Reported in New York Official Reports at American Tr. Ins. Co. v Nexray Med. Imaging PC (2023 NY Slip Op 50506(U))
American
Transit Insurance Company, Petitioner,
against Nexray Medical Imaging PC D/B/A Soul Radiology, A/A/O Carlos Guzman, Respondent. |
Index No. 533041/2022
Larkin Farrell LLC, New York City (David Fair of counsel), for petitioner.
Roman Kravchenko, Melville, for Respondent.
Aaron D. Maslow, J.
The following numbered papers were read on this petition and cross-petition:
Petition (NYSCEF Doc No. 1)Notice of Petition (NYSCEF Doc No. 2)
Exhibit A – Arbitration Award (NYSCEF Doc No. 3)
Exhibit B – Master Arbitration Award (NYSCEF Doc No. 4)
Exhibit C — Respondent’s Arbitration Request Form and Arbitration Submission (NYSCEF Doc No. 5)
Exhibit D — Petitioner’s Arbitration Submission and Master Arbitration Brief (NYSCEF Doc No. 6)
Statement of Authorization for Electronic Filing (NYSCEF Doc No. 7)
Request for Judicial Intervention (NYSCEF Doc No. 8)
Affidavit of Service (NYSCEF Doc No. 9)
Statement of Authorization for Electronic Filing (NYSCEF Doc No. 10)
Affidavit of Service (NYSCEF Doc No. 11)
Statement of Authorization for Electronic Filing (NYSCEF Doc No. 12)
Notice of Cross-Petition (NYSCEF Doc No. 13)
Cross-Petition (NYSCEF Doc No. 14)[FN1]
Issues Presented
Should a No-Fault arbitration award be sustained where the insurer denied payment on the ground that there was a fact or founded belief that health services were unrelated to the motor vehicle accident but the insurer failed to submit an explanatory brief, witness statements, medical records, or an expert affidavit to support its defense?
Is it the role of a No-Fault hearing arbitrator to peruse a transcript of an examination under oath for the purpose of locating testimony to support such a defense, in the absence of the insurer’s highlighting the specific substantiating testimony?
Background
Petitioner American Transit Insurance Company (“ATIC”) commenced this CPLR Article 75 proceeding by notice of petition, seeking an order and judgment vacating a No-Fault Insurance master arbitration award of Victor J. D’Ammora, Esq. (dated September 8, 2022), which affirmed the arbitration award of Kihyun Kim, Esq. (dated June 4, 2022) granting Respondent Nexray Medical Imaging PC’s (“Nexray”) claim for No-Fault insurance [*2]compensation for health service expenses.[FN2] ,[FN3] Arbitrator Kim awarded $878.67 to Nexray as compensation for performing a left knee MRI on Carlos Guzman, its assignor [FN4] (“Assignor”), who claimed to have been injured in a motor vehicle accident on September 20, 2019. (NYSCEF Doc Nos. 2, Notice of Petition; 1, Petition.)
Respondent Nexray has opposed ATIC’s petition to vacate the master arbitration award and it cross-petitioned for a judgment confirming the master arbitration award and awarding $878.67 as principal, statutory interest, the $40.00 arbitration filing fee, attorney’s fees, and costs and disbursements (NYSCEF Doc No. 13, Notice of Cross-Petition; 14, Cross-Petition).
The petition and cross-petition were scheduled for oral argument on May 19, 2023, before this Court. Prior thereto, in accordance with IAS Part 2 Rules, the parties were notified that the matter would be determined on the submissions.
The underlying arbitration which is the subject of this proceeding was organized by the American Arbitration Association (“AAA”), which assigned Case No. 17-21-1191-8028 [FN5] to it. The AAA has been designated by the New York State Department of Financial Services to coordinate the mandatory arbitration provisions of Insurance Law § 5106 [b], which provides:
Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party [“No-Fault insurance”] benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.
Insurance Law article 51 provides for the payment of basic economic loss incurred by persons injured in motor vehicle accidents. Included within basic economic loss are first-party benefits for medical and other professional health services.[FN6] First-party benefits are more commonly known as “No-Fault benefits.”[FN7]
In furtherance of the statutory scheme, a comprehensive set of No-Fault Regulations were promulgated by the Superintendent of Insurance (presently Superintendent of Financial Services). They are contained at 11 NYCRR Part 65. Said part is subdivided into five subparts which encompass the following topics: prescribed insurance policy endorsements, rights and liabilities of self-insurers, claims for benefits, arbitration, and unauthorized providers of health services. Part 65 is also known as Insurance Regulation 68.
Generally, the claims process for health service bills [FN8] for No-Fault compensation begins with the submission by a health service provider of a claim form (usually, but not always, a Form NF-3 verification of treatment by attending physician or other provider of health service).[FN9] Besides providing information regarding the injured person, diagnoses, projected treatment, etc., [*3]the claim form includes a bill for services performed. The claim form can be submitted directly by the injured person to the No-Fault insurer but over many decades a practice developed by which the health service providers submit the claim forms. As noted in footnote 4, they possess standing to do so by virtue of having received signed assignments of benefits from the injured persons.[FN10] ,[FN11] The insurer must either pay or deny the bill within 30 days, or seek additional verification within 15 business days. If it denies payment, it must issue a Form NF-10 denial of claim [FN12] identifying why the bill was not paid. (See Insurance Law § 5106 [a]; 11 NYCRR 65-3.5 [b]; Viviane Etienne Medical Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 505 [2015]; New York & Presbyterian Hospital v Progressive Casualty Ins. Co., 5 AD3d 568, 569-570 [2d Dept 2004]). The 30-day deadline does not apply to situations where the insurer claims that health services were not related to the subject motor vehicle accident (see Central Gen. Hosp. v. Chubb Group, 90 NY2d 195 [1997]).
The record evidence submitted in this Article 75 proceeding revealed that the underlying arbitration involved one Form NF-3 claim form (bill) submitted by Nexray to ATIC for payment. It was in the amount of $878.67 and it covered a left knee MRI of March 6, 2020. This was in accordance with the procedure outlined in the previous paragraph for the submission of claims for No-Fault compensation. After requesting additional verification, and receiving it on June 19, 2020, ATIC issued a Form NF-10 denial of claim on July 13, 2020.
The denial of claim asserted: “Based on American Transit’s investigation and EUO [examination under oath] testimony conducted on 6/17/20, American Transit is asserting a lack of coverage, as it has established the ‘fact or founded belief’ that the claimant’s treated condition was unrelated to the motor vehicle accident. The eligible injured person failed to establish that the alleged injuries were causally related to the motor vehicle accident.” (NYSCEF Doc No. 6, ATIC’s Arbitration Submission and Master Arbitration Brief, at 4 [FN13] ). A fee defense was also asserted but not pursued in arbitration.
Arbitrator Kihyun Kim’s Award
The record evidence reveals further that on May 5, 2002, Arbitrator Kihyun Kim conducted a hearing at which Alexander Mun, Esq., from Russell Friedman & Associates LLP, appeared for Nexray, and Helen Cohen, Esq., appeared for ATIC (NYSCEF Doc No. 3, Arbitration Award, at numbered p 1).
In his award, Arbitrator Kim stated that the hearing documents were contained in the [*4]AAA’s ADR Center [FN14] . ATIC conceded that the fee charged by Nexray was consistent with the applicable fee schedule. (Id. at numbered p 2.) The only issue in the case was “whether [ATIC] established its lack of coverage defense” (id. at numbered p 1).
In support of its claim that it established the fact or founded belief that Assignor’s treated condition was unrelated to the subject motor vehicle accident, ATIC’s counsel maintained that Assignor’s EUO “testimony revealed that the accident was a low impact condition, and that the scope and amount of treatment was disproportionate to the nature of the accident. She noted, among other things[,] that the Assignor did not go to the hospital and was not treated at the scene. Counsel further advised that Applicant’s [Nexray] owner has been indicted for his participation in a no fault fraud scheme involving Applicant.” (Id. at numbered p 4.) In terms of evidence, ATIC relied on “a Report of Motor Vehicle Accident – MV104; the Assignor’s NF-2 [application for No-Fault benefits]; the EUO scheduling letters; and the transcript of the Examination Under Oath of the Assignor, dated June 17, 2020” (id.).
Nexray’s counsel argued that ATIC “failed to upload sufficient proof to the record to establish its defense” (id.).
Arbitrator Kim reviewed case law pertaining to No-Fault insurers’ defense that a purported accident was not a covered event because there was a fact or founded belief that a condition and/or treatment was not proximately related to it (id. at numbered pp 2-3):
• Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]: The initial burden is on the insurer to come forward with proof establishing by “fact or founded belief” that the claimed injuries have no nexus to the accident.
• Mt. Sinai Hosp. v Triboro Coach Inc., 263 AD2d 11 [2d Dept. 1999]: Causation is presumed since it would not be reasonable to insist that an applicant must prove as a threshold matter that the patient’s condition was caused by the automobile accident; when alleging a lack of coverage defense, the insurer bears the burden of coming forward with admissible evidence of the fact of lack of coverage or of the foundation for its belief that there is no coverage.
• Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13 [2d Dept. 2009]: This defense often involves a fact pattern which calls for the insurer to present evidence by a medical expert who is qualified to render an opinion on causality.
• A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 822 [Civ Ct, Kings County 2005]: When arguing fraud as a defense, the insurer bears the burden of presenting sufficient evidence of the fact of fraud or of the foundation for its belief that fraud occurred; besides medical evidence an affidavit by a special investigator can suffice; if the insurer carries its burden then the insured must rebut it or succumb.
• A.B. Med. Servs. PLLC v Eagle Ins. Co., 3 Misc 3d 8 [App Term, 2d Dept, 9th & 10th [*5]Jud Dists 2002]: An insurer’s founded belief cannot be based upon unsubstantiated hypotheses and suppositions.
Applying the law to the evidence presented to him, Arbitrator Kim made the following findings (NYSCEF Doc No. 3, Arbitration Award, at numbered p 4):
I find that Respondent failed to establish its lack of coverage/causation defense. I find that there is insufficient credible evidence in the record to support a founded belief that, “the claimant’s treated condition was unrelated to the motor vehicle accident.” Respondent did not upload any explanatory brief, any witness statements, any medical records, any expert affidavit regarding causation, any SIU affidavit discussing Respondent’s investigation or explaining how or why Respondent’s determination was made, or any other actual proof to support and substantiate its defense, other than the EUO transcript of the Assignor, and the MV-104, Report of Motor Vehicle Accident. I have carefully review[ed] the EUO transcript of the Assignor, as well as the EUO transcript of the other claimant/passenger in the linked case, and I find it unclear as to what specific testimony Respondent believes adequately supports its assertions/defense and how Respondent made the leap that the Assignor’s treated condition was unrelated to the motor vehicle accident. While counsel asserted that the accident was not significant and that the asserted injuries were disproportionate to the low impact nature of the accident, I do not[ ] believe that the testimonial evidence alone was sufficient to reach such conclusion, particularly without the presentation of some actual medical evidence and/or expert opinion. With respect to the asserted indictment of Applicant’s owner, Respondent did not present any actual evidence of any indictment nor any evidence that any such indictment related to the subject accident, the claimants and/or claims at issue in this proceeding. If Respondent’s investigation was broader than what was presented herein, then Respondent should have uploaded such supporting evidence to the record herein. In sum, only limited evidence was uploaded to the record and on this record, the evidence submitted to the record in this case does not, in my view, make out a prima facie case in support of Respondent’s asserted defense. Based on the totality of the evidence in the record, Respondent has failed to meet its initial burden and its denial cannot be sustained. Accordingly, Applicant is entitled to reimbursement in the amount of $878.67. . . .
In essence, Arbitrator Kim held that there was a lack of evidence to support ATIC’s position that it established the fact or founded belief that Assignor’s condition and treatment were unrelated to the subject accident.
Arbitrator Kim awarded the $878.67 principal billed. He also awarded statutory interest of 2% per month, an attorney’s fee, and return of the $40 filing fee (id. at numbered pp 5-6; see 11 NYCRR 65-4.5 [s]).
Master Arbitrator Victor J. D’Ammora’s
Award
ATIC filed for master arbitration to appeal Arbitrator Kim’s award. It argued that the latter’s award was irrational (NYSCEF Doc No. 6, ATIC’s Arbitration Submission and Master [*6]Arbitration Brief, at pp 70-79).
Master Arbitrator D’Ammora held that while a hearing arbitrator’s award can be reversed if it is incorrect as a matter of law, a master arbitrator exceeds his statutory power by making his own factual determination, reviewing factual and procedural errors committed during the course of the arbitration, weighing the evidence, or resolving credibility issues (NYSCEF Doc No. 4, Master Arbitration Award, at numbered p 2, citing 11 NYCRR 65-4.10 [a] [4]) and Mott v State Farm Ins. Co., 55 NY2d 224 [1982]).
He noted that Arbitrator Kim reached his determination after reviewing the submitted evidence—that there was insufficient evidence to sustain a lack of coverage defense. “Arbitrator Kim’s conclusions and findings were in his discretion and interpretation of the evidence. It cannot be regarded as reversible error within this Master Arbitrator’s purview. This Master Arbitrator cannot conduct a de novo review and substitute my interpretation and view of the evidence for that of Arbitrator Kim. In particular, as here, Arbitrator Kim’s determination is rational and supported by the record.” (NYSCEF Doc No. 4, Master Arbitration Award, at numbered p 2.) The award was affirmed along with a $195.00 attorney’s fee (id. at numbered pp 3-4).
ATIC’s Petition to Vacate
ATIC’s CPLR Article 75 petition to vacate stated that the claim was denied based upon ATIC’s investigation and the EUO testimony—that there was a fact or founded belief that Assignor’s treated condition was unrelated to the motor vehicle accident and that Assignor failed to establish that the alleged injuries were causally related to the accident (NYSCEF Doc No. 1, Petition, ¶ 26). “The arbitration decision was arbitrary and capricious, irrational and without a plausible basis” (id. ¶ 35), in that “Arbitrator Kihyun Kim failed to follow well settled law” (id. ¶ 40). The petition proceeded to argue that ATIC needed only to show a founded belief to support its defense (id. ¶ 40), and that circumstantial evidence could support it (id. ¶ 47). “[ATIC] offered evidence to establish the ‘founded belief’ of fraud. [Nexray] did not offer any evidence to rebut that showing. The arbitrator ruled for [Nexray] despite the fact that [ATIC] offered evidence of a founded belief and [Nexray] failed to offer any evidence to rebut that showing. In doing so the arbitrator failed to follow well settled law.”
The petition concluded by asserting that Arbitrator Kim’s decision was “arbitrary and capricious, without rational basis and incorrect as a matter of law because zero evidence simply cannot outweigh evidence” (id. ¶ 49). ATIC was “entitled to a declaration that the arbitration decisions of Kihyun Kim, Esq. and Vic D’Ammora, Esq. in the matter designated AAA number 99-21-1191-8208 have no force or effect” (id. ¶ 50).
Nexray’s Cross-Petition to Confirm
Nexray argued in its cross-petition most significantly that the arbitration awards had to be confirmed if they were supported by evidence or other basis in reason (citing Matter of Petrofksy v Allstate Ins. Co., 54 NY2d 207 [1981]); rational (citing Matter of Unigard Mut. Ins. Co. v Hartford Ins. Group, 108 AD2d 917 [2d Dept 1985]); and not inapposite to settled law (citing Matter of Global Liberty Ins. Co. v Therapeutic Physical Therapy, P.C., 148 AD3d 502 [1st Dept 2017]). ATIC did not meet its burden of establishing that the master arbitration award did [*7]not meet this criteria. (See generally NYSCEF Doc No. 14, Cross-Petition ¶¶ 21-29.)
Besides seeking confirmation of the hearing arbitration award which was affirmed by the master arbitrator, Nexray sought interest, attorney’s fees, return of the arbitration filing fee, and costs and disbursements (NYSCEF Doc No. 13, Notice of Cross-Petition, at numbered p 1). Notably, Nexray did not submit any calculation of an attorney’s fee for its opposition to the Article 75 petition and maintenance of the cross-petition.
No-Fault Insurance Arbitration
When the No-Fault Law was first enacted by the Legislature in Chapter 13 of the Laws of 1973 to take effect February 1, 1974, § 675 of the Insurance Law was added. In subdivision 2 thereof, insurers were required to provide claimants with an arbitration option for disputes involving liability for first-party benefits. This provision was amended in Chapter 892 of the Laws of 1977, when several changes were made to the 1973 version.[FN15] The provision regarding arbitration in § 675 was amended to add the following language:
An award by an arbitrator may be vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent [of insurance]. The grounds for vacating or modifying an arbitrator’s decision by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The decision of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s fees, the insurer or the claimant may institute an action in a court of competent jurisdiction to adjudicate the dispute de novo.[FN16]
The provisions regarding No-Fault insurance arbitration remained in the recodification of the Insurance Law enacted in Chapters 367 and 805 of the Laws of 1984. The arbitration provisions were set forth in § 5106, and subdivisions (b) and (c) now read as follows:
(b) Every insurer shall provide a claimant with 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 which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent. Such simplified procedures shall include an expedited [*8]eligibility hearing option, when required, to designate the insurer for first party benefits pursuant to subsection (d) of this section. The expedited eligibility hearing option shall be a forum for eligibility disputes only, and shall not include the submission of any particular bill, payment or claim for any specific benefit for adjudication, nor shall it consider any other defense to payment.
(c) An award by an arbitrator shall be binding except where vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent. The grounds for vacating or modifying an arbitrator’s award by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s fees, the insurer or the claimant may institute a court action to adjudicate the dispute de novo.
Insofar as is here relevant, the No-Fault Insurance Regulations promulgated by the Superintendent of Insurance provided that a master arbitrator may vacate or modify a hearing arbitrator’s award where it “was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)” (11 NYCRR 65.18 [a] [4]). This regulatory language was carried over into the revised Regulations promulgated in 2002, in 11 NYCRR 65-4.10 (a) (4).[FN17] A master arbitrator may also vacate or modify a hearing arbitrator’s award under certain other grounds also (see 11 NYCRR 65-4.10 [a]).[FN18]
Discussion
The burden of proof on the issue of whether a motor vehicle accident caused a medical condition for which a person was treated and the No-Fault insurer was billed falls upon the insurer if the latter asserts a lack of nexus between the accident and the condition; the underlying purpose of the No-Fault Law would be undermined if a claimant health care provider were required to prove as a threshold matter that a patient’s condition was caused by the accident and unrelated to his or her entire medical history (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13, 18-19 [2d Dept 2009]). An expert’s affirmation is needed to provide a factual foundation for an insurance carrier’s good faith belief that an alleged injury did not arise out of an insured accident; speculation or wishful thinking does not suffice (see Mount Sinai Hosp. v Triboro Coach Inc., 263 AD2d 11 [2d Dept. 1999]).
The courts have also recognized that a prima facie case of lack of coverage may be established by other than a medical expert. This can include a biomechanical engineer’s report (e.g., American Tr. Ins. Co. v AAAMG Leasing Corp., 2020 NY Slip Op 31811[U] [Sup Ct, NY County 2020]); Liberty Mut. Ins. Co. v Hayes, 2018 NY Slip Op 31283[U] [Sup Ct, NY County 2018]; a special investigator’s affidavit (e.g., A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 143[A], 2004 NY Slip Op 51104[U] [App Term, 2d Dept, 2nd & 11th Dists 2004]); or a low-impact study (e.g., A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co., 12 Misc 3d 140[A], 2006 NY Slip Op 51347[U] [App Term, 2d Dept, 2d & 11th Dists 2006]).
A claimant’s [health service provider] prima facie showing establishes a presumption of coverage, and the burden of going forward on the issue of coverage falls upon the insurer; once the insurer comes forward with proof for its belief that the claimed loss was a staged accident, the burden shifts to the claimant to prove coverage by a preponderance of the evidence (see New York Massage Therapy P.C. v State Farm Mut. Ins. Co., 14 Misc 3d 1231[A], 2006 NY Slip Op 52573[U] [Civ Ct, Kings County 2006]). The insurer bears the burden of coming forward with evidence of the fact of fraud or of the foundation for its belief that fraud occurred, but the burden of persuasion is on the applicant to prove that the loss was a covered event under the policy (see A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 822 [Civ Ct, Kings County 2005]). At trial, the ultimate burden of proof on issues of causal relationship of injuries to the [*9]accident in question lies with the plaintiff (see Dayan v Allstate Ins. Co., 49 Misc 3d 151[A], 2015 NY Slip Op 51751[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2015]).
The insurer must demonstrate that it has a founded basis for believing that the collision was intentionally caused but the burden of persuasion remains on the claimant, who must prove its case by a fair preponderance of the credible evidence; if the evidence weighs against the claimant or it is so evenly balanced that it is impossible to determine the matter, then judgment must be given for the insurer (see V.S. Med. Servs., P.C. v Allstate Ins. Co., 11 Misc 3d 334, 342-343 [Civ Ct, Kings County 2006], affd 25 Misc 3d 39 (App Term, 2d Dept, 2d, 11th & 13th Dists 2009]).
V.S. Med. Servs. provided an example of the evidence which demonstrated that the insurer established a founded belief that injuries did not arise from a covered accident. In that case, the insurer presented credible evidence that the subject vehicle was an older model, that the collision took place shortly after insurance was procured, that insurance on the vehicle was cancelled after the subject collision and once before after a collision, that there were several passengers in the vehicle, that no occupant underwent emergency room treatment, that there were material discrepancies in EUO testimony among the occupants as to the number and genders of people in the vehicle, where they were going, and whether the driver knew the vehicle owner, and that the vehicle sustained only a small scratch—that the collision was staged because at least one driver intended to make contact. The burden then shifted to the claimant health service provider; the latter having failed to produce the alleged injured persons or any witnesses to the collision, it failed to carry its burden of proving that the collision was a covered accident. (V.S. Med. Servs., P.C., 11 Misc 3d at 343-344 [“defendant’s proof, which plaintiff failed to rebut, established by a preponderance of the evidence its defense of lack of coverage”].)
Very rarely will a case contain a Perry Mason-like moment where there is a confession that an assignor injured person’s injuries were not the result of the claimed accident. Of necessity an insurer’s founded belief that a collision was staged will be established by circumstantial evidence. “Circumstances insignificant in themselves may acquire probative force as links in the chain of circumstantial proof.” (A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d at 827-828 [Civ Ct, Kings County 2005], quoting Van Iderstine Co. v Barnet Leather Co., 242 NY 425, 435 [1926]). For example, where a vehicle was involved in several collisions within a short period of time after the insurer issued an insurance policy, this may satisfy the need for a founded belief necessary to support a denial grounded in asserted fraud (e.g., State Farm Mut. Auto. Ins. Co. v Laguerre, 305 AD2d 490 [2d Dept 2003]). Where a driver rear ends another vehicle two days after taking out insurance, and again less than sixty days after the first collision, and his written and recorded statements contain discrepancies, this constitutes compelling circumstantial evidence that there was an intentional collision staged for the purpose of insurance fraud (e.g., National Grange Mut. Ins. Co. v Vitebskaya, 1 Misc 3d 774 [Sup Ct, Kings County 2003]).
Notwithstanding the foregoing, unsupported conclusions and suspicions, as well as unsubstantiated hypotheses and suppositions are insufficient to raise a triable issue of alleged fraud (see A.B. Medical Services PLLC v Eagle Ins. Co., 3 Misc 3d 8 [App Term, 2d Dept, 9th & 10th Dists 2002]). To create a trial issue of fraud or lack of coverage, the specific facts must be alleged with particularity (see Vital Points Acupuncture, P.C. v. New York Cent. Mut. Fire Ins. Co., 6 Misc 3d 1031[A], 2005 NY Slip Op 50267[U] [Civ Ct, Kings County 2005]).
Clearly, Arbitrator Kim did not misapply well-settled law in the arbitration at bar. As [*10]indicated above (supra at 5), he noted case law governing the adjudication of insurer defenses that there was a fact or founded belief that a condition and/or treatment was not proximately related to an alleged accident. What ATIC is challenging as a misapplication of settled law is Arbitrator Kim’s finding that its evidence did not meet the evidentiary minimum to make out its initial burden of proof. That is an issue of fact—not an issue of law.
The provision in 11 NYCRR 65-4.10 [a] [4] that a No-Fault insurance arbitration award may be vacated where it was incorrect as a matter of law refers to substantive issues—not issues of fact (see American Transit Ins. Co. v Right Choice Supply, Inc., — Misc 3d —, 2023 NY Slip Op 23039, *11 [Sup Ct, Kings County 2023]).
ATIC did not submit witness statements, supporting medical records, or a medical or other expert affidavit or report. It did not submit evidence of an indictment of the owner of Nexray, which it mentioned, the argument inferentially being that the alleged accident was fraudulent and the MRI unnecessary. ATIC merely relied on conclusory assertions of counsel which focused in large part on Assignor’s EUO testimony. ATIC did not even submit a brief to Arbitrator Kim summarizing what EUO testimony supported its position. In essence, it appears that ATIC expected the arbitrator himself to peruse the transcript to locate questionable responses by Assignor which might be indicative that something was awry. This is not the role of the arbitrator.
This Court notes that most No-Fault insurance arbitrations organized by the AAA are scheduled at 15-minute intervals.[FN19] Usually the only evidence iare the documentary submissions of the parties. In some instances where medical necessity is an issue a treating health provider or a peer review doctor may be called as a witness by the applicant or respondent respectively. In rare instances, an injured person may testify, especially if lost wages is an issue. The testimony of an SIU investigator might be offered where the respondent insurer asserts a contrived accident.
Here, it is not exactly clear whether ATIC’s defenses of lack of coverage and lack of a relationship between the accident and the treated condition were premised on a belief that the accident was staged, that Nexray performed the MRI without regard to whether Assignor actually sustained injuries in the accident, or that Assignor indeed had a condition for which an MRI was appropriate but the condition was unrelated to the accident.
At times a No-Fault arbitration respondent insurer will call the arbitrator’s attention to the fact that a transcript of the examination under oath taken of the assignor was included in its documentary submission and it alone supports the defense. Relying on this poses litigation risks for the insurer if the lack of coverage is premised upon an underlying theory that the health service was performed without regard to whether the injured person-assignor actually sustained injuries in the accident or that the injured person-assignor indeed had a condition for which the health service was appropriate but the condition was unrelated to the accident; such an underlying theory really necessitates expert medical opinion evidence and an EUO transcript likely will not suffice. Some insurers may rely on a biomechanical expert report which might be probative or not, depending on the arbitrator’s assessment of it.
Situations where the lack of coverage defense is predicated on an underlying theory that the accident was staged calls for proper advocacy by the respondent No-Fault insurer. [*11]Submitting a transcript alone without a brief, affidavit, SIU report, or counsel specifically detailing the testimony supporting its position unfairly places the hearing arbitrator in a quandary. The arbitrator has two options: (1) find that the respondent insurer failed to identify the supporting testimony, or (2) review the transcript himself and determine if any of its contents supports the fact or founded belief that there was a lack of causation due to a staged accident, i.e., that fraud took place.
The arbitrator must remain objective and impartial. It is unfair for a respondent insurer to place the arbitrator in the role of evidence explorer on its behalf. The arbitrator is not an investigator or detective. To argue to an arbitrator, “Our defense relies on the EUO testimony,” or offer a similar statement, without any identification of the transcript components being relied on is improper advocacy, and an arbitrator should decline the implied invitation to search the transcript to locate testimony supporting the respondent’s defense. It is unknown whether ATIC’s counsel made such a statement to Arbitrator Kim. From his award, it is evident that nothing was offered by way of specification as to particular testimony in one or more EUO transcripts. Arbitrator Kim did write that he “carefully review[ed] the EUO transcript of the Assignor, as well as the EUO transcript of the other claimant/passenger in the linked case, and I find it unclear as to what specific testimony Respondent believes adequately supports its assertions/defense and how Respondent made the leap that the Assignor’s treated condition was unrelated to the motor vehicle accident (NYSCEF Doc No. 3, Arbitration Award, at numbered p 4).” This burden of reviewing the transcript should not have been placed on Arbitrator Kim. And if ATIC asked him to perform this task, it should not have done so. Rather, ATIC should have submitted a brief, affidavit, or investigator’s report identifying by page and line the portions of the testimony it claims were inculpatory and thus made out its defense; or counsel at the hearing should have done so. Preferably the specification should be in writing as a document included in the arbitration submission.
If a No-Fault arbitration hearing respondent (the insurer) fails to adequately support its defense of lack of causation premised under any of the underlying theories — but especially one claiming that no true accident took place — because it failed to identify specific EUO testimony, it lacks a legal basis to challenge the hearing arbitrator’s award on appeal, either before the master arbitrator or the Article 75 judge.
The foregoing perspectives of this Court are in harmony with the expressions of sister courts. “While plaintiff [insurer] submits the transcripts of the claimants’ EUOs, it does not cite to any line or page of the claimants’ testimony to support such claims. The Court should not have to undertake the toilsome task of reading through pages and pages of testimony in order to ascertain which portions support plaintiff’s supposed contentions” that there exists a founded belief that the alleged injuries did not arise from a covered accident. (Unitrin Advantage Ins. Co. v Advanced Orthopedics and Joint Preservation P.C., 2018 NY Slip Op 33296[U] *6-7 [Sup Ct, NY County 2018]). Similarly, it has been held, “It is not the duty of the arbiter, be it an arbitrator or Court, to parse though hundreds of pages of exhibits to make out a claim or defense for a party (see e.g. Barsella v. City of New York, 82 AD2d 747, 748 [1st Dept 1981]); such duty belongs to counsel, as advocate. Failing to elucidate evidence in support of a party’s claim is not error of the arbitrator but is rather error of counsel, and such failure does not render an arbitrator’s award arbitrary and capricious [citation omitted].” Country-Wide Ins. Co. v M El Sayed Physical Therapy, P.C., 2022 NY Slip Op 31874[U] [Sup Ct, NY County 2022]).
