[*1]

Civil Court of the City of New York, Kings County, July 20, 2017

APPEARANCES OF COUNSEL

Rivkin Radler LLP, Uniondale (Vincent P. Valente of counsel), for defendant.

Zara Javakov, Esq., P.C., Brooklyn (Adam Waknine of counsel), for plaintiff.

The issue as to which reargument is granted, as to which we find no controlling appellate authority, is whether a no-fault insurer which notices an examination under oath (EUO) of a medical professional provider, as to which the provider timely objects and requests explanation as to the reason for the EUO, is obligated to provide such a reason as a prerequisite to the EUO.

Defendant GEICO Insurance (GEICO) moves for reargument of this court’s decision and order dated March 20, 2017 (March 20 decision), which denied GEICO’s motions for summary judgment in eight cases consolidated for decision.^[FN1] The March 20 decision found that plaintiffs had established their prima facie cases as to timely mailing of bills, receipt thereof by GEICO, and nonpayment of the bills, and that GEICO had made its prima facie case as to timely mailing of requests for examinations under oath and plaintiff provider’s nonappearance for examination. The court held, in relevant part, that “in view of Plaintiff’s request in response to Defendant’s demand for EUO of a reason therefore, and Defendant’s response denying necessity to provide any reason, triable issues exist as to whether Defendant had any legally valid reason for seeking EUOs of Plaintiff provider.” (Mar. 20 decision para 2 thereof.) It is primarily this holding that is challenged by GEICO on reargument.

The Relevant Facts

The relevant facts in each of these cases are similar. In each case, upon receipt of bills from plaintiff, GEICO timely notified plaintiff American Chiropractic Care P.C. (American) to appear for an EUO, and plaintiff’s counsel, upon receipt of that notification, expeditiously wrote to GEICO’s counsel, prior to the date scheduled for the EUO, requesting that GEICO{**57 Misc 3d at 531} provide “good faith reasons, based upon the application of objective standards that serves as justification for demanding [plaintiff] to appear for an EUO.” (See e.g. Letter of Julie Lyumbimova, Esq., dated [*2]Aug. 14, 2014, annexed within exhibit 3 to GEICO’s motion.)

In response to the letters of plaintiff’s counsel requesting a good faith reason for the EUO of the provider, GEICO’s counsel declined to provide any reason, but instead asserted that “GEICO is not required to provide your Client with the objective basis and/or ‘good reasons’ for its request for an EUO,” citing 11 NYCRR 65-3.5 (c), and specifically so much thereof as provides, in relation to the requirement that EUOs to be supported by specific objective justification, that “insurer standards shall be available for review by [State Insurance] Department examiners.” (See Letter of Ryan Goldberg, dated Aug. 26, 2014, part of exhibit 3 to GEICO’s motion.) It is undisputed that following the exchange of such correspondence, plaintiff did not appear for examination.

The Legal Issue

After careful analysis of the case law cited by each party, and the applicable regulations, the court stands by its prior decision that upon receipt of a timely request (that is, sufficiently prior to the date for which the EUO is scheduled to allow for a response), the insurer is required to provide some good faith basis for the EUO, and the requirement that insurer standards for scheduling EUOs are available for review by the Insurance Department does not relieve the insurer from the need to respond, in the manner set forth below, to a timely request on behalf of the provider.

Analysis

The Comprehensive Motor Vehicle Insurance Reparations Act (Insurance Law § 5101 et seq.) and the no-fault regulations (11 NYCRR 65-1.1 et seq.) provide the no-fault insurer with the right to require an EUO of the assignor of the claim, as well as the provider of medical services or supplies. While the right to an EUO of an assignor, that is, an individual who suffered injury as the result of an automobile accident, is virtually automatic, the EUO of a provider stands on different grounds. The reason for this is that there is obvious potential to abuse the EUO of a provider, typically a medical doctor or chiropractor, although it may also be a provider of durable medical{**57 Misc 3d at 532} equipment. The claims at issue in no-fault cases are ordinarily no more than a few thousand dollars, and frequently less than even $1,000. To require a doctor to leave his or her practice for at least half a day, between the time to travel to and from an EUO, and the time actually spent under examination, will often result in a loss of income to the doctor disproportionate to, if not in excess of, the amount of the claim, although here GEICO specifically offered to reimburse American for lost earnings and transportation expenses, as required by the regulations. Equally important, an EUO takes the doctor away from time that would otherwise be spent providing health care to patients. (In this regard, there is no provision to reimburse the provider for the time spent in preparation for the examination, including that necessary to compile and review the numerous documents requested by GEICO in advance of the EUO.) The public interest requires that such disruption of medical professionals not be undertaken lightly or on the proverbial fishing expedition in the hope that some basis, perhaps the provider’s nonappearance, may be developed to deny an otherwise legitimate claim.

This court recognizes, and indeed endorses, the right of an insurer, acting in good faith, to require an EUO of a provider. Such EUOs are an important tool in rooting out fraud, which many believe to be all too prevalent in the medical treatment of no-fault patients. Thus, a balance must be struck between the policy of rooting out and preventing fraud, and not unnecessarily disrupting the practice of a medical professional without a good faith basis for so doing.

On reargument, both plaintiff and GEICO have provided case law supporting their respective [*3]positions. The court notes that virtually all of the cases cited emanate from trial courts or arbitrators, so that there is little, if any, appellate authority on this issue.

GEICO relies on the following cases: City Chiropractic v State Farm (Civ Ct, Kings County, Feb. 24, 2016, Thompson, J., index No. 37182/14 [relying on Department of Insurance opinion letters dated Oct. 15, 2002 and Dec. 22, 2006]); Gotham Massage Therapy v State Farm (Civ Ct, Bronx County, Dec. 20, 2010, Taylor, J., index No. 30502/09); and Karina K. Acupuncture v State Farm (Civ Ct, Kings County, Jan. 3, 2012, Garson, J., index No. 1702/11) as well as various arbitration awards and judgments entered thereon, all holding that the insurer has no obligation to state any reason for an EUO of the provider. (The{**57 Misc 3d at 533} court opinions and orders are annexed as exhibit 5 to GEICO’s moving papers, and the arbitration awards are annexed as exhibit 6.)

None of these cases emanate from an appellate court, so they are not binding on this court. Moreover, while City Chiropractic appears directly on point, as do some of the arbitration awards, both Gotham Massage and Karina K. are factually distinguishable. In Gotham Massage, there is no indication that the provider requested a justification for the EUO prior to its scheduled date. Karina K. refused to appear for its EUO unless the insurer agreed to a series of “non-negotiable” demands, a situation far different from the request of American for an explanation of its good faith basis for an EUO. Accordingly, the legal authority relied upon by GEICO may be distilled into one case directly on point, a second which may or may not be on point depending on facts not contained in the opinion, and arbitration awards, coupled with the opinion letters of the Insurance Department. In response, plaintiff relies on a number of cases which emanate from trial courts, and are as equally lacking in binding authority as those relied upon by GEICO, together with a number of arbitration awards. We note that the trial court cases relied upon by plaintiff, while not controlling, appear to be more closely on point than those cited by GEICO. For example, in Avalon Radiology, P.C. v Ameriprise Ins. Co. (52 Misc 3d 836 [Suffolk Dist Ct 2016]) the court held:

“Thus [provider’s] request for the objective reason in response to the first EUO request triggered an obligation on the part of the . . . insurer to respond by providing the specific objective justification for the EUO request. The insurer’s response in this case to the effect that it was not obligated to do so is plainly wrong.” (52 Misc 3d at 838.)

In Rutland Med., P.C. v State Farm Ins. Co. (45 Misc 3d 1033 [Civ Ct, Kings County 2014]), the court denied the insurer’s motion for summary judgment, finding triable issues where the provider timely objected to appearing for an EUO, as to whether if the insurer failed to respond, the provider’s failure to appear for the EUO was reasonable. In Dynamic Med. Imaging, P.C. v State Farm Fire & Cas. Co. (32 Misc 3d 600 [Nassau Dist Ct 2011]), the court noted, albeit in what is arguably dicta, that the insurer “would also have to establish it had an objective justification for requesting the EUO. Such proof requires affidavits.” (32 Misc 3d 600, 604.) In Victory{**57 Misc 3d at 534} Med. Diagnostics, P.C. v Nationwide Prop. & Cas. Ins. Co. (36 Misc 3d 568 [Nassau Dist Ct 2012]), the court held that “before a claimant provider should be required to produce Mallela^[FN2] material, the insurer must have and articulate a good faith and [*4]factual basis for seeking the information.” (36 Misc 3d 568, 574.) Plaintiff cites other trial court cases and arbitration awards with similar holdings.

While plaintiff cites several Appellate Term cases, they are not controlling, as they dealt with the situation where the respective plaintiff providers, unlike American, did not timely object to the EUO request, but sought to raise objections only in response to the insurer’s subsequent summary judgment motion, following the provider’s nonappearance. While American asserts that those cases provide authority that the Appellate Term would have upheld a timely objection lacking an explanatory response by the insurer, we decline to so read those cases. (See Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 42 Misc 3d 137[A], 2014 NY Slip Op 50134[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 44 Misc 3d 141[A], 2014 NY Slip Op 51310[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; Metro Health Prods., Inc. v State Farm Mut. Auto. Ins. Co., 47 Misc 3d 127[A], 2015 NY Slip Op 50402[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015].)

GEICO asserts that the requirement that its standards for scheduling EUOs of providers be made available to the Insurance Department precludes any request by the provider for a preexamination explanation for an EUO. The court disagrees. First, that requirement neither explicitly nor implicitly provides that Insurance Department oversight is in lieu of or preempts the provider’s right to timely seek an explanation for the EUO. We note that even were the Insurance Department to find an insurer to have abused the EUO process, that would be of little solace to a provider who duly appeared for examination. Moreover, the Insurance Department’s oversight of the standards employed by an insurer is necessarily a different analysis than whether those standards were properly applied with regard to a particular provider.

In balancing the need for insurers to conduct EUOs of providers to root out and prevent fraud against the burden on the{**57 Misc 3d at 535} insurer to respond to a timely request for explanation from the provider as to the reason for an EUO, and the burden on a medical professional to appear for examination, we find the burden on the insurer to respond to be slight. In support of GEICO’s underlying motion, GEICO submitted the affidavit of its special investigator, Victor Hernandez, who set forth in great detail the matters supporting GEICO’s need for an EUO of American. From a review of the Hernandez affidavit, it appears that all of these matters were known to GEICO at the time it noticed the EUO of American. This court sees no reason why GEICO could not have easily responded to American’s request for explanation by setting forth some of the matters now contained in the Hernandez affidavit, rather than by stonewalling and asserting that it did not have to provide any explanation to American.

We do not mean to suggest that GEICO should have responded by setting forth all of the information at its disposal with regard to American, or that it needed to set forth anything under oath. But, in this court’s view, GEICO needed to set forth some explanation, even in the form of a letter from counsel, which might have contained a highly-edited version of the matters set forth in Mr. Hernandez’s subsequent affidavit, to demonstrate a good faith basis for the EUO. The burden on the insurer to make some prima facie showing of good faith is far less than the burden that would be imposed on a provider to appear for examination when there is no good faith basis to request an EUO.

There is another benefit to a rule requiring the insurer to provide a substantive response to a timely objection by a provider to an EUO. A substantive response will allow the provider, with the advice of counsel, to make an intelligent decision whether to appear for the EUO and to be adequately prepared so that the examination may be expeditiously concluded. The good faith, or lack thereof, would be established by the insurer’s substantive response. A provider who fails to appear [*5]for its properly noticed EUO, as to which a substantive response was made to any timely objection, would be subject to summary dismissal of its case. And, as the statute and regulations only require a good faith application of objective standards, it would be extremely difficult, at the least, for the provider to challenge a substantive explanation by the insurer for the EUO, so long as that explanation was made in good faith.{**57 Misc 3d at 536}

Conclusion

Accordingly, while the court has granted reargument, upon reargument, we hold that no controlling facts or applicable law was overlooked in the March 20 decision and order. The court stands by the March 20 decision, and particularly paragraph “2” thereof, holding it to be a triable issue as to whether GEICO had a good faith basis, under objective standards, to seek the EUO of American,^[FN3] given American’s timely objection to the EUO, and GEICO’s refusal to set forth any basis for the examination.

