Civil Court, Kings County

87097KCV2004

Eileen N. Nadelson, J.

This matter involves the disputed billing of $1,791.73 for MRIs which was denied by the arbitrator based upon the grounds of lack of documented medical necessity. Petitioner 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.

In presenting its claim to the arbitrator, Petitioner evidenced that it submitted its claim, a valid assignment of first party benefits, and that Respondent insurer failed to pay or deny the claim within thirty days of receiving the claim. The arbitrator found that Respondent failed to [*2]pay or deny the claim in a timely manner; however, the arbitrator also found that the MRIs billed for were not medically necessary. Based on this finding, the arbitrator denied the claim, stating that Petitioner failed to meet its burden of proof with respect to the medical necessity of the MRIs. The Master Arbitrator, in affirming the award, found that the arbitrator’s conclusion was based on sufficient evidence to support the award.

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 N.Y. 2d 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.

Historically, the courts held that the applicable test for review of no-fault arbitrations where error of law is in issue is essentially similar to that utilized for review of quasi-legislative determinations- whether any reasonable hypothesis can be found to support the questioned interpretation. Shand v. Aetna Insurance Company, 74 A.D. 2d 442, 428 N.Y.S. 2d 462 (2d Dept. 1980). Under this theory, a court, in reviewing an arbitrator’s award, should not set it aside for errors of law or fact unless the award is so irrational as to require vacatur. Hanover Insurance Company v. State Farm Mutual Insurance Co., 226 A.D. 2d 533, 641 N.Y.S. 2d 547 (2d Dept. 1996). Even as recently as 1997, the courts in this department upheld arbitrator’s decisions, even if the arbitrator misconstrued the law, provided that the arbitrator’s conclusion was neither irrational nor arbitrary and capricious so as to justify vacating the award. Gravenese v. Allstate Insurance Company, 245 A.D. 2d 507, 666 N.Y.S. 2d 710 (2d Dept. 1997). However, more recently the courts in the second department have taken a different approach when called upon to review arbitral decisions.

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 A.D. 2d 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 an informal opinion letter entitled “No-Fault Burden of Proof,” January 11, 2000, the Department of Insurance indicated that, even if a claim is not timely denied, the claimant may still have to substantiate that the treatment for which reimbursement is sought was medically necessary. This approach has been taken by the arbitrators in no-fault arbitration, but has not been followed by the courts. Das/N.Y. Medical Rehab P.C. v. Allstate Insurance Company, 297 A.D. 2d 321, 746 N.Y.S. 2d 262 (2d Dept 2002).

This court finds that the overwhelming weight of judicial authority in this matter holds that an insurer is precluded from raising any defense, other than lack of coverage, when it fails to comply with the rule requiring it to deny a claim within thirty days of receipt of the claim. Insurance law section 5106(a); New York Medical Center of Queens v. Country-Wide Insurance Company, 295 A.D. 2d 583, 744 N.Y.S .2d 201 (2d Dept. 2002); New York & Presbyterian Hospital v. American Transit Insurance Company, 287 A.D. 2d 699, 733 N.Y.S. 2d 80 (2d Dept. 2001).

Consequently, the court concludes that petitioner met its burden of proof when it presented its claim and proof that Respondent failed to deny the claim within thirty days. Based on the decision in Park Radiology, P.C. , supra, the court holds that the arbitrator’s and Master Arbitrator’s award did not have a rational basis since it is contrary to the state of legal precedent.

The court vacates the decision of the Master Arbitrator and finds for Petitioner in the amount of $1,791.73, with statutory interest and fees as established iin section 5106(a) of the Insurance Law.

Dated: September 27, 2004

__________________________

EILEEN N. NADELSON, J.C.C.

[*1]

Civil Court of the City of New York, Kings County, September 24, 2004

APPEARANCES OF COUNSEL

Amos Weinberg for plaintiff. Melli, Guerin & Melli (Matthew J. Smith of counsel), for defendant.

OPINION OF THE COURT

Eileen N. Nadelson, J.

Plaintiff, a medical provider that is seeking first-party benefits pursuant to New York’s No-Fault Insurance Law, has moved for summary judgment based on defendant insurer’s failure to pay or deny plaintiff’s claim within the statutory 30-day period following submission of said claim.

Defendant is opposing the motion for summary judgment by asserting that it is not subject to the provisions of 11 NYCRR 65-3.4 because plaintiff’s assignor, the person allegedly injured in the motor vehicle accident, failed to submit to several requests for an examination under oath (EUO), and that the loss is not a covered loss because the accident was staged, thereby rendering plaintiff’s assignor a noneligible party pursuant to New York’s No-Fault Regulation 68 (11 NYCRR part 65).

In reply to defendant’s opposition to this motion, plaintiff avers that the basis for denial [*2]stemming from its assignor’s failure to submit to EUOs is inapplicable because the statute authorizing such basis did not go into effect until after the incident in question. Further, plaintiff maintains that any accusation of fraud with respect to the claim made by defendant has been made against the other individuals involved in the incident but not against its assignor.

The basic facts are not in dispute. The insurance policy in question was issued by defendant on March 3, 2002. The alleged accident occurred on March 20, 2002. Plaintiff’s claim was received by defendant on May 16, 2002. After submission of the claim defendant requested an examination under oath of plaintiff’s assignor. Plaintiff’s assignor failed to appear and a second EUO was scheduled, which she also did not attend. On December 13, 2002, defendant issued its denial of benefits to plaintiff.

The regulation that forms the basis of this motion, Regulation 68-A, 11 NYCRR 65-1.1, was enacted in September of 2001. The regulation applies to all new and first renewal insurance policies effective on or after September 1, 2001. (11 NYCRR 65-1.1 [b] [1], [2].) The effective date of the regulation is April 5, 2002. The import of this regulation to the case at bar is that it is the operative legislative authority for an insurer to deny first-party benefits to medical providers whose assignors fail to attend EUOs.

Plaintiff’s argument rests on the fact that the effective date of the regulation is subsequent to the date of the alleged accident and injury, and therefore is inoperative to the instant action. In support of this contention, plaintiff relies on Bronx Med. Servs., P.C. v Lumbermans Mut. Cas. Co. (2003 NY Slip Op 51022[U], *3 [App Term, 1st Dept 2003]), which states that “[t]he revised regulations cannot be applied retroactively to cover plaintiff’s September 2000 no-fault claim.” However, the facts in this cited decision are clearly distinguishable from the case at bar.

In Bronx Med. Servs., the insurer was basing its denial on a provision of the issued insurance policy in question. The court stated that “[t]he no-fault protection created by statute and implementing regulations cannot be qualified by the inapplicable conditions and exclusions of the liability portion of the policy.” (At *3 [internal quotation marks omitted], quoting Utica Mut. Ins. Co. v Timms, 293 AD2d 669 [2002].) In other words, the statute would prevail over a contrary provision in a private contract of insurance. Because the regulation in question was not enacted until after the subject accident, the court found the plaintiff’s reasoning specious that the change in the regulation should give effect to its insurance policy provision. It was in the context of refuting this argument that the court correctly stated that the regulation could not be given retroactive effect.

This court notes that the accident and claim for benefits in the Bronx Med. Servs. case both occurred in the year 2000.

In the instant case, the regulation applies to the insurance policy issued by defendant in March of 2002. The only question to be decided by this court is whether the regulation applies to [*3]claims filed after its effective date relating to accidents occurring before its effective date.

Few decisions have been rendered on this issue, and none on this specific point. In Ocean Diagnostic Imaging P.C. v GEICO Ins. (3 Misc 3d 137[A], 2004 NY Slip Op 50511[U] [2d Dept 2004]), the court found that Regulation 68-A did not apply because it was not in effect on the date of the accident or of the claim, which was received on August 15, 2001. In King’s Med. Supply Inc. v Progressive Ins. (3 Misc 3d 126[A], 2004 NY Slip Op 50311[U], *2 [2d Dept 2004]), the court also found for the provider because “at the time plaintiff’s claims were filed, EUOs were not available as a form of verification.” (Emphasis added.) Finally, in A.B. Med. Servs. PLLC v Eagle Ins. Co. (3 Misc 3d 8, 10 [2d Dept 2003]), the court held that the subject regulation was inapplicable with respect to denying claims based on the provider’s assignor failing to attend EUOs because “at the time plaintiffs filed the instant claims there was no provision in the insurance regulations for such a procedure.” (Emphasis added.)