There being a paucity of evidence to support ATIC’s defense of a fact or founded belief [*12]that Assignor’s treated condition was unrelated to the alleged motor vehicle accident, Arbitrator Kim’s factual determination against ATIC was eminently reasonable.
Lower and master arbitration awards were supported by a reasonable hypothesis and were not contrary to “fairly described settled law” when a biomechanical report was rejected by the lower arbitrator, who found as follows: “I have reviewed the EUO transcript in its entirety and I do not find sufficient evidence within the EIP’s testimony that would give rise to establishing a basis for Respondent’s denial. As for the opinion of the Respondent’s accident reconstruction expert, I find it is insufficient to establish that the EIP’s injuries were not causally related to the underlying accident. Unless an injury for which an EIP is treated is so clearly unrelated to the biomechanics of a motor vehicle accident, a low-impact study (standing alone without any accompanying medical evidence—which does not explain how the EIP’s injuries are causally incompatible with the subject accident) does not suffice to prove prima facie that the injuries were not causally related to the accident. Bronx Radiology, P.C. v. New York Cent. Mutual Fire Ins. Co., 17 Misc 3d 97, 847 N.Y.S.2d 313 (App. Term 1st Dept. 2007). [¶] In this case, I find the Respondent has not submitted sufficient evidence to establish its defense that the treatment was not causally related to the MVA.” (Matter of Am. Tr. Ins. Co. v North Shore Family Chiropractic, P.C., 2022 NY Slip Op 32663[U] *1-2 [Sup Ct, Kings County 2022]). The decision of Hon. Justice Peter P. Sweeney in the case found that “the lower and master arbitration awards were supported by a reasonable hypothesis’ and [were] not contrary to what could be fairly described as settled law. The determinations of the master and lower arbitrators had evidentiary support and a rational basis. (Id. at *3.) So too did Arbitrator Kim’s award.
Since the instant Article 75 proceeding to vacate is one where vacatur of the master arbitration award is sought, this Court must assess whether Master Arbitrator D’Ammora erred as a matter of law or fact. His findings are related hereinabove at page 7. After reviewing the case law on master arbitration appeals and Arbitrator Kim’s findings, Master Arbitrator D’Ammora concluded as follows: “I cannot conclude on the basis of the record before me that Arbitrator Kim’s decision was incorrect as a matter of law or arbitrary or capricious” (NYSCEF Doc No. 4, Master Arbitration Award, at numbered p 2).
The standard for Article 75 court scrutiny is whether the master arbitration award was so irrational with respect to settled law as to require vacatur (see Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 232 [1982]; Matter of Acuhealth Acupuncture, PC v Country-Wide Ins. Co., 170 AD3d 1168 [2d Dept 2019]; Matter of Acuhealth Acupuncture, P.C. v New York City Transit Authority, 167 AD3d 314 [2d Dept 2018]; Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]). A master arbitrator’s review of a hearing arbitrator’s award where an error of a rule of substantive law is alleged must be upheld unless it is irrational (see Golden Earth Chiropractic & Acupuncture, PLLC v Global Liberty Ins. Co. of New York, 54 Misc 3d 31 [App Term, 2d Dept, 2d, 11th & 13th Dists 2016]). Clearly, Master Arbitrator D’Ammora did not err in concluding that Arbitrator Kim’s decision was not incorrect as a matter of law, because this Court reviewed the latter’s discussion of the law and found no error. Cases cited by Arbitrator Kim were directly on point in terms of the law and were likewise cited by this Court.
Did Master Arbitrator D’Ammora err in determining that Arbitrator Kim’s factual findings were erroneous? No. Here, the master arbitrator noted the case law that he cannot conduct a de novo review of the evidence and substitute his interpretation of the evidence. The arbitrator’s determination was “rational and supported by the record.” (NYSCEF Doc No. 4, [*13]Master Arbitration Award, at numbered p 2.) He was correct. This Court takes into account the general proposition that the admissibility of evidence and the determination of issues of fact are left to the arbitrator’s discretion (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 483 [2006] [“Manifest disregard of the facts is not a permissible ground for vacatur of an award. . . .”]; Central Sq. Teachers Assn. v Board of Educ. of Cent. Sq. Cent. Sch. Dist., 52 NY2d 918, 919 [1981] [“The path of analysis, proof and persuasion by which the arbitrator reached this conclusion is beyond judicial scrutiny.”]; Matter of Lipson v Herman, 189 AD3d 440, 441 [1st Dept 2020] [“error of fact . . . will not result in the vacatur of an arbitrator’s award”]; Matter of Bernstein v On-Line Software Intl., Inc., 232 AD2d 336, 338 [1st Dept 1996] [“It is well established, however, that arbitrators are not bound by the rules of evidence and may admit or deny exhibits on an equitable basis.”]).
The proper standard of master arbitration review is whether the hearing arbitrator reached his decision in a rational manner, i.e., whether it was arbitrary and capricious, irrational, or without a plausible basis; the master arbitrator may not engage in an extensive factual review, which includes weighing the evidence, assessing the credibility of various medical reports, and making independent findings of fact (see Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207 [1981]). Master Arbitrator D’Ammora adhered to this.
Judicial review of a master arbitrator’s authority to vacate a hearing arbitrator’s award derives from § 675 (presently § 5106 [c]) of the Insurance Law and involves the question of whether the master arbitrator exceeded his power (see Matter of Smith v Firemen’s Ins. Co., 55 NY2d at 231 [1982]). Master Arbitrator D’Ammora did not exceed his power and, therefore, his award must be sustained.
In its petition, ATIC concluded by asserting that Arbitrator Kim’s decision was “arbitrary and capricious, without rational basis and incorrect as a matter of law because zero evidence simply cannot outweigh evidence” (id. ¶ 49). ATIC was “entitled to a declaration that the arbitration decisions of Kihyun Kim, Esq. and Vic D’Ammora, Esq. in the matter designated AAA number 99-21-1191-8208 have no force or effect” (id. ¶ 50). Based on the foregoing analysis, this Court rejects these contentions.
ATIC’s petition in this Article 75 proceeding cited the four applicable grounds delineated in CPLR 7511 for vacating an arbitration award where a party participated in the arbitration:
if the court finds that the rights of that party were prejudiced by:
(i) corruption, fraud or misconduct in procuring the award; or
(ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or
(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or
(iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.(NYSCEF Doc No. 1, petition, ¶ 33.)
This Court finds that ATIC failed to establish that there was corruption, fraud, or misconduct in procuring the award; that there was partiality on the part of either arbitrator; that either arbitrator exceeded his or her power or so imperfectly executed it that a final and definite [*14]award upon the subject matter submitted was not made; or that there was a failure to follow the procedure of Article 75.
Cross-Petition;
Interest, Attorney’s Fees, Return of
Arbitration Filing Fee, Costs, and Disbursements
As mentioned above, Nexray sought in its cross-petition to confirm the arbitration determination. Nexray also sought additional payments in the nature of interest, attorney’s fees, return of the arbitration filing fee, and costs and disbursements (NYSCEF Doc No. 13, Notice of Cross-Petition, at numbered p 1). For the reasons set forth above, Nexray is entitled to confirmation of Master Arbitrator D’Ammora’s award.
Interest:ATIC issued its Form NF-10 denial of claim on July 13, 2020, within 30 days after final verification was received on June 19, 2020; the denial was timely (NYSCEF Doc No. 6, ATIC’s Arbitration Submission and Master Arbitration Brief, at 5). Where a claim is timely denied, interest at two per cent per month shall begin to accrue as of the date arbitration was requested by the claimant, i.e., the date the AAA received the applicant’s arbitration request, unless arbitration was commenced within 30 days after receipt of the denial, in which event interest shall begin to accrues as of the 30th day after proof of claim was received by the insurer (see Insurance Law § 5106 [a]; 11 NYCRR 65-4.5 [s] [3], 65-3.9 [c]; Canarsie Med. Health, P.C. v National Grange Mut. Ins. Co., 21 Misc 3d 791, 797 [Sup Ct, NY County 2008] [“The regulation provides that where the insurer timely denies, then the applicant is to seek redress within 30 days, after which interest will accrue.”]). The plaintiff health care provider in Canarsie Med. Health, P.C. argued that where a timely issued denial is later found to have been improper, the interest should not be stayed merely because the provider did not seek arbitration within 30 days after having received the denial. The court rejected this argument, finding that the regulation concerning interest was properly promulgated; this includes the provision staying interest until arbitration is commenced, where the claimant does not promptly take such action.
Nexray arbitration request was received by the AAA on January 22, 2021 (NYSCEF Doc No. 6, Nexray’s Arbitration Request Form and Arbitration Submission, at 1), which was clearly more than 30 days after it received the denial of claim issued on July 13, 2020. Thus, interest accrued from the filing date of January 22, 2021, not from the 30th day after proof of claim was received by ATIC. The end date for the calculation of the period of interest shall be the date of payment of the claims. In calculating interest, the date of accrual is excluded from the calculation (see General Construction Law § 20 [“The day from which any specified period of time is reckoned shall be excluded in making the reckoning.”]). Where a motor vehicle accident occurred after April 5, 2002, interest is calculated at the rate of two percent per month, simple, on a pro rata basis using a 30-day month (see 11 NYCRR 65-3.9 [a]; Gokey v Blue Ridge Ins. Co., 22 Misc 3d 1129[A], 2009 NY Slip Op 50361[U] [Sup Ct, Ulster County 2009]). CPLR 5004’s nine percent per annum is superseded by Insurance Law § 5106 [a]’s two percent per month (see Pro-Med Med., P.C. v MVAIC (74 Misc 3d 130[A], 2022 NY Slip Op 50135[U] [App Term, 2d Dept, 2d, 11th & 13th Dists 2022]).
[*15]Attorney’s Fees:
After calculating the sum total of the first-party benefits awarded in this arbitration plus interest thereon, ATIC shall pay Nexray an attorney’s fee equal to 20 percent of that sum total subject to a maximum fee of $1,360.00, as provided for in 11 NYCRR 65-4.6 [d].
Additionally, this Court sustains the $195.00 attorney’s fee for preparatory services in connection with the master arbitration. This is in accordance with 11 NYCRR 65-4.10 [j] [2] [i].
Moreover, pursuant to 11 NYCRR 65-4.10 [j] [4], having successfully prevailed in this Article 75 proceeding, Nexray is entitled to an additional attorney’s fee (see Global Liberty Ins. Co. of New York v Nexray Family Chiropractic, 178 AD3d 525 [1st Dept 2019]; GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2d Dept 2017]).
Nexray’s counsel did not submit an affirmation specifying details with regard to work performed in this Article 75 special proceeding. It is not known whether an attorney or support staff performed the work. The cross-petition contains mostly boilerplate statements which could apply to most Article 75 proceedings to confirm No-Fault arbitration awards, with a few insertions specific to this particular claim. The cross-petition asserted that Nexray “should be granted leave to serve an afirmation in order to set forth its resonable attroneys’ fees in defending this action” (NYSCEF Doc No. 13, Cross-Petition, ¶ 45).
A special proceeding, such as one commenced pursuant to CPLR 7511 to vacate an arbitration award, “is a civil judicial proceeding in which a right can be established or an obligation enforced in summary fashion. Like an action, it ends in a judgment (CPLR 411), but the procedure is similar to that on a motion (CPLR 403, 409). Speed, economy and efficiency are the hallmarks of this procedure.” (Vincent C. Alexander, Prac Commentaries, McKinney’s Cons Laws of NY, CPLR C401:01.) Counsel should have included an affirmation containing details describing the work performed (see Matter of Bay Needle Care Acupuncture, P.C. v Country Wide Ins. Co., 176 AD3d 695 [2d Dept 2019] [claim for hourly fee for prevailing on policy issue not substantiated with any time records]). It behooved counsel to do so considering the expedited nature of special proceedings.
In a Kings County No-Fault insurance case involving an appeal to the Court of Appeals, the court awarded $250.00 per hour but this was in connection with the litigation of a novel or unique issue (see Viviane Etienne Med. Care PC v Country-Wide Ins. Co., 59 Misc 3d 579 [Sup Ct, Kings County 2018]). The issues in the case at bar was neither novel nor unique, especially since there was already a plethora of case law dealing with them and Nexray’s cross-petition contained boilerplate statements of law.
Consdering the factors delineated herein, this Court awards $140.00 for work performed by Nexray’s counsel on this Article 75 proceeding. This Court applies the $70.00 per hour fee for policy issues litigated in arbitration or at the trial level (see 11 NYCRR 65-4.6 [c]), having assumed that there was attorney involvement for two hours at the most. It does not apply the $80.00 per hour fee for personal appearances before the arbitration forum or court (see id.), inasmuch as this proceeding was determined on the submissions.
Return of Arbitration Filing Fee:ATIC shall also pay Nexray $40.00 as reimbursement for the fee paid to the AAA (see 11 NYCRR 65-4.5 [s] [1]).
[*16]Costs and Disbursements:
As the prevailing party, Nexray shall recover its costs and disbursements, to be taxed by the Clerk.
Other Requested Relief
Any requested relief not expressly addressed herein has nonetheless been considered and is hereby expressly rejected.
Conclusion
Accordingly, it is hereby ORDERED, ADJUDGED, and DECREED that:
(1) ATIC’s petition to vacate the master arbitration award of Victor J. D’Ammora in AAA Case No. 99-21-1191-8028 is dismissed.
(2) Nexray’s cross-petition to confirm said master arbitration award is granted.
(3) Said master arbitration award is confirmed in its entirety.
(4) Nexray is awarded the principal amount of $878.67 as No-Fault insurance health service benefits, along with simple interest thereon (i.e., not compounded) at two per cent per month on a pro rate basis using a 30-day month, computed from January 22, 2021 to the date of payment of the principal amount, but excluding January 22, 2021 from being counted within the period of interest.
(5) After calculating the sum total of the principal amount of $878.67 plus the interest thereon, ATIC shall pay Nexray an attorney’s fee equal to 20 percent of that sum total, subject to a maximum fee of $1,360.00.
(6) ATIC shall pay Nexray an attorney’s fee of $195.00 in connection with the master arbitration.
(7) ATIC shall pay Nexray an attorney’s fee of $140.00 for work performed by counsel on this Article 75 proceeding.
(8) Nexray shall recover from ATIC costs and disbursements as allowed by law to be taxed by the Clerk.
E N T E RDated: Brooklyn, New York, May 25, 2023
______________________________
HON. AARON D. MASLOW
Justice of the Supreme Court of the
State of New York
Footnotes
Footnote 1:A reply affirmation from Respondent’s counsel (NYSCEF Doc No. 15) is not considered inasmuch as it was filed on the motion calendar date of May 19, 2023, several days after all counsels were advised that this proceeding was being determined on submissions. The time of filing of 1:13 p.m. on May 19, 2023, was after the calendar call too.
Footnote 2:The notice of petition seeks vacatur of “the arbitration award issued by Arbitrator Kihyun Kim, Esq. and/or Master Arbitrator Victor J. D’Ammora, Esq.” (NYSCEF Doc No. 2, notice of petition), but it must be deemed to seek vacatur of just the master arbitration award inasmuch as the latter is the final determination of the arbitration process. Insurance Law § 5106 (c) provides that “The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules. . . .” The No-Fault Regulations provide that “court review pursuant to an article 75 proceeding” is from the “decision of a master arbitrator” (11 NYCRR 65-4.10 [h] [1] [i]). In fact, a party may not appeal from an arbitration award without first seeking master arbitration (see Matter of Staten Is. Hosp. v USAA, 103 AD2d 744 [2d Dept 1984]; Matter of Griffith v Home Indem. Co., 84 AD2d 332 [1st Dept 1982]; Matter of Lampasona v Prudential Property & Cas. Ins. Co.,111 Misc 2d 623 [Sup Ct, Kings County 1981]). “[T]he Legislature intended the provision of CPLR article 75 to apply only to the review of the awards of master arbitrators (see, Insurance Law § 5106[c])” (Matter of Custen v General Acc. Fire and Life Ins. Co., 126 AD2d 256 [2d Dept. 1987]). Naturally, if the hearing arbitrator’s award is imperfect, this can impact judicial review of a master arbitration award affirming it.
Footnote 3:Rather than denote the parties here as “Petitioner” and “Respondent” in discussion, the parties’ names are used. This is to facilitate the reader’s understanding of the facts, arguments, analysis, and determination. This also minimizes confusion because the respondent in the underlying arbitration (ATIC) is not the respondent herein but rather is the petitioner herein. The respondent herein, Nexray, was not the respondent in the arbitration, but was the applicant.
Footnote 4:Health service providers obtain standing to pursue No-Fault insurance compensation in arbitration by virtue of having received an assignment of benefits from the respective person claiming to have been injured in a covered motor vehicle accident; such person is often denoted as an “assignor.”
Footnote 5:Paragraph 28 of the petition describes the AAA Case No. as 99-21-1191-8028, which was assigned to the master arbitration appeal. The original arbitration was assigned AAA Case No. 17-21-1191-8028.
Footnote 6:This statutory scheme was developed by New York’s legislature in 1973, as part of a tradeoff whereby lawsuits for pain and suffering sustained from personal injuries in motor vehicle accidents were limited to instances of serious injury. (See generally Insurance Law art 51; L 1973, ch 13, as amended L 1977, ch 892; John R. Dunne, New York’s No-Fault Automobile Insurance Law—A Glimpse of the Past and a Glance at the Future, 50 NY St BJ 284 [June 1978]; J. Benedict, New York Adopts No-Fault: A Summary and Analysis, 37 Albany L Rev 662 [1973]).
Footnote 7:Although Insurance Law article 51 does not mention the term “No-Fault,” shortly after the post-motor vehicle accident economic loss compensation system was enacted in 1973, the appellation “No-Fault” was adopted in common parlance to describe it.
Footnote 8:This Court uses the term “health service bills” instead of “medical bills” because the No-Fault Law provides for reimbursement of “(i) medical, hospital . . . , surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical therapy . . . and occupational therapy and rehabilitation . . . and (iv) any other professional heath services” (Insurance Law § 5102 [b] [1]). Hence, the No-Fault insurance system encompasses not just “medical” services. In the instant case, the service was an MRI.
Footnote 9:The prescribed claim forms are included within 11 NYCRR Part 65 (Regulation 68) Appendix 13. In addition to Form NF-3 (verification of treatment by attending physician or other provider of health service), Appendix 13 contains Form NF-4 (verification of hospital treatment) and Form NF-5 (hospital facility form). Other official No-Fault forms also appear in Appendix 13.
Footnote 10:There is a prescribed assignment of benefits form (Form NF-AOB) in 11 NYCRR Part 65 (Regulation 68) Appendix 13.
Footnote 11:The process of submitting a No-Fault claim to the insurer is governed by 11 NYCRR subpart 65-3, which contains §§ 65-3.1 et seq.
Footnote 12:Form NF-10 is also included within 11 NYCRR Part 65 (Regulation 68) Appendix 13.
Footnote 13:References to NYSCEF filings lacking page numbers are to the PDF page numbers.
Footnote 14:The AAA’s electronic case management and filing platform maintained on the Internet is known as “Modria,” which was the name of the company which developed it for the AAA (see Liveblogging #ODR2014: The Developing Field of Online Dispute Resolution, https://civic.mit.edu/index.html%3Fp=1452.html [last accessed Mar. 19, 2023]; Welcome to the Modria Resolution Center for the American Arbitration Association, https://aaa-nynf.modria.com/ [last accessed Mar. 19, 2023]).
Footnote 15:Among the more substantial changes in the 1977 legislation were the adoption of fee schedules to limit health service expenses and modifying the threshold categories to be able to sue for pain and suffering.
Footnote 16:Nothing in the Governor’s Bill Jacket for Chapter 13 of the Laws of 1977 or other contemporary records comments on the provision adopting master arbitration review of hearing arbitrators’ decisions, so it is not known why the master arbitration process was created.
Footnote 17:Most non-No-Fault insurance arbitration awards cannot be vacated due to an error of law (see Matter of Sprinzen v Nomberg, 46 NY2d 623, 629-630 [1979]). No-Fault insurance arbitrations are different; an error of law can be the basis for reversal—by a master arbitrator. In that sense, the master arbitrator’s review is broader than that of a court, since a court will not vacate an arbitration award due to an error of law (see Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207, 211-212 [1981]; Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 176 AD3d 800, 802 [2d Dept 2019]).
Footnote 18:11 NYCRR 65-4.10
(a) provides as follows:
Grounds for review. An award by an arbitrator rendered
pursuant to section 5106(b) of the Insurance Law and section 65-4.4 or 65-4.5 of this
Subpart may be vacated or modified solely by appeal to a master arbitrator, and only
upon one or more of the following grounds:
Footnote 19:This Court served as
a No-Fault insurance arbitrator for close to 21 years.
Reported in New York Official Reports at Glispy v Ameriprise Ins. Co. (2023 NY Slip Op 50338(U))
Michele B.
Glispy AAO RODRIGUEZ, MARIA, Plaintiff,
against Ameriprise Insurance Company, Defendant. MICHELE B. GLISPY AAO RODRIGUEZ, MARIA, Plaintiff, against AMERIPRISE INSURANCE COMPANY, Defendant. MICHELE B. GLISPY AAO RODRIGUEZ, MARIA, Plaintiff, against AMERIPRISE INSURANCE COMPANY, Defendant. |
Index No. CV-721025-20-KI
Plaintiff: Oleg Rybak
The Rybak Firm PLLC
1810 Voorhies Ave, Suite
7
Brooklyn, NY 11235-3313
(718) 975-2035
orybak@rybakfirm.com
Defendant: Steven Levy
Callinan and Smith
LLP
3361 Park Avenue-Suite 104
Wantagh, NY 11793
(516)-784-5148
slevy@callinansmith.com
Recitation, as required by CPLR § 2219 (a), of the papers considered in the review of this Motion for Summary Judgment submitted on February 1, 2023,
Papers/NumberedNotice of Motion and Affirmations/Affidavits Annexed 1-6
Affidavits/Affirmations in Opposition 7-13
Reply 14-16
Upon the foregoing cited papers, and oral argument, the Decision/Order on the Defendant’s Motions for Summary Judgement and Plaintiff’s Cross-Motions for Summary Judgement is as follows:
Defendant, Ameriprise Insurance Company, (hereinafter “Defendant”) moves by Notices of Motion dated November 2, 2020, for Orders pursuant to CPLR § 3212 (b) granting Defendant summary judgment as a matter of law and dismissing Plaintiff’s Summons and Complaint, in its entirety, with prejudice, based upon Plaintiff’s failure to attend duly scheduled Examinations Under Oath (“EUOs”). These matters are consolidated for the purposes of oral argument and this motion. Plaintiff, Michele B. Glispy, (hereinafter “Plaintiff” or “Assignee”), cross moves by Notices of Cross-Motion dated, July 9, 2021, July 12, 2021, and July 6, 2021, respectively, pursuant to CPLR § 3211 (c), CPLR § 3212 (a) seeking summary judgment in favor of plaintiff, denying defendant’s Motion for Summary Judgement, or limiting the issues of fact for trial pursuant to CPLR § 3212 (g), and seeking dismissal of defendant’s affirmative defenses pursuant to CPLR § 3211 (b).
This matter involves a claim for assigned first-party no fault benefits, which resulted from plaintiff providing medical treatment to Assignor, Maria Rodriguez (hereinafter “Assignor”), following a motor vehicle accident, which occurred on October 25, 2018. Defendant acknowledges receipt of specified bills in its denials, however, at oral argument both defendant and plaintiff agreed that bills one, two, and three were not received. After the receipt of the bills specified, defendant sent two Examinations Under Oath (hereinafter “EUO”) scheduling letters for each matter, CV-721025-20-KI letters are dated January 23, 2019, and February 19, 2019, CV-721026-20-KI and CV- 721033-20-KI letters are both dated January 4, 2019 and January, 23, 2019, respectively, to the assignor’s home address listed on the NF-3’s and Verification of Treatment forms and to the provider’s billing address. Defendant annexed affidavits in all three instant matters of Michael A. Callinan, Esq. (hereinafter the “Callinan Affidavits”) all dated October 19, 2020, in order to establish the mailing of the scheduling letters and the non-appearance of the assignor for the scheduled EUO’s. Defendant states that the [*2]assignor did not attend the two scheduled EUO’s for each of the three matters sub judice, and therefore, the defendant asserts that they are entitled to summary judgement dismissing the complaints.
At oral argument, defendant confirmed that it properly mailed EUO scheduling letters to the assignor for all three scheduled EUO’s. Defendant contends that the EUO scheduling letters sent to the assignor, the Callinan affidavits establishing both mailing of the letters and the non-appearance of assignor, in conjunction with a statement on the record, are sufficient under the current no-fault laws, to warrant dismissal of plaintiff’s case for the assignor’s failure to appear. The Court notes that the Callinan affidavits were identical in sum and substance as to the instant matters, but for the dates of the scheduling letters. As set forth below, defendant put forth numerous cases in which the Second Department has held that affidavits similar to Mr. Callinan’s were sufficient to establish the proper mailing of EUO scheduling letters and EUO non-appearance.
Plaintiff argues that the Callinan affidavits were conclusory and insufficient to establish proper mailing as required under CPLR. Plaintiff asserted that defendant did not annex copies of the envelopes in which the scheduling letters were sent as was required according to plaintiff. In the Cross-Motions for Summary Judgement and at oral argument, plaintiff drew the Court’s attention to the matter of Carle Place Chiropractic v. New York Cent. Mut. Fire Ins. Co., 19 Misc 3d 1139A, 866 NYS2d 90 [1st Dist. Nassau Co. 2008]. Plaintiff argues that the Court’s rationale in Carle Place should be applied to the matters sub judice for failure to establish proper mailing procedure. The case is not an appellate case and has no precedential authority herein.
Plaintiff seeks to create new law by using this Court to impose more rigorous requirements on defendants to prove EUO non-appearance and the mailing of scheduling EUO letters. There is no legal requirement of such additional proof along with personal knowledge of mailing procedures to prove mailing of scheduling notices. Additionally, there is no requirement of that which plaintiff urged at oral arguments, to wit: annexing proof of first class mailing and/or envelopes in which the scheduling letters were sent, in addition to affidavits by an attorney with personal knowledge of the mailing of the specific scheduling letters at issue.
All three of plaintiff’s Cross-Motions acknowledge receipt of the scheduling letters by stating that plaintiff responded to the EUO scheduling letters in March of 2019. Though not annexed in plaintiff’s cross-motions, defendant’s motion papers contain, three letters from plaintiff’s counsel, all dated March 5, 2019, after the two scheduled EUO dates had already passed in each instant matter.
In this matter the Callinan affidavits describe in detail that he created the mailing procedure at the legal office handling these matters for defendant, as he was partner and oversaw the mailing of EUO scheduling letters, explicitly outlining his personal knowledge of mailing procedure. The Callinan affidavits state Mr. Callinan was personally responsible for handling these instant matters and these files “on a day-to-day basis.” His “personal knowledge” was not limited to file review and office mailing procedure. It was based upon his personal involvement on these matters in conjunction with review of the file, his creation and over-sight of office mailing procedure, and his knowledge of office mailing procedure.
Defendant argues that the Callinan affidavits established both mailing and the EUO non-appearances. There was no contradictory evidence provided by plaintiff in their motion papers aside from a blanket assertion that defendant did not have enough personal knowledge to establish proper mailing and EUO non-appearance and letters allegedly sent to defendant in [*3]March 2019 attempting to reschedule the EUO’s that were not actually annexed. Plaintiff did not provide any affidavit from its assignor to contradict the assertions made by the Callinan affidavits. Defendant cited to multiple cases in which the Second Department upheld both the sufficiency of similar affidavits to establish EUO no-shows and mailing of scheduling letters, to those of the Callinan affidavits in the matters sub judice as set forth below. Though plaintiff’s Cross-Motion asserts that there was no statement on the record to prove EUO non-appearance, in each of the three instant matters, defendant attached Mr. Callinan’s statements (Defendant’s Motions for Summary Judgement Exhibit “F”) on the record reflecting the non-appearances of plaintiff’s assignor for the scheduled EUO’s in contradiction to plaintiff’s assertions.
In Adelaida Physical Therapy, P.C. v Ameriprise Auto & Home, 58 Misc 3d 130(A), 92 NYS3d 702 (2nd Dept., 2017), the Second Department held that, “contrary to plaintiff’s contention, the affirmation submitted by defendant’s attorney, who was present in his office to conduct plaintiff’s EUO on the scheduled dates, was sufficient to establish that plaintiff had failed to appear for the EUOs” (see, Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 827 NYS2d 217 [2006]). Adelaida Physical Therapy, P.C. v Ameriprise Auto & Home, 58 Misc 3d 130(A), 92 NYS3d 702 (2nd Dept., 2017). Adelaida represents one of many examples proffered by defendant in which the Second Department has held that attorney affirmations alone can establish both mailing of EUO scheduling letters and non-appearance for an EUO. The Court in Adelaida did not require defendant to provide envelopes in which the scheduling letters were sent out in, nor did it as plaintiff requested in its Cross-Motion, ask defendant to provide a log of other people scheduled for EUO’s the same day as the assignor in question. Id. The affirmation of the attorney was relied upon in Adelaida to prove both sufficient mailing and failure of the assignor to appear for an EUO and therefore, affirmed the dismissal of plaintiff’s case. Id.
