Supreme Court, Nassau County

8206/04

Antonio I. Brandveen, J.

The plaintiff moves for an order vacating and setting aside any prior disposition of this matter, restoring this matter to active for a determination on the merits, and extending the time for the plaintiff to file a note of issue. The defendant opposes the motion. The underlying action seeks Payment of medical bills under no-fault coverage from an automobile accident Denied, where the infant plaintiff sustained personal injuries on August 10, 1999 when struck by a motor vehicle while riding a bicycle owned and operated by Nathaniel Salvador at or near the intersection of Jerusalem Avenue and Hawthorne Avenue, Uniondale, New York.

The plaintiff’s attorney states, in a supporting affirmation dated August 28, 2007, the mother of the infant plaintiff, as a result of the injuries, commenced a personal injuries claim against Salvador, and the defendant, under its insurance policy number 078074840 covered the Salvador vehicle for liability and no-fault. The plaintiff’s attorney states the liability action was eventually settled for $10,000.00 before now retired Nassau County Supreme Court Justice Bruce D. Alpert resulting in a $5,935.27 net recovery to the client. The plaintiff’s attorney report that sum remains in escrow as there are multiple liens against proceeds totaling $14,451.81, nearly three times the actual net recovered here. The plaintiff’s attorney asserts the liens arose because none of the medical bills incurred by the plaintiff were covered by the defendant under its no-fault insurance coverage. The plaintiff’s attorney avers the defendant contended the no-fault application for benefits was untimely filed within the 90 day period, and subsequently the infant plaintiff brought an action for payment of those medical bills in this action. The [*2]plaintiff’s attorney submits, upon information and belief, all discovery in this action has been completed, including depositions and physical examinations. The plaintiff’s attorney points out a certification order was entered on or about November 29, 2005, in this action which required the plaintiff to file a note of issue within 60 days of the order, but a note of issue was not filed within that time, and, upon information and belief, this matter was dismissed on March 14, 2006, as a pre-note issue matter for failure to file a note of issue. The plaintiff’s attorney alleges, subsequent to the certification conference and continuing to the present, settlement discussions were held between the law offices of the parties, and copies of all itemized bills were obtained and forwarded to the attorneys for the defendant on May 2, 2006, requesting payment for various medical providers. The plaintiff’s attorney reports the defense counsel, in approximately June 2006, responded to the plaintiff’s request for settlement, and advised a problem was encountered since the plaintiff had originally executed assignments to the medical providers. The plaintiff’s attorney maintains counsel for the plaintiff discussed the assignment of benefits problem with the attorney for the defendant resulting in the plaintiff’s agreement to attempt to have the assignment of benefits vacated so the plaintiff could receive the benefits, and pay the outstanding medical bills. The plaintiff’s attorney alleges the law office of the plaintiff, since approximately July 13, 2006, has been attempting to have the previously executed assignments vacated with the agreement the money collected would be applied to the outstanding medical bills, and in the interim, the note of issue was not filed which resulted in the dismissal of this matter. The plaintiff’s attorney contends there has been activity during the one year period since the matter has been dismissed, and such efforts are continuing in an attempt to settle the matter, but if it cannot be settled, it must be determined on the merits. The plaintiff’s attorney affirms, the plaintiff’s motion did testify, during the course of the discovery in this action, she filed a no-fault application within the required 90 day period, however, the plaintiff’s mother did not retain a copy of the no-fault application, and the defendant apparently denied receiving the application.

The defense attorney states, in an opposing affirmation dated October 30, 2007, the plaintiff’s motion must be denied because (1) the plaintiff fails to show a reasonable excuse why this case was not restored within one year; (2) the plaintiff fails to demonstrate a meritorious cause of action; (3) the plaintiff fails to show the absence of prejudice, if the matter is restored; and (4) the plaintiff fails to demonstrate no intent to abandon the action. The defense attorney states action was dismissed on March 14, 2006, due to the plaintiff’s failure to file a note of issue with 60 days of the order, and on August 28, 2007, the plaintiff brought a motion to restore this matter to the trial calendar. The defense attorney asserts the plaintiff’s counsel has failed to offer any reasonable excuse why it took 17 months to bring a motion seeking restoration. The defense attorney avers, by the plaintiff’s own admission in the moving papers, the plaintiff assigned the right to sue to medical providers, and there has not been any release of the assignment of those benefits, so the plaintiff has no standing to sue. The defense attorney insists the plaintiff [*3]is not able to provide proof a no-fault application was mailed within 90 days of the date of accident. The defense attorney points out the plaintiff’s motion is not supported by a person having personal knowledge of facts, to wit the plaintiff fails to include the required sworn statement of merits to support the contention the plaintiff’s bills were timely mailed to the defendant. The defense attorney contends the defendant is prejudiced by the delay, if the action is restored to the trial calendar, since more than eight years have passed since the August 10, 1999 accident, and August 28, 2007, the date of the motion to restore. The defense attorney points out there is a presumption of abandonment when the plaintiff fails to demonstrate no intent to abandon the action under CPLR 3404, and this action was dismissed on March 16, 2006, and the plaintiff seeks to restore it more than a year after the dismissal.

The plaintiff’s attorney counters, in a reply affirmation dated December 10, 2007, the defense contention the motion should be denied since the plaintiff has not complied with the requirements to restore an action pursuant to CPLR 3404 because no note of issue was filed, CPLR 3404 is inapplicable. The plaintiff’s attorney notes the sanctions under 22 NYCRR § 208.14 (c) and requirements of CPLR 3404 as postulated by the plaintiff do not apply to a matter which has been disposed prior to the filing of a note of issue. The plaintiff’s attorney challenges the defense assertion that the motion should be denied because an affidavit has not been submitted by a person with knowledge of the facts. The plaintiff’s attorney points to the reply affidavit dated December 10, 2007, of the plaintiff’s mother, a person with such knowledge, and points out the plaintiff’s mother was deposed on August 23, 2005, and testified she had received, completed, signed, and returned the no-fault application to the defendant within the required 90 day period. The plaintiff’s attorney asserts there is a reasonable excuse for not moving within one year based upon ongoing settlement discussions, and the plaintiff has a meritorious cause of action since the plaintiff’s position, as stated by the plaintiff’s mother in sworn statements and testimony, is the defendant received the no-fault application within the required period. The plaintiff’s attorney avers the prejudice claim of the defense is specious because the issue is whether the defendant received the no-fault application, and the passage of time creates no prejudice to the defendant. The plaintiff’s attorney maintains the plaintiff has continued to pursue this matter, and there is no demonstration of an intent to abandon the action.

“No-fault benefits are intended to reimburse persons for, among other things, medical expenses “incurred” as a result of a motor vehicle accident (Insurance Law § 5102 [a])” (Todaro v. GEICO General Ins. Co., 46 AD3d 1086, 1088, 848 NYS2d 393 [3rd Dept., 2007]).