All of the above-cited decisions are clear on one point: Regulation 68-A does not apply retroactively to claims filed before its effective date. By contrast, the claim for benefits in the instant case was filed more than a month after the regulation came into effect, and the insurance policy upon which the claim is based is subject to the regulation because it was issued and effective after September 1, 2001. Therefore, the court holds that Regulation 68-A applies to claims filed after its effective date and, consequently, the court denies plaintiff’s motion for summary judgment.

Although now moot, the court also finds that defendant’s argument that plaintiff’s assignor is not a covered person because of alleged fraud to be without merit. Defendant asserts correctly that the preclusion rule (denying an insurer the ability to raise any defense to a claim not paid or denied within 30 days of receipt or 30 days after verification) does not apply to a defense based on a claim that the incident was not an accident but a deliberate event staged in furtherance of a scheme to defraud the insurer (A.B. Med. Servs. PLLC v Eagle Ins. Co., supra). However, defendant has failed to provide any evidence of fraud with respect to plaintiff’s assignor. All assertions of fraud are made against the other parties to the incident, and therefore are not relevant to the assignor in question.

Plaintiff’s motion for summary judgment is denied for the reasons stated above.

Civil Court of the City of New York, Kings County

80154/03

David M. Steiner, Esq. of Isreal, Isreal & Purdy of Great Neck, NY appeared for plaintiff; Jeanne M. Valentine, Esq. of Cluasen, Miller P.C. of New York, New York appeared for Defendant.

Ann Elizabeth O’Shea, J.

Upon the foregoing cited papers, the decision and order on defendant’s motion to vacate a default judgment and to dismiss the complaint, is as follows:

Plaintiffs Aurora Chiropractic PC, Dragon Acupuncture PLLC, Latortue Medical Services, PC and S & B Neurocare, PC, instituted this action to recover first-party, no-fault benefits for medical services rendered to their assignor, Kathleen Marsh, who was injured in an automobile accident on February 16, 2001. Plaintiffs provided medical services to Ms. Marsh between March 14, 2001, and February 8, 2002. Each of the plaintiffs made several claims for payment. Upon the purported failure of defendant to pay or deny the claims within thirty days, plaintiffs instituted this action.

The summons and complaint were served on defendant on June 25, 2003. An extension of time to file an answer was requested and granted, giving counsel until August 15, 2003, to answer the complaint. On defendant’s failure to answer, a clerk’s judgment was entered, without any judicial intervention, in the amount of $31,287.65.

Defendant now seeks an order opening the default and setting aside the judgment entered [*2]against it. Defendant also seeks an order dismissing the complaint on the grounds that after August 31, 2001, it had no further obligation to pay No Fault benefits. Plaintiff submitted papers in opposition. Oral argument was heard on May 19, 2004, subsequent to which the matter was submitted for decision.

As a general rule, a default judgment will be vacated and a late answer will be permitted when a defendant can show that there was some reasonable excuse for its delay in answering and there is some merit to its defense (see Spencer v. Sanko Holding USA, 247 AD2d 532 [2d Dept 1998]). A defendant is not required to establish its defense as a matter of law; it need only set forth sufficient facts to make out a prima facie showing of a meritorious defense (see Quis v. Bolden, 298 A.D.2d 375 (2d Dept 2002).

In support of its claim to have a reasonable excuse for its delay in answering, defendant states that it intended to file an answer to the complaint, but ultimately could not do so without an index number, which plaintiff failed to provide. Although defendant allegedly attempted independently to ascertain the index number, by sending its law clerk on September 25, 2003, directly to the Court, its law clerk allegedly was told that there was no index number assigned to the matter. When defendant’s law clerk subsequently sought the information directly from plaintiff’s counsel by telephone, he purportedly was informed that plaintiff’s counsel was “not aware of” the index number, a telephone conversation which plaintiff’s counsel denies ever occurred. No claim is made that any further attempts to serve or file its answer were made. Because it was plaintiffs’ duty to provide defendant with an index number, defendant asks the court to excuse defendant from having taken no further action between the date on which it made inquiry of the Civil Court, and the date on which the default judgment was entered.

Despite defendant’s failure to follow up on the case during the five months which passed between the date it first sought an index number incident to filing an answer, and the date the default judgment was entered, it seems evident that there was no intention on the part of defendant to default in answering. Viewed in light of the strong public policy of this State which favors the resolution of cases on the merits (see Scagnelli v. Pavone, 178 AD2d 590 [2d Dept 1991]), and considering the fact that defendant moved promptly to open the default (see A.B. Med. Servs. Pllc v. Americar & Truck Rental Inc.., 2003 NY Slip Op 51394U [App. Term. 2003]), defendant’s excuse is deemed adequate.

Defendant advances as its “meritorious defense” a claim that the treatment rendered by plaintiffs was not medically necessary. Lack of medical necessity is a defense to an action to recover no-fault benefits, which an insurer may assert pursuant to a timely denial, based on a medical examination or a sufficiently detailed peer review report (see Amaze Med. Supply, Inc. v. Eagle Ins. Co., 2004 NY Slip Op 50279U, 1 [App. Term 2d Dept 2004]). In this case, defendant’s claim of a lack of medical necessity is supported by the results of five independent medical examinations conducted by Dr. Weiss, an orthopedist, Dr. Weksler a clinical psychologist and certified pain specialist, Dr. Zlatnick, a neurologist, Dr. Orenstein, a chiropractor, and Dr. Iozzio, an acupuncturist. In their reports, the last dated August 21, 2001, each concludes that Ms. Marsh is fully recovered, and has no further need for medical treatment, establishing its defense.

Defendant contends that the timeliness of its denial is not in issue as it issued a blanket denial of all “future benefits” directly to Ms. Marsh, in advance of the submission of any of plaintiffs’ [*3]claims, bringing it outside of the preclusion rules set forth in Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 [1997]. In support of this contention, defendant appends as an exhibit to its motion papers, five undated denial of claim [NF-10] forms. Each references a particular independent medical examination report and states that “future benefits are being denied” based on the specified report. Although no proof of mailing was adduced, defendant contends that the NF-10 forms, and the medical reports, were mailed to Ms. Marsh on August 31, 2001.

No-fault regulations provide that “if the insurer has information which clearly demonstrates that the applicant is no longer disabled, the insurer may discontinue the payment of benefits by forwarding to the applicant a prescribed denial of claim form” (11 NYCRR 65.15[g][2][ii]). However, that section does not absolve defendant of its responsibilities under the No-Fault law and regulations to individually consider and timely pay or deny each subsequent claim made for benefits under the No-Fault law. As was observed by the court in Atlantis Medical, P.C. v. Liberty Mutual Insurance Co., 2002 NY Slip Op 40043U, 2002 NY Misc LEXIS 202 [Dist. Ct. Nassau Co.], when the provider of medical services submits a claim as assignee of an insured, neither the statute nor the regulations contemplate the insurer simply “sitting mute and failing to act upon the claim, silently and secretly relying upon an earlier denial issued directly to the insured.” To the contrary, both the statute and the regulations contemplate the insurer responding directly to the claim within the statutorily prescribed time frame, failing which it will be precluded, pursuant to Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 [1997], from interposing such defenses as a lack of medical necessity.

Nor will a belated denial of plaintiffs’ No Fault claims be “deemed” timely on the basis of its earlier blanket disclaimer of responsibility which predated plaintiffs’ provision of services (see A&S Medical, P.C. v. Allstate Insurance Co., 196 Misc2d 322, 323 [App. Term. 1st Dept 2003], app. granted, NY App Div 2004 LEXIS 9836 [1st Dept July 5, 2004]). Thus, the additional NF- 10 forms included in defendant’s motion papers, dated January 16, 2002, responding to two claims made by plaintiff Aurora Chiropractic for $48.90 and $439.27, one claim made by plaintiff Latortue Medical Services for $812.89, and two claims made by plaintiff Dragon Acupuncture, for $1,275 and $1105, are not rendered “timely” by the mere addition of “benefits terminated on 8/31/01” as a part of the reason given for denial of the claims.

Nor do any of the January 10, 2003, NF-10 forms, standing on their own, evidence a timely denial of these five claims. For one thing, none of the NF-10 forms was sent to plaintiffs, as required by 11 NYCRR § 65.15(g)(3)(i)(“the applicant or the authorized representative”). They were all sent to plaintiffs’ assignor. Further, the forms are incomplete, lacking among other things the date on which the specified claims were received, absent which the timeliness of the response cannot be determined. Finally, defendant does not list a lack of medical necessity as the reason for its denial of plaintiffs’ claims. Having failed to do so, defendant is precluded pursuant to Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 [1997], from advancing lack of medical necessity as a defense to any part of this action.