The Second Department applied similar logic in Island Life Chiropractic Pain Care, PLLC v Ameriprise Ins., 1, 69 Misc 3d 143(A), 133 NYS3d 384, (2nd Dept. 2020) and wrote “defendant established that initial and follow-up letters scheduling an examination under oath had been timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 857 NYS2d 211 [2008]); that plaintiff’s assignor had failed to appear on either date (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 827 NYS2d 217 [2006]); and that the claims had been timely denied on that ground (see St. Vincent’s Hosp. of Richmond, 50 AD3d 1123, 857 NYS2d 211). As plaintiff failed to raise a triable issue of fact in opposition to defendant’s motion, defendant is entitled to summary judgment dismissing the complaint. Island Life Chiropractic Pain Care, PLLC v Ameriprise Ins., 1, 69 Misc 3d 143(A), 133 NYS3d 384, (2nd Dept. 2020). Similarly, to Island Life Chiropractic Pain Care, PLLC v Ameriprise Ins., this Court finds that in the three matters sub judice that defendant has established timely mailing of EUO scheduling letters and the non-appearance of the assignor at scheduled EUO’s by the Callinan affidavits and Mr. Callinan’s three statements on the record. Additionally, plaintiff has failed to raise an issue of fact for trial.
Summary Judgment is a drastic remedy and should be granted only in the absence of any triable issue of material fact. See, Rotuba Extruders, Inc. v Ceppos, 46 NY2d 141 [1978]; Andre v Pomeroy, 35 NY2d 361 [1974]. In order to prevail, the movant must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient proof to demonstrate the absence of any material issues of fact. Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]. The appearance of the eligible injured person, or its assignor, at an EUO is a condition precedent [*4]to coverage. See W&Z Acupuncture, P.C. v. Amex Assur. Co., 24 Misc 3d 142(A) (NY App. Term July 31, 2009). The Second Department holds that, “[a]n insurer may establish its prima facie entitlement to judgment as a matter of law based on the failure to submit to an EUO by establishing that the letters scheduling the EUOs were timely and properly mailed, that the insured failed to appear at two scheduled EUOs, and that the insurer issued a timely and proper denial of the claims.” Nationwide Affinity Ins. Co. of Am. v. George, 183 AD3d 755, 756 (2nd Dept. 2020).
The Court finds that though other arguments were raised by both plaintiff and defendant in their Motion papers, the sole issues at oral argument were the mailing of the scheduling letters and the veracity of the Callinan affidavits to prove non-appearance of the assignor at the scheduled the EUO’s. The Court found no need to explore those additional written arguments as they are rendered moot by the issues determined in this decision.
Thus, the defendant’s Motion for Summary Judgement must be granted as plaintiff has failed to rebut the presumption of the mailing of the EUO scheduling letters and non-appearance at the EUO’s. Plaintiff has failed to raise an issue of fact for trial. Therefore, Plaintiff’s motion must be denied by the Court as it is moot.
WHEREFORE it is hereby
ORDERED AND ADJUDGED that defendant’s motions for summary judgement dismissing the complaint is granted pursuant to CPLR § 3212 and the matter is dismissed. Plaintiff’s cross-motions for Summary Judgement are denied in all respects.
Dated: Brooklyn, New YorkApril 13, 2023
_______________s/_____________________
HON. JILL R. EPSTEIN,
JCC
Reported in New York Official Reports at American Tr. Ins. Co. v North Shore Family Chiropractic PC (2023 NY Slip Op 50208(U))
American
Transit Insurance Company, Petitioner,
against North Shore Family Chiropractic PC, A/A/O ALBERTO CARPINTEYRO, Respondent. |
Index No. 535468/2022
Larkin Farrell LLC (David Fair of counsel), for petitioner.
Aaron D. Maslow, J.
The following numbered papers were read on this petition and cross-petition:
Petition (NYSCEF Doc No. 1)Notice of Petition (NYSCEF Doc No. 2)
Exhibit A – Arbitration Award (NYSCEF Doc No. 3)
Exhibit B – Master Arbitration Award (NYSCEF Doc No. 4)
Exhibit C – Respondent North Shore Family Chiropractic PC’s Arbitration Request Form and Arbitration Submission (NYSCEF Doc No. 5)
Exhibit D – Petitioner American Transit Insurance Company’s Arbitration Submission and Master Arbitration Brief (NYSCEF Doc No. 6)
Statement of Authorization for Electronic Filing (NYSCEF Doc No. 7)
Request for Judicial Intervention (NYSCEF Doc No. 8)
Affidavit of Service (NYSCEF Doc No. 9)
Statement of Authorization for Electronic Filing Affidavit of Service (NYSCEF Doc No. 10)
Affidavit of Service (NYSCEF Doc No. 11)
Answer (NYSCEF Doc No. 12)
Notice of Cross-Petition (NYSCEF Doc No. 13)
Affirmation in Opposition to Motion and in Support of Cross-Petition (NYSCEF Doc No. 14)
Exhibit A – Affirmation as to Attorney’s Fees (NYSCEF Doc No. 15)
Affirmation in Opposition to Cross-Petition and in Further Support of Petition (NYSCEF Doc No. 16)
Issue Presented
Case law holds that where a health service provider’s bills for treating an injured for-hire vehicle driver are submitted to the No-Fault insurer and the latter denies payment on the asserted ground that the driver was injured in the course of employment, adjudication of that defense in court or arbitration must be held in abeyance pending its resolution by the Workers’ Compensation Board. Considering this, is it arbitrary and capricious, without rational basis, and incorrect as matter of law for a No-Fault insurance arbitrator to reject the course-of-employment defense — and not defer resolution of it to the Workers’ Compensation Board — where the No-Fault insurer’s only evidence is a police report establishing that the driver was operating a vehicle which bore “TC” plates and lacked passengers?
Background
Petitioner American Transit Insurance Company (“ATIC”) commenced this CPLR Article 75 proceeding by notice of petition, seeking an order and judgment vacating a No-Fault Insurance master arbitration award of Robyn D. Weisman, Esq. (dated September 29, 2022), which affirmed the arbitration award of Mitchell Lustig, Esq. (dated July 10, 2022) granting Respondent North Shore Family Chiropractic PC’s (“North Shore”) claim for No-Fault insurance compensation for health service expenses.[FN1] ,[FN2] Arbitrator Lustig awarded $2,104.48 to North Shore as compensation for treating Alberto Carpinteyro, its assignor [FN3] (“Assignor”), who claimed [*2]to have been injured in a motor vehicle accident on July 29, 2019.
Respondent North Shore has opposed ATIC’s petition to vacate the master arbitration award, and it cross-petitioned for a judgment confirming the master arbitration award and awarding $2,173.14 as principal, statutory interest, the $40.00 arbitration filing fee, attorney’s fees, and costs and disbursements. ATIC opposed North Shore’s cross-petition and filed a reply in support of its petition.
The petition and cross-petition came before the undersigned for oral argument on March 8, 2023. At that time, ATIC appeared by counsel. North Shore did not appear.
The underlying arbitration which is the subject of this proceeding was organized by the American Arbitration Association (“AAA”), which assigned Case No. 17-21-1223-5155 [FN4] to it. The AAA has been designated by the New York State Department of Financial Services to coordinate the mandatory arbitration provisions of Insurance Law § 5106 [b], which provides:
Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party [“No-Fault insurance”] benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.
Insurance Law article 51 provides for the payment of basic economic loss incurred by persons injured in motor vehicle accidents. Included within basic economic loss are first-party benefits for medical and other professional health services.[FN5] First-party benefits are more commonly known as “No-Fault benefits.”[FN6] Notably, and relevant in the instant case, is that first-party benefits are reduced by, among other things, Workers’ Compensation benefits where an injured person in a motor vehicle accident was acting in the course of employment (Insurance Law § 5102 [b] [2]).
In furtherance of the statutory scheme, a comprehensive set of No-Fault Regulations were promulgated by the Superintendent of Insurance (presently Financial Services). They are contained at 11 NYCRR part 65. Said part is subdivided into five subparts which encompass the [*3]following topics: prescribed insurance policy endorsements, rights and liabilities of self-insurers, claims for benefits, arbitration, and unauthorized providers of health services. Part 65 is also known as Insurance Regulation 83.
Generally, the claims process for health service bills [FN7] for No-Fault compensation begins with the submission by a health service provider of a claim form (usually, but not always, a Form NF-3 verification of treatment by attending physician or other provider of health service).[FN8] Besides providing information regarding the injured person, diagnoses, projected treatment, etc., the claim form includes a bill for services performed. The claim form can be submitted directly by the injured person to the No-Fault insurer but over many decades a practice developed by which the health service providers submit the claim forms. As noted in footnote 3, they possess standing to do so by virtue of having received signed assignments of benefits from the injured persons.[FN9] ,[FN10] The insurer must either pay or deny the bill within 30 days, or seek additional verification within 15 business days. If it denies payment, it must issue a Form NF-10 denial of claim [FN11] identifying why the bill was not paid. (See Insurance Law § 5106 [a]; Viviane Etienne Medical Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 505 [2015].)
The record evidence submitted in this Article 75 proceeding revealed that the underlying arbitration involved seven Form NF-3 claim forms (bills) submitted by North Shore to ATIC for payment. This was in accordance with the procedure outlined in the previous paragraph for the submission of claims for No-Fault compensation. For each of North Shore’s claim forms there was an appurtenant Form NF-10 denial form issued by ATIC. Pertinent details are as follows:
• Dates of service October 2, 2020 – October 23, 2020 ($343.30):
Bill received November 18, 2020, and timely denied on December 16, 2020. Grounds of denial: (1) Assignor was in the course of employment and therefore eligible for Workers’ Compensation, so the bill must be submitted to the Workers’ Compensation insurer [*4](“course-of-employment defense”), (2) excessive fees [FN12], and (3) untimely submission of proof of claim (45-day rule)[FN13].
• Dates of service November 6, 2020 – November 30, 2020 ($411.96):
Bill received December 18, 2020, and timely denied on January 14, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees.
• Dates of service December 7, 2020 – December 28, 2020 ($217.15):
Bill received January 19, 2021, and timely denied on December 16, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees.
• Dates of service January 3, 2021 – January 25, 2021 ($354.47):
Bill received February 16, 2021, and timely denied on March 12, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) no further treatment needed effective January 4, 2021 per Dr. Dennis Mann’s Dec. 10, 2020 independent medical examination (“IME defense”).
• Dates of service February 9, 2021 – February 26, 2021 ($285.81):
Bill received March 15, 2021, and timely denied on April 13, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.
• Dates of service March 1, 2021 – March 29, 2021 ($343.30):
Bill received April 19, 2021, and timely denied on May 18, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.
• Dates of service April 18, 2021 – April 30, 2021 ($217.15):
Bill received May 20, 2021, and timely denied on June 18, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.
The record evidence reveals further that on July 6, 2002, Arbitrator Lustig conducted a hearing at which Alex Beyenson, Esq., from The Beynenson Law Firm, P.C., appeared for North Shore, and Helen Cohen, Esq., appeared for ATIC.
Arbitrator Mitchell Lustig’s
Award
In his award, Arbitrator Lustig stated that his findings and conclusions were based upon the documents submitted by the parties in the AAA’s ADR Center [FN14] and the parties’ arguments at the hearing. He first found that North Shore established its prima facie case of entitlement to compensation “by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received and that payment of No-Fault benefits were overdue.” The arbitrator [*5]cited to Westchester Med. Ctr. v Lincoln Gen. Ins. Co. (60 AD3d 1045 [2d Dept 2009]) and Mary Immaculate Hosp. v Allstate Ins. Co. (5 AD3d 742 [2d Dept 2004]). (NYSCEF Doc No. 3, arbitration award, at numbered p 2.)
The arbitrator then reviewed the defenses asserted by ATIC in its Form NF-10 denials of claim. The first defense reviewed was the one concerning the timeliness of submission of the bill for dates of service October 2, 2020 – October 23, 2020. Given that this defense to payment of the bill was not raised in this Article 75 proceeding, it suffices to say that the arbitrator sustained it with respect to a date of service which was more than 45 days earlier than the bill was received by ATIC; other dates of service were within the 45-day period so the defense was denied as to them. (Id. at numbered pp 2-4.)
The arbitrator then reviewed ATIC’s IME defense. He found that North Shore’s contemporaneous and post-IME cutoff re-examination reports outweighed Dr. Mann’s IME report; that Assignor had documented complaints of pain in his neck and lower back and restrictions in motion in those locations. He found that North Shore had refuted Dr. Mann’s determination that further chiropractic treatment was not necessary. (Id. at numbered pp 4-5.) Arbitrator Lustig’s determination of this issue is not challenged in the within Article 75 proceeding.
That part of Arbitrator Lustig’s award which is at issue herein — the course-of-employment defense — will be assessed in more detail. As noted above, ATIC asserted in each of its Form NF-10 denials of claim that Assignor was in the course of employment and therefore eligible for Workers’ Compensation, so the bills had to be submitted to the Workers’ Compensation insurer. The arbitrator cited to Arvatz v Empire Mutual Ins. Co. (171 AD2d 262 [1st Dept 1991]), for the point of law that “[t]he Workers’ Compensation Board is the exclusive forum to determine whether an individual was in the course of his employment at the time of a motor vehicle accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 5). Citing to a master arbitration award reported in 2000, the arbitrator continued by stating that “As long as there is ‘at least minimal proof of the indicia of employment from which an inference could be drawn to support the defense’ that the assignor is covered by the Workers’ Compensation Law . . . the claim must be denied without prejudice, pending the determination of the issue of employment by the Board.” The third statement of law by the arbitrator was a citation to A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U] [App Term 2d & 11th Dists 2005]), for the proposition that “If, however, the insurer’s contention that the Assignor acted in the course of his or her employment at the time of the accident is ‘mere speculation’ that fails to establish the defense’s ‘potential merit’ so as to warrant the Board’s review of the facts, the issue need not be resolved by the Board” (NYSCEF Doc No. 3, arbitration award, at numbered p 5).
This was followed by Arbitrator Lustig’s review of the evidence submitted by ATIC concerning its course-of-employment defense: “In support of its Workers’ Compensation defense, [ATIC] submitted a copy of the Police Accident Report indicating that at the time of the accident the Assignor was operating a 2015 Nissan license plate number T751729C.[FN15] [¶] However, notably absent from the Respondent’s submission is any proof that the Assignor was acting in the course of his employment, such as an Affidavit from its underwriting manager [*6]indicating that the Respondent issued a livery or taxi policy to the Assignor for a ‘for hire vehicle.’ ” (Id.)
Arbitrator Lustig concluded his analysis of the course-of-employment defense as follows: “After careful consideration of the evidence, I find, as a matter of fact, that the Respondent has not submitted sufficient proof that the Assignor was acting in the course of his employment at the time of the accident. Accordingly, the Respondent’s denials premised upon Workers’ Compensation being primary are vacated.” (Id. at numbered p 6.) (emphasis added)
As a result of his analysis, Arbitrator Lustig awarded compensation to North Shore for all amounts billed except for the date of service concerning which the 45-day rule defense was sustained. A total of $2,104.48 was awarded to North Shore. (Id. at numbered pp 6-7.) Interest, an attorney’s fee, and return of the $40.00 arbitration filing fee were also awarded.
Master Arbitrator Robyn D. Weisman’s
Award
ATIC filed for master arbitration to appeal Arbitrator Lustig’s award. ATIC did not challenge Arbitrator Lustig’s determinations regarding the defenses of untimely proof of claim (45-day rule) and lack of necessity past an IME cutoff, which pertained to certain bills. The only issue raised in master arbitration was Arbitrator Lustig’s not having deferred to the Workers’ Compensation Board on ATIC’s course-of-employment defense — that he determined it himself. (NYSCEF Doc No. 6, ATIC’s arbitration submissions, at 60-72.)
In her award, Master Arbitrator Weisman set forth the issue in dispute as follows: “Whether [the] lower arbitrator acted in an arbitrary and capricious manner or in violation of a law in ruling that [North Shore] was entitled to reimbursement regardless of [ATIC]’s claim of Worker’s Compensation benefits” (NYSCEF Doc No. 4, master arbitration award, at numbered p 1).
Master Arbitrator Weisman cited to Arvatz (171 AD2d 262), as did Arbitrator Lustig. She also cited to Liss v Trans Auto Systems, Inc. (68 NY2d 15 [1986] [determination that worker did not sustain injuries in course of employment not binding in liability suit on those not parties to compensation proceeding], to the effect that the question of whether one was injured in the course of employment must be resolved by the Workers’ Compensation Board. (Id. at numbered p 2.)
Acknowledging that in arbitration there are many instances in which the possible existence of Workers’ Compensation coverage should be determined by the Workers’ Compensation Board, Master Arbitrator Weisman wrote that here the issue “came down to a question of fact. The issue of whether the accident occurred during the course of employment was a factual one.” (Id.) With respect to this issue of fact, the standard of review was whether the hearing arbitrator’s award was supported by the evidence, had a reasonable and plausible basis, and was rational, Master Arbitrator Weisman citing principally to Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207 [1981]. She found that Arbitrator Lustig’s decision “was based on the evidence submitted” (id. at numbered p 3). As for any issue of law, “The grounds of review also included wither the decision was incorrect as a matter of law, as provided for in 11 NYCRR 65-4.10 [a] [4]. I do not see a misapplication of law” (id.).
Arbitrator Lustig’s award was affirmed in its entirety by Master Arbitrator Weisman.
ATIC’s Petition to Vacate
ATIC’s petition to vacate asserted that “The arbitration decision was arbitrary and capricious, irrational and without a plausible basis” (NYSCEF Doc No. 1, petition, ¶ 35), in that “Arbitrator Lustig failed to follow well settled law” (id., ¶ 41). The petition proceeded to argue that ATIC had reason to believe that Assignor may have been in the course of his employment at the time of the motor vehicle accident, rendering Workers’ Compensation benefits primary to No-Fault (id., ¶ 42), and it was improper for Arbitrator Lustig to express an opinion whether Workers’ Compensation coverage existed (id., ¶ 54). The petition cited to case law concerning the Workers’ Compensation Board’s jurisdiction over the issue of whether one was in the course of employment when injured. That issue is the only one ATIC advanced in this Article 75 proceeding.
The petition concluded by asserting that Arbitrator Lustig’s decision was “arbitrary and capricious, without rational basis and incorrect as a matter of law because the arbitrator ignored [ATIC]’s evidence and/or well settled legal precedent in order to justify a determination in favor of [North Shore]” (id., ¶ 56). “As a result, [ATIC]’s rights were prejudiced by the partiality of the arbitrator and the arbitrator exceeded his/her power and failed to make a final and definite award and the decision must be vacated” (id., ¶ 57). ATIC was “entitled to a declaration that the arbitration decisions of Mitchell Lustig, Esq. and Robyn D. Weisman, Esq. in the matter designated AAA number 99-21-1223-5155 have no force or effect” (id., ¶ 58).
North Shore’s Cross-Petition to Confirm
North Shore argued in its cross-petition most significantly that the arbitration awards had to be confirmed if there was a colorable justification and a plausible basis for them, citing to Rose Castle Redevelopment II LLC v Franklin Realty Corp. (184 AD3d 230 [1st Dept 2020], and if they were neither arbitrary nor capricious, citing to Matter of Petrofsky v Allstate Ins. Co. (54 NY2d 207) ((NYSCEF Doc No. 14, cross-petition, ¶¶ 3, 6). North Shore pointed out that Arbitrator Lustig found that ATIC did not submit sufficient evidence to support its defense that Assignor was in the course of his employment and that Master Arbitrator Weisman found the finding to be neither arbitrary, capricious, nor contrary to law (id., ¶¶ 14, 15). There was no basis to vacate the awards, it insisted (id., ¶ 3).
North Shore added that it was entitled to an attorney’s fee of $1,650.00 in connection with the Article 75 proceeding as well as costs and disbursements (id. ¶ 23). The original principal amount of $2,173.14, as well as interest, attorney’s fees, and a return of the arbitration filing fee should likewise be awarded (id. at numbered pp 7-8).
No-Fault Insurance Arbitration
When the No-Fault Law was first enacted by the Legislature in Chapter 13 of the Laws of 1973 to take effect February 1, 1974, § 675 of the Insurance Law was added. In subdivision 2 thereof, insurers were required to provide claimants with an arbitration option for disputes involving liability for first-party benefits. This provision was amended in Chapter 892 of the [*7]Laws of 1977, when several changes were made to the 1973 version.[FN16] The provision regarding arbitration in § 675 was amended to add the following language:
An award by an arbitrator may be vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent [of insurance]. The grounds for vacating or modifying an arbitrator’s decision by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The decision of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s fees, the insurer or the claimant may institute an action in a court of competent jurisdiction to adjudicate the dispute de novo.[FN17]
The provisions regarding No-Fault insurance arbitration remained in the recodification of the Insurance Law enacted in Chapters 367 and 805 of the Laws of 1984. The arbitration provisions were set forth in § 5106, and subdivisions (b) and (c) now read as follows:
(b) Every insurer shall provide a claimant with 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 which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent. Such simplified procedures shall include an expedited eligibility hearing option, when required, to designate the insurer for first party benefits pursuant to subsection (d) of this section. The expedited eligibility hearing option shall be a forum for eligibility disputes only, and shall not include the submission of any particular bill, payment or claim for any specific benefit for adjudication, nor shall it consider any other defense to payment.
(c) An award by an arbitrator shall be binding except where vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent. The grounds for vacating or modifying an arbitrator’s award by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s [*8]fees, the insurer or the claimant may institute a court action to adjudicate the dispute de novo.
Insofar as is here relevant, the No-Fault Insurance Regulations promulgated by the Superintendent of Insurance provided that a master arbitrator may vacate or modify a hearing arbitrator’s award where it “was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)” (11 NYCRR 65.18 [a] [4]). This regulatory language was carried over into the revised Regulations promulgated in 2002, in 11 NYCRR 65-4.10 (a) (4).[FN18] A master arbitrator may also vacate or modify a hearing arbitrator’s award under certain other grounds also (see 11 NYCRR 65-4.10 [a]).[FN19]
Discussion
The provision that a hearing arbitrator may vacate or modify a hearing arbitrator’s award due to an error of law is one of several grounds but is the main gravamen of ATIC’s objection to the arbitration outcome here. As noted above, ATIC has maintained that Arbitrator Lustig erred in not complying with “well settled legal precedent” concerning how to deal with a No-Fault insurer’s defense asserting that an injured person was in the course of employment when the motor vehicle accident occurred (NYSCEF Doc No. 1, petition, ¶ 41). ATIC has insisted that the Workers’ Compensation Board had to decide whether Assignor was injured in the course of employment — that Arbitrator Lustig should have never ventured into any sort of consideration of it.
The issue of the availability of Workers’ Compensation benefits as a first line source before No-Fault compensation is available derives from Insurance Law § 5102 [b] [2], where the No-Fault Law defines first-party benefits:
payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle, less: . . .
(2) Amounts recovered or recoverable on account of such injury under state or federal laws providing social security disability benefits, or workers’ compensation benefits, or disability benefits under article nine of the workers’ compensation law, or medicare benefits, other than lifetime reserve days and provided further that the medicare benefits utilized herein do not result in a reduction of such person’s medicare benefits for a subsequent illness or injury. (emphasis added)
The No-Fault Regulations implement this at 11 NYCRR 65-3.16 (a) (9): “Pursuant to section 5102(b)(2) of the Insurance Law, when the applicant is entitled to workers’ compensation benefits due to the same accident, the workers’ compensation carrier shall be the sole source of reimbursement for medical expenses.”
Probably the first appellate decision on the issue of how to treat a No-Fault insurer’s defense that a court lacked jurisdiction to determine if motor vehicle accident injuries occurred while in the course of employment was Arvatz v Empire Mut Ins. Co., 171 AD2d 262 (1st Dept 1991], to which both arbitrators cited. This was a declaratory judgment action commenced by an injured driver against his vehicle’s No-Fault insurer. The latter had contended that the plaintiff operated his vehicle while being employed by a car service. The plaintiff maintained that the No-Fault insurer was required to make the mandated No-Fault payments to which he was entitled. The Supreme Court found at a framed issue hearing that the plaintiff was an independent contractor and not an employee. This was in error, held the Appellate Division, “since the matter should have been remanded to the Workers’ Compensation Board to determine the threshold issue of whether plaintiff is an employee or independent contractor” (id. at 267). This was a mixed question of law and fact, noted the court, and the Board has primary jurisdiction to resolve the question of coverage. The court cited to O’Rourke v Long (41 NY2d 219 [1976] and Liss v Trans Auto Systems, Inc. (68 NY2d 15 [1986]). The judgment of Supreme Court was reversed and a declaration was made that the Workers’ Compensation Board had to make the initial determination as to whether the alleged injuries were within the purview of the Workers’ Compensation Law.
Arvatz was a First Department decision. The Appellate Division, Second Department, in LMK Psychological Services, P.C. v American Transit Ins. Co. (64 AD3d 752 [2d Dept 2009]), [*9]held that it was improper for the Supreme Court to sustain a No-Fault insurer’s defense that the injured person was injured in the course of employment. Rather the determination had to be made by the Workers’ Compensation Board. Although the decision did not mention Arvatz, it placed the Second Department in conformity with the First Department.
Consistent with LMK Psychological Services, P.C. and citing to Arvatz, the Second Department wrote in Dunn v American Transit Ins. Co. (71 AD3d 629, 630 [2010]): “[I]t is therefore inappropriate for the courts to express views with respect thereto pending determination by the board. . . . In this case, the defendant’s motion presented factual questions as to the plaintiff’s ‘status as either an independent contractor, as he claims he is, or as an employee of’ a car service dispatch base, as the defendant claims. . . . Resolution of these questions ‘is best suited for determination by the [Workers’ Compensation] Board, given its expertise in the area’. . . . Accordingly, prior to rendering a determination on the motion, the Supreme Court should have referred the matter to the Workers’ Compensation Board for a hearing and determination as to whether the plaintiff is relegated to benefits under the Workers’ Compensation Law. . . .”
The first reported court decision to apply Arvatz in the context of No-Fault arbitration was JSI Expert Services Inc. v Fireman’s Fund Ins. Co. (10 Misc 3d 1060[A], 2005 NY Slip Op 52058[U] [Civ Ct, Kings County 2005]). At the arbitration, the No-Fault insurer raised the question as to whether the assignor was working at the time of the accident. The arbitrator determined that there was at least minimal proof of the indicia of employment and, therefore, the Workers’ Compensation Board — and not arbitration — was the proper forum for making the ultimate determination on the course-of-employment defense. The master arbitrator affirmed. The court held that the master arbitrator’s award was neither arbitrary, capricious, irrational, nor without a substantial or plausible basis.
In JSI Expert Services Inc. the course-of-employment defense was not asserted in a timely Form NF-10 denial of claim, yet the court sustained the arbitrator’s finding that there was an indicia of employment, warranting deferring a determination of the issue to the Workers’ Compensation Board. Subsequently, the Appellate Division, Second Department held that an insurer’s course-of-employment defense in a No-Fault insurance compensation case had to be timely asserted, i.e., within the statutory 30-day deadline for issuing denials (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2d Dept 2009]).[FN20] Notwithstanding this, JSI Expert Services Inc. is still good law for the principle that just as a court must defer to the Workers’ Compensation Board if a course-of-employment defense is raised by the No-Fault insurer (albeit timely), so too should an arbitrator.
Strict compliance with Arvatz in No-Fault insurance compensation actions took a turn in A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U] [App Term 2d & 11th Dists 2005]). The defendant No-Fault insurer timely rejected the claims on the sole ground that at the time of the accident the assignor was acting in the course of his employment, and ergo the plaintiff health service providers had to pursue their claims before the Workers’ Compensation Board. The Civil Court denied the motions of all parties for summary judgment. The Appellate Term modified the Civil Court’s order by granting the plaintiff health service providers’ motion for summary judgment. “In our view, the insurer [*10]failed to establish the defense’s ‘potential merit’ so as to warrant Board review of the facts” (id. at *1). The Appellate Term noted that the No-Fault insurer’s evidence on the issue consisted of a claim adjuster’s assertion that the claimant was eligible for Workers’ Compensation, and this determination was based solely on an employer’s unsworn statement dated 18 months before the accident and a police accident report. The police accident report was offered in evidence in support of the insurer’s motion for the first time in reply papers. In contrast, the health service providers submitted sworn statements by the assignor and his purported employer that the assignor was not working when the accident occurred. The court described the insurer’s claim that the assignor acted in the course of employment as “mere speculation,” and found that the insurer failed to establish any issues of fact that had to be resolved by the Workers’ Compensation Board. This case stands as a precedent for the principle that although the routine course would be to defer to the Workers’ Compensation Board, the No-Fault insurer must submit enough evidence of potential merit so as to create an issue of fact; it may not rely on mere speculation. Arbitrator Lustig relied on this Appellate Term decision.
In another Appellate Term decision it was found that the “defendant’s proof, including the police accident report, was sufficient to raise a question of fact as to whether [the injured person] was acting as an employee at the time of the accident, which issue must be resolved by the Workers’ Compensation Board” (Response Equipment, Inc. v American Transit Ins. Co., 15 Misc 3d 145[A], 2007 NY Slip Op. 51176[U] [App Term 2d & 11th Dists 2007]). The court did not elucidate on what evidence besides the police accident report was submitted.
There are various instances where court decisions have found the No-Fault insurer’s evidence sufficient to trigger deference to a determination by the Workers’ Compensation Board:
• A certified EUO transcript was submitted (see Active Care Med. Supply Corp. v Global Liberty Ins., 71 Misc 3d 129[A], 2021 NY Slip Op. 50257[U] [App Term 2d, 11th & 13th Dists. 2021] [error for trial court to deny admission of EUO transcript during trial]).
• The injured person’s statement was submitted (see AEE Med. Diagnostic, P.C. v Travelers Prop. Cas. Co. of America, 57 Misc 3d 131[A], 2017 NY Slip Op. 51209[U] (App Term 1st Dept 2017]).