Footnotes

Footnote 1:We similarly consolidated for decision GEICO’s eight motions for reargument.

Footnote 2:State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 (2005).

Footnote 3:American and GEICO dispute whether American attached to its papers in the underlying motion sufficient documents to show that it raised timely objection to EUOs with regard to assignments from certain assignors, namely Jesus and Bella Gutierrez. In reviewing American’s papers, it appears that its counsel’s letter included these claims in a list annexed to that letter referencing these assignors. Nevertheless, as to these assignors, the issues for trial shall include whether American’s counsel timely objects to the EUOs prior to the scheduled date.

[*1]

Civil Court of the City of New York, Kings County, May 25, 2017

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC, Brooklyn (Mikhail Kopelevich of counsel), for plaintiff.

Richard T. Lau & Associates, Jericho (Jeremy Maline of counsel), for defendant.

In this action by a provider to recover assigned first-party no-fault benefits, a bench trial commenced and concluded on May 4, 2017. The parties made no pretrial stipulations. Pursuant to the order of the Honorable Steven Z. Mostofsky, dated February 3, 2016, plaintiff “establishe[d] [its] prima facie case” and the amount in dispute is $2,389.76. The order goes on to indicate, “[t]he sole issue for trial shall be whether the verification requests remain[ ] outstanding.” There were no witnesses appearing on behalf of either party.

The court left the record open solely to address the legal issue of which party bears the burden of establishing whether the verification requests remain outstanding. In support, defendant submitted a posttrial memorandum by Jeremy Maline, Esq., dated May 18, 2017, and in reply, plaintiff submitted a posttrial memorandum by Oleg Rybak, Esq., dated May 22, 2017. In brief, plaintiff’s counsel argued that as the issue of outstanding verification is an affirmative defense, it is the defendant’s burden to establish that verification remains outstanding. Defense counsel argued, inter alia, that the order dated February 3, 2016, should be read to indicate that defendant has met its burden of establishing its defense as defendant has proved “timely and proper mailing of the verification requests and mailing of the 120 day denial.”

It is well settled that an insurer may toll the 30-day period to pay or deny a claim by [*2]properly requesting verification within 15 business days from its receipt of the proof of claim form or bill. (11 NYCRR 65-3.5 [b]; Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723 [Civ Ct, Queens County 2004].) If the

“requested verifications has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by telephone call . . . or by mail. At the same time the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in{**56 Misc 3d at 683} writing the missing verification and the party from whom it was requested.” (11 NYCRR 65-3.6 [b].)

“A claim need not be paid or denied until all demanded verification is provided.” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; Prime Psychological Servs., P.C. v ELRAC, Inc., 25 Misc 3d 1244[A], 2009 NY Slip Op 52579[U] [Civ Ct, Richmond County 2009]; see also Insurance Law § 5106 [a]; 11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1].) As for services rendered on or after April 1, 2013, if the applicant does not provide within 120 calendar days from the date of the initial request either all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply, the insurer may deny the claim. (11 NYCRR 65-3.5 [o].)

In the court’s view, defendant’s argument that defendant established mailing of the 120-day denial obviates defendant’s burden to demonstrate prima facie that it had not received the requested verification is unpersuasive as the sole issue for trial is whether the verification requests remain outstanding. Defendant generally bears the burden of proving its affirmative defense (Manion v Pan Am. World Airways, 55 NY2d 398 [1982]). Defendant failed to present any witnesses at trial to prove that it, in fact, did not receive any response to its verification requests.

Lastly, defense counsel has not cited any case law that would convince this court to find otherwise. To the extent that defense counsel discusses any outstanding discovery in its memorandum, such issue is not before the court and therefore was not considered.

Based on the foregoing, the court finds that the defendant has failed to meet its burden of establishing its affirmative defense of outstanding verification and as the order of the Honorable Steven Mostofsky found that plaintiff established its prima facie case, the Clerk is directed to enter judgment in favor of the plaintiff in the amount of $2,389.76 with applicable statutory attorney’s fees, interest, costs and disbursements.

[*1]

Civil Court of the City of New York, Kings County, May 26, 2017

APPEARANCES OF COUNSEL

Law Offices of Emilia Rutigliano, P.C., Brooklyn (Michael Tsugel of counsel), for plaintiff.

Rivkin Radler, LLP, Uniondale (John J. Vobis Jr. of counsel), for defendant.

In this action by a provider to recover assigned first party no-fault benefits, plaintiff moves for summary judgment arguing that it established its prima facie entitlement to recovery of its unpaid no-fault bills and defendant cross-moves for summary judgment based upon plaintiff’s purported failure to appear for four examinations under oath (EUO).

Plaintiff argues, inter alia, the denials issued in this matter were untimely as defendant’s EUO scheduling letters were untimely. Specifically, defendant’s letter dated May 19, 2015 which rescheduled plaintiff’s missed EUO on May 8, 2015 is late as the regulations require that the follow-up requests be issued within 10 calendar days of the missed EUO date. Lastly, plaintiff contends that the affidavits proffered by defendant are conclusory and insufficient to establish that the EUO scheduling letters and subsequent denials were timely and properly mailed and that defendant’s affiant fails to demonstrate personal knowledge of plaintiff’s nonappearances.

In reply, defendant contends that the mailing of the EUO notice 11 days after the third missed EUO does not negate plaintiff’s obligation to appear based upon 11 NYCRR 65-3.5 (p). Further, defendant contends that its affiant sufficiently established its standard office procedures as to the issuance of the letters and denials at issue and that plaintiff’s nonappearances for the four EUOs were, likewise, adequately demonstrated.

An insurer may toll the 30-day period to pay or deny a claim by properly requesting verification within 15 business days from its receipt of the proof of claim form or bill. (11 NYCRR 65-3.5 [b]; Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723 [Civ Ct, Queens County 2004].) If the

“requested verification[ ] has not been supplied to the insurer 30 calendar days after the original [receipt], the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by [a] telephone call . . . or by mail. At the same time the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” (11 NYCRR 65-3.6 {**56 Misc 3d at 928}[b].)

“For the purposes of counting the 30 calendar days after proof of claim, wherein the claim becomes overdue pursuant to section 5106 of the Insurance Law, with the exception of section 65-3.6 of this Subpart, any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.” (11 NYCRR 65-3.8 [l].)

Plaintiff also relies upon Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co. (233 AD2d 431 [2d Dept 1996]), where the Court found that the follow-up requirements for verification requests are to be “strictly construed.” In Presbyterian, the insurer, after not receiving a response to its initial request for additional verification, did not issue a follow-up request and after receiving the requested records three months later, issued a denial shortly thereafter. As such, the 30-day period within which the carrier should have either paid or denied the claim had run “ ’even before verification [was] obtained’, due to the carrier’s ‘lack of diligence in obtaining the verification’ ” (Presbyterian, 233 AD2d at 433, citing Keith v Liberty Mut. Fire Ins. Co., 118 AD2d 151, 154 [2d Dept 1986]). In Concourse Chiropractic, PLLC v Fiduciary Ins. Co. of Am. (35 Misc 3d 146[A], 2012 NY Slip Op 51058[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), the court found that the insurer’s follow-up request was untimely when its follow-up request was issued more than a month after the nonappearance at the first scheduled EUO. However, the foregoing cases and their progeny were decided on a set of facts and circumstances prior to the promulgation and application of the fourth amendment of 11 NYCRR subpart 65-3. The fourth amendment of 11 NYCRR subpart 65-3, subdivision 65-3.5 (p) (fourth amendment), was enacted on January 30, 2013 and reads as follows:

“(p) With respect to a verification request and notice, an insurer’s nonsubstantive technical or immaterial defect or omission, as well as an insurer’s failure to comply with a prescribed time frame, shall not negate an applicant’s obligation to comply with the request or notice. This subdivision shall apply to medical services rendered, and to lost earnings and other reasonable and necessary expenses incurred, on or after April 1, 2013.”

There appears to be no higher court analysis of the phrase: “as well as an insurer’s failure to comply with a prescribed time frame, shall not negate an applicant’s obligation to comply{**56 Misc 3d at 929} with the request or notice.” Nonetheless, and comparably, in Pine Hollow Med., P.C. v Global Liberty Ins. Co. of N.Y. (25 Misc 3d 244 [Civ Ct, Kings County 2009]), the court reasoned that “defendant should not be deprived entirely of the opportunity to review and obtain the needed proof by dint of its one-day tardiness in submitting its follow-up request” and that “[i]t would be patently absurd and contravene the meaning of 11 NYCRR 65-3.8 (j) to impose a more draconian punishment on an insurer who is one day late in requesting follow-up verification than on an insurer who is one day late in requesting additional verification” (id. at 250). It would appear that the fourth amendment addresses such deficiency and is in accord with the foregoing opinion. Thus, it is within this framework upon which the court evaluates the matter at hand.

As an initial matter, upon a review of defendant’s proffered affidavit, the court notes that the affidavit of Cerean Edwards lacks the name of the person whom it was sworn printed beneath the signature as required by CPLR 2101 (a). However, CPLR 2101 (f) states:

“(f) Defects in form; waiver. A defect in the form of a paper, if a substantial right of a party is not prejudiced, shall be disregarded by the court, and leave to correct shall be freely given. The party on whom a paper is served shall be deemed to have waived objection to any defect in form unless, within fifteen days after the receipt thereof, the party on whom the paper is served returns the paper to the party serving it with a statement of particular objections.”

To the extent that plaintiff’s counsel did not proffer any objection to the affidavit in its opposition papers and the same does not prejudice a substantial right of plaintiff, the court finds such defect to have been waived (see generally Devonshire Surgical Facility, LLC v Allstate Ins. Co., 38 Misc 3d 127[A], 2012 NY Slip Op 52351[U] [App Term, 1st Dept 2012]; Complete Orthopedic Supplies, Inc. v State Farm Mut. Auto. Ins. Co., 23 Misc 3d 5 [App Term, 2d Dept, 2d & 11th Jud Dists 2009]).

As to the facts of this case, defendant contends that upon receipt of the bills at issue, defendant issued an initial demand for EUO scheduled for March 23, 2015.^[FN1] When plaintiff failed to appear, defendant issued a request dated March 26, 2015 for{**56 Misc 3d at 930} EUO on April 14, 2015. Defendant contends that plaintiff failed to appear and thus issued another request dated April 20, 2015 for EUO on May 8, 2015. When plaintiff failed to appear, defendant issued a request dated May 19, 2015 for EUO on June 16, 2015. As plaintiff failed to appear for the fourth time, defendant issued a denial dated June 24, 2015.^[FN2]

In the instant matter, the court finds that defendant submitted sufficient proof in admissible form to demonstrate that the EUO scheduling letters were properly and timely mailed. Upon review of the affidavit of Cerean Edwards, defendant’s claims associate, the court finds that defendant, through its standard office policies and procedures, has established the timely and proper mailing of its letters scheduling plaintiff’s EUO and the denials at issue (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2d Dept 2008]; Flushing Traditional Acupuncture, P.C. v GEICO Ins. Co., 36 Misc 3d 156[A], 2012 NY Slip Op 51767[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]; Hollis Med. Servs., P.C. v GEICO Ins. Co., 36 Misc 3d 156[A], 2012 NY Slip Op 51768[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). Defendant also proffered the affirmation of Ryan Goldberg, Esq., who affirmed that he was present in the office to conduct the examination under oath of plaintiff on March 23, 2015, April 14, 2015, May 8, 2015 and June 16, 2015 and that plaintiff failed to appear for the same. The court finds that the affirmation sufficiently demonstrated plaintiff’s nonappearances (see Olmeur Med., P.C. v Nationwide Gen. Ins. Co., 41 Misc 3d 143[A], 2013 NY Slip Op 52031[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]).