As defendant is precluded, in the absence of a timely denial, from advancing lack of medical necessity as a defense, defendant’s motion to vacate the default and set aside the judgment is denied.

This constitutes the decision and order of this Court. [*4]

Date:September 23, 2004_____________________________

Ann Elizabeth O’Shea, J.C.C.

[*1]

Civil Court of the City of New York, Kings County, September 23, 2004

APPEARANCES OF COUNSEL

Baker, Barshay & Neuwirth, P.C. (Robert J. Baker of counsel), for plaintiff. Meiselman, Denlea, Packman, Carton & Eberz, P.C. (Stephen L. Bauley of counsel), for defendant.

OPINION OF THE COURT

Eileen N. Nadelson, J.

This motion and cross motion for summary judgment raises a question of first impression under the regulations enacted pursuant to New York’s No-Fault Insurance Law.

Plaintiff sued defendant insurer to recover for first-party benefits under New York’s No-Fault Law. In support of its claim, plaintiff submitted proof of claim to defendant, including its proof of mailing. Plaintiff alleges that defendant failed to pay or deny its claim within 30 days as required by the No-Fault Law, nor has defendant requested additional verification. Under such circumstances, plaintiff asserts that defendant is precluded from raising a defense to its claim. (Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274 [1997].) Therefore, plaintiff moved this court for summary judgment pursuant to CPLR 3211.

In opposition to plaintiff’s motion, defendant raised several issues, all of which have been dealt with during oral argument, leaving only one issue to be decided by the court. [*2]Defendant maintains that it does not have to pay the claim because plaintiff is not currently registered with the New York State Department of Education. This argument forms the basis of defendant’s cross motion for summary judgment. Plaintiff’s counsel has represented that plaintiff, although not currently registered, was registered at the time the services that form the basis of this claim were provided.

Therefore, the issue to be determined by the court is: Whether a health care provider who is registered with the New York State Department of Education at the time services are provided may recover the value of those services under New York’s No-Fault Insurance Law if the provider is no longer registered at the time payment for those services is sought?

11 NYCRR 65-3.16 (a) (12) states:

“A provider of health care services is not eligible for reimbursement under section 5102 (a) (1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed.”

To date, this section of the regulation has not been subject to judicial scrutiny.

The words of the statute would appear to be clear on its face: licensed to “perform such service.” However, without any other direct interpretation of this regulation, the court must look to other circumstances in which the judiciary has determined similar issues.

Section 691.10 (b) of title 22 of the Official Compilation of Codes, Rules and Regulations of the State of New York, dealing with the conduct of attorneys, states that “[a] disbarred, suspended or resigned attorney may be compensated . . . for legal services rendered and disbursements incurred by him prior to the effective date of the disbarment or suspension order or of his resignation.”

The rationale behind this regulation is that the services were provided by the attorney when he or she was licensed, and therefore the attorney is entitled to appropriate compensation for the work the attorney legally performed. (See generally, Casey v Ruffino, 306 AD2d 304 [2d Dept 2003]; Lee v Hayt, Percy & Mermelstein, 4 Misc 3d 1012[A], 2004 NY Slip Op 50853[U] [2004].)

Further, under general principles of contract law, it is well settled that contracts made by private parties must necessarily be construed in the light of the applicable law at the time of their execution. (10 NY Jur 2d, Contracts § 204, at 112; see City of Troy Unit of Rensselaer County Ch. of Civ. Serv. Empls. Assn. v City of Troy, 36 AD2d 145 [3d Dept 1971].) Generally, therefore, the validity of a contract will depend upon the law as it existed at [*3]the time it was made. (Goldfarb v Goldfarb, 86 AD2d 459 [2d Dept 1982].) The only exception to this rule occurs if there is a variation in the law that is made due to changes in public policy. Otherwise, the contract will be interpreted according to the law in effect at the time of its execution. (Bloomfield v Bloomfield, 97 NY2d 188 [2001].)

The court does not find any legislative intent that indicates it is against public policy to reimburse a medical provider for services rendered that were lawfully performed, regardless of the subsequent status of the medical provider.

Based on the foregoing, the court holds that a medical provider may be reimbursed for services rendered while he or she was registered and licensed to perform such services under section 65-3.16 (a) (12) of 11 NYCRR, even if the provider subsequently becomes unregistered.

Plaintiff’s motion for summary judgment is granted. Defendant’s cross motion for summary judgment is denied.

[*1]

Civil Court of the City of New York, Kings County, September 14, 2004

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for plaintiffs. Bruno, Gerbino & Soriano, LLP, Melville, for defendant.

OPINION OF THE COURT

Ann Elizabeth O’Shea, J.

Plaintiffs A.B. Medical Services PLLC and LVOV Acupuncture P.C. instituted this action to recover first-party, no-fault benefits for medical services rendered to their assignor, Danny Arenas, who was injured in an automobile accident on March 7, 2003. Plaintiffs provided medical services to Mr. Arenas between March 24, 2003 and June 5, 2003. Each of the plaintiffs made several claims for payment. Only four of those claims are in issue here, each originating from plaintiff A.B. Medical.

Under the no-fault insurance regulations, an insurer must pay or deny a claim within 30 days after it receives a properly completed proof of claim (11 NYCRR 65-3.8 [c]). While an insurer may request additional information to verify a claim, it must do so within 15 days after receiving the proof of claim (11 NYCRR 65-3.5 [b]), and it must then pay or deny the claim within 30 days after receipt of the requested information (11 NYCRR 65-3.8 [a] [1]; [c]).

In order to establish a prima facie case of entitlement to summary judgment on its claims for first-party, no-fault benefits, a plaintiff medical provider need only provide proof that it submitted and defendant received a properly completed claim form, including a “properly executed” assignment of benefits (11 NYCRR 65-3.11 [b] [2]), and that defendant did not pay or deny the claim within 30 days after its receipt of the proof of claim or of additional information in response to a [*2]timely request for verification (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]; New York Hosp. Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2d Dept 2004]).

All four claims were denied on the asserted ground that the services provided were not medically necessary. The forms denying three of the four claims in issue were dated more than 30 days after defendant had received complete proofs of claim. One—for $604.24—was received by defendant on April 29, 2003, and the denial form is dated June 3, 2003, 35 days after the claim was received. A claim for $240 and another for $1,972.08 were received by defendant on June 11, 2003; the denial form for each of those is dated July 22, 2003, 41 days after receipt of the claim. The fourth claim, for $360, was received by defendant on April 14, 2003. Although the denial form is dated May 14, 2003, exactly 30 days after receipt of the claim, the envelope in which the denial was mailed is postmarked May 19, 2003, 35 days after receipt of the claim. In that situation, the operative date for determining the timeliness of the denial must be the date on which the denial was mailed, not the date stated on the denial form (accord Damadian MRI in Canarsie v Countrywide Ins. Co., 194 Misc 2d 708 [2003]). To conclude otherwise would undermine the primary goal of the no-fault system, which is the prompt consideration and processing of claims for losses resulting from automobile accidents (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003]), permit unwarranted delays in the notification of the denial, or encourage the backdating of denials.

Despite the untimeliness of its denials, defendant contends that the assignment of benefits submitted by plaintiff in conjunction with its proofs of claim is deficient because it is undated and the signature of the purported assignor is unauthenticated. While the no-fault regulations require that a proof of claim include a “properly executed” assignment of benefits (11 NYCRR 65-3.11 [b] [2]), the Appellate Term has rejected the argument that the signature on an assignment of benefits must be authenticated for a plaintiff to meet its prima facie burden on a motion for summary judgment (see Ocean Diagnostic Imaging P.C. v Lumbermens Mut. Cas. Co., 3 Misc 3d 137[A], 2004 NY Slip Op 50510[U] [2004], revg Ocean Diagnostic Imaging P.C. v Lumbermens Mut. Cas. Co., Civ Ct, Kings County, July 7, 2003, Sweeney, J., Index No. 75326/02). There is no principled reason why the absence of a date on an assignment should be treated differently from the absence of an authentication of the signature (but see A.B. Med. Servs. v American Tr. Ins. Co., Civ Ct, Kings County, Apr. 13, 2004, Gesmer, J., Index No. 69587/03). Defendant had the opportunity to object to the form or sufficiency of the assignment and to request the original assignment pursuant to its right to seek verification of the claim at the claims stage of the proceeding (see 11 NYCRR 65-3.5 [a]-[c]; 65-3.11 [c]). Its failure to do so results in a waiver of any defense based upon an asserted infirmity in the assignment (New York Hosp. Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640, 641 [2d Dept 2004]; Ocean Diagnostic Imaging P.C. v Lumbermens Mut. Cas. Co., 3 Misc 3d 137[A], 2004 NY Slip Op 50510[U]), or on any other asserted deficiency in the claim (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; Montefiore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 9 AD3d 354 [2d Dept 2004]; Presbyterian Hosp. v Aetna Cas. & Sur. Co., 233 AD2d 433 [2d Dept 1996]), as well as any defense based upon lack of medical necessity (see e.g. Liberty Queens Med., P.C. v Liberty Mut. Ins. Co., 2002 NY Slip Op 40420[U] [App Term, 2d & 11th Jud Dists, June 27, 2002]).