• The injured person checked off on the Form NF-2 application for No-Fault benefits that he was employed at the time of the accident and the police report stated that the vehicle operated by him was a taxi (see Compas Med., P.C. v American Transit Ins. Co. (49 Misc 3d 146[A], 2015 NY Slip Op 51675[U] [App Term 2d, 11th & 13th Dists 2015]); Lenox Hill Radiology, P.C. v American Transit Ins. Co., 18 Misc 3d 1136[A], 2008 NY Slip Op. 50330[U] [Civ Ct, NY County 2008]).
• The police report indicated that the vehicle had a taxi license plate and two passengers were inside (see Clear Water Psychological Servs. PC v American Transit Ins. Co., 54 Misc 3d 915 [Civ Ct, Kings County 2016]).
• A cab company owned the vehicle involved in the accident and was named as the insured on the automobile policy (Chiropractic Testing Servs. of New York, P.C. v American Transit Ins. Co. (59 Misc 3d 250 [Civ Ct, Richmond County 2018]).
• The injured person drove a vehicle with TC plates which was owned by a livery company and insured under a livery policy (see RX Warehouse Pharm., Inc. v American Transit Ins. Co., Civ Ct, Kings County, Nov. 13, 2015, Montelione, J., index No. 51265/13).
Numerous decisions have held that the No-Fault insurer’s evidence was sufficient to raise a question of fact triggering the necessity for a Workers’ Compensation Board determination but did not describe the evidence (e.g. Madison Products of USA, Inc. v American Transit Ins. Co., 67 Misc 3d 144[A], 2020 NY Slip Op 50749[U] [App Term 2d, 11th & 13th Dists 2020]; A.B. Med. Servs., PLLC v American Transit Ins. Co., 34 Misc 3d 141[A], 2012 NY Slip Op 50076[U] [App Term 9th & 10th Dists 2012]; Jamaica Med. Supply, Inc. v American Transit Ins. Co., 34 Misc 3d 133[A], 2011 NY Slip Op 52371[U] [App Term 2d, 11th & 13th Dists 2011]; Devonshire Surgical Facility, L.L.C. v Hereford Ins. Co., 30 Misc 3d 129[A], 2010 NY Slip Op 52297[U] [App Term 1st Dept 2010]); AR Med. Rehabilitation, P.C. v American Transit Ins. Co., 27 Misc 3d 133[A], 2010 NY Slip Op 50708[U] [App Term 2d, 11th & 13th Dists 2010]; A.B. Med. Servs., PLLC v American Transit Ins. Co., 24 Misc 3d 75 [App Term 9th & 10th Dists 2009]).
On the other hand, there are holdings in a few decisions where the No-Fault insurer’s evidence was insufficient to create an issue of fact in support of a course-of-employment defense: The assignor, driving a livery car, had been issued his license from the Taxi and Limousine Commission (“TLC”) that day and the insurer submitted no evidence that the assignor was on duty or carrying a paying passenger at the time of the accident; the Supreme Court properly denied the No-Fault insurer’s petition to vacate the arbitration award granting compensation to the health service provider (by coincidence the provider herein) (see Matter of Global Liberty Ins. Co. of New York v North Shore Family Chiropractic, P.C., 178 AD3d 525 [1st Dept 2019]). A third-party claims administrator’s affidavit alleged in a conclusory manner that the assignor was injured in the course of employment without substantiating the assertion with any evidence (see Central Radiology Servs., P.C. v First America Ins., 40 Misc 3d 126[A], 2013 NY Slip Op 51031[U] [App Term 2d, 11th & 13th Dists 2013]). The police report listed TC plates for the vehicle, Katt Corporation as the registered owner, and an insurance policy number, and indicated that a report must be sent to the TLC, and the NF-3 claim form had “No” checked for whether the patient’s condition was due to an injury arising from employment (see Jing Huo Lac v American Transit Ins. Co., 19 Misc 3d 1146[A], 2008 NY Slip Op 51177[U] [Civ Ct, Richmond County 2008]).
Synthesizing all of the above decisions — both those involving actions commenced in court and those reviewing No-Fault arbitrations — the settled law on the subject issue is as follows: Generally, where a health service provider’s bills for treating an injured for-hire vehicle driver are submitted to the No-Fault insurer and the latter denies payment on the asserted ground that the driver was injured in the course of employment, adjudication of that defense in court or arbitration must be held in abeyance pending its resolution by the Workers’ Compensation Board.
However, the No-Fault insurer’s evidence must demonstrate potential merit sufficient to create an issue of fact in support of its defense; mere speculation does not suffice. Evidentiary indicia of potential merit include the injured person’s statement in one form or another that he was working; the vehicle had taxi plates and passengers; a cab company owned the vehicle and was named as the insured on the automobile policy; the injured person drove a vehicle which was owned by a livery company, had TC plates, and was insured under a livery policy; or there was a police accident report plus other supporting evidence. There is no potential merit to the course-of-employment defense where the insured person had been issued his TLC license that day and there were no paying passengers; the claims administrator’s affidavit was conclusory; [*11]the police report listed TC plates but the vehicle was owned by an ambiguously named company and the claim forms indicated the injured person’s injuries did not arise from employment; or the claim adjuster’s information was based on an unsworn employer’s statement predating the accident and a police report which was not properly in evidence.
Determination
In the instant case, ATIC’s sole evidence at the arbitration in support of its course-of-employment defense was the police report. Assignor was indicated to be driving a TC-plated vehicle owned by Edge Limo Inc. No insurance company code was listed. Nobody else besides Assignor was in the vehicle. No insurance policy for the vehicle was submitted so it is unknown whether the insurance policy was specific to liveries. The NF-3 claim forms had “No” checked off for whether Assignor’s injuries arose from employment. None of the decisions cited above dealt with this combination of evidence. However, Jing Huo Lac v American Transit Ins. Co. (19 Misc 3d 1146[A], 2008 NY Slip Op 51177[U]) comes closest. There, the police report listed TC plates for the vehicle, Katt Corporation as the registered owner, and an insurance policy number, and indicated that a report must be sent to the TLC, and the NF-3 claim form had “No” checked for whether the patient’s condition was due to an injury arising from employment. In fact, although the registered owner had the word “Limo” in it, the quantum of evidence in the instant case was less than that in Jing Huo Lac. Significantly there was no policy submitted by ATIC. The Jing Huo Lac court held that the insurer failed to show potential merit to its course-of-employment defense (id. *6). In fact, Arbitrator Lustig noted that absent from ATIC’s submission was evidence that it had issued a livery or taxi policy to Assignor for a for-hire vehicle (NYSCEF Doc No. 3, arbitration award, at numbered p 5).
The provision in 11 NYCRR 65-4.10 [a] [4] that a No-Fault insurance arbitration award may be vacated where it was incorrect as a matter of law refers to substantive issues — not issues of fact (see American Transit Ins. Co. v Right Choice Supply, Inc., — Misc 3d —, 2023 NY Slip Op 23039, *11 [Sup Ct, Kings County 2023]).
Arbitrator Lustig correctly applied the substantive law when he cited to Arvatz for the principle that “[t]he Workers’ Compensation Board is the exclusive forum to determine whether an individual was in the course of his employment at the time of a motor vehicle accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 5). He correctly applied the law when he cited to A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U]), for the proposition that “If, however, the insurer’s contention that the Assignor acted in the course of his or her employment at the time of the accident is ‘mere speculation’ that fails to establish the defense’s ‘potential merit’ so as to warrant the Board’s review of the facts, the issue need not be resolved by the Board” (id.).
At oral argument on the within Article 75 petition, ATIC’s counsel argued that the law was to the effect that a No-Fault insurer’s submission of a police report indicating that the vehicle operated by the injured person bore TC plates, without any other evidence — even without a claim examiner’s affidavit and even without a copy of the insurance policy — required the arbitrator to rule that a course-of-employment defense had to be determined by the Workers’ Compensation Board. This Court rejects said argument as it is not in accord with the settled law discussed above. Arbitrator Lustig’s award was not incorrect as a matter of law within the purview of 11 NYCRR 65-4.10 (a) (4).
This Court must next determine whether to sustain Master Arbitrator Weisman’s review of Arbitrator’s Lustig award for an error of law. The standard for such Article 75 court scrutiny is whether the master arbitration award was so irrational as to require vacatur (see Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 232 [1982]; Matter of Acuhealth Acupuncture, PC v Country-Wide Ins. Co., 170 AD3d 1168 [2d Dept 2019]; Matter of Acuhealth Acupuncture, P.C. v New York City Transit Authority, 167 AD3d 314 [2d Dept 2018]; Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]). A master arbitrator’s review of a hearing arbitrator’s award where an error of a rule of substantive law is alleged must be upheld unless it is irrational (see Golden Earth Chiropractic & Acupuncture, PLLC v Global Liberty Ins. Co. of New York, 54 Misc 3d 31 [App Term, 2d Dept, 2d, 11th & 13th Dists 2016]).
Master Arbitrator Weisman held, “The grounds of review also include that the decision was incorrect as a matter of law. 11 NYCRR 65-4.10(a)(4). I do not see a misapplication of law.” (NYSCEF Doc No. 4, master arbitration award, at numbered p 3). In the case at bar, Master Arbitrator Weisman’s review of the legal issue presented by ATIC was not irrational. Hence, in terms of the legal issue, Master Arbitrator Weisman’s award was actually correct, let alone not irrational.
11 NYCRR 65-4.10 (a) (4) provides that “procedural or factual errors committed in the arbitration below are not encompassed within this ground,” i.e., the review by a master arbitrator for an error of law. It is an issue of fact as to whether submitted evidence rises to potential merit to support a course-of-employment defense and is not mere speculation. Did Arbitrator Lustig err as a matter of fact in finding that “the Respondent has not submitted sufficient proof that the Assignor was acting in the course of his employment at the time of the accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 6)?
This Court takes into account the general proposition that the admissibility of evidence and the determination of issues of fact are left to the arbitrator’s discretion (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 483 [2006] [“Manifest disregard of the facts is not a permissible ground for vacatur of an award. . . .”]; Cent. Square Teachers Assn. v Board of Educ. of Cent. Sq. Cent. Sch. Dist., 52 NY2d 918, 919 [1981] [“The path of analysis, proof and persuasion by which the arbitrator reached this conclusion is beyond judicial scrutiny.”]; Matter of Lipson v Herman, 189 AD3d 440, 441 [1st Dept 2020] [“error of fact . . . will not result in the vacatur of an arbitrator’s award”]; Matter of Bernstein v On-Line Software Intl., Inc., 232 AD2d 336, 338 [1st Dept 1996] [“It is well established, however, that arbitrators are not bound by the rules of evidence and may admit or deny exhibits on an equitable basis.”]).
Considering that in no reported case did a court find that the mere submission of a police report listing TC plates ipso facto warranted referral to the Workers’ Compensation Board for a determination on a course-of-employment defense, this Court finds reasonable Arbitrator Lustig’s factual determination that there was insufficient proof submitted to support such defense. This Court notes that the police report reflected no passengers being in Assignor’s vehicle.
With respect to the factual issues reviewed by Master Arbitrator Weisman, the proper standard of her review was whether Arbitrator Lustig reached his decision in a rational manner, i.e., whether it was arbitrary and capricious, irrational, or without a plausible basis; the master arbitrator may not engage in an extensive factual review, which includes weighing the evidence, assessing the credibility of various medical reports, and making independent findings of fact [*12](Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207 [1981]). Here, Master Arbitrator Weisman correctly held that “The issue of whether the accident occurred during the course of employment was a factual one” (NYSCEF Doc No. 4, master arbitration award, at numbered p 3). She noted that Arbitrator Lustig “did discuss the findings in detail” and “the decision was based on the evidence submitted” (id.)
Judicial review of a master arbitrator’s authority to vacate a hearing arbitrator’s award derives from § 675 (presently § 5106 [c]) of the Insurance Law and involves the question of whether the master arbitrator exceeded his power (Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 231 [1982]). Master Arbitrator Weisman did not exceed her power when she reviewed the factual findings of Arbitrator Lustig. She applied the correct standard of review, mentioning that it involved whether the award was supported by the evidence, arbitrary and capricious, irrational, or without plausible basis. She noted that she could not conduct a de novo review. Master Arbitrator Weisman was correct when she found that Arbitrator Lustig discussed his findings in detail and his decision was based on the evidence submitted. This Court finds that Master Arbitrator Weisman’s review of Arbitrator Lustig’s factual determination that the evidence was insufficient to sustain a course-of-employment defense was neither arbitrary, capricious, irrational, nor without a plausible basis (see Matter of Petrofsky v Allstate Ins. Co.).
ATIC’s petition in this Article 75 proceeding cited the four applicable grounds delineated in CPLR 7511 for vacating an arbitration award where a party participated in the arbitration:
if the court finds that the rights of that party were prejudiced by:
(i) corruption, fraud or misconduct in procuring the award; or
(ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or
(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or
(iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.(NYSCEF Doc No. 1, petition, ¶ 33)
This Court finds that ATIC failed to establish that there was corruption, fraud, or misconduct in procuring the award; that there was partiality on the part of either arbitrator; that either arbitrator exceeded his or her power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or that there was a failure to follow the procedure of Article 75.
Cross-Petition;
Interest, Attorney’s Fees, Return of Arbitration
Filing Fee, Costs, and Disbursements
As mentioned above, North Shore sought in its cross-petition to confirm Master Arbitrator Weisman’s award. Having found that no grounds exist to vacate it, it must be confirmed. North Shore’s cross-petition sought $2,173.14, whereas the amount awarded by Arbitrator Lustig was $2,104.48. The difference results from Arbitrator Lustig denying [*13]compensation for one date of service because of untimely submission of proof of claim (the 45-day rule). The cross-petition did not challenge this component of Arbitrator Lustig’s award so any challenge to it is deemed abandoned by North Shore. North Shore is entitled to No-Fault compensation for health services in the principal amount of $2,104.48.
North Shore also sought additional payments in the nature of interest, attorney’s fees, return of the arbitration filing fee, costs, and disbursements.
Interest:
Where a claim is timely denied, interest at two per cent per month shall begin to accrue as of the date arbitration was requested by the claimant, i.e., the date the AAA received the applicant’s arbitration request, unless arbitration was commenced within 30 days after receipt of the denial, in which event interest shall begin to accrues as of the 30th day after proof of claim was received by the insurer (see Insurance Law § 5106 [a]; 11 NYCRR 65-4.5 [(s] [3], 65-3.9 [c]; Canarsie Med. Health, P.C. v National Grange Mut. Ins. Co., 21 Misc 3d 791, 797 [Sup Ct, NY County 2008] [“The regulation provides that where the insurer timely denies, then the applicant is to seek redress within 30 days, after which interest will accrue.”]). The plaintiff health care provider in Canarsie Med. Health, P.C. argued that where a timely issued denial is later found to have been improper, the interest should not be stayed merely because the provider did not seek arbitration within 30 days after having received the denial. The court rejected this argument, finding that the regulation concerning interest was properly promulgated; this includes the provision staying interest until arbitration is commenced, where the claimant does not promptly take such action. North Shore presumptively received ATIC’s last-issued denial a few days after June 18, 2021, when it was issued. Applicant’s arbitration request was received by the AAA on October 19, 2021, which was certainly more than 30 days later. Thus, interest on all of the claims herein accrued from that date, not from the 30th day after proof of claim was received by ATIC. The end date for the calculation of the period of interest shall be the date of payment of the claims. In calculating interest, the date of accrual is excluded from the calculation (see General Construction Law § 20 [“The day from which any specified period of time is reckoned shall be excluded in making the reckoning.”]). Where a motor vehicle accident occurred after April 5, 2002, interest as calculated at the rate of two percent per month, simple, on a pro rata basis using a 30-day month (see 11 NYCRR 65-3.9 [a]; Gokey v Blue Ridge Ins. Co., 22 Misc 3d 1129[A], 2009 NY Slip Op 50361[U] [Sup Ct, Ulster County 2009]). CPLR 5004’s nine percent per annum is superseded by Insurance Law § 5106 [a]’s two percent per month (see Pro-Med Med., P.C. v MVAIC (74 Misc 3d 130[A], 2022 NY Slip Op 50135[U] [App Term 2d, 11th & 13th Dists 2022]).
Attorney’s Fees:
After calculating the sum total of the first-party benefits awarded in this arbitration plus interest thereon, ATIC shall pay North Shore an attorney’s fee equal to 20 percent of that sum total subject to a maximum fee of $1,360.00, as provided for in 11 NYCRR 65-4.6 [d].
Additionally, this Court sustains the $65.00 attorney’s fee for preparatory services in connection with the master arbitration. This is in accordance with 11 NYCRR 65-4.10 [j] [2] [*14][i].[FN21]
Moreover, pursuant to 11 NYCRR 65-4.10 [j] [4], having successfully prevailed in this Article 75 proceeding, North Shore is entitled to an additional attorney’s fee (see Global Liberty Ins. Co. of New York v North Shore Family Chiropractic, 178 AD3d 525 [1st Dept 2019]; GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2d Dept 2017]).
Alek Beynenson, Esq., submitted an affirmation in support of an attorney’s fee with regard to this Article 75 proceeding (NYSCEF Doc No. 15). In pertinent part, he wrote:
1. As the principal attorney at The Beynenson Law Firm, P.C., attorneys for Respondent, I provided valuable and necessary services on behalf of NORTH SHORE FAMILY CHIROPRACTIC PC, A/A/O ALBERTO CARPINTEYRO for which I am requesting compensation pursuant to 11 NYCRR 65—4.10(j)(4). . . .
3. I request the usual hour billing rate for my services which is $550.00 per hour. This figure takes into account over a decade of experience specializing primarily in no-fault litigation and arbitration.
4. The total time required to provide these legal services to the client was 3.0 hours including case review, research, drafting, exhibit preparation, and e-filing.
5. Based upon the above calculations, Respondent NORTH SHORE FAMILY CHIROPRACTIC PC, A/A/O ALBERTO CARPINTEYRO seeks an attorney’s fee of $1,650.00 ($550.00 x 3.0 hours) for the necessary time expended in this matter.
This Court notes that Attorney Beynenson did not attest to he himself having performed the work in connection with opposing the petition and preparing the cross-petition. He did not indicate whether a different attorney or perhaps a paralegal performed it. The affirmation in support of the cross-petition contains mostly boilerplate statements which could apply to most Article 75 proceedings to confirm No-Fault arbitration awards, with a few insertions specific to this particular claim. The amount of $550.00 per hour is excessive, especially considering that the attorney’s fee for policy issues litigated in arbitration or at the trial court level in court is $70.00 per hour (see 11 NYCRR 65-4.6 [c]). It is also excessive considering that North Shore’s papers for this case consisted of a two-page answer (NYSCEF Doc No. 12), a one-page notice of cross-petition (NYSCEF Doc No. 13), an eight-page affirmation in opposition to the petition and in support of the cross-petition (NYSCEF Doc No. 14), and a two-page affirmation in support of an attorney’s fee (NYSCEF Doc No. 15).[FN22] Mr. Beynenson did not even attend oral argument when the proceeding appeared on this Court’s calendar. Neither did Mr. Beynenson submit a timesheet as to when the work was performed and how much time was spent on each document.
In a Kings County No-Fault insurance case involving an appeal to the Court of Appeals, the court awarded $250.00 per hour but this was in connection with the litigation of a novel or unique issue (see Viviane Etienne Med. Care PC v Country-Wide Ins. Co., 59 Misc 3d 579 [Sup Ct, Kings County 2018]). The issue in the case at bar was neither novel nor unique, especially since there was already a plethora of case law on it.
Consdering the factors delineated herein, this Court awards $210.00 for work performed by North Shore’s counsel on this Article 75 proceeding. This Court applied the $70.00 per hour fee for policy issues litigated in arbitration or at the trial level.
Return of Arbitration Filing Fee:
ATIC shall also pay North Shore $40.00 as reimbursement for the fee paid to the AAA [see 11 NYCRR 65-4.5 [s] [1]).
Costs and Disbursements:
As the prevailing party, North Shore shall recover its costs and disbursements, to be taxed by the Clerk.
Other Requested Relief
Any requested relief not expressly addressed herein has nonetheless been considered and is hereby expressly rejected.
Notice to Superintendent of Financial Services
and the AAA
The Superintendent of Financial Services (formerly the Superintendent of Insurance) bears the statutory duty to promulgate procedures governing the No-Fault arbitration system (see Insurance Law § 5106 [b], [c], [d]). The AAA has been charged by the Superintendent with administering the No-Fault insurance arbitration program in New York, and “The superintendent shall oversee the operation procedures of the designated organization” (11 NYCRR 65-4.2 [a] [5]). The proper application of case law to No-Fault arbitration is in the public interest. Inasmuch as the underlying arbitration called for application of case law to the No-Fault insurance dispute between the parties, this Court finds that the Superintendent of Financial Services and the AAA be notified of the outcome of this judicial review of the arbitration.
Conclusion
Accordingly, it is hereby ORDERED, ADJUDGED, and DECREED that:
(1) ATIC’s petition to vacate the master arbitration award of Robyn D. Weisman in AAA Case No. 99-21-1223-5155 is dismissed.
(2) North Shore’s cross-petition to confirm said master arbitration award is granted.
(3) Said master arbitration award is confirmed in its entirety.
(4) North Shore is awarded the principal amount of $2,104.48 as No-Fault insurance health service benefits, along with simple interest thereon (i.e., not compounded) at two per cent [*15]per month on a pro rate basis using a 30-day month, computed from October 19, 2021 to the date of payment of the principal amount of $2,104.48, but excluding October 19, 2021 from being counted within the period of interest.
(5) After calculating the sum total of the principal amount of $2,104.48 plus the interest thereon, ATIC shall pay North Shore an attorney’s fee equal to 20 percent of that sum total, subject to a maximum fee of $1,360.00.
(6) ATIC shall pay North Shore an attorney’s fee of $65.00 for preparatory services in connection with the master arbitration.
(7) ATIC shall pay North Shore an attorney’s fee of $210.00 for work performed by counsel on this Article 75 proceeding.
(8) North Shore shall recover from ATIC costs and disbursements as allowed by law to be taxed by the Clerk.
E N T E R
Dated: Brooklyn, New York, March 20, 2023
______________________________
HON. AARON D. MASLOW
Justice of the Supreme Court of the
State of New York
Footnotes
Footnote 1: The notice of petition seeks vacatur of “the arbitration award issued by Arbitrator Mitchell Lustig, Esq. and/or Master Arbitrator Robyn D. Weisman, Esq.” (NYSCEF Doc No. 2, notice of petition), but it must be deemed to seek vacatur of just the master arbitration award inasmuch as the latter is the final determination of the arbitration process. The No-Fault Regulations provide that “court review pursuant to an article 75 proceeding” is from the “decision of a master arbitrator” (11 NYCRR 65-4.10 [h] [1] [i]). In fact, a party may not appeal from an arbitration award without first seeking master arbitration (see Matter of Staten Island Hospital v USAA, 103 AD2d 744 [2d Dept 1984]). Naturally, if the hearing arbitrator’s award is imperfect, this can impact judicial review of a master arbitration award affirming it.
Footnote 2:Rather than denote the parties here as “Petitioner” and “Respondent” in discussion, the parties’ names are used. This is to facilitate the reader’s understanding of the facts, arguments, analysis, and determination. This also minimizes confusion because the respondent in the underlying arbitration (ATIC) is not the respondent herein but rather is the petitioner herein. The respondent herein, North Shore, was not the respondent in the arbitration, but was the applicant.
Footnote 3:Health service providers obtain standing to pursue No-Fault insurance compensation in arbitration by virtue of having received an assignment of benefits from the respective person claiming to have been injured in a covered motor vehicle accident; such person is often denoted as an “assignor.”
Footnote 4:Paragraph 28 of the petition describes the AAA Case No. as 99-21-1223-5155, which was assigned to the master arbitration appeal. The original arbitration was assigned AAA Case No. 17-21-1223-5155.
Footnote 5:This statutory scheme was developed by New York’s legislature in 1973, as part of a tradeoff whereby lawsuits for pain and suffering sustained from personal injuries in such accidents were limited to instances of serious injury. (See generally Insurance Law art 51; L 1973, ch 13, as amended L 1977, ch 892; John R. Dunne, New York’s No-Fault Automobile Insurance Law—A Glimpse of the Past and a Glance at the Future, 50 NY St BJ 284 [June 1978]; J. Benedict, New York Adopts No-Fault: A Summary and Analysis, 37 Albany L Rev 662 [1973]).
Footnote 6:Although Insurance Law article 51 does not mention the term “No-Fault,” shortly after the post-motor vehicle accident economic loss compensation system was enacted in 1973, the appellation “No-Fault” was adopted in common parlance to describe it.
Footnote 7:This Court uses the term “health service bills” instead of “medical bills” because the No-Fault Law provides for reimbursement of “(i) medical, hospital . . . , surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical therapy . . . and occupational therapy and rehabilitation . . . and (iv) any other professional heath services” (Insurance Law § 5102 [b] [1]). Hence, the No-Fault insurance system encompasses not just “medical” services. In the instant case, the services were chiropractic treatments.
Footnote 8:The prescribed claim forms are included within 11 NYCRR Part 65 (Regulation 68) Appendix 13. Besides Form NF-3 (verification of treatment by attending physician or other provider of health service), Appendix 13 contains Form NF-4 (verification of hospital treatment) and Form NF-5 (hospital facility form).
Footnote 9:There is a prescribed assignment of benefits form (Form NF-AOB) in 11 NYCRR Part 65 (Regulation 68) Appendix 13.
Footnote 10:The process of submitting a No-Fault claim to the insurer is governed by 11 NYCRR subpart 65-3, which contains §§ 65-3.1 et seq.
Footnote 11:Form NF-10 is also included within 11 NYCRR Part 65 (Regulation 68) Appendix 13.
Footnote 12:The defense of excessive fees asserted in each denial of claim appears to have been abandoned by ATIC, as Arbitrator Lustig did not refer to it.
Footnote 13:The 45-day rule is set forth within the No-Fault Regulations at 11 NYCRR 65-1.1 (d) (“Conditions”).
Footnote 14:This is the AAA’s electronic case management and filing platform maintained on the Internet; it is known as “Modria,” which was the name of the company which developed it for the AAA (see Liveblogging #ODR2014: The Developing Field of Online Dispute Resolution, https://civic.mit.edu/index.html%3Fp=1452.html [last accessed Mar. 19, 2023]; Welcome to the Modria Resolution Center for the American Arbitration Association, https://aaa-nynf.modria.com/ [last accessed Mar. 19, 2023]).
Footnote 15:TC license plates are indicative that the vehicle was registered for use as a for-hire vehicle.
Footnote 16:Among the more substantial changes in the 1977 legislation were the adoption of fee schedules to limit health service expenses and modifying the threshold categories to be able to sue for pain and suffering.
Footnote 17:Nothing in the
Governor’s Bill Jacket for Chapter 13 of the Laws of 1977 or other contemporary records
comments on the provision adopting master arbitration review of hearing arbitrators’
decisions, so it is not known why the master arbitration process was created.
Footnote 18:Most non-No-Fault insurance arbitration awards cannot be vacated due to an error of law (see Matter of Sprinzen v Nomberg, 46 NY2d 623, 629-630 [1979]). No-Fault insurance arbitrations are different; an error of law can be the basis for reversal — by a master arbitrator. In that sense, the master arbitrator’s review is broader than that of a court, since a court will not vacate an arbitration award due to an error of law (see Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207, 211-212 [1981]; Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 176 AD3d 800, 802 [2d Dept 2019]).
Footnote 19:11 NYCRR 65-4.10 (a) provides as follows:
Footnote 20:There is no issue of timeliness of ATIC’s denial of claim forms in the case at bar.
Footnote 21:Master Arbitrator Weisman misstated the regulation under which an attorney’s fee is awarded for successfully prevailing at master arbitration. She cited to 11 NYCRR 65-4.6 [d], which is applicable to the hearing arbitration or a trial court adjudication.
Footnote 22:No compensation can be awarded for preparing the affirmation in support of an attorney’s fee (see Hempstead General Hospital v Allstate Ins. Co., 106 AD2d 429 [2d Dept 1984], aff’d 64 NY2d 958 [1985] [attorney’s fee for time spent in substantiating counsel fees is not authorized]).
Reported in New York Official Reports at American Tr. Ins. Co. v Marta Med. Supply, Corp (2023 NY Slip Op 50513(U))
American
Transit Insurance Company, Petitioner,
against Marta Medical Supply, Corp, A/A/O SANDRA GOMES, Respondent |
Index No. 533882/2022
Attorney for Petitioner
William Robert Larkin, Esq.
Larkin Farrell, LLC
1250 Broadway, 36th Fl.
New York City, NY 10001
Respondent Marta Medical Supply, Corp, A/A/O Sandra Gomes did not appear.
Francois A. Rivera, J.Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of petition and petition filed on November 18, 2022, by American Transit Insurance Company (hereinafter ATIC or petitioner) pursuant to CPLR Article 75, seeking to vacate an award of a master arbitrator which affirmed, in its entirety, an award of a lower arbitrator in the amount of $4,423.99 in favor of the respondent Marta Medical Supply, Corp, A/A/O Sandra Gomes.
-Notice of Petition-Petition
-Exhibits A to D
-Affirmation of Service
BACKGROUND
On November 18, 2022, ATIC commenced the instant special proceeding pursuant to CPLR Article 75 to vacate an award of a master arbitrator in favor of the respondent Marta Medical Supply, Corp, A/A/O Sandra Gomes (hereinafter respondent). The respondent has not appeared or interposed an answer.
The petition alleges the following salient facts. The petitioner issued a New York insurance policy to Hugo Gomes which included a no-fault endorsement. The no-fault [*2]endorsement provided coverage to any eligible injured person for all necessary medical expenses, lost wages and other expenses resulting from a motor vehicle accident up to the minimum statutory amount of $50,000.00.