Thus, in this instance, the court finds that the insurer’s one-day tardiness in issuing its follow-up request for the EUO scheduled for June 16, 2015 to be a technical defect excusable under 11 NYCRR 65-3.5 (p). Further, under 11 NYCRR 65-3.5 (p), plaintiff’s obligation to appear for an EUO was not negated{**56 Misc 3d at 931} based upon the one-day tardiness in light of the fact that there were three prior EUOs previously scheduled in a timely manner, where plaintiff failed to appear for all four scheduled EUOs and where plaintiff “failed to allege, much less prove, that it had responded in any way to the EUO requests at issue” (Professional Health Imaging, P.C. v. State Farm Mut. Auto. Ins. Co., 52 Misc 3d 134[A], 2016 NY Slip Op 51026[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). Similarly, in Infinity Health Prods., Ltd. v Eveready Ins. Co. (67 AD3d 862 [2d Dept 2009]), the Appellate Division, in reversing the Appellate Term’s determination in favor of plaintiff where defendant’s follow-up request for additional verification was sent three days prior to the expiration of a full 30 calendar days as dictated by 11 NYCRR former 65-15 (e) (2) (now 11 NYCRR 65-3.6 [b]), stated the following:

“Indeed, in light of the particular factual circumstances herein, it would be incongruous to conclude that the Insurance regulation regarding follow-up verification, or any other statute or rule, warrants a result which would, in effect, penalize an insurer who diligently attempts to obtain the information necessary to make a determination of a claim, and concomitantly, rewards a plaintiff who makes no attempt to even comply with the insurer’s requests.” (Infinity Health Prods., Ltd. v Eveready Ins. Co., 67 AD3d 862, 865 [2d Dept 2009]; see also Triangle R Inc. v Praetorian Ins. Co., 30 Misc 3d 129[A], 2010 NY Slip Op 52294[U] [App Term, 1st Dept 2010].)

To the extent that this court finds 11 NYCRR 65-3.5 (p) applicable to the unique set of facts and circumstances before it, the court notes that this provision may invariably create additional litigation rather than serving the purpose of the no-fault legislation, which is to encourage expeditious resolution of claims (see New York Hosp. Med. Ctr. of Queens v Motor Veh. Acc. Indem. Corp., 12 AD3d 429, 430 [2004], quoting Dermatossian v New York City Tr. Auth., 67 NY2d 219, 225 [1986]). Thus, even in finding in favor of defendant in this matter, the court notes that such ruling is limited to the facts and circumstances of the instant case.

Therefore, based upon the foregoing, plaintiff’s motion for summary judgment is denied. Defendant’s cross motion for summary judgment is granted and plaintiff’s complaint is dismissed.

Footnotes

Footnote 1:The court notes that as to the two bills at issue, both demands were made one to two business days beyond the requisite 15 business days and as such, the number of days beyond 15 business days would only reduce the calendar days allowed for the issuance of a denial pursuant to 11 NYCRR 65-3.8 (l).

Footnote 2:The court notes that the affidavit of defendant’s affiant, Cerean Edwards, contained what appears to be a scrivener’s error in part II, paragraph 10, where Ms. Edwards states that plaintiff did not appear for the EUO on April 14, 2015. When read in whole, the date denoted by Ms. Edwards does not appear to be correct. However, the same is without any consequence as only an attorney affirmation adequately demonstrates plaintiff’s nonappearances for the scheduled EUOs.

[*1]

Civil Court of the City of New York, Kings County, December 8, 2016

APPEARANCES OF COUNSEL

Law Offices of Ilona Finkelshteyn, P.C., Brooklyn, for plaintiff.

Law Offices of Daniel J. Tucker, Brooklyn, for defendant.

Plaintiff Clear Water Psychological Services PC seeks to recover no-fault benefits assigned to it by Oshane Crooks (assignor) and moves for summary judgment on the grounds that the bills it submitted to American Transit Insurance Company remain unpaid. Defendant cross-moves for a 90-day stay of the action pending a determination by the Workers’ Compensation Board as to whether the assignor was acting as an employee at the time of the subject automobile accident which occurred on November 10, 2014, and whether he is entitled to workers’ compensation benefits.

At issue is the admissibility of the signed but uncertified police accident report dated November 10, 2014, which indicated that at the time of the accident, the assignor was driving a vehicle with a taxi license plate number and that there were two passengers in the vehicle, to establish that the assignor was acting in the course of his employment. Defendant submits that the report mandates that the 90-day stay be granted.

Facts stated in a police report are not admissible unless they constitute an exception to the hearsay rule (Memenza v Cole, 131 AD3d 1020, 1021-1022 [2d Dept 2015]). If the report is based upon the officer’s personal observations while carrying out police duties, it is admissible as a business record. (Id.; CPLR 4518 [a]; Wynn v Motor Veh. Acc. Indem. Corp., 137 AD3d 779, 780 [2d Dept 2016]; see also Bhowmik v Santana, 140 AD3d 460, 461 [1st Dept 2016] [police accident report, in which officer recorded his own observations that the plaintiff smelled of alcohol and appeared to be intoxicated, was not based on hearsay, and was therefore admissible].)

Pursuant to Vehicle and Traffic Law §§ 603-a and 604, whenever a motor vehicle accident results in serious physical injury, and such accident either is discovered by a police officer, or reported to an officer within five days after an accident, it is the duty of the police to immediately investigate the facts and complete a report on a form prescribed by the Commissioner of Motor Vehicles, a copy of which shall be sent to the Commissioner{**54 Misc 3d at 917} within five business days of the completion of such investigation report (People v Quackenbush, 88 NY2d 534, 539 [1996]; Bouet v City of New York, 125 AD3d 539, 540 [1st Dept 2015]). In New York City, the prescribed police accident report (PAR) is the MV-104AN. (See State of New York Department of Motor Vehicles, Police Accident Report Manual, https://dmv.ny.gov/forms/p33Part01.pdf.)

In the instant action, Police Officer (P.O.) Stephenson filled out this form. The fifth line on the PAR asks for the plate numbers of the vehicles involved in the accident, and the table following line 7 asks for a list of all involved in the accident. As P.O. Stephenson filled out the particulars of the license plate number and the names of the passengers, one can only conclude that his notations were based on his personal observations at the scene of the subject accident.

Although the MV-104AN is signed at the bottom by P.O. Stephenson, it is not certified, and defendant’s cross motion for summary judgment does not contain an affidavit or other sworn evidence from someone with personal knowledge establishing its authenticity or accuracy. CPLR 4518 (c) permits a police report to be admitted as proof of the facts recorded therein only if “[it] bear[s] a certification or authentication by the head of the . . . [police] department . . . or by an employee delegated for that purpose.” Since the MV-104AN is not certified, it does not qualify for admission under CPLR 4518 (c) (Nationwide Gen. Ins. Co. v Bates, 130 AD3d 795, 796 [2d Dept 2015]; Adobea v Junel, 114 AD3d 818 [2d Dept 2014]; Cheul Soo Kang v Violante, 60 AD3d 991 [2d Dept 2009]).

Although the PAR may not be admitted into evidence in its current form, defendant’s motion still presents factual questions regarding the assignor’s status as an employee of a taxi base, as plaintiff does not dispute the truthfulness of P.O. Stephenson’s observations that the vehicle involved in the subject accident had a taxi license plate. Pursuant to Workers’ Compensation Law § 2 (3) and (4), the term “employer” includes a person or entity who leases a taxicab, and concomitantly, the term “employee” includes “a driver, operator or lessee who contracts with an owner, operator or lessor for the purpose of operating a taxicab” (see Matter of Mihalaris v UTOG 2-Way Radio, 299 AD2d 677, 678 [3d Dept 2002]). The question of the assignor’s employment status and his entitlement to benefits under the Workers’ Compensation Law must be resolved at a hearing before the Board, which has primary jurisdiction over{**54 Misc 3d at 918} deciding these matters (Siekkeli v Mark Mariani, Inc., 119 AD3d 766, 768 [2d Dept 2014]; Dunn v American Tr. Ins. Co., 71 AD3d 629, 630 [2d Dept 2010]; Speroni v Mid-Island Hosp., 222 AD2d 497, 498 [2d Dept 1995]).

In light of the above, defendant’s motion is granted to the extent that this action shall be [*3]stayed for 90 days pending a prompt application to determine the applicability of the Workers’ Compensation Law to plaintiff’s claim.

[*1]

Civil Court of the City of New York, Kings County, December 8, 2016

APPEARANCES OF COUNSEL

Law Offices of Aloy O. Ibuzor, New York City, for defendant.

The Rybak Firm, PLLC, Brooklyn (Oleg Rybak of counsel), for plaintiff.

The novel issue presented is whether a no-fault insurer must request examinations under oath (EUOs) of all conceivable entities within 15 business days of receipt of a written notice of claim, as provided in 11 NYCRR 65-3.5 (b), or whether its 15 days in which to request an EUO starts anew after it completes one EUO and discovers the need for an additional EUO of another entity.

Plaintiff Sure Way NY, Inc. seeks to recover from defendant Travelers Insurance Co. no-fault benefits for services and medical equipment it provided to its assignor Rachel Constantino for alleged injuries she sustained in a motor vehicle accident which occurred on July 26, 2013.

Defendant received plaintiff’s two bills on September 16, 2013 (first bill), and October 2, 2013 (second bill), respectively, and made two successive verification requests for each bill seeking, inter alia, documentation describing the equipment provided, including wholesale invoices, information regarding the model number, manufacturer, and serial number, and cancelled checks used to pay the invoices. Defendant made verification requests on the two bills between September and November 2013. Petitioner does not challenge the timeliness of these requests.

On December 19, 2013, while the requested verification remained outstanding, defendant conducted an EUO of the assignor, which plaintiff also concedes was timely. The assignor’s testimony raised questions regarding the accuracy of the billing and coding associated with the claims submissions, and the legal relationship between the plaintiff’s corporation and the individuals who performed the services. As a result, on January 9, 2014, defendant sent a letter to plaintiff requesting that it appear for an EUO scheduled for January 29, 2014. After plaintiff failed to appear for the EUO, defendant sent a second{**56 Misc 3d at 291} scheduling letter to plaintiff dated January 31, 2014, requesting that plaintiff appear for an EUO on February 18, 2014. Plaintiff again failed to appear.

Based upon plaintiff’s failure to respond to the verification requests and failure to appear for the two scheduled EUOs, defendant issued a denial of plaintiff’s claims on February 20, 2014. Plaintiff does not dispute that it failed to respond to the verification requests or that it failed to appear for the EUOs. Defendant moves for summary judgment on the grounds that plaintiff breached a condition precedent to coverage by failing to attend the EUOs. Plaintiff cross-moves for summary judgment on the ground that defendant did not timely mail a request for an EUO within 15 days of its receipt of plaintiff’s claim.

In Prestige Med. P.C. v Travelers Home & Mar. Ins. Co. (56 Misc 3d 284 [Civ Ct, Kings County 2014]), this court held that before an insurance company can take advantage of denying a claim for failure to appear for an EUO beyond the 30-day period pursuant to Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC (82 AD3d 559 [1st Dept 2011]), it must first comply with the notification time lines contained in the verification procedures. This court reached this result because an EUO, as cogently noted by the Honorable Fred J. Hirsh in Tarnoff Chiropractic, P.C. v GEICO Ins. Co. (35 Misc 3d 1213[A], 2012 NY Slip Op 50670[U], *5 [Nassau Dist Ct 2012]), “is a hybrid between a condition precedent to coverage and verification.” Thus, most of the procedural time lines governing EUOs are contained in the regulations relating to verification. (Prestige at 286; see also Country-Wide Ins. Co. v Castro, 2016 NY Slip Op 31505[U] [Sup Ct, NY County 2016].)

