]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338 [2d Dept 2002]) or was sent to the plaintiff’s [*4]attorney rather than directly to plaintiff (St. Vincent’s Hosp. of Richmond, 299 AD2d at 340; New York Hosp. Med. Ctr. of Queens v State Farm Mut. Auto. Ins. Co., 293 AD2d 588 [2d Dept 2002]). The contours of plaintiff’s duty of cooperation are good faith and common sense. “[E]ven if [the insurer’s] request for the hospital records should have been sent directly to the hospital, its attorney, upon receiving the requests, should have contacted State Farm and communicated that requirement, or forwarded State Farm’s requests to the hospital himself.” (New York Hosp. Med. Ctr. of Queens, 293 AD2d at 591.)

When plaintiff received defendant’s verification requests, it had a duty to respond. Plaintiff might have submitted the prescriptions it had received from its assignor. It might have supplied the name and address of the treating physician. It might have contacted its assignor to obtain a letter of medical necessity from his physician, or contacted the physician directly. Because plaintiff simply ignored the requests altogether, however, it is unnecessary for the court to decide what the minimum adequate response would have been.

Because plaintiff failed to respond to defendant’s valid and proper verification requests, the 30-day period within which defendant had to either pay or deny the claim did not begin to run. (See Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534-535 [2d Dept 2004]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2d Dept 2002].) Therefore, plaintiff’s claims for no-fault benefits are not overdue, and this action is premature and must be dismissed. (See Hospital for Joint Diseases, 8 AD3d at 534-535; St. Vincent’s Hosp. of Richmond, 299 AD2d 338 [2002]; New York Hosp. Med. Ctr. of Queens, 293 AD2d at 591.) Accordingly, judgment is for defendant and plaintiff’s complaint is hereby dismissed.

Footnotes

Footnote *: Obviously, in the case of an IME or EUO of the injured party, only the injured party can actually provide the requested verification.

Civil Court, Kings County

046401/04

Loren Baily-Schiffman, J.

This action for first-party No-Fault benefits was tried to completion on February 8, 2005. Plaintiff seeks payment of claims for $708 for services to James Percine and $1600.50 for services provided to Antoine Wekson. 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 any accident or loss for which coverage is sought under this policy.” At the start of trial, the parties stipulated that Plaintiff’s bills had been timely submitted and that Defendant’s denial would be admitted into evidence along with a number of exhibits. Plaintiff then made several motions in limine.

Plaintiff first sought the exclusion from evidence of transcripts of Examinations Under Oath (hereinafter “EUO”) of Plaintiff’s assignors. The Court granted this motion on the basis that the transcripts had not been signed by the assignors and that such documents would be hearsay.^[FN1] Plaintiff also sought a determination by the Court that subpoenas for testimony of the assignors are defective and, accordingly, no adverse inference can be drawn from the non-appearance of the assignors at trial. The Court granted this application on the basis that the subpoenas had not been properly served.

The trial then proceeded on defendant’s affirmative defense of fraud. Defendant called Philip Tirone as its only witness. Mr. Tirone is employed by defendant as an investigator in its Special Investigation Unit. He was assigned to investigate the subject claims. Mr. Tirone testified that the assignors allegedly sought treatment from plaintiff as a result of an accident [*2]between two cars. There were several passengers in the cars, including the assignors involved in this action. As part of his investigation, Mr. Tirone attempted to contact his insured, Ms. Paul, and assignor Wekson who gave the same home address as Ms. Paul. He was not able to reach either Ms. Paul or Mr. Wekson. He contacted assignor Percine, but testified that he got no helpful information from Mr. Percine. Mr. Tirone then recommended to defendant’s attorney that EUOs be scheduled of Ms. Paul, Mr. Wekson and the other passengers. After more than one attempt to obtain appearances at EUOs, Mr. Wekson, Mr. Percine and Ms. Jerome appeared for EUOs with their attorneys and their testimony was taken. Mr. Tirone testified that other than his unsuccessful attempts to obtain signatures of the witnesses to their EUO transcripts, no further efforts were made to investigate the subject claims.

