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.

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.

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.

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.

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.

_____________________________
J.S.C

[*1]

Supreme Court, Kings County, February 9, 2023

APPEARANCES OF COUNSEL

Larkin Farrell LLC (David Fair of counsel) for petitioner.[*2]

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 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.

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.

[*1]

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.

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.

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).

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:

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:

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)).

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.’ “

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.

A 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.

Plaintiff 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.

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.

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.

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.

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.

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.

[*1]

Civil Court of the City of New York, Kings County, July 28, 2021

APPEARANCES OF COUNSEL

Brian E. Kaufman for defendant.

Richard Rozhik for plaintiff.

The decision/order on defendant’s motion for summary judgment and plaintiff’s cross motion for summary judgment is decided as follows:

It is well settled that a proponent for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact (see CPLR 3212 [b]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; see also Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 852 [1985]; Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 [1957]).

A moving defendant seeking summary judgment to dismiss the complaint based upon failure to appear for an examination under oath (hereinafter EUO) must show timely mailing of the EUO scheduling letters and that the assignee, in fact, failed to appear (see 11 NYCRR 65-1.1; Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d 755, 756 [2d Dept 2020]).

Defendant did so here. Defendant established that it scheduled plaintiff’s EUO four times by letters dated, October 26, 2017, January 10, 2018, March 26, 2018, and May 25, 2018, for EUOs noticed for January 8, 2018, March 20, 2018, May 23, 2018, and July 12, 2018, respectively. Defendant also established that plaintiff failed to appear at each of the noticed EUOs.

Moreover, defendant demonstrated that plaintiff repeatedly sent letters to counsel for Nationwide stating that it needed two additional months to appear for the EUO, while requesting [*2]an explanation regarding the basis of the EUO and impermissibly demanding a $3,500 appearance fee per claimant to appear at the noticed examinations under oath. The said letters were sent on December 27, 2017 (in relation to the January 8, 2018 EUO), March 16, 2018 (in relation to the March 20, 2018 EUO), May 9, 2018, and May 21, 2018 (in relation to the May 23, 2018 EUO), and June 28, 2018 (in relation to the July 12, 2018 EUO). Each of the aforementioned letters were sent within days or weeks of the respective scheduled EUOs although each EUO request provided nearly two months’ notice as per plaintiff’s request to accommodate plaintiff’s claim that it had a busy calendar. Despite repeatedly claiming to be unavailable to attend the EUO and successfully obtaining two{**73 Misc 3d at 253} months’ adjournment, plaintiff failed to submit an affidavit of an individual with personal knowledge to establish its unavailability on any of the dates the EUO was noticed for or an affidavit attesting to any date it provided defendant that plaintiff would be available to appear.

The purpose of the No-Fault Law and regulations, Insurance Law § 5102 et seq. and 11 NYCRR part 65, is to ensure prompt payment of medical claims for treatment provided to people injured in automobile accidents regardless of fault. If an EUO is requested as additional verification an insurer must schedule it within a reasonable time frame and as “expeditiously as possible.” (Eagle Surgical Supply, Inc. v Progressive Cas. Ins. Co., 21 Misc 3d 49, 51 [App Term, 2d Dept, 2d & 11th Jud Dists 2008].) Plaintiff frustrated the intent of the no-fault regulation by attempting to delay the claim over a period of nine months by claiming it needed two months’ notice for each noticed EUO, thereafter receiving two months’ notice of the EUOs and then continuing to claim it was unavailable and further, without authority, requiring $3,500 for the appearance.

The record demonstrates that plaintiff failed to appear for EUOs scheduled on four occasions, January 8, 2018, March 20, 2018, May 23, 2018, and July 12, 2018. Moreover, the record demonstrates that although defendant Nationwide attempted to accommodate plaintiff by noticing the EUO four times at plaintiff’s request, plaintiff nonetheless failed to appear for any of the noticed EUOs. The last scheduled EUO was for July 12, 2018, and the claims were timely denied on July 19, 2018.

Both parties were given an opportunity to orally argue this motion, at which time plaintiff raised the issue of a timely denial based on a recent case, Quality Health Supply Corp. v Nationwide Ins. (69 Misc 3d 133[A], 2020 NY Slip Op 51226[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020]). It appears that Quality Health stands for the proposition that a denial issued more than 30 days after the second EUO no-show, despite the scheduling of subsequent EUOs, is untimely. In Quality Health, the record before the court failed to establish that there were any objections to the EUO request and/or requests seeking an adjournment or postponement of the EUO.

The court finds that the case herein is distinguishable from Quality Health because the defendant herein demonstrated to the court that plaintiff requested that defendant Nationwide notice the EUO additional times, and that defendant in good faith was attempting to accommodate plaintiff’s request by rescheduling the EUOs.{**73 Misc 3d at 254}

Defendant has submitted sufficient proof to demonstrate that plaintiff failed to appear at four duly scheduled EUOs and therefore, failed to comply with a condition precedent to coverage. The plaintiff failed to provide evidence to rebut defendant’s showing.

Plaintiff’s contention that defendant is unable to establish the January 8, 2018 no-show as the transcript states a time of 11:45 p.m. (as opposed to 11:45 a.m.) lacks merit. The court finds that the EUO was noticed for 11:00 a.m. and that the affidavit of Allan Hollander stated that the scheduled start time of the EUO was 11:00 a.m. This is an obvious error in the transcript. Further, the December 27, 2017 correspondence from The Rybak Firm, PLLC, confirmed that FJL Medical Services PC would “be unavailable to appear for the requested EUO currently scheduled for [*3]January 8, 2018.” The court finds that the error in the transcript is insignificant to raise a triable issue of fact.

In light of the above, defendant’s motion for summary judgment is granted and plaintiff’s complaint is hereby dismissed.

CV-739339-17/KI

Hollander Legal Group, P.C., Melville (Jonathan Drapan of counsel), for Nationwide Ins., defendant.

The Rybak Firm, LLC, New York City (Oleg Rybak of counsel), for MSB Physical Therapy P.C., plaintiff.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion:

Papers Numbered

Notice of Motion, Affirmation and Affidavits Annexed

Exhibits A-Z 1-18

Notice of Cross Motion, Affirmation in Support of Cross Motion and In Opposition to Motion, Affidavits Annexed Exhibits 1-8 19-22

Affirmation in Opposition to Cross Motion Exhibits A-B 23-24

Replying Affidavits NONE

In this action seeking to recover assigned first-party no-fault benefits, defendant moves for summary judgment dismissing the complaint on the ground that plaintiff failed to appear at duly scheduled Examinations Under Oath (EUOs) on four separate occasions (Motion Seq. No. 001). Plaintiff opposes the motion and cross-moves for summary judgment in its favor against defendant, or in the alternative, moves for an order compelling defendant to provide discovery (Motion Seq. No. 002). Defendant opposes the cross motion.

The issue presented is whether plaintiff raised triable issues of fact as to whether plaintiff had failed to appear at the EUOs, where defendant refused plaintiff’s requests to reschedule the EUOs for lengthy adjournments of two to three months. Additionally, another issue presented is [*2]whether the EUOs scheduled before defendant received the bills at issue tolled the 30-day period for defendant to pay or otherwise deny the bills received, where the record contains no evidence that defendant had otherwise sent any requests for additional verification during the relevant 30-day periods for some of those bills.

A prior decision and order dated July 12, 2021 decided both the motion and cross motion. However, that decision and order is hereby recalled and vacated, because this court inadvertently overlooked defendant’s opposition papers to plaintiff’s cross motion, which are now considered in this amended decision and order.

BACKGROUND

On September 7, 2016, plaintiff’s assignor, Sayquan U. Bright, was allegedly injured in a motor vehicle accident (see defendant’s exhibit A in support of motion, complaint ¶ 2). This action concerns eight bills for dates of service during the period of January 13, 2017 through February 15, 2017:

(see defendant’s exhibits E-H in support of motion).

Prior to the alleged receipt of the bills, by a letter dated November 8, 2016, purportedly sent by certified mailed and first class mail to plaintiff, defendant’s counsel scheduled an EUO of plaintiff on November 21, 2016 at 2:00 p.m., at its office in Melville, New York, regarding 14 claimants which plaintiff treated, including Bright (see defendant’s exhibit I in support of motion, scheduling letter).

By a letter dated November 17, 2016 (four days before the scheduled EUO), purportedly sent by fax, the Rybak Firm PLLC responded that it represented plaintiff, requested that the EUO be rescheduled to a location in Brooklyn, New York, and advised that plaintiff “will be unavailable for the months of November and December due to the upcoming seasonal holidays” (defendant’s exhibit J in support of motion). Plaintiff’s counsel also noted that the EUO date conflicted with another scheduled EUO for a different medical provider which plaintiff’s counsel [*3]represented (id.). Plaintiff’s counsel therefore requested that plaintiff’s EUO be rescheduled to January, and requested reimbursement of $1,500 per claimant prior to the commencement of the EUO (id.). In closing, the letter stated, “Your failure to respond to this letter at least three (3) business days prior to the next scheduled EUO will be deemed a waiver of Nationwide’s rights to conduct EUO for the above named assignee(s)” (id.).

According to defendant’s counsel, Allan S. Hollander, plaintiff failed to appear at the EUO, and counsel placed a statement on the record accordingly at 2:53 p.m. (see defendant’s exhibit K in support of motion, aff of Allan S. Hollander ¶ 5 and tr. at 5). Hollander stated that plaintiff’s counsel “asked for a date in January . . . and I responded to him via a letter, that we would select a date in January to conduct his client’s examination under oath” (tr. at 6).

EUO of plaintiff on January 23, 2017

By a letter dated November 22, 2016, purportedly sent by first class mail to plaintiff’s counsel, defendant’s counsel scheduled an EUO of plaintiff on January 23, 2017 at 11:00 a.m. at American Stenographic Court Reporting in Brooklyn, New York regarding the 14 claimants, including Bright (see defendant’s exhibit L in support of motion, scheduling letter). The letter further stated,

“Provided your client appears at the examination under oath and answers questions with respect to the corporate structure of MSB Physical Therapy and the treatment of the patients named herein, Nationwide will honor your client’s reimbursement request and present your client a check for $1,500.00. Nationwide will show your client the check prior to the examination under oath and will provide your client with the check subsequent to its completion”

(id.). By a letter dated November 28, 2016, purportedly sent by first class mail to plaintiff’s counsel, defendant’s counsel again notified plaintiff of the EUO on January 23, 2017 at 11:00 a.m. in Brooklyn, New York (defendant’s exhibit M in support of motion).