11 NYCRR 65-3.5 details the verification procedures to be followed after the insurer receives the completed application for no-fault benefits (NYS form N-F 2). The injured party or that party’s assignee (medical services provider) must then submit written proof of claim (claim form—usually verification of treatment by attending physician or other health care provider—NYS form N-F 3) to the insurer within 45 days after the date the medical services are rendered (Prime Psychological Servs., P.C. v Nationwide Prop. & Cas. Ins. Co., 24 Misc 3d 230, 233 [Civ Ct, Richmond County 2009]). 11 NYCRR 65-3.5 (b) authorizes an insurer, upon [*2]receiving the written proof of claim or its substantial equivalent written notice, to request{**56 Misc 3d at 292} “any additional verification required . . . to establish proof of claim . . . within 15 business days of receipt of the prescribed verification forms.” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 299 [2007]; see A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 101 AD3d 53 [2d Dept 2012]; Prestige at 286.) By properly requesting additional verification within 15 days from the receipt of the proof of claim form, an insurer may toll the 30-day period in which it must deny the claim. (Prestige at 286, citing Prime Psychological Servs., 24 Misc 3d at 233.) If the requested verification has not been supplied to the insurer within 30 days after the original request, the insurer shall, within 10 days, follow up upon its request for verification either by a telephone call or by mail (11 NYCRR 65-3.6 [b]).

EUOs and independent medical examinations (IMEs) are considered to be part of an insurer’s “entitlement to ‘additional verification’ ” following receipt of a provider’s statutory claim forms (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 19 [App Term, 2d Dept, 2d & 11th Jud Dists 2004], affd in part 35 AD3d 720 [2d Dept 2006]; see 11 NYCRR 65-3.5 [d]; see also Prime Psychological, 24 Misc 3d at 233; All-Boro Med. Supplies, Inc. v Progressive Northeastern Ins. Co., 20 Misc 3d 554 [Civ Ct, Kings County 2008]). Therefore, the written request or demand letter for an EUO must be mailed by an insurer within 15 days of receipt of the proof of claim form (Allstate Ins. Co. v American Comprehensive Healthcare Med. Group, P.C., 2016 NY Slip Op 31175[U] [Sup Ct, NY County 2016]; see National Liab. & Fire Ins. Co. v Tam Med. Supply Corp., 131 AD3d 851, 851 [1st Dept 2015]; American Tr. Ins. Co. v Jaga Med. Servs., P.C., 128 AD3d 441, 441 [1st Dept 2015]; O & M Med., P.C. v Travelers Indem. Co., 47 Misc 3d 134[A], 2015 NY Slip Op 50476[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Prestige at 286; see also Unitrin Advantage Ins. Co. v Better Health Care Chiropractic, P.C., 2016 NY Slip Op 30837[U] [Sup Ct, NY County 2016] [an insurer must comply with the no-fault insurance regulations governing the claim procedure which prescribe specific time frames for requesting and scheduling EUOs and IMEs in order to satisfy its prima facie burden on a motion for summary judgment declaring that no coverage exists based on the failure of a claimant or medical provider to appear for an EUO or IME]).

In Prestige, this court ruled, in a case of first impression, that when an insurer obtains new information from an EUO of the assignor, which gives it reason to conduct an EUO of the{**56 Misc 3d at 293} assignee provider, the insurer must send the EUO request to the assignee within 15 business days of the date the EUO of the assignor was held. This court now provides the rationale for this ruling: that the decision to conduct the EUO of the assignee was based upon new information, causing this to be a new verification request, as opposed to a follow-up request upon a party who has not responded or did not respond in full to the initial request for information.

This court then addressed the ramifications that flow from a request for an additional EUO that was not made within the 15 days prescribed in the regulations. It applied precedent governing untimely requests for additional verification to untimely requests for EUOs. In Nyack Hosp. v General Motors Acceptance Corp. (27 AD3d 96 [2d Dept 2005]), the Second Department ruled that when an insurer is late in requesting additional verification beyond the 15-day time period, the insurer’s time to either pay or deny the claim is reduced. Therefore, inasmuch as the defendants mailed the request for additional verification two days beyond the 15-day period, the time within which the defendants had to either pay or deny the claim was reduced from 30 to 28 days. In so ruling, the Appellate Division relied on 11 NYCRR 65-3.8 (l), which states that “[f]or the purposes of counting the 30 calendar days . . . , with the exception of section 65-3.6 [follow-up requirements], any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.” In Prestige, the insurer requested an EUO of the provider four days after the expiration of the 15-day time period from which the assignor’s EUO was conducted, resulting in the provider having to subtract those four days from the 30 days it had to pay or deny the claim after the provider failed to show up for the scheduled EUO follow-up on April 23, 2012.

Similarly here, defendant insurer sent a letter requesting an EUO of the provider on January 9, 2014, some 21 calendar days, or 15 business days, after the EUO was conducted of the assignor on December 19, 2013. It therefore did not have to subtract any days from the 30 days it had in which to issue a denial after the provider failed to appear for its EUO on February 18, 2014. Since defendant issued its denial on February 20, 2014, only two days after the EUO no-show, its denial was timely. Defendant also properly established that it properly generated and mailed the two EUO notification letters, and that the insurer failed to appear for the EUO. (IDS Prop. Cas.{**56 Misc 3d at 294} Ins. Co. v Stracar Med. Servs., P.C., 116 AD3d 1005 [2d Dept 2014]; Synergy First Med., P.L.L.C. v Allstate Ins. Co., 53 Misc 3d 130[A], 2016 NY Slip Op 51365[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; Professional Health Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 52 Misc 3d 134[A], 2016 NY Slip Op 51026[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]).

Accordingly, the defendant’s motion for summary judgment is granted and the plaintiff’s cross motion for summary judgment is denied.

[*1]

Civil Court of the City of New York, Kings County, November 30, 2016

APPEARANCES OF COUNSEL

Law Offices of Emilia I. Rutigliano, P.C., Brooklyn, for plaintiff.

Bruno, Gerbino & Soriano, LLP, Melville, for defendant.

Plaintiff’s motion for summary judgment and defendant’s cross motion for summary judgment are decided as follows:

Plaintiff brought this action against defendant to recover assigned first-party no-fault benefits. Plaintiff sufficiently established its prima facie entitlement to summary judgment through the affidavit of its owner, Irina Kazanskaya, who states that plaintiff mailed three claims for benefits to defendant’s Arizona location. The first claim is dated December 8, 2014, in{**55 Misc 3d at 189} the amount of $1,114.84 (claim 1); the second claim is dated January 6, 2015, in the amount of $1,087.39 (claim 2); and the third claim is dated February 5, 2015, in the amount of $384.23 (claim 3). Ms. Kazanskaya states that none of the claims were paid within 30 days of defendant’s receipt of the claim (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 507 [2015]). Ms. Kazanskaya further established plaintiff’s procedures for generating and mailing the claims (St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 1123 [2d Dept 2008]).

Following submission of each of the claims, defendant had 30 days from receipt to pay or deny the claim for any defense, other than a non-precludable defense (Viviane Etienne Med. Care, 25 NY3d at 506). According to the affidavit of Travis Miller, a no-fault litigation supervisor with defendant, defendant received claim 1 on December 17, 2014, and generated a denial of that claim on June 3, 2015. Defendant received claim 3 on February 20, 2015, and generated a denial of that claim on June 8, 2015. As to claim 2, defendant never denied it, and defendant alleges that it did not receive this claim. As Mr. Miller explains, defendant mailed the denials within one day of generating them.

Mr. Miller further states in his affidavit that defendant denied plaintiff’s claims because of plaintiff’s purported failure to appear for an examination under oath (EUO). Failure to attend an EUO is a precludable defense that must be preserved through a timely denial (Compas Med., P.C. v Praetorian Ins. Co., 49 Misc 3d 145[A], 2015 NY Slip Op 51667[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Because defendant denied claim 1 and claim 3 more than 30 days after receipt, defendant’s EUO no-show defense is waived unless defendant’s time to pay or deny the claim was tolled such that its June 2015 denials were timely.

In this case, defendant contends that it timely requested recorded statements, verification requests, and EUOs from plaintiff and Venton Carmichael, the assignor, which effectively tolled the time by which defendant had to either pay or deny claims 1 and 3. First, Mr. Miller states in his affidavit that defendant sought to obtain a “recorded statement” from the assignor. To that end, Mr. Miller states that defendant sent letters to plaintiff and the assignor requesting the recorded statement. These letters are dated December 24, 2014, January 8, 2015, and February 4, 2015. Mr. Miller states that defendant{**55 Misc 3d at 190} obtained the recorded statement from the assignor on March 12, 2015.

[1] The question arises as to whether a request for a recorded statement effectively tolls the time by which an insurer must pay or deny a claim. First, we must be clear about what a “recorded statement” is. Defendant’s letters identified the event as a “statement” and, subsequently, as a “recorded statement,” but did not specify what a recorded statement entailed. It merely stated that defendant wanted a statement from the assignor discussing the accident and the injuries sustained. In addition, defendant did not treat the request for a recorded statement as an EUO. In fact, the defendant’s letters state that asking for a recorded statement does not preclude defendant from requiring EUOs or medical examinations. Thus, defendant implies, if not explicitly states, that a recorded statement is distinct from an EUO.

Furthermore, in an apparent matter of first impression, cases in this state have not yet specified what a “recorded statement” is or how it should be treated. Certain cases used the terms “recorded statement” and “EUO” interchangeably, but did not state whether the event in question was a formal examination in which testimony was given under oath (see Westchester Med. Ctr. v Government Empls. Ins. Co., 2009 NY Slip Op 30914[U] [Sup Ct, Nassau County 2009]; see also American Commerce Ins. Co. v Sanford, 2014 NY Slip Op 31108[U] [Sup Ct, NY County 2014]). The term “recorded statement” also has been used in the context of notice of a claim (see Matter of New York Cent. Mut. Fire Ins. Co. [Bett], 12 AD3d 1024, 1024 [4th Dept 2004] [holding that a recorded statement was not enough notice of claim to the insurance company]).

Additionally, the relevant regulation does not explicitly state that recorded statements, however they are defined, toll the time to pay or deny a claim (see 11 NYCRR 65-3.5 [b]). Cases construing 11 NYCRR 65-3.5 (b) do not suggest that the regulation should be read so broadly as to include recorded statements (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 280, 285 [1997] [suggesting in dicta that interrogatories, a “distinct request for information,” would not be a sufficient mode of verification]; but see St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2d Dept 2002] [holding that the statutory period in which insurer was required to pay or deny the hospital’s claim was tolled by a request for patient records that was made by letter rather{**55 Misc 3d at 191} than by prescribed forms]). As a result, there appears to be no basis to hold that a request for a recorded statement should toll the time by which defendant must pay or deny a claim.

[2] Defendant also suggests that the “verification requests/delay letters” it mailed in response to claims 1 and 3 tolled the time to deny the claims. Mr. Miller states that the first verification requests were mailed on December 31, 2014 for claim 1 and on March 3, 2015 for claim 3. Although a verification request may be made in letter form,

“an insurer may not rely on a letter, even if denominated a verification request, that merely informs a claimant that a decision on the claim is delayed pending an investigation, and without specifying a particular form of verification and the person or entity from whom the verification is sought, to toll the 30-day claim determination period” (Ocean Diagnostic Imaging P.C. v Citiwide Auto Leasing Inc., 8 Misc 3d 138[A], 2005 NY Slip Op 51314[U], *1 [App Term, 2d & 11th Jud Dists 2005], quoting Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92, 94 [App Term, 2d & 11th Jud Dists 2004]; New Way Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 49 Misc 3d 148[A], 2015 NY Slip Op 51706[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]).