A defendant seeking to vacate a default pursuant to CPLR 5015(a)(1) must demonstrate both a reasonable excuse for the default and the existence of a meritorious defense (see Eugene Di Lorenzo, Inc. v. Dutton Lbr. Co., 67 NY2d 138, 501 NYS2d 8, 492 NE2d 116; Dominguez v. Carioscia, 1 [*4]AD3d 396, 766 NYS2d 685). Here, the Supreme Court improvidently exercised its discretion in denying the defendant’s motion to vacate its default since the defendant established that the default was not willful, but rather, was due to law office failure on the part of its counsel (see Hospital for Joint Diseases v. ELRAC, Inc., 11 AD3d 432, 783 NYS2d 612; Weekes v. Karayianakis, 304 AD2d 561, 758 NYS2d 117; CPLR 2005). Furthermore, the defendant demonstrated a meritorious defense (see Fentin & Goldman v. Ito, 2 AD3d 397, 767 NYS2d 865). Accordingly, the Supreme Court should have vacated the defendant’s default in appearing and answering the complaint

Friedman v. Crystal Ball Group, Inc., 28 AD3d 514, 514-515, 813 NYS2d 496 [2nd Dept., 2006].

This Court has carefully reviewed and considered all of the parties’ papers submitted on this motion.

In an action to recover no-fault benefits, a plaintiff makes a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms were mailed and received and that payment of no-fault benefits was overdue (see Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274 [1997]; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]). 11 NYCRR 65-3.8 (a) provides that no-fault benefits are overdue if not paid within 30 days after the insurer receives proof of claims, which shall include verification of all of the relevant information requested pursuant to 11 NYCRR 65-3.5

New York and Presbyterian Hosp. v. Selective Ins. Co. of America, 43 AD3d 1019, 1020, 842 NYS2d 63 [2nd Dept., 2007].

This Court finds the plaintiff has not met the prerequisites for the relief sought here.

Accordingly, the motion is denied in all respects. So ordered.

Dated: February 8, 2008

E N T E R:

______________________________

J. S. C.

FINAL DISPOSITION XXXNON FINAL DISPOSITION

Supreme Court, Nassau County

3442/02

TO: Stillman & Stillman

By: Christopher McCollum, Esq.

Attorney for Plaintiffs

2622 East Tremont Avenue

Bronx, NY 10461

Julie A. Linwood, Esq.

McDonnell & Adels, P.C.

Attorneys for Defendants

401 Franklin Avenue

Garden City, NY 11530Howard Stern, Esq.

Werner, Zaroff, Stern, Ashkenazcz, LLP

Attorney for counterclaim

360 Merrick Road, 2nd Floor

Lynbrook, NY 11563

Daniel Palmieri, J.

The motion by plaintiffs for partial summary judgment pursuant to CPLR 3212 as to the 5th and 24th causes of action in the complaint (Hernandez and Leyva) is granted. Entry of judgment shall await resolution of all claims and counterclaims asserted by the parties hereto.

The motion by plaintiffs on the counterclaim (improperly denominated as a cross motion) for partial summary judgment pursuant to CPLR 3212 dismissing defendant’s counterclaim to the extent interposed against plaintiffs 5th and 24th causes of action in the complaint is denied.

The cross motion by defendant Geico for an order pursuant to CPLR 3126 striking plaintiffs’ pleadings, or in the alternative for partial summary judgment pursuant to CPLR 3212 summarily dismissing those portions of the complaint that request interest, is denied, without prejudice to requesting a negative inference charge from the trial court with regard to documents demanded but stated no longer to be in possession of the plaintiffs, and without prejudice to the service of a further demand consistent with this decision and order.

The background of this action is set forth in this Court’s prior order dated October 10, [*2]2006. In short, the principal of plaintiff Carnegie Hill Orthopedic Services, P.C. (“Carnegie”) and the owner of Devonshire Surgical Facility (“Devonshire”) is Dr. Allen Chamberlin, a physician whose license to practice medicine was revoked based on evidence of the performance of unnecessary procedures and filing reports with false diagnoses. See Matter of Chamberlin v New York State Bd. For Professional Med. Conduct, 34 AD3d 1097 (3rd Dept. 2006). Geico alleges that Dr. Chamberlin carried out an extensive and pervasive practice of fraud which included fabricating injuries, falsifying medical records to justify surgery billed for but not performed, and performance of procedures/surgeries which risked harm to patients. Nevertheless, the plaintiffs contend that pursuant to applicable Department of Insurance regulations they were entitled to be paid or to have their claims denied within the 30 days after proof of their claims were suppled to the defendant, and because neither occurred they are now entitled to be paid, with interest and attorneys’ fees.

Plaintiffs now move for partial summary judgment on two of their fifty-three claims for unpaid No-Fault first-party insurance benefits.

Summary judgment is the procedural equivalent of a trial. S.J. Capelin Assoc. Inc. v Globe Mfg. Corp., 34 NY2d 338, 341 (1974). The function of the court in deciding a motion for summary judgment is to determine if triable issues of face exist. Matter of Suffolk Cty Dept of Social Services v James M., 83 NY2d 178, 182 (1994). The proponent must make a prima facie showing of entitlement to judgment as a matter of law. Guiffrida v Citibank Corp., 100 NY2d 72, 82 (2003); Alvarez v Prospect Hosp., 68 NY2d 320, 324 (1986). Once a prima facie case has been made, the party opposing the motion must come forward with proof in evidentiary form establishing the existence of triable issues of fact or an acceptable excuse for its failure to do so. Zuckerman v City of New York, 49 NY2d 557, 562 (1980).

In an action for no-fault payments the plaintiff makes a prima facie showing of entitlement to judgment by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of the No-Fault benefits was overdue. Insurance Law 5106(a); Westchester Medical Center v AIG, Inc., 36 AD3d 900 (2nd Dept. 2007). On this motion plaintiffs argue that they have presented a prima facie case for payment of no-fault benefits for services rendered to John Hernandez in 2000 in the amount of $15,802 and services rendered to Helio Leyva in 1998 in the amount of $15,801. They have submitted the requisite billing forms, certified mail receipts, signed return receipt cards, and an affidavit from Martha Chamberlin stating that she personally mailed the claims. There is no dispute that Geico failed to pay or deny the claims within 30 days. On this record the Court finds that plaintiffs have presented a prima facie case.

In opposition Geico relies upon its affirmative defenses, including lack of proximate cause, and its counterclaim of fraud, which this Court permitted Geico to assert by way of its order of October 10, 2006.