On June 23, 2020, while the policy was in effect, Sandra Gomes (hereinafter Sandra G.) was injured in a motor vehicle accident (hereinafter the subject accident). Sandra G. put the petitioner on notice of the subject accident and the injuries that it caused. Sandra G. sought medical treatment for those injuries and the respondent was one of the medical providers that allegedly rendered treatment to Sandra G. She assigned the right to collect no-fault benefits to the respondent in exchange for the medical treatment she allegedly received.
The respondent submitted no-fault claims to the petitioner seeking reimbursement for medical services rendered to Sandra G. from July 21 through August 4, 2020, in the total amount of $4,423.99. The petitioner did not pay and denied the claim contending that the alleged injuries were not causally related to the motor vehicle accident based, in part, on the opinion of biomechanical expert Omid Komari.
The respondent initiated an arbitration claiming entitlement to $4,423.99. The arbitration matter was decided by Arbitrator Deepak Sohi, Esq. (hereinafter the no-fault arbitrator) who awarded the respondent the full amount claimed of $4,423.99. Thereafter, the petitioner filed for Master Arbitration. Master Arbitrator Burt Feilich, Esq. (hereinafter the master arbitrator) upheld the lower arbitration award in its entirety.
The petitioner contends that the arbitration award was arbitrary and capricious, irrational and without a plausible basis. The petitioner contends that the claim was properly and timely denied for lack of medical necessity and, also, because the petitioner had a founded belief that the alleged injuries were not causally related to the subject accident.
The respondent has not appeared or filed an answer.
LAW AND APPLICATION
A court reviewing the award of a master arbitrator is limited to the grounds set forth in CPLR Article 75, which include, in this compulsory arbitration, the question of whether the determination had evidentiary support, was rational, or had a plausible basis (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 212 [1981]). Notably, the master arbitrator’s review power is broader than that of the courts’ because it includes the power to review for errors of law (see id. at 211—212; 11 NYCRR 65—4.10[a][4]). In contrast, the courts generally will not vacate an arbitrator’s award where the error claimed is the incorrect application of a rule of substantive law, unless it is so irrational as to require vacatur (Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 [1982]; see also Matter of Liberty Mut. Ins. Co. v Spine Americare Med., 294 AD2d 574, 576 [2d Dept 2002]).
The petitioner’s evidentiary submissions include the no-fault arbitrator’s award and the master arbitrator’s award. The no-fault arbitrator set forth the following in the award letter. The no-fault arbitrator found that on June 23, 2020, Sandra Gomes was involved in a motor vehicle accident as a passenger. She was injured and sought treatment. Part of the treatment included durable equipment, specifically a lumbar-sacral orthosis, knee orthosis, and shoulder orthosis.
The no fault arbitrator noted that Marta Medical Supply, Corp. was seeking reimbursement for the durable medical equipment provided to Sandra G. on dates of service during July 21, 2020, and August 4, 2020. ATIC denied reimbursement for the durable medical equipment based upon its belief the alleged injuries did not arise out of an insured event and/or were not causally related to a covered incident. ATIC based that claim on Sandra G.’s [*3]examination under oath dated December 4, 2020, and the report of biomechanical engineering consultant, Mr. Omid Komari, PhD, dated December 24, 2020.
The no fault arbitrator found that the opinion of Omid Komari was too vague to provide a definitive analysis of the subject accident. It was also too vague to conclude that Sandra G.’s injuries and subsequent medical treatment were not causally related to the subject accident.
The no fault arbitrator found that ATIC’s evidentiary submission failed to establish that Sandra G.’s injury was not caused by the subject accident and its contention that the medical devices were not medically necessary. The no-fault arbitrator determined that the petitioner failed to meet the burden of proof in support of its lack of medical necessity defense and, accordingly, issued an award in favor of the respondent in the amount of $4,423.99.
The standard for Article 75 court scrutiny of a master arbitrator’s review of a hearing arbitrator’s award in terms of whether there was an error of law is whether it is so irrational as to require vacatur (Am. Transit Ins. Co. v Right Choice Supply, Inc., 2023 NY Slip Op 23039 [Sup Ct Feb. 9, 2023], citing Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 232 [1982]).
Here, the master arbitrator reviewed the record and award of the no-fault arbitrator and stated the following findings. The award by the no-fault arbitrator did not violate the regulations. It was within the province of the no-fault arbitrator to determine what evidence to accept or reject and what inferences should be drawn based on the evidence. Upon reviewing the record and evidence submitted, the master arbitrator did not find the no-fault arbitrator’s interpretation of the evidence and applicable law pertaining to this dispute to be arbitrary, capricious, or contrary to law. Consequently, the master arbitrator upheld the award to the respondent in the amount of $4,423.99.
The instant petition is a special proceeding. The procedure for special proceedings contemplates that the petition will be accompanied by affidavits demonstrating the evidentiary grounds for the relief requested (see CPLR 403[a]). It is settled that a special proceeding is subject to the same standards and rules of decision as apply on a motion for summary judgment, requiring the court to decide the matter upon the pleadings, papers, and admissions to the extent that no triable issues of fact are raised (CPLR 409 [b]; Saadia Safdi Realty, LLC v Melvin Press, 207 AD3d 633, 635 [2d Dept 2022], citing Matter of Arben Corp. v Durastone, LLC, 186 AD3d 599 at 600 [2d Dept 2020]).
The evidentiary submissions and legal reasoning proffered by the petitioner did not make a prima facie showing that the no-fault arbitrator’s award or the master arbitrator’s award was either arbitrary or capricious. To the contrary, the petitioner’s evidentiary submissions established that the no-fault arbitrator’s award and the master arbitrator’s affirmance of the award was based on sound and well-reasoned analysis of the evidence submitted and upon the proper application of the pertinent laws and regulations.
CONCLUSION
The petition by petitioner American Transit Insurance Company for an order pursuant to Article 75 of the CPLR vacating an Arbitration Award and a Master Arbitration is denied and the petition is dismissed.
The foregoing constitutes the decision and order of this Court.
ENTER:_____________________________
J.S.C
Reported in New York Official Reports at American Tr. Ins. Co. v Right Choice Supply, Inc. (2023 NY Slip Op 23039)
| American Tr. Ins. Co. v Right Choice Supply, Inc. |
| 2023 NY Slip Op 23039 [78 Misc 3d 890] |
| February 9, 2023 |
| Maslow, J. |
| Supreme Court, Kings County |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| As corrected through Wednesday, May 31, 2023 |
[*1]
| American Transit Insurance Company, Petitioner, v Right Choice Supply, Inc., as Assignee of Fanny Munoz, Respondent. |
Supreme Court, Kings County, February 9, 2023
APPEARANCES OF COUNSEL
Larkin Farrell LLC (David Fair of counsel) for petitioner.[*2]
{**78 Misc 3d at 891} OPINION OF THE COURT
Issue Presented
The no-fault insurance regulations provide that a master arbitrator may vacate a hearing arbitrator’s[FN1] award where it is “incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)” (11 NYCRR 65-4.10 [a] [4]). Considering this, does it constitute an error of law where the hearing arbitrator{**78 Misc 3d at 892} makes a finding of medical necessity without adhering to Pan Chiropractic, P.C. v Mercury Ins. Co. (24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]) and its progeny case law which hold that in the context of a summary judgment motion by an insurer asserting lack of medical necessity for a health service, the health service provider must submit expert medical opinion evidence which specifically refers to and either discusses or rebuts the insurer’s expert medical opinion evidence?
Background
This is a special proceeding—pursuant to CPLR article 75—commenced by American Transit Insurance Company (ATIC) seeking an order and judgment vacating a no-fault insurance master arbitration award of Victor D’Ammora, Esq. (dated Aug. 24, 2022), which affirmed the arbitration award of Lester Hill, Esq. (dated May 14, 2022), granting respondent Right Choice Supply, Inc.’s (Right Choice) claim for no-fault insurance compensation for health service expenses.[FN2] Arbitrator Hill awarded the $4,737.90 sought by respondent Right Choice for providing supplies to its assignor[FN3] (Assignor), who claimed to have been injured in a motor vehicle accident on January 30, 2020.
The arbitration was organized by the American Arbitration Association (AAA), which has been designated by the New York State Department of Financial Services to coordinate the mandatory arbitration provisions of Insurance Law § 5106 (b), which provides: [*3]
“Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party [‘no-fault insurance’] {**78 Misc 3d at 893}benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.”
The arbitration was assigned case No. 17-21-1226-7577[FN4] by the AAA. At oral argument before this court on January 25, 2022, petitioner ATIC appeared and argued that the above-referenced arbitration awards should be vacated. Respondent Right Choice has neither submitted opposition nor appeared in this special proceeding.
The record evidence submitted in this article 75 proceeding reveals that Arbitrator Hill conducted a hearing on May 13, 2022, at which Walter Pisary, Esq., appeared for Right Choice and Helen Cohen, Esq., appeared for ATIC. At issue were four bills from Right Choice submitted to ATIC for payment pursuant to the no-fault insurance system set forth in Insurance Law article 51 and the Department of Financial Services’ no-fault regulations set forth at 11 NYCRR part 65. Pertinent details of the four bills are as follows: date of service May 21, 2020, $548.08, provision of cane and hinged knee brace; dates of service May 25, 2020-June 21, 2020, $1,839.78, rental of knee CPM (continuous passive motion) device and provision of synthetic sheepskin pad; dates of service May 25, 2020-June 14, 2020, $1,365.00, rental of Game Ready compression unit; and dates of service May 25, 2020-June 7, 2020, $985.04, rental of DVT (deep vein thrombosis) prevention device.
Only one Form NF-10 denial of claim was included in the record—denying payment of the $548.08 bill for the cane and hinged knee brace on the grounds of lack of causation and fees not being in accordance with the fees schedule. Apparently, with respect to the other three bills, ATIC relied on a defense that additional verification it had sought was never provided.
Arbitrator Lester Hill’s Award
In that part of Arbitrator Hill’s award containing his findings, conclusions, and basis, he wrote: “The basis of the respondent’s timely denial based upon a lack of medical necessity is{**78 Misc 3d at 894} the peer report by Dr. Matthew Skolnick.”[FN5] This was followed by citations to case law concerning a prima facie showing of entitlement to no-fault benefits: the prescribed statutory billing forms had been mailed and received and the payment of no-fault benefits were overdue. He found that respondent’s submission of its “NF-10 denial of claim form established that the insurer received the claim referenced therein as having been submitted by the provider and that the insure[r] did not pay the claim.” (NYSCEF Doc No. 3, arbitration award at numbered page 2.)
There then ensued a discussion of law concerning denials of claim and a defense of lack [*4]of medical necessity. Arbitrator Hill discussed the medical evidence before him. Noteworthy was the fact that Assignor underwent left knee surgery on May 21, 2020. As a result, the latter was provided with supplies, as noted above. “The claim for the knee brace was denied based upon the peer report by Dr. Slotnick.[FN6] With respect to the claim for the continuous passive motion device [and synthetic sheepskin pad], [Game Ready] compression unit, and DVT device, the respondent asserts that the claims are not verified.” (Id. at numbered page 3.)
Arbitrator Hill noted that in a prior arbitration award of his—in AAA case No. 17-21-1190-2706—ATIC had relied on the same peer review from Dr. Skolnick which was submitted in the arbitration at issue. In this other case, Arbitrator Hill found the left knee surgery to be medically necessary.
Continuing with his analysis, Arbitrator Hill mentioned that Dr. Skolnick had relied in part on a review of intraoperative photos by Dr. Howard Levin. Arbitrator Hill discussed competing medical evidence, including a report by Dr. Anjani Sinha, which was submitted in support of medical necessity. (Id. at numbered pages 3-4.)
Arbitrator Hill found as follows regarding the bill for the cane[FN7] and hinged knee brace:{**78 Misc 3d at 895}
“I find that the respondent has not demonstrated by sufficient factual basis and medical rationale that the knee brace prescribed to the EIP post surgery was medically unnecessary. With respect to the surgery itself I find that the best source of information is the surgeon, who noted in his postsurgical diagnosis of tears of the medial and lateral menisci. This is particularly the case with this EIP where the EIP presented a positive McMurray’s sign, the test for meniscal injury and an MRI that noted a tear of the medial meniscus. Putting these facts together it would appear that the most reasonable conclusion is that the EIP did suffer from a meniscal injury from the motor vehicle accident as there was no history nor any medical records to indicate that the EIP had a prior history of injury to the left knee. The peer report provides no factual basis to conclude that the surgery was not causally related to the motor vehicle accident other than the conclusion in the report of Dr. Levin that there were no meniscal tears. Therefore, based upon the evidence submitted, I find that the applicant has demonstrated that the surgery was medically necessary and causally related to the motor vehicle accident. I find that the respondent has not demonstrated that the knee brace following the surgery was medically unnecessary.” (Id. at numbered page 4.)[*5]
As for the other three bills, Arbitrator Hill found as follows:
“With respect to the claims for the continuous passive motion device, compression unit, and DVT device, the respondent, upon receipt of the claims requested verification, specifically, a letter of medical necessity and the pertinent medical records and stated that the claim was delayed pending the examination under oath of the EIP.
“On October 21, 2020, the applicant provided the documentary verification, specifically, a letter of medical necessity and the pertinent medical reports. The applicant further inquired [as to] the status of the examination under oath of the EIP.
“There is no evidence submitted by either party that an examination under oath of the EIP was scheduled or attempted to be scheduled.{**78 Misc 3d at 896}
“Without evidence that there was an examination under oath [which] was timely scheduled, the respondent’s position that the claims are not verified is without merit.” (Id.)
Right Choice’s arbitration claim was granted in its entirety by Arbitrator Hill, who awarded $4,737.90 in medical expenses plus interest and an attorney’s fee (id. at numbered pages 5-6).
Master Arbitrator Victor D’Ammora’s Award
Master Arbitrator D’Ammora set forth the issues in dispute as follows:
“The issues before the lower arbitrator were whether the Respondent properly denied the claim for various devices and durable medical equipment based upon (1) the lack of medical necessity and/or causation; and (2) unverified claims. The lower arbitrator allowed the claim. The Respondent seeks to overturn the award of the lower arbitrator.
“The issue before me is whether Arbitrator Hill’s decision to allow the claim was arbitrary, capricious or incorrect as a matter of law.” (NYSCEF Doc No. 4, master arbitration award at numbered page 1.)
Master Arbitrator D’Ammora set forth case law to the effect that the standard of his review was limited to whether the hearing (“lower”) arbitrator’s review was supported by evidence or another reasonable basis or was arbitrary or capricious, irrational, and without a plausible basis. He noted that a master arbitrator’s review did include whether the hearing arbitrator’s award was incorrect as a matter of law, but he was constrained in reviewing the facts adduced by the evidence. (Id. at numbered page 2.)
As for the cane and hinged knee brace ($548.08 bill),
“Arbitrator Hill conducted a hearing and reviewed all of the evidence including the medical documentation. Arbitrator [Hill] considered the peer review of Dr. Skolnick, the intraoperative photo review of Dr. Levin and the rebuttal of Dr. Sinha. Based upon the medical evidence Arbitrator Hill determined that the devices and equipment were medically necess[ar]y and causally related. And as such [he] allowed the claim” (id.).[*6]
As for the unprovided verification defense (regarding the other three bills), “Arbitrator Hill further determined that the {**78 Misc 3d at 897}Respondent had failed to show that an EUO of the EIP was scheduled or attempted to be scheduled. And as such there is no merit to . . . the position that the claims were not verified.” (Id.)
Master Arbitrator D’Ammora stated that Arbitrator Hill’s conclusions and findings were within his discretion and based on his interpretation of the evidence. It did not constitute reversible error. “This Master Arbitrator cannot conduct a de novo review and substitute my interpretation and view of the evidence for that of Arbitrator Hill. In particular, as here, Arbitrator Hill’s determination is rational and supported by the record.” He concluded, “I cannot conclude on the basis of the record before me that Arbitrator Hill’s decision was incorrect as a matter of law or arbitrary and capricious. Therefore, I must affirm the award.” (Id.)
ATIC’s Petition to Vacate
ATIC’s petition to vacate asserted that “[t]he arbitration decision was arbitrary and capricious, irrational and without a plausible basis” (NYSCEF Doc No. 1, petition ¶ 35), in that “Arbitrator . . . Hill . . . failed to follow well settled law” (id. ¶ 37). The petition went on to argue that Dr. Howard Levin’s review of the intraoperative photos concluded that there was no tear resulting from the subject motor vehicle accident; any change was degenerative and not traumatically induced (id. ¶ 39).[FN8] ATIC’s evidence submitted to the hearing arbitrator “clearly satisfied its burden” (id. ¶ 41). Ultimately the medical provider—Right Choice in this instance—had to prove by a preponderance of the evidence that its services were medically necessary, claimed ATIC; the petition to vacate cited to Dayan v Allstate Ins. Co. (49 Misc 3d 151[A], 2015 NY Slip Op 51751[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]), and Park Slope Med. & Surgical Supply, Inc. v Travelers Ins. Co. (37 Misc 3d 19, 22 n [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]) (id. ¶ 42). “In order for an applicant to prove that the services were medically necessary, it must meaningfully refer to, or rebut, the conclusions set forth in the peer{**78 Misc 3d at 898} review,” maintained the petition, which cited to Pan Chiropractic, P.C. v Mercury Ins. Co. (24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]) (id. ¶ 43). Right Choice failed to offer any rebuttal at all, and certainly did not meaningfully refer to Dr. Skolnick’s peer review, as was required by Pan Chiropractic, P.C. and the more than 100 published decisions citing to it, insisted ATIC (id. ¶ 45).
ATIC reiterated in several paragraphs of its petition that a health service provider seeking no-fault medical expense compensation must meaningfully refer to and rebut an insurer’s peer reviewer’s conclusions (id. ¶¶ 51-54). “This proposition is widely accepted as ‘well settled’ law in the industry” (id. ¶ 55).
“In this case the arbitrator also ruled for Respondent [Right Choice] despite the fact that Respondent failed to offer a rebuttal. In doing so the arbitrator failed to [*7]follow well settled law. As such, this Court should vacate the arbitration award for the same reasons the Appellate Term reversed the trial courts in Pan Chiropractic, Eastern Star Acupuncture, Jaga Med. Servs., P.C. and High Quality Medical.” (Id. ¶ 58.)
The petition concluded by asserting that Arbitrator Hill ignored ATIC’s “evidence and/or well settled legal precedent in order to justify a determination in favor of Applicant [Right Choice]” (id. ¶ 62). Therefore, ATIC’s rights were prejudiced by the arbitrator’s partiality “and the arbitrator exceeded his/her power and failed to make a final and definite award and the decision must be vacated” (id. ¶ 63). The relief sought was vacatur of the awards of both Arbitrator Hill and Master Arbitrator D’Ammora—that they “have no force or effect” (id. ¶ 64).
ATIC has not addressed that part of Arbitrator Hill’s findings with respect to the three bills concerning which ATIC asserted that verification was unprovided. As such, I deem ATIC to have abandoned any effort to vacate that part of Master Arbitrator D’Ammora’s award which affirmed Arbitrator Hill regarding the bills in the amounts of $1,839.78, $1,365.00, and $985.04. Therefore, the discussion which follows relates to the $548.08 bill for the cane and knee brace dispensed on May 21, 2020, to Assignor—whether to vacate Master Arbitrator D’Ammora’s award insofar as that bill is concerned.{**78 Misc 3d at 899}
As noted above, respondent Right Choice has not appeared in this special proceeding, either with written opposition or oral argument. Nonetheless this petition must be adjudicated—in this instance solely on the papers and record submitted by petitioner ATIC.
No-Fault Insurance Arbitration
In order to determine this petition to vacate an arbitration award, some discussion of the nature of no-fault insurance arbitration is necessary. When the No-Fault Law was first enacted by the Legislature in chapter 13 of the Laws of 1973 to take effect February 1, 1974, section 675 of the Insurance Law was added. In subdivision (2) thereof, insurers were required to provide claimants with an arbitration option for disputes involving liability for first-party (no-fault) benefits. This provision was amended in chapter 892 of the Laws of 1977, when several changes were made to the 1973 version of the No-Fault Law.[FN9] The provision regarding arbitration in section 675 was amended to add the following language:
“An award by an arbitrator may be vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent [of insurance]. The grounds for vacating or modifying an arbitrator’s decision by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The decision of an arbitrator shall be binding except where vacated or modified by a master arbitrator. The decision of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s fees, the insurer or the claimant may institute an action in a court of competent [*8]jurisdiction to adjudicate the dispute de novo.” (L 1977, ch 892, § 13.)
Nothing in the Governor’s Bill Jacket for chapter 892 of the Laws of 1977 comments on the provision adopting master arbitration review of hearing arbitrators’ decisions.{**78 Misc 3d at 900}
The provisions regarding no-fault insurance arbitration remained in the recodification of the Insurance Law enacted in chapters 367 and 805 of the Laws of 1984. The arbitration provisions were set forth in section 5106, and subsections (b) and (c) now read as follows:
“(b) Every insurer shall provide a claimant with 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 which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent. Such simplified procedures shall include an expedited eligibility hearing option, when required, to designate the insurer for first party benefits pursuant to subsection (d) of this section. The expedited eligibility hearing option shall be a forum for eligibility disputes only, and shall not include the submission of any particular bill, payment or claim for any specific benefit for adjudication, nor shall it consider any other defense to payment.
“(c) An award by an arbitrator shall be binding except where vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent. The grounds for vacating or modifying an arbitrator’s award by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s fees, the insurer or the claimant may institute a court action to adjudicate the dispute de novo.”
Insofar as is here relevant, the no-fault insurance regulations promulgated by the Superintendent of Insurance provided that a master arbitrator may vacate or modify a hearing arbitrator’s award where it “was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)” (11 NYCRR 65.18 [a] {**78 Misc 3d at 901}[4] [filed June 8, 1988, eff July 1, 1988]). This regulatory language was carried over into the revised regulations promulgated in 2002, in 11 NYCRR 65-4.10 (a) (4). A master arbitrator may also vacate or modify a hearing arbitrator’s award under certain other grounds too (see 11 NYCRR 65-4.10 [a]).[FN10][*9]
Discussion
The provision that a master arbitrator may vacate or modify a hearing arbitrator’s award due to an error of law is one of several grounds but is the main gravamen of ATIC’s petition. ATIC argued that in finding medical necessity for the supplies dispensed by Right Choice on May 21, 2020, Arbitrator Hill{**78 Misc 3d at 902} failed to follow well-settled law that a health service provider opposing an insurer’s prima facie case of lack of medical necessity must submit a rebuttal meaningfully referring to and rebutting the insurer’s peer reviewer’s conclusions. As such, affirmance by Master Arbitrator D’Ammora was improper and both awards should be vacated pursuant to CPLR 7511 (b) (1) (iii). ATIC also argued that Arbitrator Hill’s award “was arbitrary and capricious, without rational basis and incorrect as a matter of law” (NYSCEF Doc No. 1, petition ¶ 61). ATIC argued further, among other things, that the weight of the evidence clearly favored its position that the subject supplies were not medically necessary (id. ¶ 60).
While Arbitrator Hill referred to a “rebuttal” of Dr. Anjani Sinha in his award (NYSCEF Doc No. 3, arbitration award at numbered page 3), by definition it was not a rebuttal. Dr. Matthew Skolnick’s peer review was dated October 20, 2020 (NYSCEF Doc No. 6, ATIC’s arbitration submission at 26), and Dr. Sinha’s report was dated March 4, 2020 (id. at 86). Therefore, the latter report could not be deemed a rebuttal meaningfully referring to and rebutting the peer reviewer’s conclusions on a later date. Dr. Sinha’s report is certainly not labeled a “rebuttal.” Applicant did have other supporting evidence in the record, none of which would be considered a formal rebuttal.[FN11] Based on the record evidence submitted by ATIC in [*10]support of its petition, I agree that no rebuttal was submitted to Arbitrator Hill to formally rebut Dr. Skolnick’s conclusions. But did Right Choice’s failure to submit a formal rebuttal mandate vacatur by Master Arbitrator D’Ammora or by this court? Did it constitute an error of law pursuant to 11 NYCRR 65-4.10 (a) (4), as claimed by ATIC?
One of the difficulties in assessing ATIC’s claim is that the no-fault regulation enabling a master arbitrator to vacate a hearing arbitrator’s award due to an error of law is unclear exactly as to what is meant by “incorrect as a matter of law” (11 NYCRR 65-4.10 [a] [4]). We know that procedural or factual errors are not encompassed: “(procedural or factual errors committed in the arbitration below are not encompassed within{**78 Misc 3d at 903} this ground)” (id.). However, what does constitute an error of law? Does it mean that the hearing arbitrator failed to comply with a statute or a regulation? Or does this encompass case law also? If it encompasses case law, does that mean any deviation from a conclusion of law of any court warrants vacatur of the hearing arbitrator’s award? From a trial court? From just appellate courts? Does a conclusion of law in one case suffice to establish the “law” referred to in 11 NYCRR 65-4.10 (a) (4) or must there be a series of cases formulating “well settled law,” the phrase utilized in paragraph 37 of the petition?[FN12] Clearly this regulatory provision could benefit from clarification from the New York State Department of Financial Services (successor to the Department of Insurance) in the form of an amendment to 11 NYCRR 65-4.10 (a) (4).[FN13]
ATIC’s claim that the necessity for a rebuttal meaningfully referring to the peer reviewer’s conclusions derives from a long line of decisions of the Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts (at one time just the 2d and 11th Districts) over a period of years. One of the earlier decisions in this regard was in A. Khodadadi Radiology, P.C. v N.Y. Cent. Mut. Fire Ins. Co. (16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2007]). The decision held that the insurer may rebut the inference of medical necessity through a peer review and, if the peer review is not rebutted, the insurer is entitled to denial of the claim. This was within the context of the defendant insurer’s cross-motion for summary judgment against the plaintiff medical provider. Shortly afterwards, Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co. (18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2007]) cited to A. {**78 Misc 3d at 904}Khodadadi Radiology, P.C.‘s requirement that a peer review establishing a prima facie case of lack of medical necessity necessitated a rebuttal from the medical provider in order to avoid summary judgment being granted against it.
This concept of a rebuttal being required from a health service provider to avoid summary judgment where the medical provider’s peer review made out a prima facie case of lack of medical necessity was enhanced in Pan Chiropractic, P.C. v Mercury Ins. Co. (24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]), the case chiefly relied upon by ATIC. In Pan Chiropractic, P.C., the said Appellate Term established the requirement that on a motion by the insurer for summary judgment against the medical provider, if the peer review sets forth a factual basis and medical rationale for the conclusion of lack of medical necessity, the medical provider must rebut it with an affidavit which “meaningfully refer[s] to, or discuss[es], the determination of defendant’s doctor” (Pan Chiropractic, P.C., 2009 NY Slip Op 51495[U], *2); without the provider submitting such an affidavit, the insurer is entitled to summary judgment dismissing the complaint.
Since Pan Chiropractic, P.C. was decided on July 9, 2009, by the Appellate Term for the 2d, 11th and 13th Judicial Districts, that court has cited it at least 100 times when reviewing trial court orders on summary judgment motions, according to Westlaw. The Appellate Term for the 9th and 10th Judicial Districts has also cited it (e.g. B.Y., M.D., P.C. v Progressive Cas. Ins. Co., 26 Misc 3d 135[A], 2010 NY Slip Op 50144[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2010]). Therefore, this principle of law exists throughout the Second Department and is binding, at least on all trial courts within it. The requirement of a rebuttal from a health service provider which meaningfully refers to or discusses the determination of the no-fault insurer’s peer review doctor has basically been repeated in practically the same or similar language, per this court’s review of all cases citing to Pan Chiropractic, P.C., although in some instances the Appellate Term merely referred to rebutting the peer review without the words “meaningfully refers to, or discusses” (e.g. BLR Chiropractic, P.C. v American Tr. Ins. Co., 35 Misc 3d 141[A], 2012 NY Slip Op 50882[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]; Crotona Hgts. Med., P.C. v New York Cent. Mut. Fire Ins. Co., 34 Misc 3d 155[A], 2012 NY Slip Op 50401[U] [App Term, 2d Dept, 2d, 11th &{**78 Misc 3d at 905} 13th Jud Dists 2012]). In Neomy Med., P.C. v American Tr. Ins. Co. (35 Misc 3d 135[A], 2012 NY Slip Op 50769[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), the court found that the plaintiff’s supervising physician’s affidavit “failed to justify with specificity the additional studies” and therefore “did not rebut the conclusions set forth in the peer review report”; the words “meaningfully refers to, or discusses” were not used. The term “meaningfully rebut” was used in New Life Med., P.C. v GEICO Ins. Co. (35 Misc 3d 146[A], 2012 NY Slip Op 51061[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). In Yklik, Inc. v Electric Ins. Co. (36 Misc 3d 131[A], 2012 NY Slip Op 51287[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), the term used was “failed to meaningfully refer to, let alone rebut,” without the word “discuss.”
The Pan Chiropractic, P.C. holding regarding the need for a rebuttal which meaningfully referred to, or discussed, the determination of the no-fault insurer’s peer review doctor was extended in connection with independent medical examination (IME) reports submitted by an insurer to establish lack of medical necessity, in High Quality Med., P.C. v Mercury Ins. Co. (29 Misc 3d 132[A], 2010 NY Slip Op 51900[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]) and MIA Acupuncture, P.C. v GEICO Ins. Co. (29 Misc 3d 132[A], 2010 NY Slip Op 51899[U] [App Term, 2d Dept, 2d, 11th[*11]& 13th Jud Dists 2010]). Subsequent decisions of that court continued to hold likewise regarding an insurer’s IME report.