Here, defendant’s request for “verification” generally seeks “the circumstances surrounding the accident; the causal relationship of the claimed injuries sustained in this accident; and whether there is coverage for this claim.” The defendant fails to state with specificity what part of the claim concerned it and the exact information it needs to conduct an investigation. Furthermore, the verification request itself is included at the end of certain explanations of benefits, which are congested with other information, in minuscule font. Defendant’s requests for additional information are mere delay letters, which did not effectively toll defendant’s time to pay or deny plaintiff’s claims.

Mr. Miller states that, following the request for the assignor’s recorded statement, defendant decided it needed an EUO of plaintiff, and retained the law firm of Bruno, Gerbino & Soriano, LLP to conduct that EUO. According to the affidavit of Shawn Kelleher, Esq., a partner with the Bruno firm, the firm sent a letter to plaintiff, dated March 24, 2015 (97 and 32 days after defendant received claims 1 and 3, respectively),{**55 Misc 3d at 192} asking plaintiff to appear for an EUO on April 17, 2015. When plaintiff did not appear for the EUO, the firm sent a letter to plaintiff, dated April 20, 2015, asking plaintiff to appear for an EUO on May 18, 2015. Mr. Kelleher states that plaintiff did not appear for that EUO, either.

Defendant was required to pay or deny claims 1 and 3 within 30 days of receipt (Compas Med., 2015 NY Slip Op 51667[U], *1). Defendant did not do so. Further, defendant did not toll its time to pay or deny claims 1 or 3, since it requested the EUO more than 30 days after receipt of those claims (Neptune Med. Care, P.C. v Ameriprise Auto & Home Ins., 48 Misc 3d 139[A], 2015 NY Slip Op 51220[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Therefore, defendant’s denials of claim 1 and claim 3 were untimely.

[3] As to claim 2, defendant alleges that the bill was never received. Furthermore, defendant purports that plaintiff’s mailing of the claims to defendant’s Arizona location was improper due to the parties’ past dealings. Proof of proper mailing gives rise to a rebuttable presumption that the item was received by the addressee (Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001]). 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 (id.). In order to rebut the presumption of receipt, the defendant, in addition to denying receipt, must show that the plaintiff did not follow routine office practices or that plaintiff’s routine office practices are so careless that it would be “unreasonable to assume that the notice was mailed” (see Nassau Ins. Co. v Murray, 46 NY2d 828, 830 [1978]).

To begin, defendant’s contention that plaintiff should have known that its location was not in Arizona is without merit. Plaintiff claims that it sent the three claims to the same Arizona address, and defendant acknowledges that it received at least two of them. As to the mailing of claim 2, plaintiff submitted an official United States Postal Service (USPS) mailing form designed to provide a record for accountable mail. However, the document contains conflicting date stamps: one stamp for January 8, 2015, and the other for January 8, 2016. Thus, the date of actual mailing is unclear. Essentially, plaintiff did not establish that claim 2 was mailed pursuant to its own office procedures. Although Ms. Kazanskaya, who claims to have personal knowledge of company’s procedures, detailed the{**55 Misc 3d at 193} office procedures for mailing, the dueling date stamps on the USPS form conflict with the procedures described in her affidavit. Hence, office procedures do not establish proper mailing in this instance (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 547-548 [2d Dept 2006]; see also Alur Med. Supply, Inc. v GEICO Ins. Co., 27 Misc 3d 142[A], 2010 NY Slip Op 51053[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]). Because questions of fact prevent this court from finding that plaintiff mailed claim 2, this court likewise does not presume that defendant received claim 2.

For the foregoing reasons, defendant’s cross motion for summary judgment is denied. Plaintiff’s motion for summary judgment is granted only as to claims 1 and 3. Plaintiff may enter judgment for $1,499.07 plus statutory costs, attorney’s fees, disbursements and interest. With regard to claim 2, plaintiff has not yet established that the claim was timely mailed. However, if claim 2 is shown to have been timely mailed, then it was not timely denied by defendant. Accordingly, this case shall proceed to trial to determine whether or not claim 2 was timely mailed.

500177/16

Attorneys for Plaintiff
Bruno, Gerbino & Soriano., P.C.
Richard C. Aitken
445 Broad Hollow Road, Suite 220
Melville, New York 11747
(631) 390-0010

Attorneys for Laurentia St. Rose
Monfort, Healy, McGuire & Salley
840 Franklin Avenue
P.O. Box 7677
Garden City, New York 11530
(516) 747-4082

Pro Se
Tiesha Thompson

Recitation in accordance with CPLR 2219 (a) of the papers considered on the motion of plaintiff State Farm Mutual Automobile Insurance Company (hereinafter State Farm) filed on April 19, 2016, under motion sequence number two, for an order entering a default against the defendants Accelerated DME Recovery, Inc., ( hereinafter DME), Brookdale Hospital Medical Center, (hereinafter Brookdale Hospital), Brookdale ER PHYS Dept. (hereinafter Brookdale ER), DHD Medical, P.C. (hereinafter DHD), Global Health Pharmacy Corp., (hereinafter Global), Integrated Neurological Associates, PLLC, (hereinafter Integrated), Stand up MRI of Brooklyn, P.C. (hereinafter MRI), and Total Neuro Care, P.C., (hereinafter Neuro) (hereinafter jointly the healthcare providers), pursuant to CPLR § 3215 for failure to appear in the instant action.^[FN1]

Notice of Motion
Affirmation in support
Exhibits 1-8

On January 7, 2016, State Farm commenced the instant declaratory judgment action by filing a summons and complaint (hereinafter the commencement papers) with the Kings County Clerk’s office. The complaint alleges the following salient facts: Tiesha Thompson (hereinafter Thompson) is insured under an automobile policy issued by State Farm for a 2012 Chevrolet Tahoe (hereinafter the Tahoe). Laurentia St. Rose (hereinafter St. Rose) claimed that on March 31, 2015, she was a pedestrian involved in an accident with the Tahoe. St. Rose, thereafter, filed for no-fault benefits and received medical services for personal injuries allegedly arising out of the March 31, 2015 accident. The Tahoe owned by Thompson was not involved in the accident of March 31, 2015, nor any other accident that St. Rose can claim personal injuries arising out of. The healthcare provider defendants are entities that treated St. Rose for her injuries that allegedly arose out of the accident on March 31, 2015.

The instant action seeks the following declarations: (1) that the alleged accident of March 31, 2015 is not a covered event under the State Farm policy; (2) that Thompson was not negligent or responsible for the alleged accident of March 31, 2015 or any alleged personal injuries of St. Rose; (3) that State Farm is under no obligation to pay any monies for any alleged medical treatment or economic harm stemming from the alleged accident of March 31, 2015.

State Farm seeks an order pursuant to CPLR 3215 granting a default judgment on its claim for a declaratory judgment as against healthcare provider defendants. CPLR 3215 (a) permits a plaintiff to seek default when the defendant has failed to appear. “On motion for leave to enter a default judgment pursuant to CPLR 3215, the movant is required to submit proof of [*2]service of the summons and complaint, proof of the facts constituting plaintiff’s claim, and proof of the defaulting party’s default in answering and appearance” (Atlantic Cas. Ins. Co. v RJNJ Services, Inc., 89 AD3d 649, 651 [2nd Dept. 2011]). CPLR 3215 (f) states that upon any application for a judgment by default, proof of the facts constituting the claim, the default, and the amount due are to be set forth in an affidavit “made by the party” (HSBC Bank USA, N.A. v Betts, 67 AD3d 735, 736 [2nd Dept. 2009]).

A plaintiff seeking to assert jurisdiction over a defendant must “bear the ultimate burden of proving by a preponderance of the evidence that jurisdiction over the defendant was obtained by proper service of process” (Gottesman v Friedman, 90 AD3d 608, 609 [2nd Dept. 2011] quoting Santiago v Honcraft, 79 AD3d 847, 848 [2nd Dept. 2010]).

The procedure to effectuate service of the commencement papers on Limited Liability Companies is delineated in Limited Liability Company Law § 301 (a). The statute provides in pertinent part that the secretary of state shall be the agent of every domestic limited liability company (see LLC § 302 [a]). Limited Liability Company Law § 302 (a) further provides that in addition to the designation of the secretary of state, each domestic limited liability company or authorized foreign limited liability company may designate a registered agent.

Similarly, the method to effectuate service on corporations is set forth in CPLR 311 and Business Corporations Law § 306 (b) (1). CPLR 311 provides that service upon a corporation shall be made by “delivering the summons on an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service” (CPLR 311). BCL 306 (b) (1) provides that service may be effectuated on corporations by delivery to the Secretary of State.

The affidavits of Heather Morigerato (hereinafter Morigerato), plaintiff’s process server, has established prima facie proof of service of the commencement papers upon six of the healthcare providers pursuant to Limited Liability Company Law § 301 (a) and BCL 306 (b) (1). Morigerato has averred that on January 14, 2016 service of the summons and complaint upon DME, DHD, Global, Integrated, MRI, and Neuro was completed by personal delivery upon the Secretary of State.

The affidavit of Jonathan Cohen (hereinafter Cohen), plaintiff’s other process server, has established prima facie proof of service of the commencement papers upon Brookdale Hospital and Brookdale ER pursuant to CPLR 311. Cohen has averred that Brookdale Hospital was served on January 19, 2016, by personal delivery upon Cecilia Villarama, an administrator in Risk Management Department and authorized agent for receipt of service. Cohen has also averred in a separate affidavit of service that Brookdale ER was served on January 19, 2016, by personal delivery upon Karnie Lee, a manager and authorized agent for receipt of service. A process server’s affidavit ordinarily constitutes a prima facie showing of proper service (S. Point, Inc. v. John, 140 AD3d 1150 [2nd Dept. 2016] citing Aurora Loan Servs., LLC v. Gaines, 104 AD3d 885, 886 [2nd Dept. 2013]). State Farm has established that the healthcare defendants were properly served with the commencement papers.

Plaintiff’s next hurdle is a showing that DME, DHD, Global, Integrated, MRI, Neuro, Brookdale Hospital, and Brookdale ER failed to appear or answer the complaint (see CPLR 3215). Pursuant to CPLR 320, a defendant appears by serving an answer or notice of appearance, or by making a motion which has the effect of extending time to answer. An appearance shall be made within twenty days after service of the summons is complete (CPLR [*3]320 [a]). The affirmation of Richard C. Aitken, State Farm’s counsel, establishes that Accelerated DME Recovery, Inc., Brookdale Hospital Medical Center, Brookdale ER PHYS Dept., DHD Medical P.C., Global Health Pharmacy Corp., Integrated Neurological Associates PLLC, and Stand up MRI of Brooklyn, P.C. did not interpose an answer to the complaint.

Assuming proper service of the commencement papers, a plaintiff is required to set forth the facts constituting the elements of the claim to succeed on a motion to hold a defendant in default (see CPLR 3215 (f), HSBC Bank USA, N.A. v Betts, 67 AD3d 735, 736 [2nd Dept. 2009]). In support of the instant motion State Farm has submitted, among other things, the affidavit of Michael Higgins (hereinafter Higgins), its claim specialist.Higgins has averred that he conducted and completed an investigation and concluded that the Tahoe and Thompson, its insured, were not involved in the alleged accident of March 31, 2015.