Having submitted proof that it mailed and defendant received its claim forms demonstrating the amount of the loss sustained and that defendant failed to request verification of the assignments or claims or to pay or deny those claims within the applicable time limits, plaintiff established its prima facie entitlement to summary judgment on each of its claims (see New York Hosp. Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640, 641 [2d Dept 2004]). Since defendant is precluded from raising any defense with respect to the sufficiency of the claim forms or the medical necessity of the services provided, there are no issues of fact or law that remain in dispute.

Accordingly, plaintiffs’ motion for partial summary judgment is granted.

Supreme Court, Kings County

37746/03

Francois Rivera, J.

The defendant Allstate Insurance Company moves pursuant to CPLR §603 to sever and dismiss the claims brought by plaintiff Aviyon Medical Rehabilitation, P.C. Plaintiff opposes defendant’s motion.

Plaintiff is a health care provider authorized to practice and render diagnostic services in New York State and maintains an office at 107-13 Jamaica, Richmond Hill in Queens County. Defendant is a foreign corporation, duly authorized to conduct the business of providing automobile liability and no fault insurance to New York State motorists.

On October 9, 2003, plaintiff commenced this action by filing a summons and verified complaint with the Kings County Clerk’ s Office. Defendant answered with a general denial and asserted (28) twenty-eight affirmative defenses. Plaintiff’s verified complaint annexed a list containing the names of (36) thirty-six motor vehicle accident victims, the dates of their accidents, the amount of their unpaid no fault claims, and the corresponding claim numbers assigned to them by the defendant. Plaintiff alleged that all these individuals were injured while covered by an automobile liability insurance policy containing a New York State no-fault endorsement issued by the defendant.

Plaintiff allegedly provided health services to each of these individuals for their accident related injuries and they each assigned to plaintiff the right to receive their no-fault benefits for these services. Plaintiff contended that contrary to the requirements of Insurance Law §5106(a), defendant failed to pay the total amount due on the assigned claims leaving an aggregate unpaid balance in the amount of $105,218.78.

CPLR §603 provide as follows:

Severance and separate trials. In furtherance of convenience or to avoid prejudice the court may order a severance of claims, or may order a separate trial of any claim, or of any separate issue. The court may order the trial of any claim or issue prior to the trial of the others. [*2]

In support of its motion for severance, defendant contends that joinder is improper pursuant to CPLR §1002(a) because the thirty-six (36) joined claims do not arise from a series of transactions or occurrences and do not contain a common question of law or fact. Defendant further alleges that joinder would cause defendant prejudice and lead to jury confusion. Defendant ‘s claim of prejudice is premised on the alleged logistical difficulty of coordinating and preparing a defense for each claim between the various assigned claims representatives spread throughout the state. Defendant also claims a likelihood of jury confusion based solely on the volume of claims.

CPLR §1002(a) provides:

Persons who assert any right to relief jointly, severally, or in the alternative arising out of the same transaction or occurrence, or series of transactions or occurrences, may join in one action as plaintiffs if any common question of law or fact would arise.

Although defendant claims improper joinder, the case at bar has but one party on each side, Aviyon Medical Rehabilitation, P.C. and Allstate Insurance Company. Pursuant to the liberal pleading provisions of CPLR §601(a), a plaintiff in a complaint, or the defendant in an answer setting forth a counterclaim or cross-claim, may join as many claims as he may have against an adverse party. Thus, the plaintiff is free to join in one lawsuit as many claims as it may have against Allstate.

Here, the plaintiff has accumulated thirty-six claims against Allstate and has chosen to join them in a single action. It is well settled that joinder of claims by a plaintiff against a single defendant need not be consistent or even related (Collins v. Telcoa Intern. Corp., 283 A.D.2d 128, 131 [2nd Dept. 2001]; see also Twitchell v. McKay, 78 A.D.2d125, 127 [4th Dept. 1980]). The purpose of this policy of liberal joinder is to prevent multiplicity of suits so that the aggrieved party can obtain complete relief in one action (Saunders v. Saunders, 54 Misc.2d 1081.[Supreme Court, Special Term, Kings County 1967]; See also George Cohen Agency Inc. v. Donald S. Perlman Agency Inc., 69 A.D.2d 725 [2nd Dept. 1979]). It is also intended to reduce the caseload of the courts and its personnel and avoid unnecessary expenditure of time, money and manpower.

However, if joinder of all the claims a plaintiff may have against a defendant would achieve an undesirable result, the court is well within its discretion, and defendant may so move, to sever the claims pursuant to CPLR §603 ( Anderson v. Singh 305 AD 2d 620 [2nd Dept. 2003]; see also Broome County v. Aetna Casualty & Sur. Co. 126 A.D.2d 818 [3rd Dept. 1987]). The decision whether to grant a severance pursuant to CPLR 603 is a matter of judicial discretion which will not be disturbed on appeal absent an abuse of discretion or prejudice to a substantial right of the party seeking severance (Finning v. Niagra Mohawk Power Corp., 281 A.D.2d 844 [3rd Dept. 2001]). In the case of Hempstead General Hospital v. Liberty Mutual 134 A.D.2d 569; [2nd Dept. 1987], a healthcare provider sued an insurance carrier as assignee of twenty-nine (29) claims to recover no-fault benefits allegedly unpaid and past due. All of the assignors had received treatment at the plaintiff facility, were insured by the same defendant insurance company, and were claiming breach of the no-fault provisions of their respective policies. The Appellate Division Second Department upheld the trial court’s discretionary use of joinder in Hempstead finding that there was a common question of law. The court stated that: [*3]

“The Supreme Court did not abuse its discretion in denying the defendant’s request to sever the 29 claims. The joinder of the claims is proper under CPLR 1002(a) since the claims arise out of a uniform contract of insurance and involve the interpretation of the same no-fault provisions of the Insurance Law. While the claims involved relate to separate accidents and individuals, it has been held that multiple transactions by multiple plaintiffs “do not lose their character as a series of transactions because they occurred at different places and times extending through many months” (Akely v. Kinnicutt, 238 NY 466,474). Since the issues herein involve a common question of law, such joinder is proper and severance was appropriately denied” (Hempstead General Hospital v. Liberty Mutual supra, 134 A.D.2d at 570.

Defendant Allstate relies on Mount Sinai Hospital a/a/o Jefferson v. Motor Vehicle Accident Indemnity Corporation, 291 A.D.2d 536 [2nd Dept. 2002], for the proposition that in no fault actions with multiple assignors, the claims must be severed where there are unrelated assignors with no common contract of insurance. While the Appellate Division Second Department in Mount Sinai did indeed make such a determination, it also reversed the lower court ruling which severed the plaintiff’s third and fourth cause of action. The court found that those claims involving one assignee seeking to recover no fault benefits and involved a common question of law. The court found that those claims were properly joined pursuant to CPLR §1002.

The case at bar is virtually indistinguishable from Hempstead, but for the number of claims brought by the plaintiff. Plaintiff herein alleges that each assignor had either purchased or was covered by a contract of automobile liability insurance from the defendant and each of them assigned their rights to receive no fault benefits under that contract to the plaintiff. Thus, defendant’s reliance on the Mount Sinai decision in support of its application for severance is misplaced.

Insurance Law §5106(a) imposes upon insurers a prescribed time frame for settling bodily injury claims covered by a policy of bodily injury liability insurance. It provides in pertinent part:

Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied. All overdue payments shall bear interest at the rate of two percent per month. If a valid claim or portion was overdue, the claimant shall also be entitled to recover his attorney`s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated by the superintendent in regulations.

At its core, plaintiff’s cause of action is for a breach of contract contrary to the requirements of Insurance Law §5106(a). Plaintiff’s verified complaint alleges defendant’s breach of the no fault provision of its insurance contract covering each assignor. The alleged facts provide the requisite series of transactions or voluntary course of dealings needed to support the joinder of the claims in a single action.