Specifically with regard to the claims at issue here, Geico submits a properly affirmed report of Dr. Craig Levitz who reviewed the records of the No-Fault plaintiffs in this case and opines, in pertinent part, as follows: [*3]

… Dr. Chamberlin persistently billed for procedures that he clearly did not perform, billed for non-reimbursable procedures, made up lavish and fraudulent explanations of these procedures in records and reports, performed surgery that was not indicated and maintained inadequate records. In addition it is my opinion that the nature of this fraud was so pervasive that it would be impossible for the Geico Insurance Company to detect the fraud within 30 days.

A review of 23 cases demonstrates a disturbing pattern. In every case Dr. Chamberlin operated within a week of the patients initial visit and in some cases, the same day on patients whose main physical exam complaint is pain. He failed to document any clinical indications of a more significant problem prior to surgery and each of these patients has a relatively normal MRI. In every case he finds the same exact pathology that requires the same exact treatment… He then billed Geico for procedures that were not indicated, to correct pathology that was not present, and delivered fraudulent explanations of these procedures.

….

In review of the specific claims against [sic] patient Hernandez…It is my opinion that in patient Hernandez there was nothing wrong with this knee, there is no evidence Dr. Chamberlin did anything nor discussed any of this with his patient. If he did surgery it was not indicated…

…

In examining the case of patient Leyva the same pattern of fraud that was documented by the office of professional conduct is seen as well. He once again begins with a normal patient with no documented finding, proceeds directly to surgery, performs his standard 5 procedures that he does on every patient and then is once again not satisfied with collecting payment for unindicated surgeries for pathology without documentation, but then fraudulently bills for these services… in patient Levya there was nothing wrong with his knee, there is no evidence Dr. Chamberlin did anything nor discussed any of this with his patient. If he did surgery it was not indicated.

Geico argues that the surgeries performed on John Hernandez and Helio Levya were not injuries sustained in or causally related to the accident, and therefore plaintiffs’ claims fall outside the scope of coverage of the underlying policies.

Pursuant to Insurance Law 5106(a), no-fault benefits are overdue if not paid by the insurer within 30 days after submission of proof of loss. See also, 11 NYCRR 65-3.8, formerly 11 NYCRR 65.15(g)(3). The insurer is precluded from asserting any defenses to payment when it fails to deny the claim within the required 30-day period. Presbyterian Hosp. in the City of New York v Maryland Casualty Co., 90 NY2d 274, 278 (1997). A narrow exception to this preclusion rule is recognized for situations where the insurer raises a defense of lack of coverage. Central General Hosp. v Chubb Group of Ins. Cos., 90 NY2d [*4]195, 198 (1997). The issue presented by this case is whether Geico’s defense and counterclaim of fraud is precluded by the 30-day rule, or whether the defense and counterclaim fall within the narrow exception for lack of coverage.

The defense of fraud based upon “staged accidents” or intentional collisions are considered defenses premised on lack of coverage, and have been found not subject to the rigorous 30-day rule because there was, in fact, no “accident.” See, Matter of Allstate Ins. Co v Massre, 14 AD3d 610 (2nd Dept. 2005); State Farm Mutual Automobile Ins. Co. v Laguerre, 305 AD2d 490 (2nd Dept. 2003); Metro Medical Diagnostics, P.C. v Eagle Ins. Co., 293 AD2d 751 (2nd Dept. 2002); see also, VA Acutherapy Acupuncture, P.C. v State Farm Ins. Co., 16 Misc 3d 126(A)(App Term, 2nd & 11th Jud Dists 2007) and Vista Surgical Supplies Inc v State Farm Ins. Co., 14 Misc 3d 135(A)(App Term, 2nd & 11th Jud Dists 2007).

However, cases of fraud based upon fraudulent billing or excessive treatment are considered claims of “provider fraud” and can be precluded by the 30-day rule. Careplus Medical Supply Inc v State-Wide Ins. Co., 11 Misc 3d 29 (App Term, 2nd & 11th Jud Dists 2005); MGM Psychiatry Care PC v Utica Mutual Ins. Co., 12 Misc 3d 137(A) (App Term, 2nd & 11th Jud Dists 2006).

The key distinction is that in the first circumstance the insurance carrier demonstrated that an issue existed as to whether there was any coverage at all, whereas in the second the courts were presented with an exclusion under the policy, which does not mean that there was no contractual obligation in the first instance. In the latter, the 30-day rule still applies. Fair Price Supply Corp. v Travelers Indemnity Co., 9 Misc 3d 76 (App Term, 2nd Dept. 2005), affd 42 AD3d 277 (2nd Dept. 2007), lv granted 2007 Slip Op 78445 (2d Dept. Sept. 19, 2007)

In Fair Price the insurer was billed for various medical supplies, but the insured denied ever receiving any medical supplies as a result of injuries he sustained in the accident.

Nevertheless, the Appellate Term stated that one of the tradeoffs of No-Fault reform is that an insurer’s ability to resist “ill-founded, illegitimate and fraudulent claims” submitted by providers of medical services or medical equipment is limited to the “strict short-leashed contestable period,” of 30 days. See Presbyterian Hosp in City of New York at 285. It noted that the insurer is not without remedy; it could pay the claim and then bring an action to recover the benefits paid under a theory of fraud or unjust enrichment. 9 Misc 3d at 79-80. The Appellate Term directed payment of the subject no-fault claim.

In affirming the Appellate Term, Presiding Justice Prudenti summarized the Appellate Division’s view as follows: “Contrary to the defendant’s [insurer’s] contention, the alleged fraud in this case, no matter how egregious, was not related to the existence of coverage in the first instance. The plaintiff’s alleged failure to furnish services or supplies has no bearing on whether coverage for such services or supplies existed in [plaintiff’s assignor’s] insurance policy. Thus, enforcing the preclusion rule in this case does not have the effect of creating coverage that did not otherwise exist.” Fair Price, supra , 42 AD3d at 284.

The undersigned is of course bound by the law as established by the Appellate [*5]Division, Second Department. The fact that here the alleged fraud has to do with medical services either not provided or provided without justification, and not with supplies, is a distinction without a difference. Indeed, as noted in the above-quoted section of her opinion, Justice Prudenti places services on the same footing as supplies. In short, so long as there is no question that insurance existed-the case here-a defense to such payment based upon an exclusion from coverage, no matter how strong that defense might be, does not free the insurer from the 30-day rule. As no issue of fact exists with regard to the defendant’s failure to meet this requirement, summary judgment must be granted on the two claims at issue. Indeed, cases involving claims of other recipients of treatment or services from Dr. Chamberlin and these same plaintiffs have been construed as cases of “provider fraud,” wherein the insured’s failure to comply with the 30-day rule precluded consideration of the alleged fraud. Devonshire Surgical Facility v Geico, 16 Misc 3d 130(A), (App Term, 1st Dept. 2007); Devonshire Surgical Facility v Geico, 14 Misc 3d 1208(A) (Civ Ct., NYCty, 2006).^[FN1]

It may be that the type of fraud allegedly committed here could not reasonably be detected by a simple question put to the assignor, as was the suggestion made by the Appellate Division in Fair Price, at 285: “We find it doubtful that an insurer… will often need to do more than… simply ask the insured whether he or she received the medical supplies in question.” Nevertheless, and as indicated above, the legal concept and factual scenario underlying the Appellate Division’s determination cannot be distinguished from the matter before this Court in a meaningful way.