The Court ruled that the EUO transcripts were not admissible but Mr. Tirone could testify to his recollection of the testimony of the witnesses at their examinations. The basis of the Court’s ruling was that the assignors and the Plaintiff/assignee were united in interest and, therefore, statements made by the assignors are binding on the assignee as admissions.

Mr. Tirone continued his testimony as to the statements made by Mr. Wekson and Mr. Percine at their EUOs and the conclusions he drew from this testimony which resulted in the denial of these claims on the basis of fraud. The testimony that Mr. Tirone says supports his conclusion that the accident in question was staged are as follows:

The two witnesses testified differently concerning the order in which the passengers in their car were picked up and dropped off by the driver;

Mr. Percine delayed his medical treatment until two (2) weeks after the accident and that Mr. Wekson referred him to the provider;

Mr. Wekson sought treatment from a different provider than he had been treated by for injuries from a prior accident;

The provider from which Mr. Wekser sought treatment was not located near his work or his home.

According to the arguments of counsel, other factors that contributed to Mr. Tirone’s recommendation that the claims be denied on the basis of fraud are:

that the driver of the second car appears to have been “selected”; (No basis for this conclusion was presented at trial)

that the witnesses would not sign their EUO transcripts;

that the passengers in the first car refused to give statements to the investigator;

that the witnesses’ statements at EUO seemed to follow a script;

that the driver of the second car was a woman.

At the close of the trial, the Court invited counsel to present legal memoranda on the standard of proof applicable to defendant’s fraud defense and any other legal issues that had been presented in the trial. Defendant submitted a memorandum on the burden of proof issue. [*3]Plaintiff presented a memorandum arguing that Mr. Tirone should not have been permitted to testify to statements made by the assignors at their EUOs as such statements are hearsay and on the standard of proof issue.

STANDARD OF PROOF APPLICABLE TO FRAUD

In New York, proof of fraud must be made by clear and convincing evidence. Rudman v. Cowles Communications, 30 NY2d 1 (1972). Although defendant argued at trial that in a No-Fault case fraud need only be proven by a preponderance of the evidence, no cases could be found to support this position. In a second submission to the Court, dated March 19, 2005, defendant presented a copy of Hon. Jack Battaglia’s decision in AB Medical Services, PLLC v. State Farm Mut. Auto Ins., 2005 NY Slip Op 25089 (Civil Court, Kings Co.) and argued that it supports defendant’s position that the defense of “staged accident” in a No-Fault case only be proven by a preponderance of the evidence and not by clear and convincing evidence. To the extent that Judge Battaglia’s decision finds that the defense of staged accident need only be proven by a preponderance of the evidence, this Court respectfully disagrees with Judge Battaglia. This Court holds that the insurer’s defense of fraud, whether it be a staged accident or other fraud, requires proof by clear and convincing evidence.

ARE ASSIGNEES’ STATEMENTS MADE AT EXAMINATIONS UNDER OATH ADMISSIBLE AS ADMISSIONS AS AGAINST THE ASSIGNEE/PLAINTIFF?

At trial, the Court permitted defendant’s witness to testify to statements made by the assignors at their Examinations Under Oath on the theory that these statements are admissions by persons united in interest with the plaintiff/assignee. Plaintiff objected at trial that this testimony is hearsay. In its Post Trial Memorandum, plaintiff again argues that its objection at trial should have been sustained. Plaintiff cites to Richardson on Evidence, Farrell 11th ed. (hereinafter “Richardson”), §§8-239 and 8-241 for the “New York doctrine” which states the following:

In New York declarations of a vendor or assignor of a chattel or chose in action, whether made before or after the transfer, are inadmissible to affect the claim or title of a subsequent transferee for value.

Richardson, §8-242.