Defendant argues that if severance is denied, it will fall victim to undue prejudice caused [*4]by the voluminous amount of litigation which accompanies such a high number of claims. The court sees no apparent, logistical difficulties in preparing a defense to these claims such that the defendant would be prejudiced by going forward with the instant proceedings. In this age of sophisticated technology, the defendant should be able to instantly gather any files or documents necessary to the defend the action because these items are within the defendant’s custody and control. Similarly defendant should be able to communicate with or summon at will any employee needed for their defense. Moreover, it is more likely that defendant would suffer greater prejudice defending thirty-six (36) claims in potentially numerous venues when one considers the cost of separate filing fees, pre-trial preparation costs and duplication of effort to resolve a common question of law. Defendant’s allegations of prejudice are unpersuasive. The court finds much more convincing plaintiff’s simple argument that the defendant has ample resources available to muster a defense.

Defendant also argues that failure to sever the claims will lead to jury confusion. Defendant cites Doll v. Castiglione 86 A.D.2d 711 [3rd Dept. 1982] and Bender v. Underwood, 93 A.D.2d 747 [1st Dept. 1983] as authority for this contention. Both cases are distinguishable from the case at bar. In Doll, the plaintiff attempted to join two claims arising from two separate traffic accidents on separate days, months apart against two separate defendants. There was no commonality between the claims apart from the fact they both involved auto collisions and a single plaintiff. In the Bender case, six plaintiffs attempted to join in one action claiming negligence and medical malpractice against a single defendant. However, unlike the case at bar, there was no commonality among the claims other than that each had undergone a similar procedure by the same defendant. While the court acknowledged that some common issues of law or fact were present, it also found that individual issues concerning particular circumstances applicable to each plaintiff predominated so as to preclude the direction of a joint trial. The court went on to state that:

“Although it is claimed that each plaintiff underwent the same implantation process and was allegedly subjected to the same basic type of malpractice, clearly, each treatment was separate and distinct, involving different plaintiffs, each with individual medical histories” (Bender v. Underwood, supra, 93 A.D.2d at 748).

The sole link between the plaintiffs in the Bender case is that they all alleged a similar negligent practice by the same defendant. However, there was no common contract between the defendant and the several plaintiffs, nor was there even evidence that the negligence or the procedures were identical. Furthermore, the central proposition of the case was that severance was proper to avoid prejudice; jury confusion was merely an ancillary concern of the court in issuing its ruling.

This court finds that the analysis of the Appellate Division Second Department in Hempstead , upholding the joinder of twenty nine (29) claims on facts nearly identical to the case at bar, permits the discretionary joinder of plaintiff’s thirty-six (36) claims against the defendant. This court does not find that an additional seven claims will produce the undesirable effect expressed by the defendant.

Defendant also contends that if the court severs plaintiff’s complaints, they would fall below the minimum monetary jurisdictional limit of the Supreme Court and thus warrant dismissal. The New York State Supreme Court is the State’s only court of general jurisdiction, [*5]retaining nearly the entire jurisdiction conferred upon it by the constitution. This encompassing jurisdiction is limited in only two instances; those cases over which Congress has conferred exclusive jurisdiction on the Federal Courts, and actions against the State, which the New York Legislature has declared the exclusive domain of the Court of Claims. Thus no threshold minimum monetary amount exists for subject matter jurisdiction in the Supreme Court as it does in the Federal Courts. Nor is there a maximum monetary limit as is proscribed for the New York City Civil Court. And despite the fact that it is the policy of this State to have a money action brought in the lowest court jurisdiction competent to entertain it, the fact that such a forum exists does not divest the Supreme Court of its original jurisdiction [D. Siegel, New York Practice, 3rd ed. §12 (1999)] This policy is effectuated by certain penalties and incentives delineated in CPLR §8102, which states that a plaintiff is not entitled to costs:

“In an action brought in the Supreme Court in a county within the city of New York which could have been brought, except for the amount claimed, in the civil court of New York, unless he shall recover six thousand dollars or more.” CPLR §8102(1).

A similar restriction regarding disbursement of costs adheres in the Supreme Court outside of the city of New York, but with a substantially lower recovery requirement of five hundred dollars. CPLR §8102(2). In sum, the defendant’s request to dismiss is improper under any circumstances, because this court is not deprived of its subject matter jurisdiction whether the matters remain joined or are severed.

Based on the foregoing, defendant’s motion to sever and dismiss plaintiff’s complaint is denied. This constitutes the decision and order of this court.

Dated: August 2, 2004

_____________________________

J.S.C.

[*1]

Supreme Court, Kings County, July 30, 2004

APPEARANCES OF COUNSEL

Eliot Spitzer, Attorney General (Lewis A. Polishook of counsel), for defendants. Gary Tsirelman for plaintiffs.

{**5 Misc 3d at 953} OPINION OF THE COURT

Gloria Cohen Aronin, J.

In 1973, the New York State Legislature enacted the Comprehensive Motor Vehicle Insurance Reparations Act, the No-Fault Law, which is now codified as article 51 of the Insurance Law. The No-Fault Law provides a plan for compensating victims of automobile accidents for their economic losses without regard to fault or negligence. One of the purposes in enacting the No-Fault Law was to provide rapid payment for economic injury (see, Oberly v Bangs Ambulance, 96 NY2d 295, 296 [2001]).

Section 5106 (b) of the Insurance Law states that claimants injured in automobile accidents [*2]have the option of submitting any dispute involving the insurer’s liability to pay first-party benefits, or additional first-party benefits, the amount thereof, or any other matter concerning first-party benefits to arbitration pursuant to simplified procedures to be promulgated and approved by the Superintendent. Insurance Law § 5106 (c) provides for the appeals process from arbitral decisions.

Relevant Arbitration Regulations:

Pursuant to Insurance Law § 5106, the Commissioner has promulgated regulations governing optional arbitration procedures.

11 NYCRR 65-4.5 (o) (1) provides:

“The arbitrator shall be the judge of the relevance and materiality of the evidence offered, and strict conformity to legal rules of evidence shall not be necessary. The arbitrator may question any witness or party and independently raise any issue that the arbitrator deems relevant to making an award that is consistent with the Insurance Law and department regulations.”

11 NYCRR 65-4.2 (b) (3) provides:

“(i) The applicant shall submit all documents supporting the applicant’s position along with their request for arbitration. All such documents shall also be simultaneously submitted to the respondent. Following this original submission of documents, no additional documents may be submitted by the applicant other than bills or claims for ongoing benefits . . .

“(iv) Any additional written submissions may be made only at the request or with the approval of the arbitrator.”{**5 Misc 3d at 954}

The Complaint:

Plaintiffs are New York corporations that are applicants in arbitration disputes subject to the no-fault arbitration regulations. They commenced this action for a judgment declaring that 11 NYCRR 65-4.5 (o) (1) violates the Due Process Clauses of the United States and New York Constitutions and restraining arbitrators from invoking it at arbitration hearings. Plaintiffs claim that 11 NYCRR 65-4.5 (o) (1) and 65-4.2 (b) (3), taken together, prevent a claimant from submitting additional proof in response to new issues raised by arbitrators, and thus, violate the requirements of procedural due process. Plaintiffs further allege that the provisions of 11 NYCRR 65-4.2 (b) (3) (iv), which give the arbitrator discretion to accept additional written submissions, does not cure the due process violation because it gives the arbitrator discretion as to whether to accept supplemental papers, the approval is almost never granted by some arbitrators and the provision does not guarantee a right to supplemental oral argument. Finally, plaintiffs allege that although they have a right to appeal to a master arbitrator, the master arbitrators are bound by the same unconstitutional regulations.

Defendants currently move to dismiss arguing that plaintiffs cannot prove that the challenged regulation is facially unconstitutional and that plaintiffs lack standing to bring an “as applied” due process challenge because they failed to avail themselves of the procedural remedies available to them.

Due Process Considerations:

The Due Process Clauses of the United States and New York Constitutions require that ” ‘deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for [*3]hearing appropriate to the nature of the case’ ” (Brancato v City of New York, 244 F Supp 2d 239, 242 [SD NY 2003], quoting Mullane v Central Hanover Bank & Trust Co., 339 US 306, 313 [1950]). The procedural safeguards required by due process are flexible and vary with the circumstances and type of proceeding (see, Goss v Lopez, 419 US 565, 578 [1975]; Matter of Vector E. Realty Corp. v Abrams, 89 AD2d 453, 456-457 [1st Dept 1982]).