Pursuant to CPLR 3001, the Supreme Court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a “justiciable controversy” whether or not further relief is or could be claimed. To constitute a justiciable controversy there must be a real dispute between adverse parties, involving substantial legal interests for which a declaration of rights will have some practical effect (see Chanos v MADAC, LLC, 74 AD3d 1007, 1008 [2nd Dept. 2010]).

The primary purpose of a declaratory judgment is to stabilize an uncertain or disputed jural relationship with respect to present or prospective obligations (Village of Woodbury v Brach, 99 AD3d 697, 699 [2nd Dept. 2012] citing, Chanos v MADAC, LLC, 74 AD3d 1007, 1008 [2nd Dept. 2010]). “Where there is no necessity for resorting to the declaratory judgment it should not be employed” (Hesse v Speece, 204 AD2d 514, 515 [2nd Dept. 1994] citing James v Alderton Dock Yards, 256 NY 298, 305 [1931]). Furthermore, a declaratory judgment is ex vi termini a judgment on the merits (Dupigny v St. Louis, 115 AD3d 638, 640 [2nd Dept. 2014]). Until disputed questions of fact necessary to be determined before judgment can be rendered are settled, it is plant that rights and legal relations cannot be determined, defined and declared (Id).

“[A] default judgment in a declaratory judgment action will not be granted on the default and pleadings alone for it is necessary that plaintiff establish a right to a declaration against… a defendant.” (Dole Food Co., Inc. v Lincoln General Ins. Co., 66 AD3d 1493 [4th Dept. 2009]; see also Levy v Blue Cross and Blue Shield of Greater New York, 124 AD2d 900, 902 [3rd Dept. 1986] citing Nat. Sur. Corp. v Peccichio, 48 Misc 2d 77, 78 [Sup. Ct., Albany County 1965]). This does not mean that the defendant can frustrate the plaintiff’s claim just by defaulting, which would amount to an absurdity, or, on the other hand, that the defendant will be dragged into court (Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7, CPLR 3001:23). It apparently means only that the plaintiff must nonetheless take the stand to attest to all parts of the claim. In ordinary actions, however, proof on a default application can be made solely on paper (Id.).

State Farm annexed an affidavit of Higgins and examination under oath (EUO) of Thomson, its insured. The EUO was conducted on September 17, 2015 over three months before the instant action was commenced. The EUO is not admissible under CPLR 3117. Moreover, it has been recognized that while the transcripts of examinations under oath may be admissible to defeat a summary judgment motion, they are nonetheless hearsay (Rizz Management Inc. v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 1102(A), 2008 NY Slip Op. 51191(U) [NY Dist. Ct. 2008] citing CPT Medical Service, P.C. v Utica Mutual Insurance, 12 [*4]Misc 3d 237, 811 N.Y.S.2d 909 (Civ. Ct. Queens Co.2006). As such, those statements are inadmissible at trial unless, for example, they are used for impeachment purposes upon cross-examination in the event that such declarant or assignor testifies (Id).

As a result, the only admissible testimony in support of a declaratory judgment is Higgins’ affidavit. The Higgins’ affidavit, however, consists of his conclusions based on an investigation which relies primarily on hearsay evidence. Consequently, although State Farm has established that the healthcare provider defendants are in default in answering the complaint it has not established its right to a declaration (Dole Food Co., Inc. v Lincoln General Ins. Co., 66 AD3d 1493 [4th Dept. 2009]). State Farm is directed to file a note of issue and present its proof at an inquest.

State Farm Mutual Automobile Insurance Company’s motion for a declaratory judgment against defendants Accelerated DME Recovery, Inc., Brookdale Hospital Medical Center, Brookdale ER PHYS Dept., DHD Medical P.C., Global Health Pharmacy Corp., Integrated Neurological Associates PLLC, Stand up MRI of Brooklyn, P.C., based on their default in answering the complaint is denied.

The foregoing constitutes the decision and order of this court.

Dated: August 16, 2016

Hon. Francois A. Rivera
J.S.C.

Footnotes

Footnote 1: At oral argument the plaintiff conceded that it accepted a late answer and was no longer seeking a default against from DME and DHD.

[*1]

Civil Court of the City of New York, Kings County, June 30, 2016

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC, Brooklyn, and Law Offices of Kopelevich & Feldsherova, P.C., Brooklyn (Mikhail Kopelevich of counsel), for plaintiff.

Law Office of McCormack & Mattei, P.C., Garden City (Jesse Lubin of counsel), for defendant.

Because of common issues of law and fact, the court consolidated for trial the following matters: Charles Deng Acupuncture, PC, as Assignee of Kesha James v Titan Ins. Co. (CV-005920-14 [the trial commenced and concluded on Feb. 16, 2016]); Pravel, Inc., as Assignee of Yvette Decosta v Nationwide Ins. Co. (index No. CV-019112-14 [the trial commenced and concluded on Feb. 16, 2016]); and Jules Francois Parisien, MD, as Assignee of Hans Destine v Progressive Ins. Co. (index No. CV-032931-14 [the trial commenced and concluded on Feb. 17, 2016]). These matters will result in separate decisions, orders and judgments. The court has considered each party’s posttrial memorandum of law and/or copies of cases provided to it.

In these actions by providers to recover assigned first-party no-fault benefits, the parties stipulated that the plaintiffs met their respective prima facie burdens by timely mailing of bills for payment. (See 11 NYCRR 65-1.1.) The burden now shifts to the defendant to show timely mailing of the notices of the examinations under oath (EUO) and the failure of the providers to attend the scheduled EUOs. (See 11 NYCRR 65-3.5, 65-3.6.)

When the issue involves EUOs, defendant must prove that its EUO requests were timely mailed and that plaintiff’s assignor failed to appear for same. (See Crescent Radiology, PLLC v American Tr. Ins. Co., 31 Misc 3d 134[A], 2011 NY Slip Op 50622[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2011]; Crotona Hgts. Med., P.C. v Farm Family Cas. Ins. Co., 27 Misc 3d 134[A], 2010 NY Slip Op 50716[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2d Dept 2006].)

“Such a showing is established by affidavit on motion for summary judgment and by live testimony at trial (see generally Great Wall, 16 Misc. id at 25; {**53 Misc 3d at 218}Power Acupuncture P.C. v. State Farm Mut. Auto Ins. Co., 11 Misc 3d 1065, 816 N.Y.S.2d 700, 2006 NY Slip Op 50393[U] [Civ. Ct, King’s County 2006]; Roberts Physical Therapy, P.C. v. State Farm Mut. Auto Ins. Co., 14 Misc 3d 1230[A], 836 N.Y.S.2d 495, 2006 NY Slip Op 52565[U] [Civ-Ct, Kings County 2006]; AVA Acupuncture P.C. v. ELCO Administrative Services Co., 10 Misc 3d 1079[A], 814 N.Y.S.2d 889, 2006 NY Slip Op 50158[U] [Civ Ct, Kings County 2006]).” (See New Era Massage Therapy PC v Progressive Cas. Ins. Co., 2009 NY Misc LEXIS 2554, *12, 242 NYLJ 2 [Sup Ct, Queens County, June 26, 2009, CV-065009-08/QU].)

The court accepts the testimony from defendant’s witnesses regarding the policies and procedures for sending out EUO scheduling letters and the court finds that defendant proved timely mailing of the EUO scheduling letters.

The court further accepts the testimony of defendant’s witness, Jamila Shukry, Esq., a senior trial attorney, regarding the policies and procedures concerning the taking of testimony at the examination before trial and the documentation regarding an EUO “no show.” The witness testified that the transcripts were generated in the usual course of its business, that it was the usual course of its business to generate such a record, and that it was made at the time reflected in the transcript. The witness who appeared at the trial, however, was not the assigned attorney and was not personally present at the place where the EUOs were scheduled to take place.

The only remaining issue before the court is whether or not the EUO transcripts allegedly generated at the scheduled EUOs are business records which may be used to show that the respective providers failed to appear at their scheduled EUOs, and the weight to give these records if they are admissible.

The court reviewed the certified EUO transcript of February 21, 2014 alleging the failure of a representative of Pravel, Inc. to appear and the scheduling letter attached (re: assignor Yvette Decosta, exhibit A); the certified EUO transcript of March 11, 2014 alleging the failure of a representative of Pravel, Inc. to appear and the scheduling letter attached (re: assignor Yvette Decosta, exhibit B); the certified EUO transcript of October 15, 2013 alleging the failure of a representative of{**53 Misc 3d at 219} Charles Deng, LAC to appear and the scheduling letter attached (re: assignor Yvette Decosta, exhibit C); the certified EUO transcript of October 31, 2013 alleging the failure of a representative of Charles Deng, LAC to appear and the scheduling letter attached (re: assignor Yvette Decosta, exhibit D); the certified EUO transcript of December 2, 2013 alleging the failure of a representative of Charles Deng, LAC to appear and the scheduling letter attached (re: assignor Yvette Decosta, exhibit E); the certified EUO transcript of December 11, 2013 alleging the failure of a representative of Charles Deng, LAC to appear and the scheduling letter attached (re: assignor Yvette Decosta, exhibit F); the certified EUO transcript of December 18, 2013 alleging the failure of a representative of Charles Deng, LAC to appear and the scheduling letter attached (re: assignor Yvette Decosta, exhibit G); the certified EUO transcript of December 27, 2013 alleging the failure of a representative of Charles Deng, LAC to appear and the scheduling letter attached (re: assignor Yvette Decosta, exhibit H); the certified EUO transcript of September 19, 2013 alleging the failure of a representative of Charles Deng, LAC to appear and the scheduling letter attached (re: assignor Kesha James, exhibit A); and the certified EUO transcript of October 7, 2013 alleging the failure of a representative of Charles Deng, LAC to appear and the scheduling letter attached (re: assignor Kesha James, exhibit B).

There is no question that the certified EUO transcripts can be used in a motion for summary judgment (see MML Med. Care, P.C. v Praetorian Ins. Co., 46 Misc 3d 127[A], 2014 NY Slip Op 51792[U] [2014]; Active Chiropractic, P.C. v Praetorian Ins. Co., 43 Misc 3d 134[A], 2014 NY Slip Op 50634[U] [2014]), but there appears to be no cases on “all fours” concerning the use of such EUO transcripts at trial.

The gravamen of the plaintiff’s objection to the transcript being admitted into evidence is that the transcripts are hearsay, that the transcripts were not prepared by the defendant’s law firm, but by the stenographer, and by allowing such a record to be admitted into evidence denies the respective plaintiffs their right to cross-examine the person who allegedly made the record and therefore cannot be a business record. Clearly the transcripts are hearsay, but the question is whether or not the transcripts of the EUO “no shows” are business records which are an exception to the hearsay rule and admissible at trial.{**53 Misc 3d at 220}

CPLR 4518 (a) reflects the following:

“Generally. Any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence or event, shall be admissible in evidence in proof of that act, transaction, occurrence or event, if the judge finds that it was made in the regular course of any business and that it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter. An electronic record, as defined in section three hundred two of the state technology law, used or stored as such a memorandum or record, shall be admissible in a tangible exhibit that is a true and accurate representation of such electronic record. The court may consider the method or manner by which the electronic record was stored, maintained or retrieved in determining whether the exhibit is a true and accurate representation of such electronic record. All other circumstances of the making of the memorandum or record, including lack of personal knowledge by the maker, may be proved to affect its weight, but they shall not affect its admissibility. The term business includes a business, profession, occupation and calling of every kind.” (Emphasis added.)

The court in Kearney v City of New York (144 Misc 2d 201 [Sup Ct, Kings County 1989]) admitted into evidence the unsworn transcript of a district attorney as a business record to show mandated disclosures made to the defendant in the presence of his counsel. The present matters are distinguishable because the court in Kearney considered a transcript of criminal proceedings made in open court and not in the offices of counsel using a privately paid stenographer. Notwithstanding this distinction, the court in Kearney found a legal duty on the part of both the attorney, as an officer of the court (22 NYCRR 700.4 [a]; People ex rel. Karlin v Culkin, 248 NY 465, 470-471 [1928]; Matter of Mitchell, 40 NY2d 153, 157 [1976]), and the court’s stenographer, to accurately report the information recorded (Judiciary Law arts 9, 15; § 292; see also Judiciary Law § 90).