This rule stems from the decision in Paige v. Cagwin, 7 Hill (NY)361 (Sup Ct 1843) (action on a promissory note) and has been followed in Wangner v. Grimm, 169 NY 421 (1902) (action on a promissory note); Kelly v. Beers, 194 NY 60 (1909) (gift of savings bank account); Merkle v. Beidleman, 165 NY 21 (1900) (mortgage foreclosure). Except where the statements were made by the real party in interest, such as a decedent, and are offered against a person who claims through representation, such as the executor of that decedent, the New York doctrine will apply and the statements of the former owner, vendor or assignor will not be admissible to affect [*4]the claim of the subsequent owner or assignee.

Pursuant to the New York doctrine, the Court erred in permitting defendant’s witness, Mr. Tirone, to testify to the statements of the assignees, Mr. Wekson and Mr. Percine at their EUOs. The Court should have sustained plaintiff’s objections to this testimony. The Court now reverses that ruling and strikes from the record so much of the testimony of Mr. Tirone as concerned the statements of Mr. Wekson and Mr. Percine at their EUOs. With that testimony stricken from the record, the conclusion Mr. Tirone reached, that the accident was staged, is without substantial basis in the record and will not be credited by the Court.

TESTIMONY OF DEFENDANT’S WITNESS

It must be noted that even if all of the evidence of defendant’s witness is credited, defendant has not met its burden of establishing by clear and convincing evidence that the accident in question was staged. Mr. Tirone relied on minor inconsistencies in the testimony of passengers in his insured’s car; the statement that Mr. Percine did not seek medical assistance until two (2) weeks after the accident and then went to a provider referred by Mr. Wekson; that Mr. Wekson sought treatment from a different provider than had treated him for injuries in a prior accident; and that Mr. Wekson obtained treatment from a provider not near his home or work, in concluding that the accident was staged. Each of these facts is capable of a motivation other than that of fraud and together they do not establish clear and convincing proof that the accident in question was staged.

Mr. Tirone testified as to his training and experience in the field of insurance investigation, although there was no request that he be treated as an expert witness. An insurer’s “founded belief” that an accident was staged cannot be based upon “unsubstantiated hypotheses and supposition”. AB Medical Services PLLC v. Eagle Ins. Co., 3 Misc 3d 8 at 9 (App. Term 2nd & 11th Jud. Dists., 2003). However, what experience or training led Mr. Tirone to his conclusions based upon the facts adduced in his investigation is missing from the record. The Court is left to wonder why the fact that an assignor sought medical treatment in a neighborhood different from his home or work is significant. Similarly, the significance of the other car being driven by a woman is not provided by Mr. Tirone’s testimony, yet he relies on this as a basis for finding that the accident was staged. While Mr. Tirone’s trained opinion is entitled to some weight, Travelers Indemnity Co. v. Morales, 188 AD2d 350, 351 (1st Dept 1992), here there is no testimony in the record relating Mr. Tirone’s training and experience to the conclusions he reached based upon the facts of this case. Accordingly, even had the Court not stricken any of Mr. Tirone’s testimony from the record, the determination would be the same that defendant has failed to meet its burden to prove fraud by clear and convincing evidence.

CONCLUSION

For all the foregoing reasons, the Court finds that defendant has failed to meet its burden [*5]at trial to prove its defense of fraud by clear and convincing evidence. Accordingly, judgment is granted to plaintiff for $708 on Mr. Percine’s claim and $1600.50 on Mr. Wekson’s claims. In addition, plaintiff is granted statutory attorneys fees, interest and costs to be computed by the Clerk of the Court.

This constitutes the Decision and Order of the Court.

Exhibits may be retrieved in Chambers, Room 705.

Dated:March 23, 2005

_______________________

LOREN BAILY-SCHIFFMAN

J.C.C.

Footnotes

Footnote 1:Notwithstanding the decision of my colleague in PSG Psychological, PC v. State Farm Ins. Co., 2004 WL 2997955, this Court is of the opinion that EUO transcripts are not governed by CPLR §3116 as they are taken prior to the commencement of litigation and are not part of the Article 31 disclosure process.

[*1]

Civil Court of the City of New York, Kings County, March 10, 2005

APPEARANCES OF COUNSEL

Alden Banniettis, Brooklyn, for plaintiff. Bruno, Gerbino & Soriano LLP, Melville, for defendant.