The Court notes, but must reject, the defendant’s contention that because a counterclaim in fraud exists that might be of equal or greater value than what the plaintiff stands to recover on these claims, it should deny summary judgment. A denial on this ground is appropriate where the claims are so intertwined that they cannot be separately analyzed. However, here they can be, because the requirements of Department of Insurance regulations clearly have been viewed as an obligation separate and distinct from any other obligation that may be imposed on the parties by other law. Cf., Yoi-Lee Realty v 177th Street Realty Assocs., 208 AD2d 185 (1st Dept. 1995).

The foregoing, however, also means that the counterclaims asserted by the defendant to recover moneys already paid in connection with any of the allegedly fraudulent claims can be separately pursued. On this record, and especially in view of Dr. Levitz’s affirmation, defendant has raised a triable issue of fact as to fraud in connection with the claims presented. The theories of recovery based on these allegations sound in fraud and unjust [*6]enrichment, and are attacked by the plaintiffs are being without support under New York common law. However, the Appellate Term endorsed both such theories in Fair Price, and its determination was affirmed by the Appellate Division without any comment on this suggested remedy. For this reason summary judgment dismissing the counterclaims is denied.

The Court now turns to defendant’s motion to dismiss the complaint for failure to comply with the following five court orders: (1) order dated November 17, 2005, by Judge Brennan directing responses to questions; (2) a preliminary conference order dated February 9, 2006 by Judge Brennan; (3) this Court’s order dated October 10, 2006, directing plaintiffs to provide answers and supporting documentation to certain interrogatories; (4) this Court’s conference order dated November 2, 2006, incorporating its prior decision of October 10, 2006; and (5) this Court’s further conference order dated February 8, 2007 wherein this Court directed that the parties continue to comply with the order of October 10, 2006.

Striking a pleading in inappropriate absent a clear showing that the failure to comply with discovery demands is wilful, contumacious or in bad faith Conciatori v Port Authority of New York and New Jersey, __AD3d__, 846 NYS2d 659 (2nd Dept. 2007); Negro v St. Charles Hosp and Rehabilitation Center, 44 AD3d 727 (2nd Dept. 2007). Defendant has made no such showing.

The major point of dispute concerns production of fifty-two “special reports” of range of motion, neurological testing, and muscle power testing, all with alleged abnormal findings. These “special reports” were used to justify the surgery billed by the plaintiffs. Dr. Chamberlin testified that the medical files originally did contain such “special reports” and he does not know the present location of the reports (for example see Chamberlin transcript at pp. 152-158, 208-209, 233-234, 264-265, 290-292, 316-317, 332-333). Under these circumstances striking of plaintiffs’ pleading is not warranted, and further discovery orders would be unproductive. The missing evidence does not prevent defendants from proving their defenses and counterclaims based upon the remaining medical records and the testimony of their expert, but it appears that it may seek a negative inference charge at trial. Yechieli v Glissen Chemical Co., Inc., 40 AD3d 988 (2nd Dept. 2007); EW Howell Co., Inc. v SAF LaSala Corp., 36 AD3d 653 (2nd Dept. 2007); see Mylonas v Town of Brookhaven, 305 AD2d 561 (2nd Dept. 2003). That, however, is a matter to be placed before the trial court.

Defendant further complains that it served a Demand for Discovery and Inspection dated April 13, 2007, which requested the production of 20 items, and that plaintiffs have failed to provide the requested documentation. A review of the April 2007 demand reveals that it seeks, inter alia, documents related to Dr. Chamberlin’s taxes and his personal bankruptcy proceeding.

Tax returns and other financial information are generally not discoverable in the absence of a strong showing that the information is indispensable to the claim and cannot be obtained from other sources. Benfeld v Fleming Properties, LLC, 44 AD3d 599 (2nd Dept. 2007); Chang v SDI International Inc., 15 AD3d 520 (2nd Dept. 2005); Latture v Smith, 304 AD2d 534 (2nd Dept. 2003). Defendant’s argument that it needs such documents to establish [*7]a motive for fraud by Dr. Chamberlin, namely that he need to recoup more than $6,000,000 he lost from 1985-1993 ( see Chamberlin v Commissioner of Internal Revenue, 14 Fed Appx. 69 (2d Cir. 2001) is untenable. This action concerns No-Fault claims, and the existence and discoverability of fraud in connection with those claims. The defrauding party’s need to defraud is immaterial, and requests directed to such motivational questions are thus outside the scope of permissible inquiry. Where, as here, discovery requests are numerous and some are improper, the Court need not prune the requests Chang v SDI International Inc. Consequently, defendant’s Demand for Discovery and Inspection dated April 13, 2007, cannot form the basis for relief based on either CPLR 3126 or CPLR 3212, and to the extent it has not been answered need not be. This ruling is without prejudice to service of any further proper demand within 20 days of the date of this order.

This shall constitute the Decision and Order of this Court.

E N T E R

DATED: January 29, 2008

_____________________________

Hon. Daniel Palmieri

Acting Supreme Court Justice

TO:Stillman & Stillman

By: Christopher McCollum, Esq.

Attorney for Plaintiffs

2622 East Tremont Avenue

Bronx, NY 10461

Julie A. Linwood, Esq.

McDonnell & Adels, P.C.

Attorneys for Defendants

401 Franklin Avenue

Garden City, NY 11530

Howard Stern, Esq.

Werner, Zaroff, Stern, Ashkenazcz, LLP

Attorney for counterclaim

360 Merrick Road, 2nd Floor

Lynbrook, NY 11563

Footnotes

Footnote 1: It should be noted that these cases do not collaterally estop defendant from litigating the instant action, as collateral estoppel does not apply to a prior determination involving solely a question of law. Sterling National Bank as Assignee of NorVergence, Inc. v Eastern Shipping Worldwide, Inc., 35 AD3d 222, 223 (1st Dept. 2006); Avon Development Enterprises Corp v Samnick, 286 AD2d 581 (1st Dept. 2001). Here that question of law is the application of the 30-day rule, or the exception thereto.

Supreme Court, Nassau County

013941/07

JOSEPH HENIG, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P. O. Box 1144

Bellmore, NY 11710

SHORT & BILLY, P.C.

Attorney for Defendant

217 Broadway, Suite 300

New York, NY 10007

James P. McCormack, J.

Motion pursuant to CPLR § 3212 by plaintiffs, Westchester Medical Center (hereinafter Westchester) , The New York Hospital Medical Center of Queens (hereinafter New York Hospital); Sound Shore Medical Center (hereinafter Sound Shore) et.al., for summary judgment.