This court must now consider whether the EUO transcripts, some of which are electronically signed, meet the requirements of the business exception to the hearsay rule under CPLR {**53 Misc 3d at 221} 4518 (a). Here, whether in or out of court, an attorney is an officer of the court (22 NYCRR 700.4 [a]) and is subject to discipline and severe sanctions if s/he misleads the court (Judiciary Law § 487; Rules of Professional Conduct [22 NYCRR 1200.0] rule 3.3, reprinted in Judiciary Law Appendix).

Turning to the certifications made by the stenographers, each certification, except for the name of the respective stenographer, reflects the following:

“I, Christa D’Alessandro, a Notary Public in and for the State of New York, do hereby certify:

“THAT the within is a true and accurate transcript of this statement on the record.

“I further certify that I am not related, either by blood or marriage, to any of the parties to this action; and

“THAT I am in no way interested in the outcome of this matter.

“IN WITNESS WHEREOF, I have hereunto set my hand this 23rd day of April, 2014.

“Christa D’Alessandro.”

To begin with, a notary public must be licensed by the State of New York, be of high moral character, and must not be convicted of a felony or certain other crimes (Executive Law § 130). A notary may be removed from office “for acts of misconduct as related” since he (or she) is a public officer whose right to remain in office is measured not only by his (or her) activities as such but also by trustworthiness and competence exhibited in other areas in which the public is concerned. (Matter of Patterson v Department of State of State of N. Y., 35 AD2d 616, 617 [3d Dept 1970]; NY CLS Executive Law § 130, Notes to Decision [Case Notes].)

A notary is required to place a statement as to her/his authority, the name of the county in which s/he originally qualified, and the date upon which her/his commission expires. (See Executive Law § 137.) What is crucial for the court’s consideration is found under Executive Law § 137,

“If any notary public shall wilfully fail to comply with any of the provisions of this section, he [or she]^[FN*] shall be subject to disciplinary action by the secretary of state. In all the courts within this state the certificate of a notary public, over his [or her]{**53 Misc 3d at 222} signature, shall be received as presumptive evidence of the facts contained in such certificate; provided, that any person interested as a party to a suit may contradict, by other evidence, the certificate of a notary public.” (Emphasis added.)

This court finds that given the reliability of unsworn statements made by attorneys as officers of the court (22 NYCRR 700.4 [a]), and the standards and licensing requirements of notaries in the State of New York (Executive Law § 130), and the notary’s certificate with its “presumptive evidence of the facts contained in such certificate” (Executive Law § 137), and the language within the certificate “THAT the within is a true and accurate transcript of this statement on the record,” and given that the court credits the testimony of the defendant’s witnesses that the transcripts were generated in the usual course of its business and it was in the usual course of its business to generate such a document, and further given that such transcripts are routinely used and accepted by courts in motions for summary judgment, and given that plaintiff, as an “interested party,” had the opportunity to “contradict, by other evidence, the certificate of a notary public,” and the failure of the plaintiff to appear at trial or to contradict by other evidence the certificate of the respective notaries, this court admits into evidence all the EUO transcripts in this matter. The court further notes that it would be the duty of the defendant to make a record when a party or assignor fails to appear two times for an EUO because unless documented there is no basis to deny benefits for a failure to appear at an EUO under the no-fault law (Stephen Fogel Psychological, P.C.).

This court recognizes there is a qualitative difference between a transcript containing pretrial testimony of a party where CPLR 3117 (a) (2) applies and a transcript which contains an unsworn statement which is certified by the stenographer who is a notary and where CPLR 4518 (a) may apply.

The court in CPT Med. Serv., P.C. v Utica Mut. Ins. (12 Misc 3d 237 [Civ Ct, Queens County 2006, Bernice D. Siegal, J.]) determined that an EUO transcript, which involved an assignor who was not a party to the action, cannot be used in the same manner as a real party in interest under CPLR 3117. This decision is consistent with other holdings regarding the use of depositions from General Municipal Law § 50-h hearings and the inadmissibility of such transcripts when used against{**53 Misc 3d at 223} parties who were not given prior notice of such proceedings. (See and cf. Rivera v New York City Tr. Auth., 54 AD3d 545 [1st Dept 2008].) But in the present matter, the real party in interest, the respective providers, never gave any testimony whatsoever because it is alleged each failed to appear altogether. None of the cases cited by either side considered whether the EUO transcript can be used as a business record at trial under CPLR 4518 (a).

The court in Rizz Mgt. Inc. v State Farm Mut. Auto. Ins. Co. (20 Misc 3d 1102[A], 2008 NY Slip Op 51191[U], *4 [Nassau Dist Ct 2008, Andrew M. Engel, J.]), in the context of a motion for summary judgment, refused to consider the EUO transcript, but that court had a very good reason for doing so because, “[n]otably absent from the transcripts submitted are certifications as to the transcripts’ accuracy, executed by the Notary Public who purportedly took the testimony.” In the instant matter, these certifications are attached to each of the transcripts.

Plaintiff argues that the transcripts are neither affirmations of counsel nor affidavits of laypersons and are nothing but self-serving. Plaintiff further argues that the stenographer transcribes nothing more than an unsworn statement of what was said by defendant’s counsel. But most business records are not affirmations of counsel or affidavits, but simply records kept in the usual course of business or profession to reflect “any act, transaction, occurrence or event.” (See CPLR 4518 [a].) What makes the EUO transcripts “inherently highly trustworthy” is the consequences to the attorney who misleads the court (Judiciary Law §§ 487, 90; Rules of Professional Conduct [22 NYCRR 1200.0] rule 3.3, reprinted in Judiciary Law Appendix), the loss of licensure of the notary public for failing to accurately transcribe which is the backbone which allows the “presumptive evidence of the facts contained in such [stenographer’s] certificate” (Executive Law § 137), and the right of the plaintiff to cross-examine and otherwise challenge the defendant’s witnesses. The arguments that plaintiff has made in its memorandum really apply to the weight given the EUO transcripts and not the admissibility of these exhibits as business records.

This court now weighs the evidence in the form of the EUO transcripts, along with the testimony regarding the policies and procedures of the defendant, and finds that the defendant has proved by a preponderance of the evidence that the providers{**53 Misc 3d at 224} have failed to appear at least two times for their respectively scheduled EUOs. No provider appeared at trial to testify.

Based on the foregoing, the clerk is directed to issue a final judgment in favor of the defendant and dismiss the complaint.

Footnotes

Footnote *:The pronoun inserted in the brackets was to balance the referred gender found within the Executive Law without changing its meaning.

010395/15

Plaintiff is represented by the Law Offices of Emilia Rutigliano, by Rachel Berzin, Esq., 1733 Sheepshead Bay Road, Suite 11, Brooklyn NY 11235; Defendant is represented by Bruno, Gerbino & Soriano LLP, by Catarina Oliveira, Esq., 445 Broad Hollow Road, Suite 220, Melville NY 11474.

Plaintiff’s motion and Defendant’s cross-motion for summary judgment pursuant to CPLR 3212 came before the Court on March 23, 2016. In addition to the oral arguments of counsel, the Court has considered the following listed submissions of the parties, pursuant to CPLR 2219(a):

Title/Number

Plaintiff’s Notice of Motion for Summary Judgment dated May 5, 2015; Affidavit of Maxim Tyorkin, M.D., sworn to on May 7, 2015; and Exhibits 1-4 1

Defendant’s Notice of Cross-Motion for Summary Judgment dated August 26, 2015; Attorney Affirmation of Dianne Galluzzo, Esq., affirmed on August 26, 2015; Affidavit of Zach Trahan, sworn to on August 12, 2015; Affidavit of Tammie Ulmer, sworn to on August 14, 2015; Affidavit of Raina Lira, sworn to on August 13, 2015; Affidavit of Lashelda Moreno, sworn to on August 24, 2015; Affirmation of Michael Baskies, M.D., affirmed on August 18, 2015; and Exhibits A-F 2

Plaintiff’s Attorney Affirmation in Opposition of Ilona Finkelshteyn, Esq., affirmed on February 8, 2016; Affidavit of Maxim Tyorkin, M.D., sworn to on February 2, 2016 (Exhibit 1 is the foregoing affidavit) 3

In an action by a provider to recover first-party no-fault benefits, Defendant moves for summary judgment based upon a negative peer review of the services rendered, or, alternatively, that Plaintiff purportedly billed above New Jersey Fee Schedule and thus is not eligible for reimbursement.

Plaintiff argues that affidavits proffered by Defendant are conclusory and fail to establish that the Denial of Claim forms were properly mailed and that Defendant’s IME report is not in admissible form.

In an apparent case of first impression, the issue before the Court is whether an insurer, when receiving a bill from a medical provider, who rendered services in New Jersey and is making a claim for New York no-fault benefits, is required to issue a Denial of Claim form, specifically, the New York State NF-10.

The no-fault regulations require an insurer to either pay or deny a claim for no-fault benefits within 30 days from the date of receipt of the claim (Insurance Law§ 5106(a); 11 NYCRR 65-3.8 (a)). An insurer who fails to timely deny the claim is generally precluded from interposing a defense to that claim. Hosp. for Jt. Disease v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 318, 879 N.E.2d 1291, 849 N.Y.S.2d 473 (2007); Nyack Hosp. v Metropolitan Property & Cas. Ins. Co., 16 AD3d 564, 791 N.Y.S.2d 658 (2d Dept. 2005). A review of Insurance Regulation 68 indicates that there are specific requirements for the issuance of a denial of claim form. See 11 NYCRR 65-3.8. For instance, in denying a claim, a form created by the Insurance Department, known as the NF-10, must be used. See id. In other instances, specific language is required to be inserted in the issuances of NF-10’s. See id.

11 NYCRR 65-3.8(c)(1) advises as follows:

(1) If the insurer denies a claim in whole or in part involving elements of basic economic loss or extended economic loss, the insurer shall notify the applicant or the authorized representative on the prescribed denial of claim form, in duplicate, and shall furnish, if requested by the applicant, one copy of all prescribed claim forms submitted by or on behalf of the applicant thereto. However, where a denial involves a portion of a health provider’s bill, the insurer may make such a denial on a form or letter approved by the department which is issued in duplicate. No form or letter shall be approved unless it contains substantially the same information as the prescribed form which is relevant to the claim denied.

In the case at bar, Defendant’s affiant, Raina Lira, a Claims Adjuster employed by Defendant, avers that Defendant, through its vendor, Auto Injury Solutions (AIS), mailed the [*2]Explanation of Reimbursement Form (EOR) to the medical provider. There is no indication that a NF-10 form was issued in this matter although Ms. Lira avers that in applicable instances, the Denial of Claim Form (NF-10) is sent. Further, there is no indication that the EOR form, which was the only document issued in response to Plaintiff’s claim, is a form or letter approved by the Department as so allowed by 11 NYCRR 65-3.8(c)(1). Thus, notwithstanding both parties’ arguments with regards to the substantive merits of the peer review defense, the Court finds that such defense is precluded by Defendant’s failure to issue a NF-10 Denial of Claim form.

Alternatively, Defendant contends that upon a proffer of a review of the bill by its Certified Coder, Lashelda Moreno, and the same indicates that Plaintiff billed above the New Jersey Fee Schedule, summary judgment must be granted in its favor.

The Fourth Amendment to Regulation 68 states that a fee schedule defense is no longer precluded by the 30 day rule in actions for services rendered after April 1, 2013.