OPINION OF THE COURT

Arlene P. Bluth, J.

Plaintiff moves for summary judgment pursuant to CPLR 3212. For the following reasons, the plaintiff’s motion is denied. [*2]

In this action, plaintiff Vista Surgical Supplies, Inc. seeks to recover first-party no-fault benefits in the amount of $1,282, plus statutory fees, interest, costs, and attorneys’ fees, for medical supplies it allegedly furnished to plaintiff’s assignor, Julian Rosario, on February 5, 2003. Plaintiff argues that defendant failed to timely deny its no-fault claims.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence in admissible form to demonstrate the absence of any material issues of fact. (See Alvarez v Prospect Hosp., 68 NY2d 320 [1986].) The motion must be supported by an affidavit from a person with knowledge of the facts, setting forth all material facts. (See CPLR 3212 [b].) If, in opposing the motion, the other party comes forward with evidence of issues of fact requiring a trial, the motion will be denied. (See Rebecchi v Whitmore, 172 AD2d 600 [2d Dept 1991].)

In a no-fault context, a health care provider establishes prima facie entitlement to summary judgment as a matter of law by submitting proof in admissible form demonstrating that it is an assignee under a properly executed assignment, that the prescribed statutory claim form, setting forth the fact and amount of the loss sustained, was mailed to and received by the defendant, and that payment of no-fault benefits is overdue. (See 11 NYCRR 65-3.11 [b] [2]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]; Triboro Chiropractic & Acupuncture P.L.L.C. v Electric Ins. Co., 2 Misc 3d 135[A], 2004 NY Slip Op 50215[U] [App Term, 2d & 11th Jud Dists 2004].) If the plaintiff makes out its prima facie case, the burden then shifts to the defendant.

In support of the motion, plaintiff submits the affirmation of its attorney and affidavit from an officer of plaintiff. It is axiomatic that a party’s attorney “who lacks personal knowledge of the essential facts, is of no probative value and is insufficient to support an award of summary judgment.” (Peters v City of New York, 5 Misc 3d 1020[A], 2004 NY Slip Op 51469, *8 [Sup Ct, Kings County 2004]; see also Zuckerman v City of New York, 49 NY2d 557 [1980]; Amaze Med. Supply Inc. v Allstate Ins. Co., 3 Misc 3d 133[A], 2004 NY Slip Op 50447[U] [App Term, 2d & 11th Jud Dists 2004]; Lupinsky v Windham Constr. Corp., 293 AD2d 317 [1st Dept 2002].)

The affidavit of Igor Kats, an officer of Vista Surgical Supplies, is also insufficient. Mr. Kats’ affidavit contains no recitations of fact particular to this case, such as the dates of service, the supplies allegedly provided, dates of mailing or amount outstanding. Rather, Mr. Kats’ affidavit contains boilerplate language^[FN*] about the authenticity of nonspecified bills and assignment from a nonspecified assignor which was witnessed either by him or someone on his staff in his office on an unspecified date. Instead of setting forth the facts in admissible form, Mr. Kats merely adopts the statements of plaintiff’s counsel as contained in the attorney’s affirmation. By adopting the contents of an affirmation which has no probative value, the plaintiff’s affidavit—itself barren of material facts—is also of no probative value.

Moreover, in his affidavit, Mr. Kats declares that “[t]he above is the same testimony that I would present to this court at trial.” If it came to that, plaintiff would lose at trial for failure to set forth a prima facie case. At trial, Mr. Kats would not be able to say, “I adopt whatever my attorney said.”

Because plaintiff’s affidavit does not satisfy CPLR 3212 (b), plaintiff is not entitled to summary judgment. Accordingly, plaintiff’s motion is denied.

Footnotes

Footnote *: Indeed, Mr. Kats’ affidavit is identical to the one he submitted in at least two completely different cases (under Index Nos. 064662/04 and 056074/04), decided simultaneously herewith.