By a letter dated January 10, 2017, purportedly sent by first class mail, plaintiff’s counsel responded,

“MSB Physical has extended their schedule till the end of February 2017, and will be unavailable to appear for the requested EUO currently scheduled for January 23, 2017. Please take further notice that it is very common amongst medical providers to have their schedules fully booked for about the same period of 2-4 months depending on the circumstances, as well to clear or extend them accordingly, which is usually the main reason of their unavailability to appear for a potential EUO”

(defendant’s exhibit N in support of motion). Plaintiff’s counsel again indicated that the EUO was scheduled on the same date as the EUO of another provider which plaintiff’s counsel represented (id.). Plaintiff’s counsel requested an EUO be scheduled in March (id.). Lastly, plaintiff’s counsel indicated that it had suggested an amount of $1,500 per claimant for reimbursement (id.).

By a letter dated January 17, 2017 addressed to plaintiff’s counsel, defendant’s counsel responded, in relevant part,

“Please be advised that a representative from this office will be present to place a default statement on the record concerning your client’s non-appearance at the EUO on January 23, 2017. Your correspondence further states that your client now needs an additional [*4]two to four months to appear and be ready for the examination under oath.

As such, this office will document the default of your client’s appearance at the EUO on January 23, 2017. Thereafter, this office will send notification noticing your client for a third and final EUO to take place on March 21, 2017. You should already be aware that your client failed to appear and/or asked to adjourn an EUO scheduled for November 21, 2016. Thereafter, your client was noticed two months later for the EUO to take place on January 23, 2017. As such, in good faith, Nationwide will afford your client one final opportunity to appear for an EUO for March 21, 2017.

Additionally, your correspondence asks for reimbursement in the amount of $1,500 for appearing at an examination under oath. . . . If your client wants more than $1,500.00 for its appearance at the EUO, your client will have to substantiate same by submitting proof of actual loss of earnings in the amount greater than $1,500.00″‘

(defendant’s exhibit O in support of motion).

According to defendant’s counsel, Christopher Volpe, plaintiff failed to appear at the EUO on January 23, 2017, and counsel placed a statement on the record accordingly at 1:35 p.m. (see defendant’s exhibit P in support of motion, aff of Christopher Volpe ¶ 4 and tr. at 5-6).

EUO of plaintiff on March 21, 2017

By a letter dated January 25, 2017, purportedly sent by first class mail to plaintiff’s counsel, defendant’s counsel scheduled an EUO of plaintiff on March 21, 2017 at 11:00 a.m. at American Stenographic Court Reporting in Brooklyn, New York regarding 14 claimants, including Bright (see defendant’s exhibit Q in support of motion, scheduling letter).

By a letter dated March 16, 2017, purportedly sent by fax, plaintiff’s counsel responded,

“Please accept this letter as a good faith effort on the part of MSB Physical to comply with all the policy requirements of Nationwide Affinity Insurance Company of America and Titan Indemnity Company (“Nationwide”). As mentioned before, our client is prepared to meet its obligations to cooperate in the investigation of all claims, and is ready to proceed with a mutually convenient and properly scheduled EUO with the basis for this request provided. . . .

However, once again Nationwide has failed to provide our client with all good cause and objective reasons for determination that an EUO of MSB Physical is necessary to verify and establish proof of claim, while our client has an absolute right to request for the basis of this EUO request, and Nationwide has a corresponding basis to provide such an explanation. . . .

As for the scheduled EUO, please be advised that MSB Physical has extended their schedule for the next two (2) months, and will be unavailable to appear for the requested EUO currently scheduled for March 21, 2017. There is nothing wrong or illegal about that, but common medical practice for medical providers to have their schedules fully booked for about the same period 2-4 months depending on the circumstances, as well as to clear or extend them accordingly, which is usually the main reason of their unavailability to appear for a potential EUO.

Accordingly, as the law provides that an EUO be scheduled for a time and place that is convenient to the person who is being examined, we preserve our client’s rights. Please let our office know which other dates in May 2017 Nationwide is available to conduct the EUO of MSB Physical so that we may arrange for a mutually convenient date, time and location. Pursuant to 11 NYCRR 65-3.2 and 11 NYCRR 65-3.5(e), the refusal to adjourn an EUO is a direct violation of the No-Fault regulations”

(defendant’s exhibit R in support of motion).

According to defendant’s counsel, Caitriona McCarthy, plaintiff failed to appear at the EUO on March 21, 2017, and counsel placed a statement on the record accordingly at 12:01 p.m. (see defendant’s exhibit S in support of motion, aff of Caitriona McCarthy ¶ 4 and tr. at 6-7).

EUO of plaintiff on May 19, 2017

By a letter dated March 23, 2017, purportedly sent by first class mail to plaintiff’s counsel, defendant’s counsel scheduled an EUO of plaintiff on May 19, 2017 (see defendant’s exhibit T). The letter further stated, in pertinent part,

“Your client has now missed its March 21, 2017 EUO date. You had asked this office previously to notice the examination under oath two months in advance due to the fact that your client’s calendar was booked in January. As such, Nationwide, in good faith, noticed the EUO two months from January to March 21, 2017 to afford your client every opportunity to clear its calendar and appear for its noticed examination under oath.

Nevertheless, once again, on the eve of the examination under oath, four days before said examination under oath, you are contacting this office and stating your client cannot appear due to its busy schedule.

You are stating in this correspondence that Nationwide has not provided your client with its good reasons and objective basis for noticing your client for an examination under oath. Please be advised that your client has been noticed for an examination under oath for the following reasons, which included but are not limited to:

1. The listed owner of MSB Physical Therapy, Maria Sheila Buslon, P.T., lives and works in Florida. This raises questions as to the true ownership and control of the New York P.C.;

2. The treating physical therapist, Ankit Baldevbhai Patel, is performing services as an employee of MSB Physical Therapy, P.C. and PFJ Medical P.C. on the same dates;

3. There is no Workers’ Compensation policy found for your client’s entity;

4. There is no phone number found on any of the bills or letterhead for your client’s company; and

5. Clinic inspections into your client’s facility have been refused.

The aforementioned are some of the reasons why Nationwide has noticed your client for an examination under oath. Nationwide is trying to determine whether or not your client is properly structured under the Business Corporation Laws of the State of New York and eligible to receive New York State No-Fault Benefits.

* * *

Your client has failed to appear for three examinations under oath with respect to the above claims. Nationwide will notice the examination under oath of your client for a day in May, 2017. The May examination under oath will be the final opportunity for your client to appear for an examination under oath with regard to the claims at issue. The date of that examination under oath will be May 19, 2017 . . . “

(defendant’s exhibit T in support of motion; see also defendant’s exhibit Y in support of motion, aff of Linda Arnold ¶ 4).

By a letter dated March 29, 2017, purportedly sent by first class mail to plaintiff’s counsel, defendant’s counsel scheduled an EUO of plaintiff on May 19, 2017 at 11:00 a.m. at American Stenographic Court Reporting in Brooklyn, New York regarding 14 claimants, including Bright (see defendant’s exhibit U in support of motion, scheduling letter).

According to defendant’s counsel, Michael Weaver, plaintiff failed to appear at the EUO on May 19, 2017, and counsel placed a statement on the record accordingly at 12:10 p.m. (see defendant’s exhibit V in support of motion, aff of Michael Weaver ¶ 4 and tr. at 6-7).

By a letter dated June 23, 2017, purportedly sent by first class mail, plaintiff’s counsel wrote,

“This correspondence is in reply to your letter dated June 1, 2017 pertaining our client’s outstanding EUO, which is still required to be submitted by our client to Nationwide Affinity Insurance Company of America and Titan Indemnity Company (“Nationwide”).

Please accept this letter as another good faith effort on the part of MSB Physical to comply with all policy requirements of Nationwide. . . .

However, upon numerous requests, up to date our client has not been provided with all good cause and objective reasons for determination that an EUO of MSB Physical is necessary to verify and establish proof of claim. Instead, you repeatedly list the same irrelevant and misleading reasons (based upon mere speculation and suspicion as opposed to a good faith substantive basis), which we have already objected to in our previous correspondence regarding this matter dated May 18, 2017.

At this point, while Nationwide’s reasons for the EUO being objected to before are irrelevant under the circumstances, we have no other choice, but to reiterate our previous request to provide our client will all good cause and objective reasons for determination that an EUO of MSB Physical is necessary to verify and establish proof of claim. As you know, our client has an absolute right to request that Nationwide explains the basis for this EUO request, and Nationwide has a corresponding obligation to provide such explanation.

Once provided with same, once an agreement is reach as for a mutually convenient and properly scheduled EUO, and once the issue of our client’s reimbursement is negotiated, our client is ready to proceed”

(defendant’s exhibit W in support of motion).^[FN1]

By a letter dated June 29, 2017, defendant’s counsel responded to plaintiff’s counsel dated June 23, 2017, stating, in relevant part, “Your client has now failed to attend its examination under oath on four separate occasions with respect to the claims at issue” (defendant’s exhibit X in support of motion). Defendant’s counsel reiterated the five reasons for plaintiff’s EUO from its prior letter dated March 23, 2017 (id.).

Denial of Claim Forms

On June 8, 2017, defendant allegedly issued denials of all eight bills at issue in this action, stating, in relevant part:

“MSBP Physical Therapy PC has failed to respond to multiple requests for additional verification and has refused to provide pertinent information that will assist Nationwide in determining the amounts due and payable, pursuant to section 65-1.1(d). Additionally, this failure to submit to the examination under oath scheduled for 11/21/2016, 01/23/2017, 03/21/2017 and 05/19/2017, duly requested, is a violation of the policy[‘]s contractual duties and a violation of proof of claim conditions that precede coverage . . . , and as a result, all no fault billing for services rendered under this policy are being denied”

(see defendant’s exhibits E-H in support of motion, NF-10 forms Box 33).