The instant action involves three no-fault insurance claims against defendant American Transit Insurance Company (hereinafter American Transit), by Westchester, New York Hospital, and Sound Shore for services rendered to Daphne McPherson, Arnold Terlien, and Raymond Labrusciano, patients involved in three unrelated automobile accidents. The claims herein stem from hospital bills that were allegedly never paid by defendant insurer. Plaintiff filed the instant motion seeking summary judgment pursuant to Insurance Law Section 5106(a).

Section 5106 (a) of the New York State Insurance Law provides that payment of a no-fault claim by an insurer is considered overdue if it is not paid or denied within 30 days after the claimant provides the insurer with proof of fact and amount of loss related to the claim. Interest is accrued at a rate of 2% for every month the claim remains unpaid (see Hempstead Gen. Hosp. v Ins. Co. of N. Am., 208 AD2d 501; see also Smithtown Gen. Hosp. v State Foram Mutual Auto Ins. Co., 207 AD2d 338.) In addition, the claimant is entitled to reasonable attorney’s fees “for services necessarily performed in connection with securing payment of an overdue claim” subject to certain limitations outlined in 11 NYCRR 65.17; NY Ins Law 5106 (a). Specifically, “once a court action has been commenced, 11 NYCRR 65.17(b)(6)(v) grants an attorney’s fee on no-fault insurance claims of 20% of the amount of first-party benefits awarded plus interest with a maximum payment of $850 per claim.” ( Hosp. for Joint Diseases v Nationwide Mutual Ins., 284 AD2d 374.)

In order to succeed on a motion for summary judgment, the plaintiff must demonstrate through competent evidence that there is no issue of material fact upon which reasonable people could disagree. (Baly v Chrysler Credit Corp., 94 AD2d 781.) Summary judgment is a drastic [*2]remedy and should only be granted where there are no triable issues of fact. (Andre v Pomeroy, 35 NY2d 361.) The goal of summary judgment is to issue find, rather than to issue determine. (Hantz v Fleischman, 155 AD2d 415.) If there is any reasonable question raised as to any alleged fact of a claim “based on personal knowledge and documentary evidence”, then a motion for summary judgment must fail and the case must proceed to trial in order to resolve the issue. (Baly, 94 AD2d 781, citing Behar v Ordover, 92 AD2d 557.)

McPherson Action

The plaintiff, Westchester is the assignee for health service rendered to Ms. McPherson between January 15, 2007 and January 22, 2007. That treatment was necessary after an automobile accident which occurred on January 14, 2007. According to the plaintiff, the defendant was billed on February 16, 2007 with a Hospital Facility Form (Form N-F 5) and UB-92, for payment of a hospital bill in the sum of $6,993.96. That bill, according to the plaintiff, was sent certified mail return receipt requested and was received by the defendant on February 20, 2007. Plaintiff allege the defendant failed to either pay the hospital bill or to issue a timely Denial of Claim Form within 30 days. Moreover, plaintiff Westchester claims that when they did finally get a Denial of Claim Form it was untimely, as it was dated April 5, 2007. In addition, the plaintiff claims the reason given on the Denial of Claim form “Claimant is eligible for workers’ comp…” is an invalid reason for denial.

In Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274, the Court of Appeals stated, “[A]n insurer may be precluded from interposing a statutory exclusion defense for failure to deny a claim within 30 days as required by Insurance Law section 5106(a) and 11 NYCRR 65.15 (g)(3).”The bill, although denied, was denied untimely and according to plaintiff remains unpaid as of today. Accordingly, the defendant did not deny the claim in a timely fashion as required under Insurance Law 5106(a), and as such, the court must grant summary judgment to the plaintiff and order defendant to pay the outstanding hospital bill in the amount of $6,993.96 with statutory interest and attorney’s fees. Counsel for plaintiff is directed to submit judgment on notice.

Terlien Action

On February 5, 2007, Arnold Terlien was in a auto accident for which he received treatment at The New York Hospital from February 5, 2007 to February 9, 2007. Terlien assigned his claim for no-fault medical benefits to the New York Hospital.

The New York Hospital subsequently billed defendant, American Transit on May 9, 2007 for the treatment in the sum of $4,670.17. Plaintiff billed with a Form N-F5 (Hospital Facility Form) and a UB-92 form by certified mail, return receipt requested. According to the plaintiff, the bills were received on May 10, 2007. Defendant does not deny receipt of this bill but rather claims the claim was immediately denied on May 11, 2007 on the grounds that proper notice of claim in writing was not received within 30 days of the date of the accident. Summary judgment must be denied where there are factual issues in dispute. If a genuine issue of fact exists, summary judgment must be denied (see Sillman v Twentieth Century Fox Film Corp., 3 NY2d 395) Summary Judgment is a drastic remedy and should be denied if there is any significant doubt as to the existence of a triable issue or if there is even arguably such an issue. When a disputed question of fact arising out of a No-Fault denial arises, the court should deny summary [*3]judgment. (see Hospital for Joint Diseases v Nationwide Mutual Ins. Co., 284 AD2d 374).

Accordingly, the court finds there is a sufficient factual issue that prevents this court from granting summary judgment. Therefore, the Terlien matter will be placed on the court’s calendar for a conference on March 18, 2008.

Labrusciano Action

Plaintiff, Sound Shore, is the assignee for health services rendered to Raymond Labrusciano during the period from January 13, 2007 through January 19, 2007. The injuries were the result of an automobile accident on January 13, 2007.

According to the plaintiff, the defendant American Transit, was billed on February 5, 2007 with Hospital Facility Form (N-F 5) and a UB-92, for payment of a hospital bill in the sum of $17,967.83. The plaintiff states the bill was mailed certified mail, return receipt requested and was received by defendant on February 7, 2007. Defendant agrees that they received the bill on February 7, 2007 and states that the defendant requested verification including (1) complete medical records; (2) a signed assignment of benefit for and (3) a completed and signed N-F 5. Thereafter, when no response had been received regarding the Labrusciano claim, the defendant sent a second request for the same information on March 14, 2007. According to the defendant on June 4, 2007 plaintiff finally responded to the two prior letters and provided the verification that had been requested. Thereafter, on June 29, 2007, defendant made a timely denial of the plaintiff’s claim. This was clearly within 30 days of the receipt of the verification that had been repeatedly requested. Plaintiff failed to address any of these communications in their motion presently before the court, but rather moves this court to grant summary judgment due to an untimely denial. Accordingly, summary judgment is denied as to the Labrusciano claim as it appears the claim was denied in a timely fashion. This matter will also be placed on the court’s calendar for a conference on March 18, 2008.

This constitutes the decision and order of this court.

Dated: January 21, 2008

JOSEPH HENIG, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P. O. Box 1144

Bellmore, NY 11710

SHORT & BILLY, P.C.