It is noteworthy that in one case, Pan Chiropractic, P.C. was cited for the principle of law that an insurer made out a prima facie case of entitlement to summary judgment dismissing the complaint on the ground of lack of medical necessity through submission of a sworn peer review. The court held that the burden shifted to the health service provider to raise a triable issue of fact, but it continued by stating that a sworn letter of medical necessity by a health service provider was “sufficient to raise a triable issue of fact as to the medical necessity of the services rendered” (Quality Psychological Servs., P.C. v Mercury Ins. Group, 27 Misc 3d 129[A], 2010 NY Slip Op 50601[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]). This constituted a departure from the case law that a health service provider had to submit a rebuttal which meaningfully referred to or discussed the determination of the no-fault insurer’s peer review doctor. However, in a subsequent case, Gentle Care{**78 Misc 3d at 906} Acupuncture, P.C. v GEICO Ins. Co. (30 Misc 3d 126[A], 2010 NY Slip Op 52226[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]), the court acknowledged that the health service provider submitted an affidavit of medical necessity for the purpose of rebutting the insurer’s IME reports but it rejected it because it did not meaningfully refer to, let alone rebut, the IME reports’ conclusions (see also Gentle Care Acupuncture, P.C. v GEICO Ins. Co., 36 Misc 3d 131[A], 2012 NY Slip Op 51290[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). A “letter of medical necessity” did not “meaningfully refer to, let alone rebut” the insurer’s psychologist’s conclusions in All Boro Psychological Servs., P.C. v Progressive Northeastern Ins. Co. (38 Misc 3d 142[A], 2013 NY Slip Op 50252[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]).
The plaintiff’s doctor’s affidavit in Neomy Med., P.C. v GEICO Ins. Co. (34 Misc 3d 144[A], 2012 NY Slip Op 50145[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]) sufficiently demonstrated the existence of a question of fact as to medical necessity but the court did not indicate whether it meaningfully referred to or discussed the insurer’s peer review (see also Bay Plaza Chiropractic, P.C. v Praetorian Ins. Co., 38 Misc 3d 126[A], 2012 NY Slip Op 52315[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]).
Not only must a health service provider’s affidavit refer to the insurer’s IME report, but the rebuttal component must not be conclusory (Flushing Traditional Acupuncture, P.C. v GEICO Ins. Co., 36 Misc 3d 156[A], 2012 NY Slip Op 51772[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]); from this one can infer that the rebutting evidence must also discuss the IME report’s conclusions.
It is clear that whatever medical evidence is submitted in response to the peer review, it must “rebut” the latter’s conclusions and meaningfully refer to it (see Promed Durable Equip., Inc. v GEICO Ins., 41 Misc 3d 19, 21 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; Jamaica Med. Supply, Inc. v GEICO Gen. Ins. Co., 39 Misc 3d 141[A], 2013 NY Slip Op 50760[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; Park Slope Med. v Praetorian Ins. Co., 39 Misc 3d 141[A], 2013 NY Slip Op 50761[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]).
This court’s review of the cases citing to Pan Chiropractic, P.C. revealed that in more recent years, the word “discuss” was replaced by “rebut” in the decisions of the Appellate Term, {**78 Misc 3d at 907}Second Department, 2d, 11th and 13th Judicial Districts. Either way, the health service provider still must “meaningfully refer” to the peer review or the IME report. As for discussing it, a lower court decision still required it in 2021 (see Heavenly Points Acupuncture v Integon Natl. Ins. Co., 73 Misc 3d [*12]1201[A], 2021 NY Slip Op 50895[U], *2 [Civ Ct, Queens County 2021]).
The case law discussed extensively above was from the Appellate Term in the Second Department when reviewing appeals from orders on summary judgment motions. By comparison, the Appellate Term in the First Department has not used the phraseology of “meaningfully referring” and either “discuss” or “rebut” in all of its relevant decisions. In Darlington Med. Diagnostics, P.C. v Praetorian Ins. Co. (34 Misc 3d 148[A], 2012 NY Slip Op 50226[U] [App Term, 1st Dept 2012]), the court held that if a chiropractor’s peer review setting forth a factual basis and medical rationale for his conclusion that diagnostic testing lacked medical necessity established a prima facie showing of entitlement to judgment for an insurer, the plaintiff medical provider failed to raise a triable issue of fact where its submitted affidavit by a physician—whose field of practice was unspecified—contained no indication that its generic conclusions were based upon either a medical examination of the injured person or a review of the injured person’s medical records. An operative report of the claimant’s principal was insufficient to rebut the peer review where it consisted of conclusory, fill-in-the-blanks findings (see Synergy Med. v Praetorian Ins. Co., 40 Misc 3d 127[A], 2013 NY Slip Op 51047[U] [App Term, 1st Dept 2013]). A medical affidavit detailing the assignor’s complaints of pain and restricted range of motion, and opining that an MRI was necessary to rule out disc herniations, was sufficient to raise a triable issue of fact as to medical necessity (see AP Diagnostic Med., PC v Chubb Indem. Ins. Co., 41 Misc 3d 126[A], 2013 NY Slip Op 51647[U] [App Term, 1st Dept 2013]).
Further, where an insurer made a prima facie showing of entitlement to judgment through the submission of an IME report of its examining acupuncturist who set forth a factual basis and medical rationale for the conclusion that the assignor’s injuries were resolved and that no further acupuncture treatment was needed, the acupuncture provider failed to raise a triable issue concerning medical necessity where its principal, who while broadly describing his approach to the practice of{**78 Misc 3d at 908} traditional Chinese medicine, failed to set forth any allegations as to the assignor’s claimed injuries or the medical necessity of the acupuncture treatments at issue (see Utica Acupuncture, P.C. v Interboro Ins. Co., 39 Misc 3d 139[A], 2013 NY Slip Op 50643[U] [App Term, 1st Dept 2013]).
However, the Appellate Term, First Department, did at one point begin to use phraseology holding that a health service provider had to meaningfully respond to prima facie evidence from the insurer. In Premier Health Choice Chiropractic, P.C. v Praetorian Ins. Co. (41 Misc 3d 133[A], 2013 NY Slip Op 51802[U], *1 [App Term, 1st Dept 2013]), the court held that a doctor’s report “did not meaningfully refer to, let alone rebut, the contrary findings made by defendant’s peer reviewer” (emphasis added). Further, the same court held in Rummel G. Mendoza, D.C., P.C. v Chubb Indem. Ins. Co. (47 Misc 3d 156[A], 2015 NY Slip Op 50900[U] [App Term, 1st Dept 2015]) that if the insurer’s examining doctor’s IME report and follow-up report set forth a factual basis and medical rationale for her conclusion that the assignor’s injuries were resolved and that there was no need for further physical therapy treatment, an affidavit of the health service provider’s treating physical therapist which failed to meaningfully address the contrary findings made by the defendant’s examining doctor, including the normal results of the range of motion testing of the assignor’s cervical and lumbar spine, was insufficient to raise a triable issue of fact. The words “meaningfully rebut” were used in Mingmen Acupuncture Servs., PC v Global Liberty Ins. Co. of N.Y. (61 Misc 3d 128[A], 2018 NY Slip Op 51358[U], *1 [App Term, 1st Dept 2018]) and Forest Drugs v Global Liberty Ins. Co. of N.Y. (61 Misc 3d 147[A], 2018 NY Slip Op [*13]51708[U], *1 [App Term, 1st Dept 2018]).
Interestingly, no Appellate Term, First Department decision has cited to the Appellate Term, Second Department’s Pan Chiropractic, P.C. decision.
The foregoing review of Appellate Term decisions was performed to determine what constitutes settled law governing a motion for summary judgment in the context of a health service provider’s having to refute a prima facie case of lack of medical necessity established through an insurer’s submission of a sufficient peer review or IME report. Therefore, this court now holds that in such context, well-settled case law holds that the health service provider must submit expert opinion evidence, whether it is a “rebuttal,” affidavit, affirmation, or letter {**78 Misc 3d at 909}of medical necessity, which meaningfully refers to and either discusses or rebuts the conclusions of the insurer’s expert witness. Nothing submitted by Right Choice to Arbitrator Hill, according to the record, referred to Dr. Skolnick’s peer review. Had the dispute at bar been a motion for summary judgment, ATIC would have prevailed. Dr. Skolnick’s peer review made out a prima facie case of lack of medical necessity, and Right Choice did not submit expert medical evidence which referred to it; neither did Right Choice’s evidence discuss it or specifically rebut it.
The instant dispute, however, does not concern a motion for summary judgment. It concerns an arbitration. And that triggers an inquiry into whether Arbitrator Hill’s determination to accord probative value to Right Choice’s evidence lacking a formal rebuttal referencing the peer review was incorrect as a matter of law (11 NYCRR 65-4.10 [a] [4]), and whether in turn, Master Arbitrator D’Ammora’s affirmance must be vacated.
Most non-no-fault insurance arbitration awards cannot be vacated due to an error of law (see Matter of Sprinzen [Nomberg], 46 NY2d 623, 629-630 [1979]). No-fault insurance arbitrations are different; an error of law can be the basis for reversal—by a master arbitrator. This is because, as discussed above, 11 NYCRR 65-4.10 (a) (4), in the no-fault insurance regulations promulgated by the Superintendent of Financial Services (previously Superintendent of Insurance), lists “incorrect as a matter of law” as a ground for vacating or modifying a hearing arbitrator’s award. In that sense, the master arbitrator’s review is broader than that of a court, since a court will not vacate an arbitration award due to an error of law (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 211-212 [1981]; Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 176 AD3d 800, 802 [2d Dept 2019]).
Determination
[1] With regard to case law, this court now holds that the phrase “incorrect as a matter of law” in 11 NYCRR 65-4.10 (a) (4) is to be construed to refer to settled or established court decisions on issues which do not relate to the admissibility, probative value, credibility, or evaluation of evidence when analyzing issues of fact. “[I]ncorrect as a matter of law” (11 NYCRR 65-4.10 [a] [4]) refers to substantive issues.
In part, this court’s present determination is based on the additional provision in 11 NYCRR 65-4.10 (a) (4) which{**78 Misc 3d at 910} provides that “procedural or factual errors committed in the arbitration below are not encompassed within this ground.” The reference to “factual errors” conveys impliedly that when it comes to assessing evidence for the purpose of fact-finding, an arbitrator has wider latitude and should not be required to comply with settled or established law concerning what specific evidence suffices to refute the opposing party’s evidence. This court also takes into account the general proposition that the admissibility of evidence and the [*14]determination of issues of fact are left to the arbitrator’s discretion (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 483 [2006] [“Manifest disregard of the facts is not a permissible ground for vacatur of an award”]; Central Sq. Teachers Assn. v Board of Educ. of Cent. Sq. Cent. School Dist., 52 NY2d 918, 919 [1981] [“The path of analysis, proof and persuasion by which the arbitrator reached this conclusion is beyond judicial scrutiny”]; Matter of Lipson v Herman, 189 AD3d 440, 441 [1st Dept 2020] [“error of fact . . . will not result in the vacatur of an arbitrator’s award”]; Matter of Bernstein v On-Line Software Intl., 232 AD2d 336, 338 [1st Dept 1996] [“It is well established, however, that arbitrators are not bound by the rules of evidence and may admit or deny exhibits on an equitable basis”]). In light of this case law with respect to the admissibility of evidence and the determination of issues of fact in arbitration, 11 NYCRR 65-4.10 (a) (4)’s “matter of law” should be limited in its breadth.
That “incorrect as a matter of law” (11 NYCRR 65-4.10 [a] [4]) refers to substantive issues—not evidentiary ones—is supported by case law. “If, however, the master arbitrator vacates the arbitrator’s award based upon an alleged error of a rule of substantive law, the determination of the master arbitrator must be upheld unless it is irrational” (Golden Earth Chiropractic & Acupuncture, PLLC v Global Liberty Ins. Co. of N.Y., 54 Misc 3d 31, 33-34 [App Term, 2d Dept, 9th & 10th Jud Dists 2016] [emphasis added and citations omitted]).
In Matter of Global Liberty Ins. Co. v McMahon (172 AD3d 500 [1st Dept 2019]), the Court held that it was incorrect as a matter of law for the hearing arbitrator to not consider the American Medical Association’s CPT Assistant newsletter, which is incorporated by reference in the New York Workers’ Compensation Medical Fee Schedule, in determining whether the no-fault insurer paid the proper fee to the medical provider. Issues regarding application of fee schedules in no-fault arbitration clearly are substantive ones. Similarly, an arbitrator’s{**78 Misc 3d at 911} failure to apply well-settled case law regarding fees for a licensed acupuncturist involved a substantive issue, which is a matter of law pursuant to 11 NYCRR 65-4.10 (a) (4) (Allstate Ins. Co. v Natural Healing Acupuncture, P.C., 39 Misc 3d 1217[A], 2013 NY Slip Op 50645[U] [Civ Ct, Kings County 2013]). Whether an insurer’s defense of fraudulent incorporation is precluded by a late denial of claim form involves an issue of law, based on case law (see Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]); it is obviously a matter of substantive no-fault insurance law. A hearing arbitrator’s assessment of medical necessity in the absence of a denial of claim asserting lack of medical necessity is incorrect as a matter of law (see Matter of Liberty Mut. Ins. Co. v Spine Americare Med., 294 AD2d 574 [2d Dept 2002]), and this too would be a substantive issue.
In contrast, an arbitrator’s task of determining whether a service is medically necessary entails making a finding of fact—not a conclusion of law. A substantive issue is not involved. Case law regarding the analysis of evidence, such as Pan Chiropractic, P.C. v Mercury Ins. Co. and its progeny, would not be controlling.
Finally, this court notes that the well-settled case law holding that the health service provider must submit expert opinion evidence which meaningfully refers to and either discusses or rebuts the conclusions of the insurer’s expert witness was rendered in the context of summary judgment motions. A court’s assessment of reviewing these motions entails scrutinizing the evidence to determine whether there is a lack of a material issue of fact. No-fault arbitrations are not summary judgment motions. They entail making final determinations, akin to a bench trial where the trial court hears the evidence and makes its own findings of fact. Decisions on [*15]summary judgment motions concerning evidence—as opposed to substantive issues—do not repose within the ambit of a “matter of law” (11 NYCRR 65-4.10 [a] [4]).
Having held that in the circumstance of case law, the phrase “incorrect as a matter of law” (id.) applies to issues of substantive law—not to the admissibility, probative value, credibility, or evaluation of evidence when analyzing issues of fact—this court further holds that when determining an issue of medical necessity, a no-fault hearing arbitrator is not required to apply the well-settled case law holding that the health service provider must submit expert opinion evidence which meaningfully{**78 Misc 3d at 912} refers to and either discusses or rebuts the conclusions of the insurer’s expert witness.[FN14]
Accordingly, in this article 75 proceeding, Arbitrator Hill’s award, which clearly did not apply the well-settled case law Pan Chiropractic, P.C. v Mercury Ins. Co. and its progeny, was not incorrect as a matter of law within the purview of 11 NYCRR 65-4.10 (a) (4). Master Arbitrator D’Ammora’s award approved Arbitrator Hill’s review of the evidence. Master Arbitrator D’Ammora noted that his review of Arbitrator Hill’s award had to consider whether it was incorrect as a matter of law, citing to 11 NYCRR 65-4.10 (a) (4) (NYSCEF Doc No. 4, master arbitration award at numbered page 2). By affirming Arbitrator Hill’s award, Master Arbitrator D’Ammora conveyed that he did not find that it was incorrect as a matter of law.
[2] This court must next determine whether to sustain Master Arbitrator D’Ammora’s award. The standard for article 75 court scrutiny of a master arbitrator’s review of a hearing arbitrator’s award in terms of whether there was an error of law is whether it is so irrational as to require vacatur (see Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 [1982]; Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 170 AD3d 1168 [2d Dept 2019]; Matter of Acuhealth Acupuncture, P.C. v New York City Tr. Auth., 167 AD3d 869 [2d Dept 2018]; Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]). In the case at bar, Master Arbitrator D’Ammora’s review of the legal issue presented by ATIC was not irrational. As this court found, the Pan Chiropractic, P.C. line of cases need not be followed by no-fault hearing arbitrators. Hence, in terms of the legal issue, Master Arbitrator D’Ammora’s award was actually correct, let alone not irrational.
With respect to the factual issues reviewed by Master Arbitrator D’Ammora, the proper standard of his review was whether Arbitrator Hill reached his decision in a rational manner, i.e., whether it was arbitrary and capricious, irrational, or without a plausible basis; the master arbitrator may not engage in an extensive factual review, which includes weighing the evidence, assessing the credibility of various medical reports, and making independent findings of fact (Matter of Petrofsky [All{**78 Misc 3d at 913}state Ins. Co.], 54 NY2d 207 [1981]). Here, with respect to the $548.08 bill, Master Arbitrator D’Ammora noted that the hearing arbitrator considered Dr. Skolnick’s peer review, Dr. Levin’s intraoperative photo review, and a report of Dr. Sinha. The supplies were found medically necessary and causally related, and the hearing arbitrator allowed the claim.
“Arbitrator Hill’s conclusions and findings regarding the lack of medical[ ] necessity and the verification defense were in his discretion and interpretation of the evidence. It cannot be [*16]regarded as reversible error within this Master Arbitrator’s purview. This Master Arbitrator cannot conduct a de novo review and substitute my interpretation and view of the evidence for that of Arbitrator Hill. In particular, as here, Arbitrator Hill’s determination is rational and supported by the record.” (NYSCEF Doc No. 4, master arbitration award at numbered page 2.)
Judicial review of a master arbitrator’s authority to vacate a hearing arbitrator’s award derives from section 675 (presently section 5106) of the Insurance Law and involves the question of whether the master arbitrator exceeded his power (Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 231 [1982]). Master Arbitrator D’Ammora did not exceed his power when he reviewed the factual findings of Arbitrator Hill. He applied the correct standard of review when he wrote, “I cannot conclude on the basis of the record before me that Arbitrator Hill’s decision was incorrect as a matter of law or arbitrary and capricious” (NYSCEF Doc No. 4, master arbitration award at numbered page 2). Indeed, Arbitrator Hill’s factual finding that the supplies at issue—the cane and knee brace—were medically necessary was neither arbitrary nor capricious. As indicated above, he found that the best source of information was the surgeon, who noted in his postoperative report that there were tears of the medial and lateral menisci. The MRI noted a tear of the medial meniscus. With no evidence of prior injury to the knee, the most reasonable conclusion was that Assignor did suffer from a meniscal injury from the motor vehicle accident. The surgery was necessary and so too were the supplies. (NYSCEF Doc No. 3, arbitration award at numbered page 4.) Master Arbitrator D’Ammora was correct when he found that Arbitrator Hill’s factual determination was rational and supported by the record (NYSCEF Doc No. 4, master arbitration award at numbered page 2). This court finds that{**78 Misc 3d at 914} Master Arbitrator D’Ammora’s review of that factual determination was neither arbitrary and capricious, irrational, or without a plausible basis (see Matter of Petrofsky [Allstate Ins. Co.]).
ATIC’s petition in this article 75 proceeding cited the four applicable grounds delineated in CPLR 7511 for vacating an arbitration award where a party participated in the arbitration:
“if the court finds that the rights of that party were prejudiced by: (i) corruption, fraud or misconduct in procuring the award; or (ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or (iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or (iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.” (NYSCEF Doc No. 1, petition ¶ 33.)
This court finds that ATIC failed to establish that there was corruption, fraud, or misconduct in procuring the award; that there was partiality on the part of either arbitrator; that either arbitrator exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or that there was a failure to follow the procedure of article 75.
Any requested relief not expressly addressed herein has nonetheless been considered and is hereby expressly rejected. [*17]
Conclusion
Accordingly, it is hereby ordered, adjudged, and decreed that ATIC’s petition is denied and the master arbitration award of Victor D’Ammora, Esq., which affirmed the arbitration award of Lester Hill, Esq., is confirmed in its entirety.
Footnotes
Footnote 1: The term “hearing arbitrator” is used herein instead of “arbitrator” to avoid confusion with the term “master arbitrator.”
Footnote 2: The notice of petition seeks vacatur of “the arbitration award issued by Arbitrator Lester Hill, Esq. and/or Master Arbitrator Vic D’Ammora, Esq.” (NY St Cts Elec Filing [NYSCEF] Doc No. 2, notice of petition), but it must be deemed to seek vacatur of just the master arbitration award inasmuch as the latter is the final determination of the arbitration process. The no-fault regulations provide that “court review pursuant to an article 75 proceeding” is from the “decision of a master arbitrator” (11 NYCRR 65-4.10 [h] [1] [i]). In fact, a party may not appeal from an arbitration award without first seeking master arbitration (Matter of Staten Is. Hosp., 103 AD2d 744 [2d Dept 1984]). Naturally, if the hearing arbitrator’s award is imperfect, a master arbitration award affirming it would likewise be imperfect and subject to vacatur.
Footnote 3: Health service providers obtain standing to pursue no-fault insurance compensation in arbitration by virtue of having received an assignment of benefits from the respective person claiming to have been injured in a covered motor vehicle accident; such person is often denoted an “assignor.”
Footnote 4: Paragraph 28 of the petition describes the AAA case No. as 99-21-1226-7577, which was assigned to the master arbitration appeal. The original arbitration was assigned AAA case No. 17-21-1226-7577.
Footnote 5: The peer review of Dr. Skolnick, referenced in the Form NF-10 denial of claim and attached to it, opined lack of medical necessity in addition to lack of causation from the accident of record (NYSCEF Doc No. 6, ATIC’s arbitration submission at 4, 29).
Footnote 6: The reference to Dr. Slotnick is obviously a typographical error; the arbitrator meant Dr. Skolnick.
Footnote 7: Although Arbitrator Hill did not mention the cane in his award, he did award compensation for it, as per Part A in the conclusion of his award: he awarded $548.08 for the bill for date of service May 21, 2020, which bill was for the cane and the knee brace. It is clear that his findings concerning the knee brace applied likewise to the cane (NYSCEF Doc No. 3, arbitration award at numbered page 5).
Footnote 8: To the extent that ATIC’s petition argued that the intraoperative photo review by Dr. Howard Levin had to be rebutted by Right Choice, it is rejected. ATIC’s denial of the $548.08 bill referred only to the “attached peer review by Dr. Matthew D. Skolnick, M.D.” (NYSCEF Doc No. 6, ATIC’s arbitration submission at 4). An insurer must stand or fall upon the defense upon which it based its refusal to pay and cannot create new grounds (Matter of State Farm Ins. Co. v Domotor, 266 AD2d 219, 220-221 [2d Dept 1999]).
Footnote 9: Among the more substantial changes in the 1977 legislation were the adoption of fee schedules to limit medical expenses and modifying the threshold categories to be able to sue for pain and suffering.
Footnote 10: 11 NYCRR 65-4.10 (a) provides as follows:
“Grounds for review. An award by an arbitrator rendered pursuant to section 5106(b) of the Insurance Law and section 65-4.4 or 65-4.5 of this Subpart may be vacated or modified solely by appeal to a master arbitrator, and only upon one or more of the following grounds:
“(1) any ground for vacating or modifying an award enumerated in article 75 of the Civil Practice Law and Rules (an article 75 proceeding), except the ground enumerated in CPLR subparagraph 7511(b)(1)(iv) (failure to follow article 75 procedure);
“(2) that the award required the insurer to pay amounts in excess of the policy limitations for any element of first-party benefits; provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of an appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart;
“(3) that the award required the insurer to pay amounts in excess of the policy limitations for any element of additional first-party benefits (when the parties had agreed to arbitrate the dispute under the additional personal injury protection endorsement for an accident which occurred prior to January 1, 1982); provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of the appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart;
“(4) that an award rendered in an arbitration under section 65-4.4 or 65-4.5 of this Subpart, was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground);
“(5) that the attorney’s fee awarded by an arbitrator below was not rendered in accordance with the limitations prescribed in section 65-4.6 of this Subpart; provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of the appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart.”Footnote 11: The record evidence did include an operative report dated May 21, 2020 (NYSCEF Doc No. 6, ATIC’s arbitration submission at 76-77), a certificate of medical necessity of Dr. Sinha’s dated May 21, 2020 (NYSCEF Doc No. 5, Right Choice’s arbitration submission at 34), and a postoperative note of his dated June 5, 2020 (NYSCEF Doc No. 6, ATIC’s arbitration submission at 89).
Footnote 12: As it turns out, there is no issue of whether the hearing arbitrator incorrectly applied law embodied in a statute or regulation, but if he had it would obviously constitute an error of law. The case law sought to be applied by ATIC in the subject article 75 petition was embodied in a long series of court decisions of the Appellate Term, so any issue of applying case law from just one decision or from a trial court is academic in this instance.
Footnote 13: In fact, since this decision involves interpretation of the Department of Financial Services’ no-fault regulations, a copy of it will be transmitted by this court to the Superintendent of Financial Services. This court encourages other justices who determine article 75 petitions seeking review of no-fault arbitration awards to likewise transmit copies of their decisions to said Superintendent and, perhaps, a process for their transmission by New York’s court system to the Superintendent could be implemented. For sure, this would assist the Superintendent to fulfill her responsibilities to promulgate procedures governing the no-fault arbitration system (see Insurance Law § 5106 [b], [c], [d]).
Footnote 14: This is not to say that a hearing arbitrator is prohibited from applying the well-settled case law which began with Pan Chiropractic, P.C. Since it is not deemed a “matter of law,” as the term is used in 11 NYCRR 65-4.10 (a) (4), an arbitrator is free to apply it or not.
Reported in New York Official Reports at Longevity Med. Supply Inc v Travelers Ins. Co. (2022 NY Slip Op 51285(U))
Longevity
Medical Supply Inc A/A/O JOSHUA LESSY, Plaintiff(s)
against Travelers Insurance Company, Defendant(s) |
Index No. CV-709111-18/KI
Attorney for Plaintiff:
Sara Diamond, Esq. (Of Counsel)
Law
Offices of Melissa Betancourt, PC
2761 Bath Avenue, Suite B1 & B2
Brooklyn, New York 11214
Attorney for Defendants:
Helen Mann
Ruzhy, Esq.
Law Offices of Tina Newsome-Lee
485 Lexington Avenue, 7th
Fl.,
New York, New York 10007
After a bench trial, this Court dismisses the complaint on the following grounds:
This action was brought by a provider seeking to recover assigned first-party no-fault benefits.
Here, the triable issue is the medical necessity of the treatment received by Joshua Lessy. The parties stipulated to: Plaintiff’s timely submission of the claim, and Defendant’s timely denial thus establishing their prima facie case; the expert qualifications of licensed Chiropractor Dr. Todd Aordkian, his peer review report, and the documents he reviewed.
At trial, the Defendant bears the burden of production and the burden of persuasion for its claim of lack of medical necessity of the treatment or testing for which payment is sought (A.M. Med. Services, P.C. v Deerbrook Ins. Co., 18 Misc 3d 1139(A) (Civ Ct 2008)). At a minimum, Defendant must establish a factual basis and medical rationale for the lack of medical necessity of Plaintiff’s services (see CityWide Social Work & Psy. Serv., P.L.L.C. v Travelers Indem. Co., 3 Misc 3d 608 (Civ Ct 2004); Inwood Hill Med. P.C. v. Allstate Ins. Co., 3 Misc 3d 1110(A) (Civ Ct 2004). “The insurer may rebut the inference of medical necessity through a peer review and, if the peer review is not rebutted, the insurer is entitled to denial of the claim (e.g., A Khodadadi Radiology, P.C. v. NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131(A) (App Term 2007)).
According to the detailed credible testimony of Dr. Aordkian, the cervical collar, back support, cervical traction unit, and the TENS unit provided by plaintiff were not medically necessary. None of these devices met the criteria for the treatment of Mr. Lessy. Relying upon the medical treatise written by Panjabi and White, Dr. Aordkian opined the criteria for back support is where there are situations of clinical instability, a fracture or dislocation of a lumbar spine, scoliosis measuring more than 25 degrees, inactive spondylolisthesis with a pars fracture, and postoperative treatment in certain lumbar spine surgeries. Based on his review of the medical records, the Assignor sustained a musculoskeletal injury. Therefore, the treatment provided would be counteractive because it would decrease the range of motion. The cervical collar is used in conversative management of cervical spine fractures where surgery is not necessary. The collar around the fractured vertebra allows the bone to heal and tightens the damaged muscle and joint structures. Here, the Assignor sustained a soft tissue brain-type injury, therefore, it was counterintuitive to place a collar around these structures because movement is restricted. Traction is traditionally used for situations where there is a damaged disk, and the disk herniation is pressing on a nerve arm pain. Here, the medical records failed to document any radicular signs or symptoms along the upper extremities involving a specific nerve root compression demonstrated on the cervical spine MRI Study. Further, Dr. Aordkian credibly testified that there was no successful cervical traction demonstrated in the treatment. The criteria for use of a TENS unit occurs where therapy has been found to be beneficial, and then the Assignor can be prescribed a TENS unit on discharge once the active treatment ends. Dr. Aordkian testified the TENs unit was ordered for home use while the Assignor was under active treatment, therefore, the TENS unit was prescribed prematurely. The chiropractor who prescribed this TENS unit did not demonstrate a successful trial of the TENS unit therapy in the office.
Defendant’s medical expert was very specific and detailed in explaining the basis for his medical opinion. The Court finds Dr. Aordkian’s testimony to be medically sound and credible. Dr. Aordkian sufficiently demonstrated he relied on his review of the Assignor’s medical records to reach his opinion that the services were not medically necessary for the Assignor’s condition. Dr. Aordkian’s testimony “demonstrated a factual basis and medical rationale for the determination that there was a lack of medical necessity” for the services (New Horizon Surgical Ctr., L.L.C. v. Allstate Ins., 52 Misc 3d 139(A) (App Term 2016)). Considering Dr. Aordkian testimony and the relevant medical records submitted to the Court, this Court finds that Defendant met its burden and provided sufficient proof that the procedures were not medically necessary.