Arbitration is intended to be a more efficient and less expensive alternative to dispute resolution than a formal court procedure (see, British Ins. Co. of Cayman v Water St. Ins. Co. Ltd., 93 F Supp 2d 506, 516 [SD NY 2000]). To achieve this goal, arbitrators are permitted to provide relief without observing{**5 Misc 3d at 955} all of the rules that the court would be bound to follow (id.). While it is undisputed that arbitrators must give each of the parties to the dispute an adequate opportunity to present its evidence and argument (see, Tempo Shain Corp. v Bertek, Inc., 120 F3d 16, 19 [1997]; Hoteles Condado Beach, La Concha & Convention Ctr. v Union De Tronquistas Local 901, 763 F2d 34, 39 [1st Cir 1985]), arbitrators are not required to hear all the evidence proffered by a party (see, Tempo Shain Corp. v Bertek, Inc., supra at 20). Arbitrators are afforded broad discretion in determining whether “additional evidence is necessary or would simply prolong the proceedings” (id. at 19).

As there is no statutory requirement to the contrary, due process mandates only that plaintiffs be accorded “an opportunity ‘to be heard’ ” (Matter of Scherbyn v Wayne-Finger Lakes Bd. of Coop. Educ. Servs., 77 NY2d 753, 757 [1991]) and to submit evidence supporting their position, and that opportunity is provided (see, Matter of Akshar v Mills, 249 AD2d 786 [3d Dept 1998]; Vector E. Realty, 89 AD2d at 455 [1st Dept 1982]; see also, Yonir Tech., Inc. v Duration Sys. [1992] Ltd., 244 F Supp 2d 195 [SD NY 2002]).

In addition, the no-fault regulations provide further safeguards through the appellate process. Claimants may appeal adverse decisions to master arbitrators and may further seek judicial review of those decisions to ensure that arbitration decisions comport with constitutional requirements of due process (see, Insurance Law § 5106 [c]; 11 NYCRR 65-4.10; see also, Matter of Unigard Mut. Ins. Co. v Hartford Ins. Group, 108 AD2d 917 [2d Dept 1985]; Country-Wide Ins. Co. v Harnett, 426 F Supp 1030 [SD NY 1977]). In fact, two recent arbitral decisions show that procedural safeguards are effective. In Matter of Schuster (Peerless Ins. Co.) (AAA Case No. 17 R 991 31701, Oct. 31, 2003) and Matter of Alpine Med. Servs. P.C. (Allstate Ins. Co.) (AAA Case No. 17 R 991 29054 03, Oct. 30, 2003), the master arbitrators vacated the arbitrator’s decisions on the ground that the arbitrators should have permitted additional evidence for review.

Facial Constitutional Challenge:

A facial challenge requires the court to examine the words of the regulation without reference to the defendant’s conduct. A plaintiff may prevail only if he or she can establish that no set of circumstances exists under which the regulation would be valid (see, People v Stuart, 100 NY2d 412 [2003]; Matter of Wood v Irving, 85 NY2d 238, 244-245 [1995]; People v Bright, 71 NY2d 376, {**5 Misc 3d at 956}382 [1988]; see also, United States v Salerno, 481 US 739, 745 [1987]; Village of Hoffman Estates v Flipside, Hoffman Estates, Inc., 455 US 489, 495 n 5, 497 [1982] [a successful facial challenge means that the law is ” ‘invalid in toto—and therefore incapable of any valid application’ “]; McGowan v Burstein, 71 NY2d 729, 733 [1988]).

Here, 11 NYCRR 65-4.5 (o) (1) and 65-4.2 (b) (3), taken together, authorize the arbitrator to permit supplementation of the claimant’s submissions, they can be constitutionally [*4]applied in tandem and the facial constitutional claim must be dismissed. In fact, plaintiffs admit that there are situations where arbitrators can and do permit supplemental submissions pursuant to the regulations.

As Applied Due Process Challenge:

There is no evidence in the record that plaintiffs sought review before a master arbitrator of the arbitrations in question. Thus, plaintiffs do not have the standing to assert an as applied due process challenge since they did not exhaust their administrative remedies and have shown no exception to this rule (see, Matter of Rodriguez v Coughlin, 219 AD2d 876 [4th Dept 1995]). In any event, plaintiffs do not challenge any specific application of the regulations at issue and thus have no standing to assert an as applied challenge.

Accordingly, the defendants’ motion is granted, and the complaint is dismissed.

Civil Court, Kings County

72088/03

Donald Scott Kurtz, J.

Plaintiff moves, pursuant to CPLR §3212, for an order granting summary judgment on [*2]the ground that no issue of fact exists with respect to the plaintiff’s entitlement to No-Fault benefits for transportation services provided to Rafael Fuentes (hereinafter “the patient”) who was allegedly injured in a motor vehicle accident on May 6, 2001. Plaintiff claims that it provided necessary transportation services to the patient at a total cost of $1,650, of which $700 was paid, leaving a balance of $950.

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. Alvarez v. Prospect Hospital, 68 NY2d 320 (1986). In light of such a showing, if the party opposing the motion comes forward with evidence of issues of fact requiring a trial, the motion will be denied. Rebecchi v. Whitmore, 172 AD2d 600 (2d Dept 1991).

In order to establish a prima facie case of entitlement to No-Fault benefits, the plaintiff must submit proof of claim and amount of loss, together with a valid assignment. See Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 (2d Dept 2004); Damadian MRI In Garden City, P.C. v. Windsor Group Ins., 2 Misc 3d 138(A)(App Term, 2d & 11th Jud Dists 2004); Interboro General Hosp. v. Allcity Ins. Co., 149 AD2d 569, appeal dismissed 74 NY2d 792 (1989). In support of its claim, plaintiff submits several invoices addressed to defendant. Those invoices purport to establish that plaintiff provided the patient with transportation services sixty-six times between May 8, 2001 and October 18, 2001, at a rate of $25 per trip. Plaintiff was reimbursed by defendant in the amount of $700, leaving a balance of $950 owing. Plaintiff also submits the affidavit of Leonid Zayets, an employee and/or officer of plaintiff, wherein he states that plaintiff submitted the invoices to defendant together with proper No-Fault verification forms. However, plaintiff fails to attach said forms.

The alleged accident occurred on May 6, 2001. Therefore, this case falls under the No-Fault provisions of 11 NYCRR § 65.15 in effect on that date. Under the applicable regulations, a patient is entitled to up to $25 per day for “other reasonable and necessary expenses incurred as a result of the accident,” including necessary transportation expenses. 11 NYCCR § 65.8(g)(1)(3). Although the current No-Fault regulations allow the assignment of the right to collect payment for health services only, under the older, applicable regulations, a patient may assign the right to collect payment from an insurer to either an attending physician or “other provider of service…” 11 NYCRR 65.15(j)(1). See also, 11 NYCRR 65-3.11(a).

Plaintiff submits a purported assignment which provides as follows:

In consideration of services rendered or to be rendered to the above, named patient, I hereby authorize payment directly to the Transportation provider services of any and all first party no-fault automobile insurance benefits, to which I may be entitled, for services rendered by the provider, but not to exceed the provider’s regular charges for such services.

I further understand that if said sum is not collected I will remain personally liable. [*3]

This language operates only to authorize defendant to make payment directly to plaintiff and in no way assigns to plaintiff the right to sue to collect such payment in the place of the patient. Therefore, it is not a valid assignment, but merely an authorization for direct payment. See also, Rehab Medical Care of New York, P.C. v. Travelers Ins. Co., 188 Misc 2d 176 (App Term, 2d & 11th Jud Dists 2001) (wherein a statement containing the language “I hereby assign to the provider of services and/or his/her assignees so much of my first party No-Fault automobile insurance benefits and rights…” [emphasis added] was held to be an assignment of the right to sue as well as the right to be paid.)

Although the Court need not consider defendant’s remaining arguments in opposition to the motion, the Court notes that defendant argues that plaintiff has failed to prove medical necessity of the transportation services claimed. However, defendant fails to establish that such a defense was raised in a timely denial of the plaintiff’s claims. Absent such a denial, defendant has waived such a defense. See Amaze Medical Supply Inc. v. Eagle Ins. Co., 2 Misc 3d 139(A) (App Term, 2d & 11th Jud Dists 2004); A.B. Medical Services Pllc v. CNA Ins. Co., 1 Misc 3d 137(A) (App Term 1st Dept 2004).