Attorney for Defendant

217 Broadway, Suite 300

New York, NY 10007

Supreme Court, Nassau County

000930/07

Plaintiffs Attorney

Joseph Henig, PC

1598 Bellmore Ave.

Bellmore, NY 11710

Defendants Attorney

Martin Fallon & Mulle

115 Broadway

New York, NY 10006

Karen V. Murphy, J.

Plaintiffs move this Court for an order pursuant to CPLR § 3212, granting Summary Judgment in their favor. Defendant opposes the requested relief and asks the Court, pursuant to CPLR § 3212(b), to grant Summary Judgment in its favor or, in the alternative, grant a hearing to determine the amount to which they are entitled.

To establish a prima facie entitlement to summary judgment as a matter of law, the plaintiff hospital is required to submit evidentiary proof that the prescribed billing forms were mailed and received, and that payment of no fault benefits is overdue. Insurance Law § 5106(a); 11 N.Y.C.R.R. 65.15(g)(3); (Mount Sinai Hospital v. Joan Service Corp., [*2]

22 AD3d 649, 803 NYS2d 102 (2d Dept., 2005), citing Mary Immaculate Hosp.

v. Allstate Ins. Co., 5 AD3d 742, 743, 774 NYS2d 564 (2d Dept., 2004); St. Luke’s Roosevelt Hosp. v. American Transit Ins. Co., 1 AD3d 498, 767 NYS2d 252 (2d Dept., 2003); St. Luke’s Roosevelt Hosp. v. Allstate Ins. Co., 303 AD2d 743, 757 NYS2d 457 (2d Dept., 2003); New York and Presbyterian Hospital v. Allstate Ins. Co., 295 AD2d 412, 743 NYS2d 733 (2d Dept., 2002). The Court’s analysis of the evidence must be viewed in the light most favorable to the non-moving party, herein the Defendant. (See Makaj v. Metropolitan Transportation Authority, 18 AD3d 625, 796 NYS2d 621 [2d Dept., 2005]).

With respect to Plaintiff St. Vincent’s Hospital of Richmond, a/a/o Ednita Lorenzo, it is undisputed that Ms. Lorenzo was admitted to the hospital on December 19, 2005 and discharged on December 30, 2005. Defendant has not challenged that the NYS Form NF-5 was mailed on October 27, 2006 and received by them on October 30, 2006. According to the August 9, 2007 affidavit of Susan Weinstein, a biller and account representative for Hospital Receivable Systems, Inc., a defective denial of claim form dated November 14, 2006 was issued, containing an incorrect amount of the bill and the amount in dispute. It is also undisputed that on November 27, 2006 Defendant paid the claim in the amount of $9,913.37. There is a dispute as to an unpaid balance of $13,349.21, plus statutory interest and attorney’s fees.It is Defendant’s position, supported by the Affidavit of Gina Pisano, Claim representative for Defendant, that they sent a proper partial denial of the claim, for bills in excess of $9,913.37, as the charges were in excess of the proper no fault fee schedule. There is no dispute that the partial denial was sent in a timely fashion.

Simultaneous with Defendant making payment in the amount of $9,913.37, a second check in the same amount was sent to Plaintiff and cashed. Defendant argues that this was a clerical error and seeks a judgment in its favor for this amount. In the alternative, Defendant seeks a hearing to determine the proper fee for the services rendered by it under the New York no fault fee schedule. Plaintiff does not address the alleged over payment in its opposition papers.

It is undisputed that the denial was sent in a timely fashion. This Court finds a question of fact exists with respect to whether or not the fees charged were in excess of the Workers’ Compensation fee schedule. (See A.B. Med. Servs., PLLC v. American Tr. Ins. Co., 15 Misc 3d 132(A), 839 NYS2d 431 (App. Term 2d & 11th Judicial Dists., 2007); see also Robert Physical Therapy, P.C. v. State Farm Mut. Auto Ins. Co. 13 Misc 3d 172, 822 NYS2d 378 (Civil Ct., City of NY, 2006) [The Workers’ Compensation fee schedules were adopted by the Superintendent of Insurance for use by those making and processing claims for No-Fault benefits.]) A hearing is necessary to determine how much should have been billed. While there was no opposition to Defendant’s cross motion with respect to the payment of $9,913.37, questions of fact exist with respect to the amount due, which will be resolved at the hearing. Summary judgment is therefore denied to both parties.

This matter is referred to the Calendar Control Part (CCP), for a hearing to be held on February 28, 2008 at 9:30 a.m.. The Plaintiff shall file and serve a Note of Issue, together with a [*3]copy of this Order, on all parties and shall serve copies of same, together with receipt of payment, upon the Calendar Clerk of this Court within twenty (20) days of the date of this Order. The directive with respect to a hearing is subject to the right of the Justice presiding in CCP to refer the matter to a Justice, Judicial Hearing Officer, or a Court Attorney/Referee, as he or she deems appropriate.

With respect to the cause of action on behalf of Plaintiff Lenox Hill Hospital, a/a/o Elizabeth Rivera, Plaintiff alleges that these actions are joined as they are covered under a uniform policy of insurance and involve the interpretation of the same provisions of the Insurance Law. However, no policy was attached to the instant motion and there is nothing before this Court to show any connection between the Plaintiffs or their claims.

CPLR § 1002(a) provides for a permissive joinder of Plaintiffs where they “assert any right to relief jointly, severally, or in the alternative arising out of the same transaction, occurrence, or series of transactions or occurrences . . . if any common question of law or fact would arise.” While it is true that the same sections of the Insurance Law are applicable in the instant action, Plaintiffs have failed to satisfy the first prong of CPLR § 1002(a).

The Court sua sponte severs the Second Cause of Action and grants leave to Plaintiff Lenox Hill Hospital, a/a/o Elizabeth Rivera, to purchase an Index Number and proceed separately on the Cause of Action against State Farm Mutual Automobile Insurance Company. (Mount Sinai Hospital v. MVAIC, 291 AD2d 536, 738 NYS2d 247 [2d Dept., 2002]). Severance is a matter of judicial discretion based upon a weighing of all the circumstances in a particular case. The First and Second Causes of Action herein are completely unrelated in time, place, party and circumstance.

The foregoing constitutes the Order of this Court.

Dated: December 31, 2007

Mineola, NY

J. S. C.

Supreme Court, Nassau County

019900/06

F. Dana Winslow, J.

This motion by plaintiff Westchester Medical Center a/a/o Christopher Andrews and Michael Mascolo for an order pursuant to CPLR 3212 granting them summary judgment is granted as provided herein.

This cross-motion by defendants Encompass Insurance Company and Allstate Insurance Company for an order pursuant to CPLR 3212 granting them summary judgment dismissing the complaint against them is denied.