Where the defendant insurer presents sufficient evidence to establish a defense based on the lack of medical necessity, the burden shifts to the plaintiff which must then present its own evidence of medical necessity (see Prince, Richardson on Evidence §§ 3-104, 3-202 (Farrell 11th ed)); W. Tremont Med. Diagnostic, P.C. v. Geico Ins. Co., 13 Misc 3d 131(A) (App Term 2006)). Plaintiff called no witnesses to rebut the defendant’s showing of a lack of medical necessity (see New Horizon Surgical Ctr., L.L.C, 52 Misc 3d 139(A) Moreover, Plaintiff failed to submit any evidence, such as the testimony of the referring physician or of its own medical expert, to establish that the Procedures were medically necessary (MK Healthcare Med. PC v. Travelers Ins. Co., 76 Misc 3d 1205(A) (Civ Ct 2022)). Plaintiff failed to demonstrate its entitlement to judgment or otherwise rebut Defendant’s showing.
Defendant met its burden of establishing that the services rendered to Joshua [*2]Plessy by Plaintiff were not medically necessary. No rebuttal was offered by the plaintiff. This case is dismissed.
This constitutes the decision and order of the Court.
November 29, 2022Hon. Ellen E. Edwards
Civil Court Judge
Reported in New York Official Reports at Parisien v Farmers Ins. (2022 NY Slip Op 22309)
| Parisien v Farmers Ins. |
| 2022 NY Slip Op 22309 [77 Misc 3d 220] |
| September 30, 2022 |
| Stein, J. |
| Civil Court of the City of New York, Kings County |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| As corrected through Wednesday, December 7, 2022 |
[*1]
| Jules F. Parisien, as Assignee of Shaquasia Partlow, Plaintiff, v Farmers Insurance, Defendant. |
Civil Court of the City of New York, Kings County, September 30, 2022
APPEARANCES OF COUNSEL
Law Offices of Buratti, Rothenberg & Burns for defendant.
Law Offices of Zara Javakov Esq., P.C. for plaintiff.
{**77 Misc 3d at 221} OPINION OF THE COURT
Defendant’s motion for summary judgment dismissing the complaint is granted, and plaintiff’s cross motion for summary judgment is denied.
This action was brought for the recovery of no-fault benefits under New York State law. The underlying facts are not in dispute. Plaintiff is a provider of medical benefits and the assignee of Shaquasia Partlow, the passenger of a motor vehicle involved in an accident that occurred on May 6, 2019, in the State of Florida. On or about May 23, 2019, in response to a letter of representation from plaintiff’s attorney, nonparty Progressive Express Insurance Company sent a letter to plaintiff’s counsel which confirmed that Progressive had issued a policy for the vehicle and driver. The letter had a header which included a section entitled “Name of Insured,” and which listed Shaquasia Partlow. The letter stated, in bold type, “[T]here are no coverage issues at this time.” The letter also notified plaintiff’s counsel that the vehicle “may have additional insurance with Farmers” and provided a policy number.
Defendant Farmers Insurance also issued a policy covering the vehicle and was similarly informed of the accident. On June 21, 2019, Farmers sent Ms. Partlow a letter which informed her that she did not qualify for personal injury protection under Farmers’ policy for this accident.
Farmers’ letter noted that the vehicle was being used as an Uber ride sharing vehicle at [*2]the time of the accident.[FN1] As the letter further explained, Farmers’ policy was for personal, noncommercial use only. Under the Farmers policy express terms, insured persons did not include any person in the vehicle while the vehicle was engaged in a commercial ride sharing{**77 Misc 3d at 222} activity. The letter further advised that any claims for service should be directed to Ms. Partlow’s Uber claim or her personal health insurance carrier. The June 21, 2019 letter did not claim that payment of no-fault claims was the responsibility of Progressive or any other insurer.
On July 24, 2019, assignor sought medical benefits from plaintiff. Despite both aforementioned letters, on July 30, 2019, plaintiff sought payment for the services from Farmers. Farmers denied those claims by letter dated August 8, 2019, stating that plaintiff’s assignor was “not eligible for benefits under this policy.” Farmers gave no additional reason or explanation for the denial and did not claim that no-fault benefits were the responsibility of Progressive or any other insurer.
This action was commenced on or about August 26, 2019. On July 22, 2020, defendant filed a motion for summary judgment to dismiss the complaint on the basis that plaintiff’s assignor was not covered by defendant’s policy. On December 30, 2020, plaintiff filed a cross motion for summary judgment for the amount stated in the complaint, $846.69, plus statutory interest and attorneys’ fees, pursuant to CPLR 3212.
Defendant, in support of its own motion and in opposition to the cross motion, submitted the affidavit of its claims supervisor, Vincent D’Ugo, a certified copy of defendant’s policy at issue, and the correspondence from Progressive of May 23, 2019. Also attached as exhibits were Farmers’ June 21, 2019 letter to the assignor and the August 8, 2019 letter to plaintiff in which it had stated that its claims were not covered by its policy.
Defendant argued that plaintiff, as assignee of Ms. Partlow, was not entitled to reimbursement under defendant’s policy because the vehicle in the accident was being used as an Uber ride sharing vehicle at that time. As defendant’s coverage was solely for personal use and not commercial use of the vehicle, any persons injured or any property damaged were not covered, as the accident was not an insured incident under the policy.
Plaintiff, in its cross motion, argued that it had established its prima facie case by proving the submission of its claim to Farmers and Farmers’ nonpayment of that claim. In support, plaintiff submitted the affirmation of an employee familiar with the billing procedures used for this claim. Plaintiff also argued that it should also prevail on its cross motion because defendant, in its opposition to the cross motion, failed to submit sufficient evidence showing that defendant had timely denied that claim. Plaintiff did acknowledge receipt of the denial.{**77 Misc 3d at 223}
In opposition to defendant’s motion and in further support of its own cross motion, plaintiff cited 11 NYCRR 65-4.11 (a) (6), and argued that as the first insurer billed, Farmers was responsible to pay the claim submitted to it, and then arbitrate with Progressive the issue of who was responsible for coverage of the claim.
Insurance Law § 5106 (d) (1), which creates the obligation for the first-billed insurer to pay and then arbitrate, provides:
“[W]here there is reasonable belief more than one insurer would be the source of first [*3]party benefits, the insurers may agree among themselves, if there is a valid basis therefor, that one of them will accept and pay the claim initially. If there is no such agreement, then the first insurer to whom notice of claim is given shall be responsible for payment. Any such dispute shall be resolved in accordance with the arbitration procedures established pursuant to section five thousand one hundred five of this article and regulations as promulgated by the superintendent, and any insurer paying first-party benefits shall be reimbursed by other insurers for their proportionate share of the costs of the claim and the allocated expenses of processing the claim, in accordance with the provisions entitled ‘other coverage’ contained in regulation and the provisions entitled ‘other sources of first-party benefits’ contained in regulation.”
Insurance Law § 5105 (b) further states that “all disputes arising between insurers concerning their responsibility for the payment of first party benefits” shall be submitted to mandatory arbitration.
11 NYCRR 65-4.11 (a) (6) regulates the mandatory arbitration called for by the Insurance Law. However, it specifically states that “this section shall not apply to any claim for recovery rights to which an insurer in good faith asserts a defense of lack of coverage of an alleged covered person on any grounds.”
Farmers has established its defense of lack of coverage in this case. Plaintiff does not dispute that the vehicle in question was being used for a ride sharing service at the time of the accident. It is also not disputed that only insured persons (as defined in the Farmers policy) were covered and that a person injured while using the vehicle as a part of a commercial ride sharing program was not covered as an insured person. Indeed,{**77 Misc 3d at 224} in its papers, plaintiff does not advance any reason as to why Farmers was incorrect in disclaiming coverage, nor explain why Ms. Partlow should have been covered as an insured person. As such, the provisions of 11 NYCRR 65-4.11 (a) (6) do not apply under the regulation’s own terms, and the issue is not subject to mandatory arbitration (see e.g. RX Warehouse Pharm. Inc. v Erie Ins. Exch., 63 Misc 3d 1236[A], 2019 NY Slip Op 50905[U] [Civ Ct, Kings County 2019]). As coverage was not included for this accident under the terms of the policy, the lack of coverage denial was proper.
Further, the relevant statutes and regulations consistently provide that if there is a “dispute” or “controversy” between the insurers, the claims between said disputing insurers are subject to mandatory arbitration.[FN2] Similarly, Insurance Law § 5106 (d) (1) states that
“where there is reasonable belief more than one insurer would be the source of first party benefits, the insurers may agree among themselves, if there is a valid basis therefor, that one of them will accept and pay the claim initially. If there is no such agreement, then the first insurer to whom notice of claim is given shall be responsible for payment.”
In this case there were no disputes or controversies between insurance companies, nor was there any reasonable basis for submission to Farmers in July 2019. In May 2019, Progressive wrote that Ms. Partlow was an insured and there were no issues with coverage at this time. In June 2019, prior to plaintiff providing benefits, Farmers informed Ms. Partlow that they would not be providing coverage as the accident was not covered. Hence, the mandatory arbitration regulations for situations where there is a dispute and controversy are not applicable.
[*4]Plaintiff’s reliance on M.N. Dental Diagnostics, P.C. v Government Empls. Ins. Co. (81 AD3d 541 [1st Dept 2011]) is unavailing. In that case, the Appellate Division held that GEICO’s denial of coverage defense was invalid and the matter was subject to mandatory arbitration. However, in M.N. Dental Diagnostics the Court held that case involved an intercompany dispute, because the defendant had denied plaintiff’s claim on the stated ground that no-fault benefits were payable by another insurer (id.). By pointing to another insurer, the Court held that defendant had raised an issue as to which insurer{**77 Misc 3d at 225} was obligated to pay first-party benefits. Thus, M.N. Dental Diagnostics was a “controversy between insurers involving the responsibility or the obligation to pay first-party benefits,” which the regulation states is “not considered a coverage question.” (11 NYCRR 65-4.11 [a] [6].)
In contrast, here, defendant did not deny plaintiff’s claims on the grounds that another insurer, such as Progressive, was responsible. Rather, Farmers solely denied the claim on the basis that the accident was not covered under the terms of the Farmers policy, a claim supported by the evidence Farmers submitted in support of its motion. Under such circumstances, there is no “controversy between insurers” under 11 NYCRR 65-4.11 (a) (6) that would be subject to mandatory arbitration.
In fact, in the underlying Appellate Term’s decision in M.N. Dental Diagnostics, the court offers additional details:
“GEICO’s argument that its denial of benefits raised an issue of coverage because it was not ‘otherwise liable’ for the payment of first-party benefits (see 11 NYCRR 65-3.12 [b]) is unavailing, since it ignores the endorsements contained in its own insurance policy, which expressly provided Burgos with rental and substitute automobile coverage. Where, as here, more than one insurance policy provides coverage for a no-fault claim, the issue becomes one of priority of payment.” (M.N. Dental Diagnostics, P.C. v Government Empls. Ins. Co., 24 Misc 3d 43, 44-45 [App Term, 1st Dept 2009].)
Hence, in M.N. Dental Diagnostics, P.C., not only was there a dispute between insurers, there was also a valid basis for a reasonable belief that more than one insurer could be the source of first-party benefits, as GEICO had possibly provided the assignee with coverage. Thus, in that case there was a real question as to which insurance company was responsible, and as to the priority of payment. Here, in July 2019, by the time the services were provided, there was no question, nor a valid basis for a reasonable belief, that Farmers had coverage, nor was there a question of priority.
Finally, the Court of Appeals has discussed several factors when considering questions of whether a defense is in fact based on lack of coverage and related timeliness or notice issues. Guidance includes whether: (a) the claim would create coverage where none existed; (b) the asserted defense is more like a “normal” exception from coverage, or a lack of coverage{**77 Misc 3d at 226} in the first instance; and (c) the denial of liability based upon lack of coverage within the insurance agreement is distinguishable from disclaimer attempts based on a breach of a policy condition (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]).
Here, there has been no argument presented that this was either a covered accident under the Farmers policy, or that the assignor was in fact covered by Farmers. Hence, requiring Farmers to make a payment would be creating coverage. In addition, prior to the services being sought, assignor’s counsel had notice that Progressive would provide coverage, and assignor had [*5]knowledge that Farmers would not. Accordingly, this court cannot impose coverage where none existed. It is therefore ordered that defendant’s motion for summary judgment is granted, and it is further ordered that plaintiff’s cross motion for summary judgment is denied, and it is further ordered that this matter is dismissed.
Footnotes
Footnote 1:Plaintiff’s opposition to defendant’s motion fails to rebut or even deny this, and correspondence defendant received from Uber in February of 2020 and annexed to its motion papers further confirms that the vehicle was engaged in a ride sharing activity at the time of the accident.
Footnote 2:See Insurance Law § 5105; 11 NYCRR 65-4.11 (a).
Reported in New York Official Reports at Life Equip., Inc v Mid-Century Ins Co (2022 NY Slip Op 50877(U))
Life Equipment, Inc
AAO Keandre Black, Plaintiff(s),
against Mid-Century Ins Co, Defendant(s). |
Index No. CV-750591-18/KI
Attorney for Plaintiff:
Zachary Whiting, Esq.
Law Office of Zara Javakov Esq.,
P.C.
100 Livingston St, Fl 4
Brooklyn, NY 11201
Attorney for
Defendant:
William Ross Van Tuyl, Esq.
Law Offices of Buratti Rothenberg &
Burns
90 Merrick Avenue, Suite 300
East Meadow, NY 11554
Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion:
Papers &nb sp; &nbs p; & nbsp; &n bsp; Numbered
Notice of Motion and Affidavits /Affirmations annexed SLIVKW; VK0TOY
Answering Affidavits/ Affirmations &n bsp; &nb sp; PINFJE; WANWVP
Reply Affidavits/ Affirmations
Memoranda of Law
Other
In this action seeking to recover assigned first-party no-fault benefits, defendant moves for summary judgment on ground that plaintiff’s assignor failed to appear for Independent Medical Examinations (“IMEs”). Plaintiff opposes the defendant’s motion and cross moves for summary judgment in its favor. The following bill is at issue:
| Date of Service |
Bill Amount |
Date Bill Received | IME Scheduling Letters sent |
IME Date |
Date Denied |
| 5/17/18 to 6/6/18 |
$1049.79 | 6/12/18 | 5/18/18; 6/14/18; 7/25/18 |
6/12/1; 7/10/1; 8/14/18 |
8/22/18; 9/20/18 |
Upon the forgoing cited papers, and after oral argument, the Decision/Order on defendant’s motion for summary judgment and plaintiff’s cross motion is as follows:
On a motion for summary judgment, the moving party must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. If the moving party produces the required evidence, the burden shifts to the nonmoving party to establish the existence of material issues of fact which require a trial of the action.
(Xiang Fu He v. Troon Mgt., Inc., 34 NY3d 167, 175 (2019) (internal citations and quotation marks omitted)).
A. Defendant’s Motion for Summary Judgment
I. IME No-Show
An assignor’s appearance at an IME “is a condition precedent to the insurer’s liability on the policy.” (Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 AD3d 720, 722 (2d Dept. 2006)). “Consequently, an insurer may deny a claim retroactively to the date of loss for a claimant’s failure to attend IMEs ‘when, and as often as, the [insurer] may reasonably require.'” (Id. at 722, citing 11 NYCRR 65-1.1).
To meet its prima facie burden, the defendant must establish that: (1) it properly mailed scheduling letters for IMEs to plaintiff’s assignor; (2) the IME was timely scheduled; (3) the assignor failed to appear at the initial IME and the rescheduled follow-up IME; and (4) defendant timely denied the claim on that ground. (Motionpro Physical Therapy v. Hereford Ins. Co., 58 Misc 3d 159(A) (App Term 2018)).
Here, the defendant contends that it issued proper and timely denials based on the assignor’s failure to appear for three scheduled IMEs. Defendant submitted the affidavit of its claims representative, Christopher Stewart to explain why defendant requested the IMEs. (See defendant’s exhibit D, Stewart aff). Stewart attested that defendant requested an IME after receiving notice that plaintiff’s assignor was involved in an accident on March 22, 2018. (Id. at ¶ 14). Thereafter, defendant requested a third-party company, ExamWorks, Inc. to schedule an initial IME on June 12, 2018 at 2:15pm. (Id. at ¶ 15). ExamWorks, Inc. also rescheduled follow-up IMEs for July 10, 2018 at 1:00 pm and August 14, 2018 at 1:00 pm. ((Id.).
“Generally, proof that an item was properly mailed gives rise to a rebuttable presumption that the item was received by the addressee.” (Viviane Etienne Med. Care, P.C. v. Country—Wide Ins. Co.,114 AD3d 33, 46 (2d Dept 2013)). “The presumption may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed.” (New York and Presbyt. Hosp. v. Allstate Ins. Co., 29 AD3d 547 (2d Dept 2006) quoting Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 680 (2d Dept 2001). To the extent that proof of mailing is based upon a standard office practice or procedure, the burden is on the insurer to present an affidavit of an employee who personally mailed the items, or an employee with personal knowledge of the office’s mailing practices and [*2]procedures. (Quality Psychological Services, P.C. v. Hartford Ins. Co., 38 Misc 3d 1210(A) (Civ Ct 2013)). This individual “must describe those practices or procedural in detail, explicitly denoting the manner in which she/he acquired the knowledge of such procedures or practices, and how a personal review of the file indicates that those procedures or practices were adhered to with respect to the processing of that particular claim.” (Id.)
Here, defendant relies on the affidavit of Georgianna Michios, a litigation manager at ExamWorks Inc. to establish proof of timely mailing of the IME scheduling letters. (See defendant’s exhibit I, Michios aff). The Court finds that defendant’s submission of Michios’ affidavit is insufficient to establish that the IME scheduling letters were timely and properly mailed. The Court agrees with plaintiff that the affidavit is conclusory. Michios merely states that an employee places the scheduling letters in a properly addressed envelope and mails the letter via regular mail and/ or certified mail. (Id. at ¶ 5). This affidavit fails to explicitly state ExamWorks, Inc. practices and procedures for mailing the scheduling letters.
Further, defendant’s submission of the three delivery confirmation receipt is also insufficient to prove that the IME scheduling letters were timely and properly mailed. (See defendant’s exhibit G, IME Scheduling Letters). The Appellate Division, Second Department found that defendant’s submission of a certified mail receipt and “Track & confirm” printout were insufficient where there was no evidence presented that the item purportedly mailed to the plaintiff was mailed under the proffered certified receipt number. (New York and Presbyt. Hosp., 29 AD3d 547). Here, the three delivery confirmation receipts submitted by the defendant state that the items were delivered on May 23, 2016, June 18, 2018 and July 27, 2018, respectively. However, there was no evidence presented that the items purportedly mailed to the plaintiff were mailed under the proffered certified receipt number listed on each delivery confirmation receipt. Thus, the defendant failed to establish timely mailing of the IME scheduling letters.
Even if defendant had demonstrated timely mailing of the scheduling letters, defendant did not establish that plaintiff’s assignor failed to appear at the IMEs. Here, defendant submitted the affidavit of John Iozzio, a licensed chiropractor and acupuncturist. (See defendant’s exhibit H, Iozzio aff). The basis of Iozzio’s information is his personal knowledge of his office policy, and review of the physical file and computer records. (Id. at ¶ 3). Iozzio’s business practice is to make a notation in the file, if the individual fails to appear. (Id. at ¶ 4). Iozzio stated that he personally recorded each of Keandre Black’s nonappearance at the scheduled IMEs. (Id. at ¶¶ 6,8,10). However,
“it is the business record itself, not the foundational affidavit, that serves as proof of the matter asserted. Accordingly, [e]vidence of the contents of business records is admissible only where the records themselves are introduced. Without their introduction, a witness’s testimony as to the contents of the records is inadmissible hearsay.’ “(Longevity Med. Supply, Inc. v. Progressive Ins. Co., 68 Misc 3d 748, 753 (Civ Ct 2020) quoting Bank of New York Mellon v. Gordon, 171 AD3d 197, 205-06 (2d Dept. 2019)). Here, Iozzio did not submit any business records evidencing the assignor’s nonappearance.
Further, Iozzio stated that he was present at each scheduled IME. According to Iozzio, the assignor failed to appear for the initial IME on June 12, 2018, and rescheduled follow-up IMEs on July 10, 2018 and August 14, 2018. (See Iozzio aff Iozzio at6,8,10). Iozzio neither stated how and whether he would have been able to identify the insured, or that no one appeared at the office at the time of each scheduled IME. (Longevity Medical Supply, Inc., 68 Misc 3d at 748). Therefore, the court agrees with plaintiff that Iozzio’s affidavit lacked personal [*3]knowledge regarding the assignor’s nonappearance.
Thus, defendant failed to establish that plaintiff’s assignor failed to appear at the IMEs on June 12, 2018, July 10, 2018 and August 14, 2018.
II. Timeliness of the Denial of Claim Forms
“[A]n insurer must either pay or deny a claim for motor vehicle no-fault benefits, in whole or in part, within 30 days after an applicant’s proof of claim is received. An insurer can extend the 30-day period within which to pay or deny a claim by making a timely demand for further verification of the claim.” (Infinity Health Prods., Ltd. v. Eveready Ins. Co., 67 AD3d 862, 864 (2d Dept. 2009) [internal citations omitted]).
Defendant contends that on June 12, 2018 it received a bill from plaintiff for the dates of service on May 17, 2018 through June 6, 2018. The bill was in the amount of $1049.79. According to defendant, after plaintiff’s assignor failed to appear for IMEs on June 12, 2018 and August 14, 2018, a general denial form dated August 22, 2018 was mailed to plaintiff on August 23, 2022. This denial falls within the 30-days period. Also, another denial of claim form dated September 20, 2018 was mailed to plaintiff on September 21, 2018.
To establish proper mailing, defendant submits the affidavit of Carlton Lewis, a mailing manager, and certificates of mailing report. (See defendant’s exhibit E, Lewis aff; defendant’s exhibit C, Denials). According to Lewis, the items were either generated and mailed from mailing centers in Chino, California or Caledonia, Michigan. (Lewis aff ¶ 3). Lewis further stated that both denials were delivered to the U.S. Post Office, and there were no notations on the certificate of mailing reports that either denial was delayed or there were any malfunctions. (Id. at ¶¶ 9,10,15). Lewis’ affidavit and certificates of mailing reports establish proof of mailing of the denial claims forms on August 23, 2022 and September 21, 2018, in accordance with a standard office procedure. (Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679 (2d Dept. 2001); Ortho-Med Surgical Supply, Inc. v. Progressive Cas. Ins. Co., 27 Misc 3d 141(A) (App Term 2010)).
Contrary to plaintiff’s arguments, Lewis demonstrated personal knowledge of the mailing procedures. Lewis was employed as the mailing manager at both the Caledonia and Chin mailing centers (Curtin aff ¶ 1). Also, he is responsible for ensuring that the standard mailing practices and procedures are followed. (Id. at ¶ 2). Further, Lewis’ affidavit properly laid the foundation for the admission of the denial of claim forms and certificates of mailing reports as business records.
Thus, defendant timely issued denial of claim forms for the dates of service on May 17, 2018 through June 6, 2018. However, as discussed above, defendant did not establish that plaintiff’s assignor failed to appear at the IMEs on May 23, 2016, June 18, 2018 and July 27, 2018.
Accordingly, defendant’s motion for summary judgment is granted to the extent it established that it timely denied plaintiff’s claim.
B. Plaintiff’s Cross-Motion for Summary JudgmentA no-fault provider establishes its prima facie entitlement to summary judgment by (1) proof of the submission to the defendant of a claim form; (2) proof of the fact and the amount of the loss sustained; and (3) proof either that the defendant had failed to pay or deny the claim within the requisite 30—days period, or that the defendant had issued a timely denial of claim that was conclusory, vague or without merit as a matter of law. (See Insurance Law § 5106(a)); Westchester Med. Ctr. v. Nationwide Mut. Ins. Co., 78 AD3d 1168 (2010); see also New York & Presbyt. Hosp. v. Allstate Ins. Co., 31 AD3d 512 (2006)). Once plaintiff meets its prima facie [*4]burden, the burden shifts to defendant to raise a triable issue fact. (See Alvarez v. Prospect Hosp., 68 NY2d 320 (1986)).
To establish proper mailing, plaintiff submits the affidavit of its owner, Albert Khaimov to describe its’s standard office and procedures for generating and mailing bills. (See plaintiff’s exhibit C, Khaimov aff). Khaimov stated that he created a bill in the amount of $1049.79 for the dates of service on May 17, 2018 through June 6, 2018. (Id. at 20). However, he does not state when the bill was mailed to defendant. The court may, in its discretion, rely on defendant’s documentary submissions to establish defendant’s receipt of plaintiff’s claims. (Devonshire Surgical Facility v. GEICO, 16 Misc 3d 130(A) (App Term 2007)). Here, defendant’s claim representative affidavit established receipt of plaintiff’s bill on June 12, 2018. (Stewart aff 18). Further, any deficiencies in plaintiff’s proof of mailing were cured by defendant’s submission of the denial of claim forms in defendant’s motion papers, which admitted receipt of plaintiff’s bills. (Bob Acupuncture, P.C. v. New York Cent. Mut. Fire Ins. Co., 53 Misc 3d 135(A) (App Term 2016); see Oleg Barshay, DC, P.C. v. State Farm Ins. Co., 14 Misc 3d 74 (App Term 2006); Longevity Med. Supply, Inc., 68 Misc 3d at 758). Therefore, defendant’s claim representative affidavit and denial of claims forms established receipt of plaintiff’s claim. Further, Khaimov stated that the bill was neither paid nor denied within the 30-days period. (Khaimov aff 20).
Defendant proved that it timely denied plaintiff’s claim by timely mailing denial of claim forms. However, as discussed above, defendant did not establish that plaintiff’s assignor failed to appear at duly scheduled IMEs. Therefore, the issue that is presented here is whether the timely denials warrant denial of plaintiff’s cross motion for summary judgment in its favor, even though the evidence of the grounds of the denials was insufficient. The court in Longevity Med. Supply, Inc. v. Progressive Ins. Co discussed how two Appellate Term, Second Department decisions reached opposite results on this issue. (See Longevity Med. Supply, Inc., 68 Misc 3d at 759-60. The court discussed that,
[In Rockaway Med. and Diagnostic, P.C. v. Country-Wide Ins. Co., 29 Misc 3d 136(A) (App Term 2010)], once the plaintiff met its prima facie burden, the Appellate Term required the defendant not only to come forward with evidence that the denial was timely, but also to lay bare the evidence of the grounds of the denial, which had to be sufficient to establish the grounds. [Three years later in Shara Acupuncture, P.C. v. Allstate Ins. Co., 41 Misc 3d 129(A) (App Term 2013), once the plaintiff met its prima facie burden that the claims were neither paid nor denied within the 30-day period after defendant’s receipt of the bill, the Appellate Term required the insurer only to come forward with evidence that the denial was timely to defeat the plaintiff’s motion for summary judgment. Put differently, once the insurer came forward with evidence that the denial was timely, the burden in Shara Acupuncture, P.C. appears to shift back to the plaintiff to establish the denial was conclusory, vague or without merit as a matter of law to be entitled to summary judgment.(Longevity Med. Supply, Inc., 68 Misc 3d at 760) (internal citations omitted.)
Shara Acupuncture, P.C. controls here. As discussed above, the plaintiff’s prima facie burden can be established in two ways: (1) proof that the defendant had failed to pay or deny the claim within the requisite 30-days period, or (2) proof that the defendant had issued a timely denial of claim that was conclusory, vague or without merit as a matter of law. (Ave T MPC Corp. v. Auto One Ins. Co., 32 Misc 3d 128(A) (App Term 2011)). If plaintiff cannot meet its prima facie burden under the first method because defendant submitted evidence of a timely [*5]denial, then the court should consider whether plaintiff met the prima facie burden under the second method. (Longevity Med. Supply, Inc., 68 Misc 3d at 760 citing Longevity Med. Supply, Inc. v. Glob. Liberty Ins. Co., 67 Misc 3d 135(A) (App Term 2020)).
Here, the plaintiff’s prima facie burden was based solely on proof that the claims were neither paid nor denied within the 30-days period. However, the defendant established that it timely denied plaintiff’s bill. Because plaintiff had not demonstrated that the denials were conclusory, vague, or without merit as a matter of law, plaintiff is not entitled to judgment in its favor.
Thus, plaintiff’s cross motion for summary judgment is granted to the extent that it established timely submission of the bill to defendant, and that it remains unpaid.
C. ConclusionPlaintiff met its prima facie case by establishing timely mailing of the bill to defendant, and that it remains unpaid. Defendant met its prima facie case by establishing timely denial.
Accordingly, the defendant’s motion for summary judgment is granted to the extent it established that it timely denied plaintiff’s bill. The plaintiff’s cross motion for summary judgment is granted to the extent it established timely submission of the claim to defendant, and the bill remains unpaid. The issue left for trial is defendant’s IME no-show defense.
This constitutes the decision and order of the court.
Dated: August 9, 2022Hon. Ellen E. Edwards
Judge of the Civil Court
Reported in New York Official Reports at James J Kim, L, AC, PC v Allstate Ins Co (2022 NY Slip Op 50700(U))
James J Kim, L, AC.,
PC ASSIGNEE OF RICK GREENGUS, Plaintiff(s)
against Allstate Ins Co, Defendant(s) |
Index No. CV-718889-16/KI
The plaintiff was represented by Michael Nathan, Esq., Lewin & Baglio LLP, 1100 Shames Drive, Westbury, New York 11590, (T) 516-307-1777 ext. 121, (F)516-307-1770, Mnathan@lewinbaglio.com.
The defendant was represented by Adam Waknine, Esq., Peter C. Merani, P.C., 1001 Avenue of the Americas, Suite 1800, New York, NY 10018, Phone: (212) 629-9690, Fax: (212)629-9664, E-Mail: awaknine@meranilaw.com.