Accordingly, plaintiff has failed to establish a prima facie case of entitlement to judgment as a matter of law. Consequently summary judgment is denied.

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

Dated: July 22, 2004

DONALD SCOTT KURTZ

Judge, Civil Court

[*1]

Civil Court of the City of New York, Kings County, May 3, 2004

APPEARANCES OF COUNSEL

Teresa Spina, Woodbury (Kevin Barry of counsel), for defendant. Anatta Levinsky, P.C., Brooklyn, for plaintiff.

{**4 Misc 3d at 185} OPINION OF THE COURT

Ellen Gesmer, J.

{**4 Misc 3d at 186}Defendant has moved to dismiss plaintiff’s complaint pursuant to CPLR 3126 because plaintiff failed to appear at an examination before trial (EBT) scheduled by defendant. Defendant’s motion is granted unless the plaintiff appears for an EBT under the terms set forth below.

Procedural History and Facts

In this action, plaintiff is seeking payment of first-party no-fault benefits for medical equipment provided by it to Leonie Joiles, who assigned to plaintiff her rights to no-fault benefits from defendant, her insurer.^[FN*] The defendant timely denied payment, on the grounds of medical necessity, based on an independent medical peer review. [*2]

Plaintiff commenced this action on or about March 20, 2003. Simultaneously with the service of its answer on April 9, 2003, defendant served plaintiff with a demand for verified interrogatories and a notice to take deposition upon oral examination. The answers to the interrogatories were due 20 days later and the deposition was scheduled for June 18, 2003, more than 60 days later. At plaintiff’s request, defendant rescheduled the deposition to August 26, 2003. Plaintiff failed to appear.

Analysis

Although the CPLR permits a party to utilize both written interrogatories and oral depositions in pretrial discovery, a party should generally complete one form of discovery before invoking another (Giffords Oil Co. v Spinogatti, 96 AD2d 851 [2d Dept 1983]; Samsung Am. v Yugoslav-Korean Consulting & Trading Co., 199 AD2d 48, 49 [1st Dept 1993]). Indeed, the Second Department has held that “the noticing of an oral deposition prior to reviewing the answers interposed to the interrogatories and without a determination of the necessity for further disclosure, verges on an abuse of the judicial system.” (Barouh Eaton Allen Corp. v International Bus. Machs. Corp., 76 AD2d 873, 874 [2d Dept 1980].) In this case, although the defendant noticed the deposition at the same time that it sent the demand for {**4 Misc 3d at 187}interrogatories, it did not take any action to enforce its request for a deposition until well after receiving the interrogatories. Moreover, in support of its motion, defendant’s counsel affirmatively asserts that “the examination before trial of plaintiff is necessary and material in order to defend this action properly,” thus meeting the standard set by the Second Department for using a second discovery device (Katz v Posner, 23 AD2d 774, 775 [2d Dept 1965] [“If the device first chosen does not adequately disclose all evidence material and necessary to the prosecution or defense of the action (CPLR 3101), then the other available remedy may be utilized”]). Consequently, defendant has established a prima facie case that it is entitled to go forward with its deposition.

In opposition to defendant’s motion, plaintiff initially argues that it made a demand for verified interrogatories to which defendant did not respond. Plaintiff has failed, however, to show why defendant’s failure to respond to interrogatories would excuse its failure to attend a deposition or serve as a defense to a motion to compel. In any event, this argument is particularly weak because plaintiff’s deposition was scheduled for August 26, 2003, well before the responses to plaintiff’s demand for interrogatories were even due.

More substantially, plaintiff argues, relying on Ostia Med. v Government Empls. Ins. Co. (1 Misc 3d 907[A], 2003 NY Slip Op 51560[U] [Nassau Dist Ct 2003]) and Zlatnick v Government Empls. Ins. Co. (2 Misc 3d 347 [Civ Ct, Queens County 2003]), that defendant may not proceed with its deposition because it failed to advise plaintiff that its answers to defendant’s demand for verified interrogatories were “inadequate, incomplete or defective.” The court rejects this argument for several reasons.

First, unlike the plaintiff medical providers in Ostia and Zlatnick, the plaintiff in this case did not move for a protective order with regard to the deposition, pursuant to CPLR 3103, and still has not done so. While there is no absolute time limit for moving for a protective order, the [*3]court may imply a standard of reasonableness, especially where the time for the scheduled deposition has long passed (Philip v Monarch Knitting Mach. Corp., 169 AD2d 603 [1st Dept 1991]; see also Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C3103:3). Plaintiff is in a particularly poor position to complain about being compelled to appear at the deposition since it took no action to object to the deposition either before it was scheduled or in the eight months since. While that would not prevent {**4 Misc 3d at 188}plaintiff from opposing this motion, it would certainly have been the better practice for plaintiff to move for a protective order rather than to just ignore defendant’s deposition notice.

Secondly, this court disagrees with the rulings in Ostia and Zlatnick that the burden is on the defendant insurance company to justify its need for a deposition. Indeed, that conclusion seems inconsistent with the holding in Ostia that a medical provider which brings an action in Civil Court to obtain no-fault benefits has the same discovery obligations under article 31 of the CPLR as any other litigant (Ostia, 2003 NY Slip Op 51560[U], *12; see also Albatros Med. v Government Empls. Ins. Co., 196 Misc 2d 656 [Civ Ct, Queens County 2003]). As set forth above, the general rule is that if a litigant determines that the responses to interrogatories from the other side do “not adequately disclose all evidence material and necessary to the prosecution or defense of the action,” then it may utilize depositions or any other available remedy, without first seeking court permission (Katz v Posner, 23 AD2d at 775). If the other party moves for a protective order, it must then bear the burden of showing that the discovery sought is not necessary, consistent with the well-established principle that “the burden of demonstrating an immunity from discovery is on the party asserting the immunity.” (Westhampton Adult Home v National Union Fire Ins. Co., 105 AD2d 627, 628 [1st Dept 1984]; see also Koump v Smith, 25 NY2d 287, 294 [1969]; Mavrikis v Brooklyn Union Gas Co., 196 AD2d 689, 690 [1st Dept 1993]; Jarvis v Jarvis, 141 Misc 2d 404, 406 [Sup Ct, NY County 1988].) The decisions in Ostia and Zlatnick improperly shift the burden to the party seeking discovery to justify a request for discovery, rather than imposing the burden on the party seeking to avoid discovery to show that the discovery sought is not necessary. In this case, plaintiff has certainly not met its burden of showing that the discovery sought is not proper.

Third, even if the court were to find that the burden is on defendant to show that the discovery is justified, it would find that defendant had met its burden. First, defendant has shown that it made a timely denial based on medical necessity, so defendant has preserved issues on which discovery is appropriate (Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274 [1997]; Ostia, 2003 NY Slip Op 51560[U], *11). Secondly, plaintiff’s responses to defendant’s interrogatories are insufficient on their face for at least two reasons. As an initial matter, the responses to {**4 Misc 3d at 189}the interrogatories were not verified, and they fail to identify the name and address of the individual responding to the interrogatories; rather, they state only that they were answered by the plaintiff’s attorney. Consequently, as formulated, the interrogatories do not subject plaintiff or its principals to cross-examination, as would properly verified interrogatories. Finally, plaintiff fails to set forth any responses to the interrogatories concerning the medical necessity of the equipment provided. Since that is the crux of the issue in this case, defendant is entitled to conduct a deposition of plaintiff to obtain the information. [*4]

Conclusion

The nature and degree of the penalty to be imposed pursuant to CPLR 3126 against a party who has disobeyed a court order is a matter within the discretion of the court (Jaffe v Hubbard, 299 AD2d 395, 396 [2d Dept 2002]). Although the court has rejected plaintiff’s arguments, the court finds that plaintiff presented a good faith argument for its failure to attend the scheduled deposition. Accordingly, the court holds that the correct remedy in this case is to permit plaintiff an opportunity to appear for a deposition, subject to the penalty of dismissal of plaintiff’s case if it fails to do so. The plaintiff shall appear for a deposition at a date, time and place to be agreed to between the parties, or, failing agreement, at 10:00 a.m. on June 14, 2004 at the courthouse located at 141 Livingston St., Brooklyn, New York. In the event that plaintiff does not appear for a deposition on the date agreed to by the parties or on the date set by the court, defendant may settle an order on notice, pursuant to 22 NYCRR 208.33, dismissing the action.