On November 2, 2017, plaintiff commenced this action asserting eight causes of action to recover assigned first-party no-fault benefits for the eight bills, with interest, plus a ninth cause of action attorneys’ fees (see defendant’s exhibit A in support of motion, summons and complaint). ^[FN2] On December 7, 2017, defendant allegedly answered the complaint (see defendant’s exhibit B in support of motion, answer and affidavit of service).

DISCUSSION

“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]).

Defendant argues that it is entitled to summary judgment dismissing the complaint because plaintiff failed to appear for duly scheduled EUOs on four separate occasions, i.e., on November 26, 2016, January 23, 2017, March 21, 2017, and May 29, 2017 (affirmation of [*5]defendant’s counsel ¶¶ 18, 23-70).

“[A]n appearance at an EUO is a condition precedent to the insurer’s liability on the policy” (GLM Med., P.C. v State Farm Mut. Auto. Ins. Co., 30 Misc 3d 137 [A], 2011 NY Slip Op 50194 [U] [App Term, 2d Dept, 2nd, 11th & 13th Jud Dists 2011]).

“To establish its prima facie entitlement to summary judgment dismissing a complaint on the ground that a provider had failed to appear for an EUO, an insurer must demonstrate, as a matter of law, that it had twice duly demanded an EUO from the provider, that the provider had twice failed to appear, and that the insurer had issued a timely denial of the claims”

(Oleg’s Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 63 Misc 3d 152[A], 2019 NY Slip Op 50760 [U], * 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019] [internal citations omitted]).

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], affd 25 NY3d 498 [2015] [internal quotation marks and citations omitted]). A party can establish proof of mailing “through evidence of actual mailing (e.g., an affidavit of mailing or service) or—as relevant here—by proof of a sender’s routine business practice with respect to the creation, addressing, and mailing of documents of that nature” (CIT Bank N.A. v Schiffman, 36 NY3d 550, 556 [2021]; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 547 [2d Dept 2006], citing Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001]).

“Actual mailing may be established by a proper certificate of mailing or by an affidavit of one with personal knowledge” (J.M. Chiropractic Servs., PLLC v State Farm Mut. Ins. Co., 36 Misc 3d 135[A], 2012 NY Slip Op 51348[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012] [internal citation, emendations and quotation marks omitted]). For proof by office practice, “the office practice must be geared so as to ensure the likelihood that the item is always properly addressed and mailed” (Progressive Cas. Ins. Co. v Metro Psychological Servs., P.C., 139 AD3d 693, 694 [2d Dept 2016], citing Nassau Ins. Co. v Murray, 46 NY2d 828, 830 [1978]).

Here, to establish proof of mailing of the EUO scheduling notices, defendant submitted an affidavit from Allan S. Hollander, a former partner with the firm of Bruno, Gerbino & Soriano LLP (see defendant’s exhibit Z in support of motion, aff of Allan S. Hollander). According to Hollander, tracking confirmations from the United States Postal Service established delivery by certified mail of the EUO scheduling notices dated November 28, 2016, January 25, 2017, and March 29, 2017 (Hollander aff ¶¶ 9, 13,17, 24). However, as plaintiff’s counsel points out, the record does not contain any copies of such tracking confirmations. Thus, defendant failed to prove mailing by proof of actual mailing via certified mail.

Neither did Hollander’s affidavit establish proof of mailing by a standard office practice or procedure. Hollander stated,

“At the time of the subject correspondence, including the EUO scheduling letters and responses to Plaintiff’s correspondence, it was the ordinary course of business at Bruno Gerbino & Soriano to mail such correspondences, via the United States Postal Service by Certified Mail, Return Receipt Requested, and 1st class mail on the same date that they [*6]are created and dated and to the address and facsimile numbers listed thereon.

Specifically, after it was created, the EUO request letters were placed in a United States Postal Service bin, located on the third (3rd) floor of the law office of Bruno, Gerbino & Soriano, and the envelope with the proper Certified Mail, Return Receipt Requested material annexed thereto.

Thereafter, a different individual would affix the proper postage to the envelope to the envelope containing the EUO request letter. This parcel of mail, as well as other mail contained in the above-referenced bin, were taken to the mail room located in the lower lobby of Bruno Gerbino & Soraino’s [sic] building. . . . A member of the United States Postal Service would then take the mail to the U.S. Post Office located in Melville, New York. The empty mail bin would be returned to Bruno Gerbino & Soriano the following business day”

(Hollander aff ¶¶ 24-26).

Although Hollander maintained that the EUO scheduling letters were mailed on the same date that they were created and dated, nothing in office procedures described supported that assertion. Hollander described the procedures, but did not state when they occurred, except to say that the empty mail bin was returned the following business day. Hollander also maintained that the envelopes containing the EUO scheduling letters were addressed to the addresses listed on the scheduling letters, but he did not state that the letters were mailed in windowed envelopes. In the absence of any recitation of as to how the names and addresses on the EUO scheduling letters were checked for accuracy on the unwindowed envelopes, this court agrees with plaintiff’s counsel that, on this record, defendant did not establish that the office practice and procedure followed was designed to ensure proper mailing (Orthotech Express Corp. v MVAIC, 37 Misc 3d 128[A], 2012 NY Slip Op 51913[U], *1 [App Term, 1st Dept 2012] [“in any event, defendant acknowledged receipt of the claim”]).

Notwithstanding the above, defendant established proof of mailing of the EUO scheduling letters based on the letters in response from plaintiff’s counsel, which acknowledged receipt of the EUO scheduling letters (see Socrates Med. Health, P.C. v Motor Vehicle Acc. Indemnification Corp., 28 Misc 3d 141[A], 2010 NY Slip Op 51606[U], *1 [App Term, 1st Dept 2010] [“in any event, defendant acknowledged receipt of the claim”]). Thus, plaintiff fails to raise a triable issue of fact as to whether the EUO scheduling letters were mailed.

2. Plaintiff’s failure to appear

Although plaintiff did not appear at the EUO scheduled on November 21, 2016, this does not constitute a failure to appear because Hollander’s statement on the record on November 21, 2016 appears to suggest that the parties mutually agreed to reschedule the EUO to a date in January 2017 (Avicenna Med. Arts, P.L.L.C. v. Ameriprise Auto & Home, 47 Misc 3d 145 [A], 2015 NY Slip Op 50701 [U][App Term 2d Dept, 2d, 11th & 13th Jud Dists 2015).

Defendant established that plaintiff failed to appear for EUOs on January 23, 2017, March 21, 2017, and May 19, 2017, by submitting certified transcripts from the EUOs scheduled and held on those days. Although plaintiff argues that defendant must also submit an affidavit from someone with personal knowledge that plaintiff failed to appear at an EUO and that the [*7]EUO transcripts must be signed or notarized by defendant’s SIU investigator (see affirmation of plaintiff’s counsel in support of cross motion and in opposition to motion [Rybak affirmation] ¶¶ 146, 163, 175, 198, 205, 208, 227), the transcripts memorializing the missed appearances, which were certified as true and accurate by stenographers, are sufficient (Active Chiropractic, P.C. v Praetorian Ins. Co., 43 Misc 3d 134[A], 2014 NY Slip Op 50634[U] [App Term 2d Dept, 2d, 11th & 13th Jud Dists 2014]; see also Atlantic Radiology Imaging, P.C. v Metro. Prop. & Cas. Ins. Co., 50 Misc 3d 147[A], 2016 NY Slip Op 50321[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). ^[FN3] In any event, defendant submitted affidavits from the attorneys who were physically present at the court reporting location in Brooklyn, New York on the dates and scheduled times of the EUOs (NL Quality Med., P.C. v GEICO Ins. Co., 68 Misc 3d 131[A], 2020 NY Slip Op 50997[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020; T & J Chiropractic, P.C. v State Farm Mut. Auto. Ins. Co., 47 Misc 3d 130[A], 2015 NY Slip Op 50406[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]).

In opposition, plaintiff argues that defendant failed to establish that it had objective reasons for requesting plaintiff’s EUO (see Rybak affirmation ¶¶ 154, 160-162). However, the Appellate Term, Second Department has repeatedly ruled, “contrary to plaintiff’s contention, defendant was not required to set forth objective reasons for requesting EUOs in order to establish its prima facie entitlement to summary judgment” (21st Century Pharmacy, Inc. v Integon Natl. Ins. Co., 69 Misc 3d 142[A], 2020 NY Slip Op 51364[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020], citing Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2d Dept 2014]; see also Gentlecare Ambulatory Anesthesia Servs. v GEICO Ins. Co., 65 Misc 3d 138[A], 2019 NY Slip Op 51684[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]).

Contrary to plaintiff’s argument (see Rybak affirmation ¶¶ 152, 155), “there is no requirement to establish willfulness” (Goldstar Equip., Inc. v Mercury Cas. Co., 59 Misc 3d 138[A], 2018 NY Slip Op 50576[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]). “The doctrine of willfulness . . . applies in the context of liability policies, and has no application in the no-fault context” (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 561 [1st Dept 2011]).

Plaintiff’s reliance upon Meridian Psychological Services, P.C. v Allstate Insurance Company (51 Misc 3d 128[A], 2016 NY Slip Op 50375[U] [App Term, 2d Dept, 2d, 11th & [*8]13th Jud Dists 2016]) is misplaced. There, the attorney testified at a nonjury trial that, “for the second EUO, she checked at 11:30 a.m. to see whether the assignor had appeared and continued to check for another 15 minutes, but plaintiff’s assignor never appeared. However, the letter scheduling the second EUO scheduled the EUO for 11:00, not 11:30” (id.). Here, unlike Meridian Psychological Services, P.C., the certified EUO transcripts reflect that defendant’s counsel stated on the record that EUO were to begin at 11:00 a.m. (see defendant’s exhibits P, S, and V in support of motion), which was the time reflected on the EUO scheduling letters. Thus, no reasonable inference could be drawn that plaintiff had appeared at the EUOs and left before defendant’s counsel had checked for plaintiff’s appearance. Additionally, for the EUO on January 23, 2017, counsel expressly stated that he had been present since 11:00 a.m. (see defendant’s exhibit P, tr at 7). Neither does plaintiff submit an affidavit from anyone claiming that plaintiff had appeared for any of the EUOs.

Contrary to plaintiff’s argument, the EUO scheduling letters complied with 11 NYCRR 65-3.5 (e). They identically stated, in relevant part, “Nationwide will reimburse you for the reasonable cost of transportation and any loss of earnings of earnings in order to comply with this request, upon submission of receipts and proper documentation” (see defendant’s exhibits M, Q, and U in support of motion).