Nicholas W. Moyne, J.After trial, held before me in the above captioned action on July 13, 2022, I find:
Plaintiff, James J. Kim, a licensed acupuncturist, commenced this no-fault action against defendant, Allstate Insurance Company (“Allstate”), following Allstate’s denial of plaintiff’s claims for no-fault benefits for acupuncture services provided from February 9, 2015, through December 7, 2015. Plaintiff’s assignor, Rick Greengus, was injured in an accident on December 7, 2013. Allstate denied the claims based upon the report of an Independent Medical Examination (“IME”) conducted by Dr. Thomas McLaughlin on March 13, 2014. At trial, Allstate defended their denials based on lack of medical necessity by solely relying upon the IME report and live testimony of Dr. McLaughlin. The plaintiff rebutted the denial through the live testimony of Dr. Kim, as well as by cross-examining Dr. McLaughlin about the contents of his IME report. Each party also submitted trial packets for the court’s consideration which were introduced into evidence on consent and without objection.
Dr. McLaughlin examined Mr. Greengus on March 13, 2014. At that time, Mr. Greengus had been receiving acupuncture services for approximately three months. Mr. Greengus complained of pain in his left shoulder and neck. Dr. McLaughlin referred to those complaints in his report as “non-descript” but did not specify what, if any, questions he asked that were designed to elicit a detailed description of Mr. Greengus’ symptoms. The report notes that Mr. Greengus indicated that his symptoms had not improved with care.
In his report, Dr. McLaughlin included a section on acupuncture treatment under the heading “Traditional Chinese Medicine (TCM) Discussion.” In relevant part, Dr. McLaughlin concludes:
Combined with a full history and inspection the TCM practitioner will also study the quality of the patient’s pulse and tongue in order to determine not only if pathology is present and the type it is, but in order to devise a treatment protocol. Traditional Chinese [*2]Medicine, acupuncture being one facet of it, is then employed in order to rebalance the body and aid in the facilitation of health and wellness. The treatments are administered by applying needles, in the case of acupuncture, to acupoints along channels that course throughout the body and promote a physiologic response. Nine of the fourteen body channels used are named after organ systems in the body. With respect to Mr. Rick Greengus’s pulse, which has a rate of 64bpm, his tongue, and the channels are unremarkable with regard to a Qi and/or blood stagnation disorder according to the principles of TCM.
Based upon his examination findings, Dr. McLaughlin concluded that no further acupuncture care was necessary because Mr. Greengus’ examination did not reveal any objective findings of dysfunction or discomfort. His trial testimony echoed those findings to a certain extent. He opined that standard practice for an acupuncturist would be to evaluate the patient by taking a history and checking certain relevant factors such as pulse, the condition of the tongue and blood stagnation. Dr. McLaughlin testified that periodic evaluation or revaluation is warranted when there is an ongoing course of treatment in order to determine whether the medical provider needs to adjust the treatment being provided (Tr at 15, 17).
The plaintiff rebutted Dr. McLaughlin’s findings through the testimony of Dr. Kim the provider who opined that continued acupuncture treatment was medically necessary due to continued neck pain, shoulder pain and lower back pain. Dr, Kim also referenced the same traditional Chinese Medicine diagnosis referenced in Dr. McLaughlin’s IME report, i.e., blood stagnation and tongue diagnosis. Dr Kim also testified that he performed through evaluations of Mr. Greengus prior to each treatment session.
After considering the testimony and evidence presented at this trial, I find that the plaintiff should have judgment in its favor. The defense being asserted by the defendant insurer is commonly known as a “IME cut-off”. The court finds this terminology, although widely used in no-fault litigation, to be imprecise and arguably misleading. To the defendant, IME cut-off is the sole proper basis for the denials. The assertion is that after March 14, 2014, based upon the findings of Dr. McLaughlin after the IME, Mr. Greengus was perfectly healthy and no longer required any further treatment, specifically acupuncture and chiropractic related. The defendant would have the court believe that the injured party’s health and condition is frozen in time as of the date of the IME and, absent evidence from the plaintiff that rebuts the findings of the IME, the plaintiff has failed to meet its burden for recovery of no-fault benefits. This misstates the purpose and/or probative value of an IME.
An IME is not some inflexible permanent fixture that cannot be altered or changed. An IME is merely a snapshot of the injured party’s medical condition as of the date of the IME. The opinion of the doctor conducting an IME and issuing a report that no further treatment or testing is needed is nothing more than an expert’s prediction that the claimant has fully recovered or received the maximum therapeutic benefit from the treatment and does not presently need any additional treatment.
An IME cut-off is not a complete defense to the action. While an IME can demonstrate a lack of medical necessity for future treatment, it does not, by itself, conclusively demonstrate that any future treatment would not be medically necessary. Instead, the IME merely shifts the burden to the plaintiff to demonstrate, by a preponderance of the credible evidence, that the treatment at issue was medically necessary (see Amato v State Farm Ins. Co., 40 Misc 3d 129(A) [App Term 2d Dept 2013], Unitrin Advantage Insurance Company v Lake Chiropractic, PLLC, [*3]64 Misc 3d 1201[A] [New York County Civ Ct 2019]; Amato v State Farm Ins. Co., 30 Misc 3d 238, 242 [NY Dist Ct 2013]; All-In-One Med. Care, P.C. v Govt. Employees Ins. Co., 43 Misc 3d 726, 734 [NY Dist Ct 2014]).
The defendant maintains that by not recognizing the IME as a fixed cut-off date for no-fault benefits deemed not medically necessary, the Court is allowing for the reimbursements of benefits indefinitely so long as the provider self-certifies that the treatment is providing medical benefits to the injured party. This is not the Court’s intention nor is it the practical result. Again, the only effect of the pre-claim IME on this litigation was to shift the burden to the plaintiff-provider to show that the treatment was medically necessary. If the defendant subsequently felt the need to try to further limit the scope of future treatment, they could have requested a supplemental IME, an EUO of the provider, or they could have had their expert conduct a peer review of all the post-IME treatment records. Instead, the defendant just denied the bills and relied on a single pre-treatment IME. The defendant is entitled to rely on that single IME if they wish, but the effect is no different than any other denial based on the alleged lack of medical necessity. It simply shifts the burden to the plaintiff, who can then rebut with credible testimony and shift the burden back to the defendant insurer.
That is exactly what happened here. Dr. Kim credibly testified that he conducted an evaluation of the patient each time the patient came to see him before providing any treatment (Tr at 55, 60). This testimony is bolstered by the records in evidence of Dr. Kim’s treatment of the patient prior to the IME – which each contain notes regarding the current diagnosis of the patient and notes of what was evaluated. (Plaintiff’s Exh. D, pages 182-187, 332-356, 422-427, 451-456). The court credits the testimony of Dr. Kim that further medical treatment was necessary for the injured assignor, over the testimony of Dr. McLaughlin, that it was not medically necessary. The court finds that Dr. Kim properly performed additional evaluations of the patient, consistent with the very same standards of traditional Chinese Medicine referenced in Dr McLaughlin’s report, and Dr. Kim was in possession of both objective and subjective findings which correlated to support the conclusion that continued treatment was medically necessary. Dr. Kim possessed more information and was in a better position to make the determination than Dr. McLaughlin. I find that Dr. Kim’s testimony is sufficient to demonstrate, by a preponderance of the credible evidence, that the treatments at issue were medically necessary.
Accordingly, judgment is rendered for the plaintiff in the amount of $2018.77 — the amount the parties stipulate is correct under the fee schedule — plus statutory interest and attorney fees.
The clerk may enter judgment.
Date: August 1, 2022Reported in New York Official Reports at SB Chiropractic, P.C. v GEICO Ins. Co. (2022 NY Slip Op 50316(U))
SB Chiropractic, P.C.,
a/a/o RIVERA, EDDIE, Plaintiff,
against GEICO Ins. Co., Defendant. |
CV-708764-2020/KI
Attorney for Petitioner: Oleg Rybak, Esq.The Rybak Firm, PLLC1810 Voorhies
Avenue, 3rd Floor, Suite 7 Brooklyn, NY 11235
Attorney for Respondent:Lola Klis, Esq. Law Office of Goldstein, Flecker & Hopkins 2
Huntington Quadrangle, Suite 2N01 Melville, NY 11747
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of Plaintiff’s motion for summary judgment and Defendant’s cross-motion for summary judgment, numbered as they appear on EDDS.
Papers NumberedNotice of Motion, Affidavits & Exhibits Annexed PLA4HI
Notice of Cross Motion, Affirmation in Opposition, Affidavits & Exhibits Annexed OK4O47
Affirmation in Reply 0ALURP
After argument, Plaintiff’s motion for summary judgment and Defendant’s cross-motion for summary judgment are consolidated for disposition purposes only and decided jointly as follows:
In this action seeking assigned no-fault benefits, SB Chiropractic, P.C. a/a/o Rivera, Eddie (“Plaintiff”) seeks summary judgment against Geico Insurance Co. (“Defendant”), or in the alternative, an order limiting the issues of fact for trial and dismissing Defendant’s affirmative defenses. Defendant opposes the motion and cross-moves for summary judgment in its favor.
Plaintiff alleges that it provided medical care to Eddie Rivera (“Assignor”) from July, 2017 through April 2018 after a July 9, 2017 automobile accident. It is undisputed that Plaintiff sent ten bills to the Defendant insurance carrier for this medical care (Plaintiff’s Motion Ex. 3). Each bill includes a list of dates when care was provided, a Current Procedural Terminology code (“CPT”) designated by the Worker’s Compensation Fee Schedule (“WCFS”) to be used for the procedure or procedures that were performed on that date, and a monetary amount billed. (Id.) The amount billed is derived from the multiplication of the Relative Value Unit (“RVU”) which is assigned to the CPT code by a conversion factor based upon where in New York State the services were rendered (see Renelique v Am. Tr. Ins. Co., 53 Misc 3d 141[A], [App Term 2016])[FN1] .
Defendant asserts that it partially paid or denied each of these bills, by sending Plaintiff”Denial of Claim forms” within 30 days of receipt (11 NYCRR 65-3.8[c]; see Defendant’s Ex C). Each Denial of Claim form includes the amount Defendant reimbursed the Plaintiff for each date of service, along with a note explaining the reasons for any reduction in reimbursement from the amount requested (Defendant’s Ex. C). Defendant’s cross-motion contains both an affirmation and an affidavit from a “Claims Representative,” which explain the computations utilized for each reimbursement, partial reimbursement, and denial (see Acupuncture Healthcare Plaza I, P.C. v Metlife Auto & Home, 54 Misc 3d 142[A], [App Term 2017]).
Plaintiff argues that it is entitled to summary judgment because it submitted claim forms to the Defendant, Defendant failed to issue a timely denial of claim form and/or the form was conclusory, vague, or without merit as a matter of law (Ave T MPC Corp. v Auto One Ins. Co., 934 NY2d 32, 2011 [App Term, 2d Dept, 2d, 11th & 13th Jud Dist 2011], Viviane Etienne Med. Care v Country-Wide Ins. Co., 25 NY3d 498, 501, [2015][“A plaintiff demonstrates prima facie entitlement to summary judgment by submitting evidence that payment of no-fault benefits are [sic] overdue, and proof of its claim, using the statutory billing form, was mailed to and received by the defendant insurer”]). Defendant argues that it properly and timely mailed Denial of Claim forms, and that each partial payment or denial was proper. Therefore, the issue is whether Defendant’s denials are sufficient to defeat Plaintiff’s motion for summary judgment, and whether they entitle Defendant to summary judgment (see Ave T MPC Corp. v Auto One Ins. Co., 934 NY2d 32, [App Term, 2d Dept, 2d, 11th & 13th Jud Dist 2011]).[FN2]
The standard for summary judgment is clearly articulated in CPLR § 3212(b) which provides that “the motion shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in [*2]directing judgment in favor of any party.” The function of summary judgment is issue finding, not issue determination (Sillman v Twentieth Century Fox Film Corp., 3 NY2d 395, 404 [1957]). Summary judgment should be granted when the moving party makes a prima facie showing of entitlement to judgment as a matter of law, giving sufficient evidence to eliminate any material issues of fact from the case (Winegrad v New York University Medical Center, 64 NY2d 851, 853 [1985]).
In order to succeed on its motion, Defendant must establish that it mailed the Denial of Claim forms within 30 days of receiving Plaintiff’s bills. To establish that denial of claim forms were mailed on time, the insurance company may rely upon the affidavit of a claims associate. Proof of mailing may be shown based on a mailing receipt, or, that the item was mailed pursuant to the affiant’s standard office practices and procedures (GL v Allstate Ins. Co., 2018 NY Slip Op 50842[U] [2d Dept 2018]). The claim representative must demonstrate, through an affidavit, knowledge of the insurance company’s standard office practices or procedures, and that the items were properly addressed and mailed pursuant to these practices or procedures (St. Vincent’s Hosp. of Richmond v Govt. Empls. Ins. Co., 50 AD3d 1123 [2d Dept 2008]). Crucially, an insurer’s non-substantive technical or immaterial defect or omission shall not affect the validity of a denial of claim (11 NYCRR 65-3.8[h]). Proof of a standard office practice and procedure gives rise to a presumption of mailing and receipt (Cit Bank N.A. v Schiffman, 36 NY3d 550 [2021]). To rebut the presumption,
“[T]here must be proof of a material deviation from an aspect of the office procedure that would call into doubt whether the notice was properly mailed, impacting the likelihood of delivery to the intended recipient. Put another way, the crux of the inquiry is whether the evidence of a defect casts doubt on the reliability of a key aspect of the process such that the inference that the notice was properly prepared and mailed is significantly undermined. Minor deviations of little consequence are insufficient” (Id).
Defendant attaches to its cross-motion an affidavit from Cleone Victor, (“Victor Affidavit”) who avers that they are a “claims associate” in Defendant’s Woodbury, New York, office (Defendant’s Cross Ex. B). The Victor Affidavit recounts, in detail, Defendant’s standard office procedures for mailing and processing bills, that Plaintiff’s bills were processed according to these procedures, and that Denial of Claim Forms were processed according to these procedures. Cleone Victor describes Defendant’s application of the ATLAS Claim System to process bills and denials like the ones submitted by Plaintiff here (Defendant’s Cross Ex. B) and how the system is designed to ensure that the denials arrive to the Defendant within the required time.
Plaintiff argues that the Victor Affidavit is insufficient because it fails to lay a proper foundation for Victor’s knowledge of Defendant’s mailing processes. But, Plaintiff’s objections are mainly technical, grammatical arguments rather than based on merit, and, Plaintiff misstates the Victor Affidavit multiple times; Plaintiff argues that Cleone Victor “never asserts that she has knowledge of what procedures were in place at the time mailing purportedly occurred” and that “Victor states that she has been employed by Geico in the Woodbury, New York office since on or about January 1995” (Plaintiff’s Aff in Opp., 72). The Victor Affidavit, however, clearly states: “[t]he procedures described in this affidavit were in place and were utilized by GEICO in the Woodbury Office at the time that the documents relating to this matter were created, printed and mailed” and, “I have been employed by GEICO in the Woodbury, New York office since on or about June 2005” (Defendant’s Cross Ex. B). Plaintiff’s remaining [*3]arguments similarly lack a factual basis necessary to rebut the presumption of timely mailing; Defendant has demonstrated that it timely mailed the Denial of Claim forms in this case.
Plaintiff also maintains Defendant has not met its burden on summary judgment because Defendant failed to establish it properly reimbursed Plaintiff for its bills. To establish proper reimbursement pursuant to the WCFS, the Defendant may submit an affidavit setting forth the calculation (Acupuncture Healthcare Plaza I, P.C. v Metlife Auto & Home, 54 Misc 3d 142[A], [App Term 2017]). Notably, an expert affidavit is not required to support fee schedule reductions (Id). Rather, the Defendant needs to prove that it multiplied the RVU assigned to the CPT code for the services rendered by a conversion factor based upon where in New York State the services were rendered (Renelique v Am. Tr. Ins. Co., 53 Misc 3d 141[A]), which, in this case, is $5.78.
In addition to the Victor Affidavit, Defendant’s cross-motion includes an affirmation in support (“Affirmation”) which explains the method Defendant used to calculate the proper reimbursement of the Plaintiff’s bills. The Affirmation and Victor Affidavit explain that based upon the WCFS formula, Plaintiff often billed Defendant in excess of the permissible amount. For example, WCFS Ground Rule 2 specifies that reimbursement for an initial evaluation shall be limited to 13.5 RVUs (Defendant’s Cross Ex. B). On 7/10/2017, however, Plaintiff billed 14.04 RVU’s for the initial evaluation: one unit of code 99203, carrying an RVU of 9.47, and one unit of code 98940, carrying an RVU of 4.57. Defendant reimbursed Plaintiff for the maximum permissible amount, 13.5 RVUs, and denied the remaining .54 RVUs. As provided below, Victor’s Affidavit and Defendant’s Affirmation articulate the application of the WCFS to each of Plaintiff’s bills and therefore an expert affidavit is not required (Acupuncture Healthcare Plaza I, P.C. v Metlife Auto & Home, 54 Misc 3d 142[A], [App Term 2017]).
The Affirmation and the Victor Affidavit explain Defendant’s processing of Plaintiff’s ten bills as follows:
• Defendant received Plaintiff’s first bill on August 10, 2017. The bill seeks reimbursement for treatment services rendered to the Assignor in the amount of $530.12 on July 10-14, 17-21, 24-28, 31 of 2017 and August 1-2 of 2017 (Defendant’s Cross Ex. C). Defendant issued its Denial of Claim form on August 30, 2017, determined that Plaintiff was entitled to $527.00, and timely denied the remainder of the bill (11 NYCRR 65-3.8). Defendant properly reduced Plaintiff’s reimbursement amount as the WCFS permits reimbursement for only 13.5 RVU per day, and Plaintiff billed for 14.04 RVU (Defendant’s Cross Ex. C at 77-79).
• Defendant received Plaintiff’s second bill on September 18, 2017. The bill seeks reimbursement for treatment services rendered to the Assignor in the amount of $269.17 on August 23-24, and 28-30 of 2017 and September 7-8 of 2017 (Defendant’s Cross Ex. C). Defendant issued its Denial of Claim form on October 10, 2017, determined that Plaintiff was entitled to $206.77, and timely denied the remainder of the bill (11 NYCRR 65-3.8). Defendant properly reduced Plaintiff’s reimbursement amount as the WCFS provides for a maximum reimbursement of 8 RVU per day, for “modalities and procedures” and Defendant had already reimbursed a separate provider, Healthway Medical Care, P.C., for 7.65 RVU on each date. Defendant includes the bills and reimbursements to the separate provider for services provided to Assignor on the same date. The court notes that Defendant actually reimbursed more than what was required on this bill; Defendant paid 4.6 RVU for the date of service when .35 RVU was all [*4]that remained of the allotment of 8 RVU (Defendant’s Cross Ex. C at 87-88).
• Defendant received Plaintiff’s third bill on October 23, 2017. The bill seeks reimbursement for treatment services rendered to the Assignor in the amount of $361.65 on October 2-5, 10, 12-13, and 16 of 2017 (Defendant’s Cross Ex. C). Defendant issued its Denial of Claim form on November 8, 2017, determined that Plaintiff was entitled to $314.42, and timely denied the remainder of the bill (11 NYCRR 65-3.8). Defendant properly reduced Plaintiff’s reimbursement amount as the WCFS provides for a maximum reimbursement of 8 RVU per day for “modalities and procedures,” and the Defendant had already paid a different provider 7.65 RVU. (Id.) In addition, the WCFS provides for a maximum reimbursement of 11 RVU for a re-evaluation, but the Plaintiff had billed for 13.46 RVU (Defendant’s Cross Ex. C at 100-102). The court notes that Defendant overpaid for certain procedures on this bill.
• Defendant received the Plaintiff’s fourth bill on November 13, 2017. The bill seeks reimbursement for treatment services rendered to the Assignor in the amount of $219.64 on October 18, 20, 24, 26, and 30 of 2017 (Defendant’s Cross Ex. C). Defendant issued its Denial of Claim form on November 30, 2017, determined that Plaintiff was entitled to $191.02, and timely denied the remainder of the bill (11 NYCRR 65-3.8). Defendant properly reduced Plaintiff’s reimbursement as the WCFS provides for a maximum reimbursement of 8 RVU per day for “modalities and procedures,” and Defendant had already paid a different provider 7.65 RVU on three of the four dates of service included in that bill (Defendant’s Cross Ex. C at 115-116). The court notes that Defendant overpaid for certain procedures on this bill.
• On November 20, 2017, Frank J. McNally, a New York State licensed chiropractor, and Rachel Saperstein, a New York State licensed acupuncturist, both conducted an Independent Medical Evaluation (“IME”) of Assignor, on behalf of Defendant. After these evaluations and a review of certain delineated medical records, both concluded that no further chiropractic or acupuncture treatment was medically necessary (Defendant’s Cross Ex. D). A “Blanket Denial of Claim” form was generated on November 27, 2017 and notice was provided to Plaintiff that further treatment was not medically necessary (Defendant’s Cross Ex. C). The form also provided that all benefits for treatment would be denied effective December 3, 2017 (Id).
• Defendant received Plaintiff’s fifth bill on December 4, 2017. The bill seeks reimbursement for treatment services rendered to the Assignor in the amount of $323.68 on November 2, 6, 8, 10, 14-15, and 27 of 2017 (Defendant’s Cross Ex. C). Respondent issued its Denial of Claim form on December 18, 2017, determined that Plaintiff was entitled to $266.44, and timely denied the remainder of the bill (11 NYCRR 65-3.8). Defendant properly reduced Plaintiff’s reimbursement because the WCFS provides for a maximum reimbursement of 8 RVU per day for “modalities and procedures,” and Defendant had already paid a different provider 7.65 RVU on six of the seven dates of service included in that bill (Defendant’s Cross Ex. C at 129-130). The court notes that Defendant overpaid for certain procedures on this bill.
• Defendant received Plaintiff’s sixth bill on December 22, 2017. The bill seeks reimbursement for treatment services rendered to the Assignor in the amount of $138.72 on November 28 of 2017 and December 1, and 4 of 2017 (Defendant’s Cross Ex. C). Defendant [*5]issued its Denial of Claim form on January 8, 2018, determined that Plaintiff was entitled to $73.40, and timely denied the remainder of the bill (11 NYCRR 65-3.8). Defendant properly reduced Plaintiff’s reimbursement for two reasons: first, the WCFS provides for a maximum reimbursement of 8 RVU per day for “modalities and procedures,” and Defendant had already paid a different provider 7.65 RVU on two of the dates of service included in that bill (Defendant’s Cross Ex. C at 143-145). The remaining procedures were denied based upon the IME reports which determined that there was no further “acupuncture, chiropractic, massage therapy, diagnostic testing and supplies treatment” necessary as of December 3, 2017 (Defendant’s Cross Ex. D).
• Defendant received Plaintiff’s seventh through tenth bills on January 15, 2018, February 5, 2018, March 26, 2018, April 19, 2018, which were all timely denied, on January 19, 2018, February 12, 2018, April 4, 2018, May 1, 2018, respectively, based upon the IME reports and the accompanying Blanket Denial (Defendant’s Cross Ex. C at 158-182), as well as the WCFS.
Plaintiff attaches a rebuttal fee schedule affidavit (Plaintiff’s Opp. Ex. 6), to rebut the Victor Affidavit and Defendant’s use of the WCFS. However, the affidavit purports to, but does not actually use the billing codes in Plaintiff’s bills. Rather, the affidavit explains why Plaintiff purportedly billed for medical procedures using codes 97799, 97810, 97811, and 99204 when in fact the bills seek reimbursement for procedures utilizing codes 99203, 98940, 98941, 99212, and 97139. As such, Plaintiff’s affidavit does not rebut, or even relate to, the Victor Affidavit. Furthermore, the Defendant’s fee schedule denials in this case do not rely upon the billing codes. Defendant denied payment of these bills because Plaintiff billed more than the maximum RVU per day per the WCFS Ground Rules, or Defendant paid a different provider for treatment performed on Assignor on the same date (Defendant’s Cross Ex. B). Accordingly, the rebuttal fee schedule affidavit does not successfully challenge the Defendant’s use of the WCFS. The court finds Defendant’s use of the WCFS proper.
Plaintiff also challenges Defendant’s denial of claims based upon lack of medical necessity. Generally, Plaintiff’s bills carry a presumption of medical necessity (Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13 [2d Dept 2009]). On summary judgment, Defendant has the burden to rebut this presumption (Dayan v Allstate Ins. Co., 49 Misc 3d 151[A], [App Term 2015]). If rebutted, the burden shifts back to the Plaintiff to demonstrate that the procedures were medically necessary (Id). Plaintiff argues that Defendant has not rebutted the presumption of medical necessity, and that Defendant has failed to provide a sufficient foundation for the authority of the IME reports.
The first IME report, written by Frank J McNally, D.C., a New York state licensed chiropractor, finds that “[t]here is no need for further chiropractic treatment. There is no need for further diagnostic testing, household help, medical supplies, special transportation, or massage therapy, from a chiropractic standpoint.” (Defendant’s Cross Ex. D). Dr. McNally specifies that the Assignor’s diagnosis is “[r]esolved cervical sprain/strain…[r]esolved lumbar sprain/strain.” (Id). He further notes that “[t]he claimant is able to work if he chooses to seek employment, from a chiropractic standpoint” (Id). Similarly, Rachel Saperstein, L.Ac. concludes that “no further acupuncture treatment is recommended or necessary…” (Defendant’s Cross Ex. D). She also notes “[t]he [Assignor] does not appear to be in any acute distress or discomfort…[a]mbulation and gait is normal, and the [Assignor] moves freely and without the assistance of any aid or appliance” (Id). These IME reports each provide a detailed accounting [*6]of the signatory’s personal evaluation of Assignor based upon documents specified and answers provided by the Assignor at the evaluation.
Plaintiff argues that the IME’s do not “explain how the treatment or services provided were ineffective and cite medical literature and standard practices in the community to support the opinion” (Plaintiff’s Opp., 37). However, Defendant’s IME’s do not state that the medical treatment provided was ineffective; on the contrary, they both state that the issues that the Assignor complained about have been resolved, and that Assignor does not require any further medical treatment for the condition caused by the accident. Accordingly, Plaintiff’s argument is misplaced. Plaintiff also argues that the IME reports are inadmissible because the physician’s signature was “computerized, affixed, or stamped” (Plaintiff’s Opp., 48). However, the signature pages of the affidavits clearly show that the signatures were handwritten and notarized.
The court finds Defendant has rebutted the presumption of medical necessity. The burden therefore shifts back to the Plaintiff to demonstrate medical necessity. Plaintiff submits an “Affidavit of Medical Necessity” from Mark Tischler, D.C., the owner of the Plaintiff corporation, which provides, in vague and conclusory terms, the benefits of acupuncture treatment, and the alleged weaknesses and shortcomings of Defendant’s IME reports (Plaintiff’s Opp. Ex. 1). Dr. Tischler defends the medical necessity of the “acupuncture treatments” but does not mention the medical necessity of the chiropractic treatments Plaintiff is seeking reimbursement for. Moreover, Defendant does not claim that all of the treatments rendered were medically unnecessary. Rather, the only treatments denied for lack of medical necessity were the treatments rendered after the IME reports were issued. Defendant also has produced a report from both a licensed chiropractor and a licensed acupuncturist to rebut the presumption of medical necessity. However, the only relevant portion of the Tischler Affidavit which relates to the post-IME condition of the Assignor is:
“[a]fter the IMEs performed by [D]efendant, Rivera, Eddie returned to my office, maintained that he still experienced significant pains and discomfort, and required medical treatment for injuries he suffered in the accident. Having re-evaluated Rivera, Eddie post-IME evaluation I concluded that he was still suffering from the effects and injuries sustained in the accident and further treatment was required given the fact that it reduced her [sic] pain.” (Plaintiff’s Opp. Ex. 1, 27)
These conclusory statements do not meet the burden of demonstrating that the treatments provided were medically necessary as the Tischler Affidavit does not describe Assignor’s physical condition, nor provide details of which medical treatments were necessary at that time (Dayan v Allstate Insurance, 49 Misc 3d 151[a]). As such, Plaintiff has not sufficiently demonstrated the medical necessity of the post-IME medical treatment on summary judgment (Id).
By submitting a detailed, fact-specific and comprehensive set of papers, Defendant has eliminated material issues of fact from this case and is entitled to summary judgment as a matter of law. Defendant’s Denial of Claim forms clearly demonstrate that Plaintiff submitted ten bills to Defendant. Certain bills were accurately reimbursed according to the WCFS for the medical care provided to Assignor, and certain bills were partially paid based upon the basic math required by the WCFS. Certain bills were partially denied based upon prior payment to a separate provider for care rendered on that same date. The calculations are clearly explained in the Victor affidavit and the Defendant’s Affirmation in support. Furthermore, certain bills were denied based upon a credible and unrebutted lack of medical necessity. In fact, Defendant [*7]concedes that it actually overpaid Plaintiff on multiple bills. Accordingly, Defendant has met its burden, and its motion for summary judgment is granted pursuant to CPLR 3212. Plaintiff’s motion for summary judgment, or to limit the issues of fact for trial is denied in its entirety. This action is dismissed with prejudice.
This constitutes the Decision and Order of the Court.
Brooklyn, New YorkApril 20, 2022
HEELA D. CAPELL, J.C.C.
Footnotes
Footnote 1: Neither party disputes that the appropriate conversion factor according to the WCFS in this case is Region IV, in the amount of $5.78 (Defendant’s Cross Ex E 211-212).
Footnote 2: While Plaintiff argues that Defendant’s defenses should be dismissed, this blanket argument is not supported by any facts or specificity and that branch of Plaintiff’s motion is dismissed.