Footnotes

Footnote *: The complaint does not allege that Ms. Joiles was injured in a car accident, which is an essential element of a claim under the No-Fault Law (Insurance Law § 5103). Accordingly, the court could dismiss the complaint sua sponte for failure to state a cause of action. The complaint refers to an annexed claim for payment, which was not attached to the copy of the complaint submitted with the moving papers. The claim for payment may have provided the missing information, since the denial of the claim refers to Ms. Joiles as the “injured person” and refers to an accident on May 18, 2000. Accordingly, the court will not dismiss the complaint, but cautions counsel to include the necessary allegations in their complaints.

Civil Court Of The City Of New York, Kings County

Index No. 40021KCV2003

Baker & Barshay, LLP ( Joaquin J. Lopez, Esq.) for plaintiff.

McDonnell, Adels & Goodstein, P.C.( Joel D. Epstein, Esq.) for defendant.

Manuel J. Mendez, J.

Plaintiff, Advanced Medical Rehabilitation, P.C., brings this action to recover $4298.37 for first party no-fault benefits provided to its assignor David Briggs, pursuant to the No-Fault provision of his insurance policy (see Insurance Law art 51). A plaintiff assignee will be awarded judgment upon establishing a prima facie case. To establish a prima facie case, plaintiff assignee must show there was a policy in effect issued by defendant insurer covering the treated person and motor vehicle collision in which the person was involved, an assignment of policy benefits, presentation of claims to the insurer for medical expenses arising from the collision and defendant insurer’s failure to deny the claims within 30 days. (11 NYCRR §65.15 (g) (6); Westchester County Medical Center v New York Central Mut. Fire Ins. Co., 262 AD2d 553, 555 [2nd Dept]; Neuro Care Center II v Allstate Insurance Co., NYLJ, Jan. 28, 2003, at 19, col 5; AB Medical Services PLLC v Progressive Insurance, 2003 NY Slip Op 50790[U], 2003 NY Misc. Lexis 463; S&M Supply inc., v Geico Insurance, 2003 NY Slip Op 51192[U], 2003 NY Misc. 1067; AB Medical Services PLLC v Highland Insurance Co., NYLJ, May 27, 2003, at 21, col 3 ).

Valid assignments of insurance benefits to plaintiff health care providers authorized by their patients are key to plaintiff’s recovery of those benefits (A.B. Medical Services PLLC v Highland, supra). To be valid, the assignor’s signature on the assignment of benefits must be authenticated (A.B. Medical Services PLLC v Highland, supra; Acevedo v Audubon Management, 280 AD2d 91 (1st Dept 2001); Fields v S&W Realty Assoc., 301 AD2d 625 (2nd Dept 2003); Neuro Care Center II v Allstate Ins. Co., supra).

The mere signature of the person listed as the assignor on an assignment document does not authenticate that signature (Neurocare Center II, supra., citing Freeman v Kirkland, 184 AD2d 331, 332 [1st Dept. 1992]; Fanelli v Lorenzo, 187 AD2d 1004, 1005 [4th Dept 1992]). Authentication of the signatures of plaintiffs’ assignor requires an attestation by a person familiar [*2]with the assignor’s signatures identifying them as such (Acevedo v Audubon Mgt., 280 AD2d 91, 95 (1st Dept 2001); Fields v S&W Realty Assoc., 301 AD2d 625 (2d Dept 2003); Neuro Care Center II, supra).

If a witness does not authenticate the executed assignment, it is inadmissible (Neurocare Center II, supra; citing People v Michallow, 201 AD2d 915 (4th Dept. 1994); People v Boswell, 167 AD2d 928 (4th Dept 1990) Wilson v Bodian, 130 AD2d 221 (2d Dept 1987).

Absent observing the assignor place his signature on the assignment, it is not sufficient that a witness merely recite that he is familiar with the assignor’s signature. (see Prince, Richardson Evidence §§9-103 at 703 [Farrell 11th ed] ). To admit the assignment in evidence, the witness must state, under oath, how it is that he has obtained familiarity with the assignor’s signature.

The assignee must establish that the claim was presented to the insurer (S&M Supply Inc. v Geico Insurance, 2003 NY Slip Op S1192[U]). Proof of mailing of the claim to the insurer may be established by testimony of the assignee’s employee who has personal knowledge that the claim was mailed (S&M Supply Inc., supra). Testimony of an employee regarding the general mailing practices of assignee’s office is insufficient (Hospital for Joint Diseases v Nationwide Mutual Ins. Co., 284 AD2d 374, 726 NYS2d 443).

This case was tried by the Court on February 19, 2004. Plaintiff presented one witness, Ruben Paez, an assistant office manager at Advanced Medical Rehabilitation. Mr. Paez testified to the practices and procedures utilized by plaintiff when a new patient comes into the office. Although it is the regular practice of the office to have the patient fill out an intake form and sign any required documentation at the initial visit, in this particular case, Mr. Paez did not witness Mr. Briggs sign the assignment or any other document and is not familiar with his signature. Furthermore, the assignment is undated and Mr. Paez could not recall the date when this assignment was actually signed.

CPLR 4518(a) codifies the business record exception to the hearsay rule. It sets forth the foundational requirements necessary to overcome a hearsay objection to the admission of certain documents. The proponent of the evidence must establish that the act, transaction, occurrence or event was made in the regular course of business; that it was the regular course of such business to make such act, transaction, occurrence or event and the entry was made at the time of the act, transaction, occurrence or event or within a reasonable time thereafter.

The essence of the business records exception to the hearsay rule is that records systematically made for the conduct of a business, as a business are inherently highly trustworthy because they are routine reflections of day to day operations and because the “entrant’s obligation” is to have them truthful and accurate for purposes of the conduct of the enterprise (Williams v Alexander, 309 NY 283, 286; People v Kennedy, 68 NY2d 569, 510 NYS2d 853, [1986]).

The Business Record Rule was not intended to permit the receipt in evidence of entries made by third parties not engaged in the business or under any duty to report (Johnson v Lutz, 253 NY 124 [Ct App 1930]). The rule should not be extended so to admit a mere private memorandum, not made in the pursuance of any duty owing by the person making it (Johnson v Lutz, supra at 128; Pector v County of Suffolk, 259 AD2d 605, 686 NYS2d 789 [2nd Dept 1999]).

The assignment of benefits is inadmissible as a business record for a number of reasons. [*3]First, the witness did not see Mr.Briggs sign the assignment and is not familiar with his signature; therefore, he could not properly authenticate the signature. Secondly, the assignment is not dated and the witness could not recall the date it was signed; thus, it could not be said that the assignment was made at the time of the events reflected in it or within a reasonable time thereafter. Finally, the assignment of benefits was made by Mr. Briggs who is not an employee of assignee or a person under a duty to report. Mr. Briggs is merely a third party not engaged in the business and under no duty to report as mandated by CPLR 4518(a). Therefore the assignment is not a business record admissible under the business record exception to the hearsay rule as embodied in CPLR 4518(a).

Mr. Paez testified that the bills for services provided to Mr. Briggs were prepared and mailed by a separate entity. When questioned during direct examination and also while being voir dired on the admissibility of the medical bills, Mr. Paez stated…. “they are not prepared by us, they are prepared for us and mailed.” He has no personal knowledge that the bills were mailed, when they were mailed or to whom. He has no personal knowledge of the general business practice of this billing entity. He is not qualified to testify as to the record keeping of an entity to which he is not related as an employee and about events over which he has no personal knowledge (Standard Textile Company, Inc. v National Equipment Rental, LTD., 80 AD2d 911, 437 NYS2d 398 [2nd dept 1981]; S&M Supply, Inc., supra).

Mr. Paez is not the proper witness to lay a foundation for the admissibility of the billing records. Plaintiff should have called an employee of the billing entity who is familiar with the general business practice of this entity and has personal knowledge that the claim was mailed (Standard Textile Company, Inc. v National Equipment Rental, LTD., supra).

CONCLUSION

The assignment of benefits form is inadmissible. It is not a business record made in the regular course of business by a person with a business duty to report. Furthermore, it was not properly authenticated or dated.

The medical bills are inadmissible because the witness is not qualified to testify as to the record keeping practices of an entity to which he is not related as an employee and about events over which he has no personal knowledge.

Two essential elements in maintaining an action seeking the recovery of first party no-fault benefits are proof of assignment and proof that the claim was mailed to the insurer. Plaintiff has failed to prove these essential elements. Plaintiff has failed to make out a prima facie case of its entitlement to recover no-fault first party benefits. Therefore, this action must be and it is hereby dismissed.

This constitutes the decision and judgment of this Court.

Dated: March 16, 2004

[*4]

Manuel J. Mendez

J.C.C.

Decision Date: March 16, 2004