To the extent that plaintiff argues that the EUO scheduling letters were not in “proper form” because the defendant did not designate a location and time was not “mutually convenient” for plaintiff (see Rybak affirmation ¶ 159), this argument is unavailing. The no-fault regulations do not require an insurer to schedule EUOs according to plaintiff’s convenience. Rather, they provide, “All examinations under oath and medical examinations requested by the insurer shall be held at a place and time reasonably convenient to the applicant” (11 NYCRR 65-3.5 [e]). On the record presented, plaintiff fails to raise a triable issue of fact as to whether the EUO were scheduled at reasonably convenient times.

The regulations do not place a limit on the number of times an applicant for no-fault benefits can request to reschedule an EUO. Courts have ruled that an EUO that is mutually rescheduled prior to the appointed time would not be deemed to constitute a failure to appear (Avicenna Med. Arts, P.L.L.C. v. Ameriprise Auto & Home, 47 Misc 3d 145 [A], 2015 NY Slip Op 50701[U] [App Term 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Metro Psychological Servs., P.C. v Mercury Cas. Co., 49 Misc 3d 143[A], 2015 NY Slip Op 51644[U] [App Term, 1st Dept 2015]).

However, one cannot assume that an EUO is mutually rescheduled merely because a request to reschedule an EUO was made (Alas Lifespan Wellness, PT, P.C. v Citywide Auto Leasing, Inc., 64 Misc 3d 131[A], 2019 NY Slip Op 51040[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019] [a phone call from the assignor on the day of the scheduled IME asking to adjourn the IME, without more, is insufficient to show that an issue of fact exists as to whether the IME was mutually rescheduled]).

If plaintiff requested to reschedule an EUO and received no response, then the insurer is not entitled to summary judgment dismissing the complaint as a matter of law (Island Life Chiropractic, P.C. v State Farm Mut. Auto. Ins. Co., 64 Misc 3d 130[A], 2019 NY Slip Op 51038[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019] [plaintiff’s owner submitted an affidavit in which he stated that he had called defendant to reschedule each EUO and that he left messages for defendant’s investigator, but that plaintiff was not contacted by defendant in response to the messages]).

If an insurer refuses a timely and proper request to reschedule, then an issue of fact arises as to whether the EUOs were scheduled to be held at a time or place which was “reasonably convenient” to plaintiff (Parisien v Metlife Auto & Home, 68 Misc 3d 126[A], 2020 NY Slip Op 50845[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020]). One lower court has ruled that an insurer may not unreasonably refuse to adjourn the exams “where a good-faith request is made to re-schedule and the adjournment sought is not excessive” (Diagnostic Radiographic Imaging, P.C. v GEICO, 42 Misc 3d 1205[A], 2013 NY Slip Op 52247[U] [Civ Ct, Kings County 2013]; see also A.B. Med. Servs. PLLC v USAA Gen. Indem. Co., 9 Misc 3d 19, 22, 2005 NY Slip Op 25297 [App Term, 2d Dept 2005]).

Here, defendant’s submissions indicate that the requests of plaintiff’s counsel to reschedule were made days before the EUOs were to occur, even though defendant’s counsel had mailed the scheduling letters well in advance before the scheduled EUOs. Assuming, for the sake of argument, that the requests of plaintiff’s counsel were timely, plaintiff did not raise a triable issue of fact as to whether these requests to reschedule were proper, or that they were made in good faith. Plaintiff requested lengthy adjournments of the EUO for two to three months, ostensibly for the reason that plaintiff is a doctor. If that reason, without more, constituted a good faith basis for an adjournment, then plaintiff could postpone an EUO indefinitely.

As discussed above, when an insurer schedules an EUO, the insurer must inform the applicant seeking no-fault benefits that “the applicant will be reimbursed for any loss of earnings and reasonable transportation expenses incurred in complying with the request” (11 NYCRR 65-3.5 [e]), which occurred here. Thus, any concern for the loss of earnings would not be a valid reason to reschedule an EUO. Additionally, when requesting to reschedule, plaintiff offered no specific dates which would be convenient for plaintiff. On this motion, plaintiff did not come forward within any additional information to support the contention that such lengthy adjournments would be reasonable under the circumstances. Thus, plaintiff fails to raise a triable issue of fact as to whether its requests for adjournments for two to three months were either proper, or made in good faith.

To the extent plaintiff contends that defendant “failed to provide[ ] that . . . Assignor [sic] is reasonably paid for his or her time and traveling expenses” and “failed to agree to reimburse the provider” (Rybak affirmation ¶¶159, 166), this argument is similarly unavailing. Plaintiff demanded a flat, up-front reimbursement in the amount of “$1,500 per claimant” at the commencement of the EUO (see defendant’s exhibit J in support of motion, letter from plaintiff’s counsel dated November 17, 2016). However, plaintiff’s counsel cites no authority for the proposition that the insurer must reimburse the lost earnings before the EUO takes place, and that the lack of reimbursement prior to the EUO would excuse the person to be examined from having to appear. As a practical matter, the duration of an EUO may be an important factor in calculating the reimbursement of lost earnings. Additionally, defendant indicated that it wished to inquire about defendant’s ownership and operations, which would be information common to all the claimants (defendant’s exhibit T in support of motion). In this case, the request of plaintiff’s counsel for a flat, up-front fee of $1,500 per claimant was improper (Professional Health Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 51 Misc 3d 143[A], 2016 NY Slip Op 50698[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016] [“plaintiff improperly demanded that defendant pay a flat, up-front fee of $4,500 for plaintiff to attend the EUO, as opposed to seeking reimbursement for any loss of earnings and reasonable transportation [*9]expenses as set forth in the regulations”]).

Thus, plaintiff fails to raise a triable issue of fact as to whether plaintiff failed to appear for duly scheduled EUOs.

3. Timely Denial of the Claims

“[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]).

According to Kathleen McAndrews, a Claims Specialist employed by defendant Nationwide Mutual Insurance Company (Nationwide Mutual) at the claims office in Liverpool, New York, the policy upon which these claims have been presented is a policy underwritten by Nationwide Affinity Insurance Company of America, which is a company of Nationwide Mutual (defendant’s exhibit D in support of motion, McAndrews aff ¶¶ 1-3). McAndrews stated that all New York No-Fault related mail “regardless of where it is addressed is forwarded to P.O. Box 26005, Daphne, AL 36526-1126 for processing” (id. ¶ 10). It is undisputed that the claim forms were sent to “Nationwide Insurance Company” at “P.O. Box 26005, Daphne, AL 36526” (see defendant’s exhibits E-H in support of motion, NF-3 forms).

According to Douglas Taylor, a Vice President employed by Auto Injury Solutions, Inc. (AIS), AIS is defendant’s authorized agent “for receiving bills and/or correspondence at Post Office Box 26005, Daphne, AL 36526” (see defendant’s exhibits E-H in support of motion, Taylor long affs ¶ 2).^[FN4] He stated,

“Upon receipt of a bill . . . via regular mail at Post Office Box 26005, Daphne, AL 36526, or facsimile, the following process is utilized: Once the mail is delivered, the inbound mailroom team sorts all of the mail. Each envelope is opened by an electronic machine and then distributed to the batching team. The batchers take the contents of each envelope out, assign an identifying ID number to the contents of each envelope, and then the contents are given to the scanners to create an electronic image. The scanner machine affixes the receive date that the document was received onto each page of the document, as it is imaged. The hard copies of the records are filed and maintained in the file room for Thirty (30) days. The documents are imaged to Nationwide Affinity Insurance Company of America on the same day that the scanner machines affixes the receive date. The scanner machine affixes the received date to the document the same [*10]date the document is received by AIS”

(Taylor long affs ¶ 4). Defendant also submitted the business records of AIS (see defendant’s exhibits E-H in support of motion), which Taylor established as admissible business records under CPLR 4518 (see Taylor long affs ¶¶ 12-13). Based on the date stamps that appeared at the top of bills submitted to defendant, and based on the business records, defendant established that it received the bills on the following dates shown in Table 1 below:

Table 1. Date of Receipt of Bills

b. Proof of Mailing of Denials

To establish proof of timely mailing of the denials, defendant again relied upon the affidavits of McAndrews and Taylor, and the business records of AIS.

According to McAndrews, NF-10 forms are prepared by Claims Specialists, who then electronically notify AIS that the denials are ready for printing (McAndrews aff ¶¶ 17-18). The NF-10 forms use the address(es) contained on the billing documents provided by the medical provider and/or the medical provider’s attorney (id.¶ 15).

According to Taylor, it is AIS’s practice to mail all Explanations of Review (EORs) and NF-10 forms to the provider in duplicate on the same day that they are generated (see defendant’s exhibits E-H, Taylor long affs ¶ 6). The date that the EOR and NF-10 form are generated is noted in the lower left hand corner of the document (id.). Once an EOR and an NF-[*11]10 form are printed for a particular claim, the documents are then placed into a mail machine by AIS mailroom personnel (Taylor long affs ¶ 13). A notation in the history of the record verifies that the documents have been printed, which is entered automatically in the bill history when the print job is run and cannot be altered (id.). The mail machine reads a unique bar code number generated by the system to separate the documents, places the printed documents into a clear windowed envelope, and then prints first class postage on the envelope (id.). The letters to be mailed are maintained in a secure area in the AIS mailroom until they are picked up by the United States Postal Service, which picks up the mail each business day (id.). Any document processed by the AIS mailroom after 2:00 PM is mailed the next business day (Taylor long affs ¶ 14).

McAndrews’s and Taylor’s affidavits and AIS business records establish proof of mailing of the denials in accordance with a standard office practice or procedure (St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 1124 [2d Dept 2008]; Royal Med. Supply, Inc. v Nationwide Gen. Ins. Co., 57 Misc 3d 132[A], 2017 NY Slip Op 51235[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]), either on the dates listed in Table 2 below, or on the next business day:

Table 2. Dates when denials were issued

“[T]o rebut the presumption [of mailing], there 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 [*12]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”

(CIT Bank N.A, 36 NY3d at 557).