In this action pursuant to Insurance Law § 5106(a), the plaintiff Westchester Medical Center seeks payment of no-fault medical insurance benefits for services rendered to the individual plaintiffs, Christopher Andrews and Michael Mascolo. Westchester Medical Center has represented that its claim o/b/o plaintiff Michael Mascolo has been settled, however, that has not been established. Westchester Medical Center’s motion for summary judgment with respect to Michael Mascolo’s claim is denied without prejudice to renewal.

In its complaint, Westchester Medical Center alleges that it rendered medical services to Christopher Andrews for injuries related to a June 8, 2005 motor vehicle accident from June 26, 2006 through June 28, 2006; that it billed defendant Encompass Insurance Company for those service in the amount of $11,733.84 via an N-F5 and UB-92 on September 25, 2006, which notice was sent via certified mail, return receipt requested; that Encompass Insurance Company received that claim on September 27, 2006; and, that Encompass Insurance Company has failed to pay or deny that claim.

Westchester Medical Center presently seeks summary judgment pursuant to Insurance Law § 5106(a) and 11 NYCRR 65-3.8(a)(1), as well as attorneys fees pursuant to 11 NYCRR 65-4.6(e).

Insurance Law § 5106(a) and 11 NYCRR 65-3.8(a)(1) provide that first party benefits shall be paid as the loss is incurred and that such benefits are overdue if not paid within 30 days [*2]after proof of fact and the amount of the loss is submitted.

“The plaintiff has made a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms were mailed and received and that payment of no-fault benefits [is] overdue.” Nyack Hospital v Metropolitan Property & Casualty Insurance Company, 16 AD3d 564 (2nd Dept. 2005) citing Insurance Law § 5106(a); 11 NYCRR § 65.15(g)(3); Alvarez v Prospect Hosp., 68 NY2d 320, 325 (1986); Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 (2nd Dept. 2004).

In opposition, Encompass Insurance has submitted an affidavit by claims representative Diana Dwyer in which she attests that Westchester Medical Center’s claim for services rendered to Christopher Andrews was denied via a regulatory prescribed form on October 17, 2006 for not having been timely made. Stacey Melton, Senior Print Division Manager at the insurance company’s processing center, details how claims are processed and denied. She states that because the NF-10 and Explanation of Benefits are dated October 17, 2006, office procedure indicates that they were mailed that day, prior to the 30 days in which Encompass was required to act on Andrew’s claim.

The defendant Encompass Insurance has failed to submit a proper affidavit of service to establish that the denial of claim form was in fact mailed to plaintiff. Nyack Hospital v Metropolitan Property & Casualty Insurance Company, supra, at p. 564-565, citing Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374 (2nd Dept. 2001).

In any event, “even if the defendant timely issued the denial of claim form within 30 days of its receipt of the plaintiff’s [claim], [a] timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law.’ ” Nyack Hospital v Metropolitan Property & Casualty Insurance Company, supra, quoting Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 (NY Sup. App. Term 2004); Nyack Hosp. v State Farm Mut. Auto Ins. Co., 11 AD3d 664 (2nd Dept. 2004). “A proper denial of claim must include the information called for in the prescribed denial of claim form.” Nyack Hospital v Metropolitan Property & Casualty Insurance Company, supra, at p. 565, citing NYCRR 65-3.4(c)(11); Nyack Hosp. v State Farm Mut. Auto. Ins. Co., supra, at p. 664.

11 NYCRR 65-3.3(e) provides:

“”When an insurer denial a claim based upon the failure to provide timely written notice of claim or timely submission of proof of claim by the applicant, such denial must advise the applicant that late notice will be excused where the applicant can provide reasonable justification of the failure to give timely notice.”

This “regulation ameliorates the impact of the severely shortened time periods in which a claimant must submit its notice of claim or proof of claim . . . and while the use of mandatory language, such as must,’ is not conclusive, it is ordinarily construed as peremptory in the absence of circumstances suggesting a contrary intent.” Radiology Today v Citiwide Auto Leasing, Inc., 15 Misc 3d 92, 94 (NY Sup. App. Term 2007), citing McKinney’s Cons. Laws of NY, Book 1, Statutes § 177; Matter of Janus Petroleum v New York State Tax Appeals Tribunal, 180 AD2d 53, 54 (3rd Dept. 1992), quoting People v Schonfeld, 74 NY2d 324, 328 (1989). A defense based on an untimely submission of claim is barred where, like here, there is a lack of proof of [*3]compliance with the notice requirement of 11 NYCRR 65-3.3(e). Radiology Today v Citiwide Auto Leasing, Inc., supra, at p. 94.

Plaintiff Westchester Medical Center is accordingly granted summary judgment in the amount of $11,733.84 as and for its claims asserted o/b/o Christopher Andrews, as well as attorney’s fees.

Submit judgment on notice.

Dated:ENTER:

_________________________________

J.S.C.

Supreme Court, Nassau County

001943/07

Joseph Henig, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P.O. Box 1144

Bellmore, NY 11710

Stern & Montana, LLP

Attorney for Defendant

115 Broadway

New York, NY 10006

Daniel Palmieri, J.

The motion by the plaintiff Westchester Medical Center (“WMC”) pursuant to CPLR 3212 for summary judgment is denied. The cross motion by the defendant Allstate Insurance Company (“Allstate”) pursuant to CPLR 3212 for summary judgment is granted and the complaint is dismissed.

This is an action for payment of no-fault benefits by a provider of medical services, as assignee of the covered person’s claim therefor. It is undisputed that assignor Jose Correa was a patient at plaintiff’s facility from July 28 through August 31, 2006. By way of affidavit of an account representative for the plaintiff, Peter Kattis, and associated documentation, the plaintiff has demonstrated that a billing in the amount of $121,755.40 for this admission was mailed to the defendant on September 14, 2006 and received September 19, 2006. WMC also presents a partial denial of claim form dated October 23, 2006, which is claimed to be untimely and, in addition, defective in that it is incomplete and incorrectly states the amount in dispute. On December 15, 2006 the defendant made a payment of $37,560.01 to Taylor Care Center, leaving an unpaid balance of $84,195.39.

The foregoing constitutes proof sufficient to make out a prima facie showing that the plaintiff is entitled to judgment as a matter of law for the balance stated, with statutory interest and attorneys’ fees, as it establishes that the defendant failed either to pay the hospital bill or to issue a timely denial within 30 days of receipt of the claim. Insurance Law § 5106(a); 11 NYCRR 65-3.8(a)(1); see, Hempstead Gen. Hosp. v Insurance Co. of N.Am., 208 AD2d 501 (2d Dept. 1994). The burden thus shifts to Allstate to demonstrate that issues of fact exist with regard to plaintiff’s right to the relief sought in its complaint. See generally, Zuckerman v City of New York, 49 NY2d 557, 562 (1980).