11 NYCRR 65-3.8(g) advises the following:

Proof of the fact and amount of loss sustained pursuant to Insurance Law section 5106 (a) shall not be deemed supplied by an applicant to an insurer and no payment shall be due for such claimed medical services under any circumstances:

(i) when the claimed medical services were not provided to an injured party; or

(ii) for those claimed medical service fees that exceed the charges permissible pursuant to Insurance Law sections 5108(a) and (b) and the regulations promulgated thereunder for services rendered by medical providers.

(g)(2) This subdivision shall apply to medical services rendered on or after April 1, 2013.

This Court, as well as at least two Courts in the First Department, agree on the interpretation of the statute to be there is no preclusion of the fee schedule defense. See Surgicare Surgical Assoc. v National Interstate Ins. Co., 50 Misc 3d 85 (App. Term 2015); see also East Coast Acupuncture, P.C. v Hereford Ins. Co., 26 N.Y.S.3d 684, 685 (Civ. Ct. Kings Cty 2016); Saddle Brook Surgicenter, LLC v All State Ins. Co., 48 Misc 3d 336, 345-346 (Civ. Ct. Bronx Cty 2015).

In Surgicare Surgical Assoc v National Interstate Ins Co, the Appellate Term affirmed the Civil Court’s holding that “where a reimbursable health care service is performed outside the State of New York in a jurisdiction that has enacted a medical fee schedule prescribing the permissible charge for the service rendered, an insurer may properly rely on such fee schedule to establish the “prevailing fee” within the meaning of 11 NYCRR 68.6, and demonstrate compliance therewith by payment in accordance with that fee schedule.” Surgicare Surgical Assoc. v National Interstate Ins. Co, supra. Thus, the Appellate Term found that Plaintiff was only entitled to reimbursement for the permissible rate authorized in New Jersey for the services rendered by Plaintiff as set forth in New Jersey’s no-fault statute and applicable fee schedule.

Likewise, in this instance, the Court finds that Defendant’s fee schedule defense is neither precluded by timeliness or its failure to issue a Denial of Claim form as the language of the statute strictly mandates that “no payment shall be due .under any circumstances” for medical service fees that exceed the fee schedule charges. 11 NYCRR 65-3.8(g). In other words, [*3]Plaintiff would only be entitled to the payment of the subject bill at the rates permissible and authorized in the state of New Jersey. The Court is unpersuaded by Defendant’s argument that payment for Plaintiff’s bill is outright prohibited simply because the billed amount is higher than permissible. The regulation only reduces payment to the amount authorized by the applicable fee schedule.

With regard to the amount ultimately due to Plaintiff, Defendant proffers an explanation by Lashelda Moreno, a Certified Professional Coder employed by AIS on Defendant’s behalf. Upon review of the same, the Court finds that Ms. Moreno did not explain the exact amounts allowable in a coherent manner. In one portion of Ms. Moreno’s analysis, she lists the following with no further details:

According to the New Jersey Physicians’ Fee Schedule Exhibit 1:

Physician Fee North:

CPT 29877: $3,398.38

CPT 29875: $2,712.06 x 50% for MPR = $1356.03

CPT 29877: $3,398.38 x 20% for Assistant Surgeon = $679.68 (reimbursed BA)

CPT 29875: $2,712.06 x 20% for Assistant Surgeon = $542.41 (reimbursed BA)

In Ms. Moreno’s affidavit, upon which she concludes that the proper amount of the bill would be $5,976.50, rather than the billed amount of $10,144.88, there is no further explanation as to what the sum comprises of. While the Court may consider an attorney affirmation in the explanation of fee schedule provisions and the Court may take judicial notice of the fee schedule (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13, 18 [App. Div. 2d Dep’t 2009]), the attorney affirmation of Dianne Galluzzo neither explains Ms. Moreno’s analysis or explains allowable reductions. The Court cannot presume to be knowledgeable of fee schedule reductions that, on its face, cannot be specifically adduced, and will not make any findings of fact as to such reductions. As such, a triable issue of fact remains as to its fee schedule defense. Further, the Court notes that while Ms. Moreno’s analysis sufficiently raises a triable issue, her analysis alone is inarticulate and insufficient to be the basis of summary judgment.

The Court finds that Plaintiff met its prima facie burden in establishing the timely mailing of the bills at issue through the affidavit of Maxim Tyorkin, M.D., the annexed bill and the annexed USPS mail extract pertaining to the bill at issue. See Viviane Etienne Med. Care v Country-Wide Ins. Co., 2015 NY Slip Op 04787 (2015).

Based on the foregoing, Plaintiff’s motion for summary judgment is granted to the extent that it established its prima facie case for purposes of trial. Defendant’s cross-motion is granted to the extent that it established its prima facie case for purposes of trial. The sole issue for trial is Defendant’s fee schedule defense for which Defendant bears the burden of establishing.

This constitutes the Decision and Order of the Court.

Dated: May 20, 2016
__________________________________
Richard J. Montelione, A.J.S.C.

[*1]

Civil Court of the City of New York, Kings County, April 11, 2016

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC, Brooklyn, for plaintiff.

Peter C. Merani, P.C., New York City, for defendant.

{**52 Misc 3d at 492} OPINION OF THE COURT

Plaintiff’s and defendant’s respective motions for summary judgment are decided as follows:

I. Factual Background[*2]

In this action to recover assigned first-party no-fault benefits, plaintiff submitted a claim form and invoice to defendant for services rendered to Cosby Reavis on October 8, 2013. According to plaintiff’s claim, these services related to three different codes promulgated under the Official New York Workers’ Compensation Medical Fee Schedule. These codes are 99215, 20553 and 20999. Through the affidavit of its owner, Ksenia Pavlova, plaintiff contends it has made a prima facie case because it timely mailed a claim (NYS Form NF-3) for services rendered to Cosby Reavis, in accordance with its office procedure for generating and mailing bills, and that defendant has not paid the bill.

Defendant received plaintiff’s claim on October 21, 2013, and issued a denial (NYS Form NF-10) of the claim on December 3, 2013, based on a defense of lack of medical necessity of the services rendered, and based upon its contention that plaintiff did not bill its services in accordance with the applicable fee schedule. Defendant submits a copy of the denial with the affidavit of its claims representative, Nancy Kowalchuk, who describes defendant’s procedure for receiving and reviewing claims, and for sending denials to its Southwest Output Processing Center. Defendant also submits the affidavit of Janine{**52 Misc 3d at 493} Wicks of its Southwest Output Processing Center, who describes defendant’s procedure for mailing responses to claims for benefits, such as plaintiff’s claim. Lastly, defendant submits the sworn statement of Dr. Dorothy Scarpinato, who describes her determination that plaintiff’s services were not medically necessary, based on her independent medical examination of Cosby Reavis.

II. Discussion

A. Fee Codes 99215 and 20553

[1] To prevail on a motion for summary judgment, a medical provider must establish its prima facie case by proving it mailed its “completed claim form to the insurer,” and the insurer failed to pay or deny the claim within 30 days of receipt of the claim (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 507 [2015]). With regard to the claims bearing codes 99215 and 20553, this court holds that plaintiff has met its prima facie burden. However, for the reasons stated below, the court finds that plaintiff has not met its prima facie burden as to the claim bearing code 20999.

Following submission of the bill, defendant had 30 days to pay or deny the claim for any defense, except for any non-precludable defense (Viviane Etienne, 25 NY3d at 506). As defendant denied plaintiff’s claim more than 30 days from the date of receipt, defendant did not preserve its defense of medical necessity (Bonetti v Integon Natl. Ins. Co., 269 AD2d 413, 414 [2d Dept 2000] [lack of medical necessity is a precludable defense]). In addition, defendant’s motion omits any argument concerning the proper billing of services associated with codes 20553 and 99215. Accordingly, this court grants plaintiff’s motion for summary judgment with regard to services related to codes 20553 and 99215.

B. “By Report” Code 20999

[2] With regard to the remaining code 20999, defendant argues that plaintiff has not satisfied its prima facie burden because plaintiff’s claim is incomplete. Specifically, defendant contends plaintiff did not provide sufficient information in support of the amount it charged for the services it designated with code 20999 of the Fee Schedule. Instead of having a relative value associated with the service, code 20999 is designated “By Report,” abbreviated “BR.” The Fee Schedule states that, in order to determine the appropriate monetary value of services designated [*3]“BR,” plaintiff must provide certain information.

{**52 Misc 3d at 494}“Information concerning the nature, extent, and need for the procedure or service, time, skill and equipment necessary, etc., is to be furnished using all of the following:

“A) Diagnosis (postoperative), pertinent history and physical findings.

“B) Size, location, and number of lesions or procedures where appropriate.

“C) A complete description of the major medical procedure and the supplementary procedures.

“D) When possible, list the closest similar procedure by code and relative value unit. The ‘BR’ relative value unit shall be consistent in relativity with the other relative value units in the schedule.

“E) Estimated follow up period, if not listed.

“F) Operative time.” (See Fee Schedule § 4, Surgery at 4, Surgical Ground Rule No. 10 [June 1, 2012 ed].)

In its papers, plaintiff makes no showing that it provided this information.

Neither plaintiff nor defendant provides any case law to support or refute defendant’s argument that this information is part of plaintiff’s prima facie burden, and this court has found no governing precedent. Thus, this issue appears to be a matter of first impression in this jurisdiction.

This court views “By Report” information as, by definition, part of the proof of plaintiff’s “completed claim form” (see Viviane Etienne, 25 NY3d at 507), and thus part of plaintiff’s prima facie burden. The Fee Schedule, which has been adopted into New York’s no-fault regulations (see 11 NYCRR 68.1 [a]), places an affirmative duty on the medical provider to submit this information to justify its billing. By omitting this information, plaintiff deprived defendant of sufficient notice of the claim. Without sufficient notice, defendant should not be expected to evaluate and pay the claim. Consequently, plaintiff did not establish its prima facie case for services related to code 20999.

Separate from the language of the Fee Schedule, defendant also argues that, pursuant to the recently amended 11 NYCRR 65-3.8 (g) (1), plaintiff must prove it billed in accordance with the Fee Schedule as part of its prima facie burden. As this court held in East Coast Acupuncture, P.C. v Hereford Ins. Co. (51 Misc 3d 441, 442-443 [Civ Ct, Kings County 2016]), the amended 11 NYCRR 65-3.8 (g) (1) does not per se require a{**52 Misc 3d at 495} medical provider to prove it billed in accordance with the Fee Schedule as part of its prima facie burden. Instead, the regulation states that, to the extent plaintiff bills amounts in excess of the Fee Schedule, the claim is not established.^[FN*] Therefore, this court held that the fee schedule defense is, under the amended [*4]regulation, non-precludable. Consistent with that opinion is the implication that, to even be considered, the basis of a bill must be established. Fee Schedule encoding generally acts as an agreed shorthand for the value of services. By exception, claims submitted through “By Report” codes have no predetermined relative value, and therefore, must be properly documented and detailed (as described in Surgical Ground Rule No. 10) before they can be considered established and complete. Accordingly, this court holds that, by failing to provide the information specified in the Fee Schedule in support of its services, plaintiff has not made its prima facie case as to code 20999.

III. Conclusion

For the foregoing reasons, plaintiff’s motion is granted with respect to the services billed under codes 20553 and 99215, in the amount of $267.79, and plaintiff may enter judgment for $267.79 plus statutory costs, attorney’s fees, disbursements and interest. Defendant’s motion is granted with respect to services billed under code 20999, and plaintiff’s claim with respect to those services is dismissed.

Footnotes

Footnote *:In any event, defendant does not argue that plaintiff billed in excess of the Fee Schedule. Rather, defendant argues that its fee schedule denial arose because plaintiff failed to provide the information necessary to determine the appropriate fee for its services related to code 20999.