Contrary to plaintiff’s argument, defendant did submit an affidavit from someone with personal knowledge of the denials, because McAndrews stated that she was the Claims Specialist who issued the denials, and McAndrews also had personal knowledge of the claims procedures and mailing procedures (McAndrews aff ¶¶ 5-7, 22-23).^[FN5] Although plaintiff’s counsel contends that the affidavit of Kelly Weaver, Claims Representative, was insufficient (see Rybak affirmation ¶¶ 317-334), defendant did not submit an affidavit from Kelly Weaver. The affidavit of Linda Arnold was not offered to establish proof of mailing, but rather discussed defendant’s reasons for requesting the EUO of plaintiff (see defendant’s exhibit Y in support of motion).

As plaintiff points out, McAndrews indicated that she had reviewed electronic claim file (McAndrews aff ¶ 23), but defendant did not submit copies or printouts of the electronic claim file. “Evidence 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” (Bank of New York Mellon v Gordon, 171 AD3d 197, 205-06 [2d Dept 2019] [internal citations and internal quotation marks omitted]). Thus, any information that McAndrews could only have obtained from the electronic log would not be admissible. However, in this case, McAndrews had personally issued the denials, and had submitted copies of the denials themselves, which McAndrews established as defendant’s business records (see McAndrews aff ¶ 38). Plaintiff does not point to any information in McAndrews’s affidavit relevant to proof of mailing that could only have been derived from a review of the electronic claims file.

Plaintiff’s reliance upon Acupuncture Prima Care, P.C. v State Farm Mutual Auto Ins. Co. (17 Misc 3d 1135[A], 2007 NY Slip Op 52273[U] [Dist Ct, Nassau County 2007]) and Carle Place Chiropractic v New York Cent. Mut. Fire Ins. Co. (19 Misc 3d 1139[A] [Dist Ct, Nassau County 2008]) is misplaced. The same court which decided Carle Place Chiropractic and Acupuncture Prima Care, P.C. acknowledged that its prior cases were no longer good law in light of St. Vincent’s Hospital of Richmond:

“It was the opinion of this court that, when stripped of all of its excess verbiage, the insurance companies’ mailing procedures were simply to place a denial form in an envelope and to have someone subsequently mail same. Carle Place Chiropractic v. New York Central Mutual Fire Insurance Company, 19 Misc 3d 1139(A), Slip Copy, 2008 WL 2228633 (Dist.Ct. Nassau Co. 2008); Acupuncture Prima Care, P.C. v. State Farm Mutual Auto Ins. Co., 17 Misc 3d 1135 (A), 851 NYS2d 67 (Dist.Ct. Nassau Co. 2007); New York Hospital Medical Center of Queens v. Liberty Mutual Insurance Company, 16 [*13]Misc 3d 1104 (A), 841 NYS2d 827 (Dist.Ct. Nassau Co. 2007) Recently, however, the Appellate Division, Second Department has found just such a practice and procedure to adequately describe “a standard office practice[] or procedure[] designed to ensure that items were properly addressed and mailed (citations omitted).” St. Vincent’s Hospital of Richmond v. Government Employees Insurance Company, 50 AD3d 1123, 857 NYS2d 211 (2nd Dept. 2008). This court is now constrained to follow this appellate authority”

(Uniondale Chiropractic Off. v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 1130[A], 2008 NY Slip Op 51687[U] [Dist Ct, Nassau County 2008]).

Contrary to plaintiff’s assertion, boxes #23 through #33 on each of the denials were not blank, and so plaintiff fails to raise a triable issue of fact as to whether the denials were facially defective. Plaintiff also asserts that defendant “fails to use the proper denial of claim form (statutory version of the NF-10 form) (Rybak affirmation ¶ 186). To the extent that plaintiff is arguing that the denial of claim forms were not issued using the most current version of the NF-10 form, defendant’s use of “outdated” denial of claim forms is not a fatal defect, “as they contain substantially the same, pertinent information as prescribed forms” (Sheepshead Bay Med. Supply, Inc. v Erie Ins. Co. of NY, 71 Misc 3d 140[A], 2021 NY Slip Op 50491[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2021]).

Contrary to plaintiff’s argument, the denials adequately apprised plaintiff that the bills were denied due to plaintiff’s failure “to submit to the examination under oath scheduled for 11/21/2016, 01/23/2017, 03/21/2017 and 05/19/2017” (see defendant’s exhibits E-H, NF-10 forms). Notably, “a denial of claim form based upon the failure to appear for scheduled EUOs need not set forth the dates of the EUOs” (JYW Med., P.C. v IDS Prop. Ins. Co., 58 Misc 3d 134[A], 2017 NY Slip Op 51800[U], * 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]).

c. Timeliness of Denials

Because all the denials were issued more than 30 days after the bills were received, the issue presented is whether the 30-day period for defendant to pay or otherwise deny plaintiff’s claims was properly tolled for each bill. Plaintiff generally asserts that defendant failed to toll the payment period by timely requesting an EUO (Rybak affirmation ¶ 169).

If the insurer requires any additional information to evaluate the proof of claim, such request for verification must be made within 15 business days of receipt of the proof of claim (11 NYCRR 65—3.5[b]; see New York Univ. Hosp.-Tisch Inst. v Government Empls. Ins. Co., 117 AD3d 1012, 1014 [2d Dept 2014]).

“Where there is a timely original request for verification, but no response to the request for verification is received within 30 calendar days thereafter, or the response to the original request for verification is incomplete, then the insurer, within 10 calendar days after the expiration of that 30—day period, must follow up with a second request for verification (see 11 NYCRR 65—3.6 [b])”

(Mount Sinai Hosp. v New York Cent. Mut. Fire Ins. Co., 120 AD3d 561, 563 [2d Dept 2014]).Defendant must demonstrate “that its initial and follow-up requests for verification were timely mailed” (Urban Radiology, P.C. v Clarendon Natl. Ins. Co., 31 Misc 3d 132 [A], 2011 NY Slip Op 50601[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]). “[A] follow-up [*14]request is not premature when sent within 10 days of the failure to appear for the initial scheduled examination” (ARCO Med. NY, P.C. v Lancer Ins. Co., 37 Misc 3d 136[A], 2012 NY Slip Op 52178[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]).

As plaintiff correctly points out, delay letters which inform plaintiff that defendant was investigating the claims and was in the process of obtaining verification, which included examinations under oath, are insufficient to toll the 30-day statutory time period (Parsons Med. Supply, Inc. v Progressive Northeastern Ins. Co., 36 Misc 3d 148[A], 2012 NY Slip Op 51649[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]).

Because defendant requested plaintiff’s EUO prior to its receipt of the bills, the notification requirements for verification requests under 11 NYCRR 65-3.5 and 65-3.6 did not apply to those pre-claim EUO requests (Mapfre Ins. Co. of New York v Manoo, 140 AD3d 468, 469 [1st Dept 2016]; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 21 [App Term, 2d Dept, 2d & 11th Jud Dists 2004], affd 35 AD3d 720 [2d Dept 2006]). However, once the bills are received, defendant is required to comply with the follow-up provisions of 11 NYCRR 65.36 (b) (Mapfre Ins. Co. of NY, 140 AD3d at 470).

i. Tolling with respect to Bill #1

For bill #1, an EUO was scheduled on January 23, 2017, after receipt of bill #1 on January 20, 2017, and plaintiff failed to appear. A follow-up EUO scheduling letter was timely sent on January 25, 2017, within 10 days of the missed EUO, for another EUO to take place on March 21, 2017, where plaintiff did not appear as well. Another follow-up scheduling letter was timely sent on March 23, 2017, within 10 days of the missed EUO, for an EUO to take place on May 19, 2107. Thus, plaintiff failed to appear at three EUOs scheduled to take place after the receipt of bill #1.

“Where, as here, no other verification request is outstanding, the 30-day period for an insurer to pay or deny a claim based upon a failure to appear for an EUO begins to run on the date of the second EUO nonappearance, when an insurer is permitted to conclude that there was a failure to comply with a condition precedent to coverage”

(Quality Health Supply Corp. v Nationwide Ins., 69 Misc 3d 133[A], 2020 NY Slip Op 51226[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020]).

As defendant did not deny bill #1 until June 8, 2017, which was more than 30 days after plaintiff’s second failure to appear, for the EUO scheduled for March 21, 2017, defendant is not entitled to summary judgment dismissing bill#1, because defendant did not demonstrate that it is not precluded from raising its proffered defense as to bill #1 (see id.).

Therefore, summary judgment dismissing the first cause of action is denied.

iii. Tolling with respect to Bills #2-5

For bills #2-5, a pre-claim EUO scheduling letter was sent on January 25, 2017 before the defendant’s receipt of bills #2-5 on February 6, 2017. The only EUO scheduling letter in the record after receipt of bills #2-5 was a follow-up EUO scheduling letter sent on March 23, 2017, more than 30 days after the receipt of bills #2-5.

On the issue of whether pre-claim EUO requests toll the 30-day determination period to pay or otherwise deny a claim, the Appellate Term, Second Department has issued conflicting decisions on that issue.

In Doctor Goldshteyn Chiropractic, P.C., the Appellate Term rejected the argument that pre-claim EUO scheduling letters did not toll the 30-day period for an insurer to pay or deny a [*15]claim. There, the defendant mailed a scheduling letter to plaintiff’s assignor on January 4, 2011, and the defendant received the plaintiff’s bill on January 21, 2011 (Doctor Goldshteyn Chiropractic, P.C., 56 Misc 3d 132[A], 2017 NY Slip Op 50923[U] at *1). The Appellate Term ruled, “defendant’s time to pay or deny these claims, which defendant received on January 21, 2011, was tolled” (id.).

In Vitality Chiropractic, P.C. v Kemper Insurance Company (14 Misc 3d 94, 96 [App Term, 2d Dept, 2d & 11th Jud Dists 2006]), the Appellate Term held, “the tolling provisions of the insurance regulations do not apply” to pre-claim verification requests. There, the defendant had scheduled IMEs of the plaintiff’s assignor by letters dated May 22 and 23, 2002, which pre-dated the receipt of the plaintiff’s claim on May 30, 2002. The Appellate Term ruled that the defendant’s denial of the claim on July 11, 2002 (which was more than 30 days after the receipt of the plaintiff’s bill) was untimely (id. at 96).

Vitality Chiropractic, P.C. and Doctor Goldshteyn Chiropractic, P.C. cannot be reconciled. The logic of Vitality Chiropractic, P.C. has straightforward appeal: the toll is based on outstanding verification requests made pursuant to 11 NYCRR 65-3.5 (see 11 NYCRR 65-3.8 [a][1], [b][3]; see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 563 [2008]). Given that the Appellate Term, Second Department has held that 11 NYCRR 65-3.5 does not apply to pre-claim requests at all, it logically follows that pre-claim requests cannot toll the 30-day period. Vitality Chiropractic, P.C. relied upon the Appellate Term’s prior decision in Stephen Fogel Psychological, P.C. v Progressive Casualty Insurance Company, which held that “the detailed and narrowly construed verification protocols are not amenable to application at a stage prior to submission of the claim form” (7 Misc 3d 18, 21 [App Term, 2d Dept, 2d & 11th Jud Dists 2004], affd 35 AD3d 720 [2d Dept 2006]). Citing Stephen Fogel Psychological, P.C., lower courts therefore concluded that a denial based on a pre-claim IME was proper so long as the insurer mailed the denial within 30 days of its receipt of the claim (see e.g. Lender Med. Supply, Inc. v Hartford Ins. Co., 35 Misc 3d 1226[A], 2012 NY Slip Op 50903[U] [Civ Ct, Kings County 2012]; Prime Psychological Servs., PC v ELRAC, Inc., 25 Misc 3d 1244[A], 2009 NY Slip Op 52579[U] [Civ Ct, Richmond County 2009]; cf. All-Boro Medical Supplies, Inc. v Progressive Northeastern Ins. Co., 20 Misc 3d 554 [Civ Ct, Kings County 2008] [if defendant insisted upon conducting a pre-claim EUO before deciding whether to pay or deny the claim, it had no choice but to reschedule the EUO to a date within 30 calendar days from the date it received the claim]).

By comparison, Doctor Goldshteyn Chiropractic, P.C. did not explain why it ruled that a pre-claim EUO request tolled the defendant’s time to pay or deny the plaintiff’s claim. The court cited ARCO Medical NY, P.C. v Lancer Insurance Company (34 Misc 3d 134[A], 2011 NY Slip Op 52382[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]), which had different facts. In ARCO Medical NY, P.C., the EUO requests were sent within 15 days after the defendant received the plaintiff’s claims (id. at *2). Also, it is not clear that the plaintiff in Doctor Goldshteyn Chiropractic, P.C. had actually argued that pre-claim requests could toll the 30-day period. Rather, the plaintiff apparently argued that there was no toll because an issue of fact arose as to whether the scheduling letters were mailed, which the court rejected (Doctor Goldshteyn Chiropractic, P.C., 56 Misc 3d 132[A], 2017 NY Slip Op 50923[U]). No appellate cases have followed Doctor Goldshteyn Chiropractic, P.C.

In deciding which case this court should follow, the Appellate Division, Second Department’s decision in Sound Shore Medical Center v New York Central Mutual Fire [*16]Insurance Company (106 AD3d 157 [2d Dept 2013]) is instructive. There, the defendant-insurer received a UB-04 form from the plaintiff-hospital, which prompted the insurer to send two “requests for verification” to the hospital (id. at 159). Thereafter, the insurer received a NF-5 form from the hospital, which prompted the insurer to send another verification request, but the insurer neither denied the claim nor sent another verification request (id. at 160).

The insurer argued that the hospital’s claim was premature because the hospital did not respond either to the insurer’s initial verification request following receipt of the UB-04 form, or to the verification request following receipt of the NF-5 form. However, the hospital argued that it was entitled to summary judgment in its favor because the UB-04 form was not the functional equivalent of a NF-5 form. Because the insurer did not send a follow-up verification request after sending an initial verification request when it received the NF-5 form, the hospital argued that the insurer’s time to pay the claim had not been tolled.

The Appellate Division agreed with the hospital, and it held that the hospital’s submission of a UB-04 form was not the functional equivalent of a NF-5 form, which would have triggered the 30-day period for the insurer to pay or deny a claim, or to seek verification of the claim (id. at 162, 163). The Appellate Division also ruled, “a request for verification that precedes a no-fault insurer’s receipt of the prescribed N-F 5 claim form does not trigger the tolling of the 30-day period within which an insurer must determine whether to pay or deny such a claim” (id. at 164 [emphasis supplied]).

Given all the above, this court therefore follows Vitality Chiropractic, P.C. Although Doctor Goldshteyn Chiropractic, P.C. is a more recent decision, Vitality Chiropractic, P.C. is based on the Appellate Term’s rulings in Stephen Fogel Psychological, P.C., which was affirmed by the Appellate Division, Second Department (Stephen Fogel Psychological, P.C., 7 Misc 3d 18 at 21, affd 35 AD3d 72). Additionally, Vitality Chiropractic, P.C. is consistent with the Appellate Division’s ruling in Sound Shore Medical Center, that pre-claim verification requests involving a hospital claim did not toll the 30-day period, and is consistent with the Appellate Term, First Department’s decision in Okslen Acupuncture, P.C. (39 Misc 3d 144[A], 2013 NY Slip Op 50821[U]).

Accordingly, the pre-claim EUO scheduling letter was sent on January 25, 2017 did not toll the 30-day period for defendant to pay or otherwise deny bills #2-5, which ended on March 8, 2017. Although the follow-up EUO scheduling letter was sent within 10 days of missed EUO on March 21, 2017, the follow-up EUO scheduling letter was sent on March 23, 2017, more than 30 days after the receipt of bills #2-5 on February 6, 2017. Thus, defendant failed to demonstrate any tolling with respect to bills #2-5 (see Tsatskis v State Farm Fire & Cas. Co., 36 Misc 3d 129 [A], 2012 NY Slip Op 51268 [U] [App Term, 2d Dept, 9th & 10th Jud Dists 2012]).

Therefore, summary judgment dismissing the second, third, fourth, and fifth causes of action is denied.

For bills #6-8, a pre-claim EUO scheduling letter was sent on January 25, 2017, for an EUO to take place on March 21, 2017, which was within 30 days of the receipt of bills #6-8 on February 25, 2017. A follow-up EUO scheduling letter was sent on March 23, 2017, for an EUO to take place on May 19, 2017.

As discussed above, defendant’s pre-claim EUO scheduling letter sent on January 25, [*17]2017 did not toll the 30-day period to pay or otherwise deny bills #6-8.

The only verification request in the record which was sent after bills #6-8 were received was the follow-up EUO scheduling letter sent on March 23, 2017. Because this verification request was sent within 30 days of the receipt of bills #6-8, and was sent within10 days after the missed EUO on March 21, 2017, the follow-up EUO scheduling letter sent on March 23, 2017 was timely and tolled defendant’s time to pay or otherwise deny bills #6-8 through the EUO scheduled on May 19, 2017. Because defendant issued the denial of bills #6-8 on June 8, 2017, which was within 30 days of the missed EUO on May 19, 2017, defendant demonstrated that the denial of bills #6-8 was timely.

In this court’s view, Quality Health Supply Corp. v Nationwide Insurance (69 Misc 3d 133[A], 2020 NY Slip Op 51226[U]) does not dictate a different result. Although plaintiff failed to appear at the EUOs on January 23, 2017, March 21, 2017, and May 19, 2017, it is this court’s view that defendant’s time to pay or otherwise deny bills #6-8 did not run from missed EUO on March 21, 2017, because the January 23, 2017 EUO was scheduled to take place prior to the receipt of bills #6-8.

As discussed above, the notification requirements for verification requests under 11 NYCRR 65-3.5 and 65-3.6 do not apply to pre-claim EUO requests (Manoo, 140 AD3d at 469; Stephen Fogel Psychological, P.C., 7 Misc 3d 18, 21, affd 35 AD3d 720). Also, as discussed above, pre-claim EUO requests do not toll the 30-day period for an insurer to pay or otherwise deny a claim. Therefore, it would not make sense to consider any pre-claim EUO in determining when the insurer’s toll has ended.

To illustrate, suppose the insurer had scheduled two EUOs of plaintiff to take place on January 23, 2017 and March 21, 2017, prior to receipt of the bills on May 19, 2017, and plaintiff had failed to appear at those pre-claim EUOs. Taking Quality Health Supply Corp. literally, the insurer’s time to pay or otherwise deny the claims would run from the second missed EUO on March 21, 2017, even though the insurer has yet to receive the bills.

Thus, this court interprets Quality Health Supply Corp. to apply to those EUOs that are scheduled to occur after the insurer’s receipt of the bills at issue. In this case, because the only EUOs that were scheduled to occur after the receipt of the bills #6-8 were the EUOs on March 21, 2017 and May 19, 2017, the 30-day period for defendant to pay or otherwise deny bills #6-8 ran from May 19, 2017.

Plaintiff fails to raise a triable issue of fact as to whether the 30-day period was tolled as to bills #6-8.

Therefore, defendant is entitled to summary judgment dismissing the sixth, seventh, and eighth causes of action, based on plaintiff’s failure to appear at EUO scheduled on March 21, 2017 and May 19, 2017.

Although defendant is entitled to judgment dismissing three out of the eight causes of action against it, this court exercises its discretion not to grant any costs to defendant with respect that judgment (see CPLR 8103). As discussed in the next section of this decision, on the issue of costs and disbursements (which was not addressed by either party), plaintiff is the prevailing party in this action. Because much of the elements of defendant’s prima facie burden for the sixth, seven, and eighth causes of action were the same as the elements of the other causes of action on which plaintiff prevailed, this court does not view the sixth, seventh and eighth causes of action being as substantially different for this court to exercise its discretion under CPLR 8103 to award costs to defendant (cf. Gibson v Tsandikos, 23 AD3d 801, 802—03 [*18][3d Dept 2005]).

II. Plaintiff’s Cross Motion (Motion Seq. No. 002)

“A no-fault provider establishes its prima facie entitlement to summary judgment by proof of the submission to the defendant of a claim form, proof of the fact and the amount of the loss sustained, and proof either that the defendant had failed to pay or deny the claim within the requisite 30-day period, or 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], 2011 NY Slip Op 51292[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]). Once plaintiff meets its prima facie burden, the burden shifts to defendant “to show that it has a meritorious defense and that such a defense is not precluded” (Urban Radiology, P.C. v GEICO Gen. Ins. Co., 39 Misc 3d 146[A], 2013 NY Slip Op 50850[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013] [internal citation omitted]).

Here, plaintiff established its prima facie entitlement for summary judgment in its favor against defendant as to bills #1-5, based on the denial of claim forms in defendant’s motion papers, which admitted receipt of plaintiff’s bills (see Bob Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 53 Misc 3d 135[A], 2016 NY Slip Op 51434[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; see Oleg Barshay, DC, P.C. v State Farm Ins. Co., 14 Misc 3d 74, 75 [App Term, 2d Dept, 2d & 11th Jud Dists 2006]). The denials also establish that the bills were not paid within 30 days after defendant’s receipt of those bills. As discussed above, the denials themselves were also untimely, and thus were without merit as a matter of law.

Thus, plaintiff is granted summary judgment in its favor against defendant on the first, second, third, fourth, and fifth causes of action against defendant, in the sum of $922.15. Plaintiff is also entitled to prejudgment interest on bills #1 through #5 at the rate of 2% per month from November 2, 2017, the date of the commencement of the action, because plaintiff did not commence a lawsuit within 30 days after those bills became overdue (see 11 NYCRR 65-3.9 [c]; East Acupuncture, P.C. v Allstate Ins. Co., 61 AD3d 202, 205 [2d Dept 2009]).

Plaintiff is also granted summary judgment in its favor on the ninth cause of action against defendant, for attorneys’ fees (11 NYCRR § 65-4.6 [d]). The award of attorneys’ fees is calculated as 20% of the aggregate amount of bills #1 through #5 ($922.15) plus interest, subject to a maximum of $1,360 (id.; LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217, 223 [2009]).

On the issue of costs and disbursements (which was not addressed by either party), plaintiff prevailed in obtaining summary judgment in its favor on five out of the eight causes of action against defendant, and plaintiff is entitled to recover exactly half of the total amount sought against defendant (exclusive of interest and attorneys’ fees). Thus, plaintiff is the prevailing party entitled to recover costs of the action from defendant, in the amount of $20.00, as a notice of trial has not been filed and the amount of the judgment is not more than $6,000 (CPLR 8101; NY City Civ Ct Act § 1901 [b] [1]). Having been awarded costs, plaintiff is also therefore entitled to recover any disbursements (CPLR 8301; NY City Civ Ct Act § 1908).

The branch of plaintiff’s motion for summary judgment in its favor on the sixth through eighth causes of action against defendant is denied. As discussed above, defendant demonstrated that it timely denied bills #6-8 based on the failure of plaintiff to appear for duly scheduled [*19]EUOs on March 21, 2017 and May 19, 2017.

The branch of plaintiff’s motion to compel defendant to comply with discovery demands is denied as academic.

CONCLUSION

Upon the foregoing cited papers, it is hereby ORDERED that defendant’s motion for summary judgment dismissing the complaint (Motion Seq. No. 001) is GRANTED IN PART TO THE EXTENT that the sixth, seventh, and eighth causes of action are severed and dismissed, and the remainder of defendant’s motion is otherwise denied; and it is further

ORDERED that the branch of plaintiff’s cross motion for summary judgment in its favor against defendant (Motion Seq. No. 002) is GRANTED IN PART TO THE EXTENT that summary judgment is granted in plaintiff’s favor against defendant on the first, second, third, fourth, and fifth causes of action against defendant, in the sum of $922.15, with prejudgment interest from the date of November 2, 2017; and judgment is granted in plaintiff’s favor on the ninth cause of action for attorneys’ fees in the amount of 20% of the sum of $922.15 plus the accrued prejudgment interest, as calculated by the Clerk, subject to a maximum of $1,360, with costs and disbursements to plaintiff upon submission to the Clerk upon an appropriate bill of costs, and the remainder of plaintiff’s cross motion is denied; and it is further

ORDERED that the Clerk is directed to enter judgment accordingly; and it is further

ORDERED that the prior decision and order dated July 12, 2021 is hereby recalled and vacated.

This constitutes the amended decision and order of the court.

Dated: July 13, 2021
New York, New York
ENTER:
________________________________
RICHARD TSAI, J.
Judge of the Civil Court

Footnotes

Footnote 1: Defendant did not submit a copy of the purported letter from plaintiff’s counsel dated May 18, 2017 or the purported letter from defendant’s counsel dated June 1, 2017.

Footnote 2: Plaintiff also commenced a separate action against defendant to recover assigned first-party no-fault benefits concerning eight bills for dates of service during the period of November 8, 2016 through January 5, 2017, MSB Physical Therapy P.C. a/a/o Bright, Sayquan U v Nationwide Ins., Civ Ct, Kings County, Index No. CV-739338-17/KI.

Footnote 3: In opposition to plaintiff’s cross motion, defendant also argues that, in another action involving the parties for different dates of service from September 9, 2016 through November 3, 2016, another judge of this court determined that plaintiff failed to appeared at EUOs (see defendant’s exhibit A in opposition to plaintiff’s cross motion, MSB Physical Therapy, P.C. a/a/o Sayquan U. Bright v Nationwide Ins., Civ Ct, Kings County, May 8, 2019, Walker-Diallo, J., index No. CV-729770-17/KI).

In light of this court’s determination that defendant’s submissions in its moving papers established plaintiff’s failures to appear at the EUOs on January 23, 2017, March 21, 2017, and May 19, 2017, this court need not reach defendant’s arguments of res judicata and collateral estoppel, which were essentially new arguments raised for the first time in reply in support of summary judgment dismissing this action.

This court notes that the decision in the other action, which ruled that plaintiff had failed to appear at EUOs, appears to concern only the EUOs on November 21, 2016 and January 23, 2017 (see id., at 7-8). The decision did not discuss any proof with respect to the other EUOs scheduled on March 21, 2017 or May 19, 2017.

Defendant also submitted another affidavit from Taylor that is nine paragraphs long and is identical for each bill (see defendant’s exhibits E-H [hereinafter, Taylor short aff]).

CV-740154-19/KI

Attorney for Plaintiff: Oleg Rybak, Esq. The Rybak Firm, PLLC1810 Voorhies Ave., 3rd Floor, Ste. 7, Brooklyn, NY 11235

Attorney for Defendant: Alisa Burns, Esq., McDonnell Adels & Klestzick, PLLC 401 Franklin Ave., 2nd Floor, Garden City, NY 11530

The court’s Decision and Order is based upon consideration of the following papers:

CPLR 2219(a) Recitation

NOTICE OF MOTION & AFFIDAVITS ANNEXED 1

OPPOSITION/CROSS-MOTION 2

REPLY/OPPOSITION TO CROSS-MOTION 3

EXHIBITS

In this No-Fault action, Plaintiff medical provider seeks reimbursement for seven bills which cover a period of medical services provided from October 2, 2018 through January 24, 2019. Defendant acknowledges timely receipt of Plaintiff’s seven bills and now moves for summary judgment on its outstanding verification request defense. Plaintiff cross moves for summary judgment pursuant to CPLR 3212 and to dismiss Defendant’s affirmative defenses pursuant to CPLR 3211(b).

“The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case” (Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). “The failure to make such prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers” (id.). In order to prevail on a motion based on an outstanding additional verification request defense, the movant must establish that the plaintiff failed to comply with its additional verification requests (Compas Medical, P.C. v. New [*2]York Cent. Mut. Fire Ins. Co., 50 Misc 3d 146[A] [App Term, 2d Dept., 11th & 13th Jud. Dists. 2016]; Compas Med., P.C. v Farm Family Cas. Ins. Co., 38 Misc 3d 142[A] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists. 2013]; TAM Medical Supply Corp. v. Tri State Consumers Ins. Co., 57 Misc 3d 133[A] [App Term, 2d Dept., 2d, 11th & 13th Jud. Dists. 2017]).

As an initial matter, the court finds that Defendant established timely mailing of its verification requests pursuant to 11 NYCRR 65-3.5(b) for each of the seven bills at issue through the affidavit of claims specialist Timothy Dacey. However, the proper denial of the bills remains an issue of fact as Defendant failed to establish its outstanding verification request defense.

Defendant mailed post-EUO requests for additional verification to Plaintiff on December 4, 2018, January 18, 2019, February 7, 2019 and March 5, 2019 wherein it requested the following documents:

1. Burke’s federal and state tax returns for 2017 to the present, including any W-2s, 1099’s, and quarterly payroll tax returns.

2. Burke’s bank records for the period December 1, 2017 to the present, including any statements, deposits slips and cancelled checks.

3. Burke’s general ledgers for the period December 1, 2017 to the present, or such other documents as reflect its financial condition, payments made and payments received.

4. Any documents relating to or reflecting any agreement, contract, lease, deal, arrangement or understanding with any person or entity providing management, billing, collection, consulting, or administrative services to Burke during the period December 1, 2017 to the present, including Expert Billing Solutions and Streamline Services.

5. Any documents relating to or reflecting any payment to or received from any person or entity providing management, billing, collection, consulting, or administrative services to Burke during the period December 1, 2017 to the present, including Expert Billing Solutions and Streamline Services.

6. All contracts, leases, subleases and agreements concerning Burke’s operations at 941 Burke Avenue, Bronx, New York, including the written agreement with Seo Han Medical, P.C.

7. All contracts, leases, subleases and agreements concerning Burke’s operations at 764 Elmont Road, Elmont, New York, including the written agreement with Starmed Group, Inc.

8. All contracts, leases, subleases and agreements concerning Burke’s operations at 2625 Atlantic Avenue, Brooklyn, New York, including the written agreement with 2625 Group, Inc.

9. All contracts, leases, subleases and agreements concerning Burke’s operations at 152-180 Rockaway Boulevard, Jamaica, New York.

10. All contracts, leases, subleases and agreements concerning Burke’s operations at 80-12 Jamaica Avenue, Woodhaven, New York, including the written with 19413 Northern Boulevard, Inc.

11. All contracts, leases, subleases and agreements concerning Burke’s operations 424 East 147th Street, Bronx, New York, including the written agreement with 19413 Northern Boulevard, Inc.

12. All contracts, leases, subleases and agreements concerning Burke’s operations at 5037 Broadway, New York, New York, including the written agreement with 19413 Northern Boulevard, Inc.

13. All contracts, leases, subleases and agreements concerning Burke’s operations at 2510 Westchester Avenue, Bronx, New York, including the written agreement with 19413 Northern Boulevard, Inc.

14. All contracts, leases, subleases and agreements concerning Burke’s operations 90-04 Merrick Road, Merrick, New York, including any written agreement with Life Health Care Medical, P.C.

15. All contracts, leases, subleases and agreements concerning Burke’s operations at 2025 Davidson Avenue, Bronx, New York, including any written agreement with Seasoned Chiropractic P.C.

16. All contracts, leases, subleases and agreements concerning Burke’s operations at 550 Remsen Avenue, Brooklyn, New York.

17. All contracts, leases, subleases and agreements concerning Burke’s operations at 1122A Coney Island Avenue, Brooklyn, New York, including the written agreement with Marina Gadaborshev/MG Chiropractic, P.C.^[FN1]

Defendant states that it properly denied all seven bills due to Plaintiff’s failure to provide the requested documentation within 120 days or “written proof providing a reasonable justification for the failure to comply” (Defendant 1, ¶17). However, in the following paragraph, Defendant acknowledges receipt of Plaintiff’s written responses, by letters dated February 26, 2019 and April 16, 2019. Defendant attaches these letters and two of State Farms’ response letters dated March 11, 2019 and April 24, 2019 as an exhibit to its motion papers (Def. 1, exh. 4).

In Plaintiff’s four-page letter dated February 26, 2019, Plaintiff objects to Defendant’s verification request on both procedural and substantive grounds, citing case law and the No-Fault statutes in support of its arguments. The letter further demonstrates that Plaintiff provided similar written objections in previous correspondences along with specific responses to each of the items on Defendant’s list:

“State Farm has now received from Burke Physical all documents in its possession that are responsive to State Farm’s verification requests. As noted in previous correspondences with regards to State Farm’s unduly burdensome, improper and illegal request for additional documents/information listed in paragraphs 1-17 on page 4-5 of your Letter, it should be stated again for the record that the carrier has already been provided with the items in paragraphs 4, 5, 6, 7, 8, 10, 11, 12, 13 and 17 during the EUO. Meanwhile, the items in paragraphs 9, 14, 15 and 16 cannot be provided due to their verbal/oral nature. As for items in paragraphs 1, 2 and 3, they are improper to be requested by the carrier in the first place for the reasons supra.”

In cases where a medical provider sent a similar response to a verification request, courts have denied an insurer summary judgment based on an outstanding verification request defense. In Mount Sinai Hosp. v. Auto One Ins. Co., the Second Department found that the defendant insurer failed to demonstrate its prima facie entitlement to summary judgment as the record [*3]revealed that the medical provider hospital replied to the verification requests with respect to the records in its possession that it was authorized to release. However, the court did find triable issues of fact regarding the “propriety” of the defendant’s verification requests and whether the documents requested existed or were in the possession of the hospital (Mount Sinai Hosp. v. Auto One Ins. Co., 121 AD3d 869 [2d Dept. 2014]; Pro-Align Chiropractic, P.C. v. Travelers Property Casualty Ins. Co., 58 Misc 3d 857 [Dist Ct, Suffolk County 2017]).

Further, the No-Fault rules do not require a medical provider to provide each and every document requested by the insurer. New York Insurance Law Section 65-3.5(o) states that the applicant must provide “all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply.” (11 NYCRR 65-3.5[o] [emphasis added]). Just as Defendant asserts its right to request all information necessary to verify a claim, Plaintiff’s right to object to such requests is codified in the no fault statute as noted in each of Defendant’s verification request letters:

“Please be advised that pursuant to 11 NYCRR 65-3.5(o), State Farm may deny the claim if Burke Physical Therapy does not provide within 120 calendar days from the date of this initial verification request all of the documents identified above under Burke Physical Therapy control or possession or written proof providing reasonable justification for the failure to comply” [emphasis added].

This principle is affirmed by the caselaw Defendant directly quotes in its opposition affirmation: “If a plaintiff deems a verification request to be defective and or unreasonable, it is incumbent on that plaintiff to convey that information to the defendant and to state the reasons thereof, thereby giving the defendant the opportunity to respond accordingly” (Canarsie Chiropractic P.C. a/a/o Day v. Adirondack Mut. Auto. Ins., 27 Misc 3d 1228[A] [Civ. Ct. Kings Cty., 2010]).

Here, Plaintiff objected to Defendant’s requests with strong and detailed arguments in its February 26, 2019 and April 16, 2019 letters. In its response letters dated March 11, 2019 and April 24, 2019, Defendant argued that its requests were proper and repeated its demand for all seventeen items listed in its original request, including those items which Plaintiff stated did not exist. In the instant motion, Defendant disregards these correspondences and either denies Plaintiff’s response altogether or characterizes Plaintiff’s response as a “generic refusal to provide any of the requested verification” (Def. 3, ¶16). Defendant also fails to properly address the arguments and issues raised in Plaintiff’s objection letters. Rather, Defendant argues that Plaintiff is barred from objecting to the propriety of the requests because of its failure to respond. This argument is without merit under the circumstances and wholly inconsistent with the documents provided in Defendant’s motion papers. Further, the objection letters raise an issue of fact regarding Plaintiff’s compliance with 11 NYCRR 65-3.5(o). Based on the foregoing, Defendant failed to meet its summary judgment burden on its outstanding verification defense.

The timely mailing of Plaintiff’s bills is established as Defendant acknowledged timely receipt of those bills. However, in its cross motion, Plaintiff failed to establish its full compliance with Defendant’s verification requests or that the requests themselves were improper. It is well settled that summary judgment is appropriate when sufficient evidence in admissible form is presented to demonstrate the absence of any material issues of fact (Alvarez v. Prospect Hosp., 68 NY2d 320 [1986]; Zuckerman v. City of New York, 49 NY2d 557 [1980]). In support of its cross-motion, Plaintiff attaches the December 8, 2020 affidavit of John Nasrinpay, wherein he avers the following: “I personally responded and mailed on 01/18/2019, 03/07/2019, [*4]04/05/2019 and 05/07/2019 the verification response in issue in this case to the address designated by defendant on the verification requests, to the extent that such response was proper and in my possession.” The affiant provides no further details as to which documents constituted the “verification response in issue” that were “proper” and in his “possession.” Further, while the affidavit refers to the responses provided, there is no admissible documentation to that effect as Plaintiff fails to attach copies of the allegedly mailed responses to its motion. The arguments within Plaintiff’s motion objecting to the propriety of Defendant’s verification requests are equally vague and conclusory. Accordingly, Plaintiff’s request for summary judgment is denied.

Likewise, Plaintiff failed to provide the court with any legal or factual grounds to dismiss Defendant’s affirmative defenses. To prevail on a motion to dismiss an affirmative defense pursuant to CPLR 3211(b), ” the plaintiff bears the burden of demonstrating that the affirmative defense is ‘without merit as a matter of law'” (Bank of New York v. Penalver, 125 AD3d 796, 797 [2d Dept. 2015] quoting Vita v. New York Waste Servs., LLC, 34 AD3d 559, 559 [2d Dept. 2006]). Plaintiff cites no legal authority and provides no substantive or even intelligible argument to support dismissal of Defendant’s affirmative defenses. The bulk of Plaintiff’s arguments against Defendant’s verification requests are conclusory, vague and repetitive. They are also intertwined with Plaintiff’s arguments against Defendant’s discovery demands, a matter which Plaintiff improperly raises in its motion. Further, as both Plaintiff’s arguments and supporting papers fail to establish, in evidentiary form, Plaintiff’s allegations of having mailed verification in compliance with Defendant’s request, this court will not hear Plaintiff’s objections regarding the substance of those requests (see Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [2d Dept. 1999]; Compas Medical, P.C. v. New York Cent. Mut. Fire Ins. Co., 50 Misc 3d 146[A]).

Further, Defendant’s fraudulent incorporation defense is a non-precludable affirmative defense (State Farm Mut. Auto. Ins. Co. v. Mallela, 4 NY3d 313 [2005]; 11 NYCRR 65-3.16[a]). An insurance carrier may, at any time, assert a non-precludable “Mallela defense” and deny payment based on the medical provider’s fraudulent incorporation (Matter of Acuhealth Acupuncture, P.C. v. Country-Wide Ins. Co., 149 AD3d 828 [2d Dept. 2017]; Lexington Acupuncture, P.C. v. General Assur. Co., 35 Misc 3d 42, 44, [App. Term, 2d, 11th & 13th Jud. Dists 2012]). “Inasmuch as the defense of ‘fraudulent incorporation’ is not subject to the preclusion rule, the defendant may raise this defense in its answer, even if not asserted in the claim denial” (Island Chiropractic Testing, P.C. v Nationwide Ins. Co., 35 Misc 3d 1235[A] [Dist Ct, Suffolk County 2012]). Accordingly, Plaintiff failed to establish that dismissal of any of Defendant’s affirmative defenses, including its outstanding verification defense, is warranted under CPLR 3211 (b).

Finally, in its opposition, Plaintiff objects to the discovery demands served with Defendant’s Answer. However, as noted above, the matter is not properly before the court as Plaintiff does not move for relief based on the discovery demands. Plaintiff states, “Defendant has failed to demonstrate its entitlement to the discovery demanded in these matters. In light of that fact, Defendant cannot possibly be entitled to an Order compelling responses to improper discovery demands.” Yet, Defendant has not moved to compel discovery demands.

Based on the foregoing, Defendant’s motion for summary judgment is granted solely to the extent that it established timely mailing of its verification requests. Plaintiff’s cross-motion for summary judgment is granted to the extent that timely receipt of the bills has also been [*5]established. The remainder of Plaintiff’s cross-motion is denied. Defendant’s outstanding verification defense remains an issue of fact for trial.

This constitutes the decision and order of this court.

ENTER.

June 30, 2021

Brooklyn, NY

Hon. Consuelo Mallafre Melendez

Judge, Civil Court

Footnotes

Footnote 1:In its letter dated February 26, 2019, intra, Plaintiff claims that items 4, 5, 6, 7, 8, 10, 11, 12, 13 and 17 were provided during the EUO and items 9, 14, 15 and 16 could not be provided due to their verbal nature. Plaintiff objected to the propriety of Defendant’s request for items 1, 2 and 3.