In response, however, the defendant has presented evidence demonstrating that issues of fact exist precluding judgment in plaintiff’s favor. By way of affidavit of a no-fault claims representative [*2]employed by Allstate, Dietra Tripp, and associated documentation, the defendant has met its burden.

On September 29, 2006 a written statement was sent to Taylor Care Center requesting its records regarding Correa’s admission. Tripp states that upon receipt of the records, and within 30 days thereafter, a statement indicating approval of a partial payment and denial of the balance was issued on October 23, 2006. An NF-10 form bearing this date and containing this information is annexed to her affidavit. Although WMC’s presents proof in reply that it voluntarily mailed complete medical records to Allstate, which were received on September 30, 2006 (i.e., the verification request of September 29 was unnecessary and crossed in the mail), this does not mean that the verification request itself was improperly issued, as at the time Allstate did not yet have the records it needed to evaluate the claim. The request for verification therefore tolled the 30-day period to pay or deny the claim until the records were received. 11 NYCRR 65-3.5(a),(b); 65-3.8; see, New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 (2d Dept. 2004). Accordingly, an issue of fact exists as to the timeliness of the denial.

As noted above, WMC’s attorney also claims that the denial itself is defective in that Taylor Care Center is named as the provider, and that the stated amount billed and amount in dispute varies from the plaintiff’s billing claim.

However, in a footnote found in Allstate’s opposing papers the discrepancy is explained as reflecting the initial hospital charges before an apparent audit by the plaintiff itself, which then sought the lower amount stated in its complaint. Further, the difference in facility name has been adequately addressed by Allstate’s proof that WMC and the Taylor Care Center are effectively one and the same for present purposes. Specifically, Tripp states in reply, and presents documentary proof, that the $37,560.01 check was accepted and deposited into the account of Westchester County Health Care Corporation, the same account where WMC’s checks are deposited. In addition, the Court notes that in stating the amount still due, WMC’s affiant acknowledges in his own moving affidavit that this payment reduced the total billed to the amount owed, making no distinction between the two entities.

Accordingly, the motion is denied.

The cross motion is granted. Allstate has presented prima facie proof that its coverage limits have been exhausted. This is supported by the statement of its claims representative, who states that the coverage available under its policy was $150,000, and that the balance sought in this action exceeds those limits. Allstate also presents a payment log document entitled Medical Bill-Loss History, introduced as a business record by Tripp, which indicates that Allstate paid a total $149,909.60 to various providers who cared for Correa, including plaintiff. Given the de minimus difference between the payments indicated in the Medical Bill-Loss history and the undisputed coverage limits, the foregoing constitutes sufficient proof that the defendant is not liable for the charges sought in this action, as they exceed Allstate’s maximum exposure under the policy. New York and Presby. Hosp. v Allstate Ins. Co., 28 AD3d 528 (2d Dept. 2006); see also, Mount Sinai Hosp. v Zurich Am. Ins. Co., 15 AD3d 550 (2d Dept. 2005); Hosp. for Joint Diseases v State Farm Mut. Auto. [*3]Ins. Co., 8 AD3d 533 (2d Dept. 2004); New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., supra. Indeed, it should be noted that an insurer’s defense that policy limits have been reached by payments to eligible providers cannot be waived by a issuing a denial, or making a part payment, beyond the periods established by the Insurance Law and its allied regulations. New York and Presby. Hosp. v Allstate Ins. Co., 12 AD3d 579 (2d Dept. 2004).

In response, the plaintiff has presented no evidence that would place in issue the foregoing proof of exhaustion of benefits as a complete defense to its claim. Its only argument of substance is that payment to other providers was made by Allstate after it received plaintiff’s bill on September 19, 2006, but Allstate was entitled to do so while withholding payment to the plaintiff in view of its timely issued request for verification. See, Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 (2d Dept. 2005). Accordingly, summary judgment is granted to the defendant on its cross motion.

This shall constitute the Decision and Order of this Court

E N T E R

Dated: October 22, 2007

_____________________________

Hon. Daniel Palmieri

Acting Supreme Court Justice

To:

Joseph Henig, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P.O. Box 1144

Bellmore, NY 11710

Stern & Montana, LLP

Attorney for Defendant

115 Broadway

New York, NY 10006

Supreme Court, Nassau County

9808/04

Locks Law Firm, PLLC

Attn: Seth R. Lesser, Esq.

Andrew P. Bell, Esq.

Attorneys for Plaintiff

110 East 55th Street

New York, NY 10022

Thomas W. Alfano, Esq.

Attorney for Plaintiff

400 Garden City Plaza

New York, NY 11530

Balesi & Donovan, P.C.

Attn: John Balesi, Esq.

Attorneys for Plaintiff

1225 Franklin Avenue

Suite 400

Garden City, NY 11501

O’Melveny & Myers, LLP Attn: Ralph P. DeSanto, Esq.

Attorneys for Defendant

Times Square Tower

7 Times Square

New York, NY 10036

Thomas P. Phelan, J.

Motion by plaintiff for an order: (a) granting plaintiff re-argument and/or granting his requested extension of time to serve the instant motion on or before March 3, 2006; and (b) certifying the above-captioned action, pursuant to CPLR 901 and 902, as a class action is denied, except that plaintiff’s time to serve this motion is extended nunc pro tunc to March 3, 2006 and is deemed timely.

In a prior order dated March 24, 2005, this Court dismissed plaintiff’s first, third and fourth causes of action. Plaintiff’s second cause of action for breach of contract remains as the only predicate for the proposed class action. As such, plaintiff, a retail supplier of durable medical equipment (DME), brings this breach of contract action to recover on behalf of the Class for defendant’s alleged refusal to pay the regulatory rate of reimbursement for DME no-fault claims submitted by entities and/or persons in New York State.

More specifically, plaintiff alleges that: “Defendant GEICO arbitrarily, unilaterally, and without any basis in law or pursuant to any contractual terms, reduced the amounts it would reimburse claimants and/or their assignees from New York State ( Claimants’) based upon the results of ad hoc surveys that a Geico claims examiner conducted to come up with their own idea of what should be a reasonable and customary’ charge for certain DMEs. [and that] In conjunction with reducing such reimbursements, Geico stated to each such Claimant that the claimed amounts were reduced to a reasonable reimbursement of 150%’ of the industry average’ or of the average retail price’ for the particular DME for which a claim was submitted.” (Plaintiff’s memorandum of law dated March 3, 2006 [plaintiff’s memo] at pp. 1-2; see complaint ¶¶2, 22-23, 39).

Plaintiff contends that: “This case is a perfect one for class certification. Under New York law, a determination of whether GEICO breached its contracts will not require the trier of fact to look at the circumstances of individual transactions” (plaintiff’s memo at p.2). The Court does not agree that this is a perfect case for class certification or that individual transactions will not have to be examined. On this motion, the burden of proof is on plaintiff to establish “compliance with the statutory requirements for class action certification under CPLR 901 and 902.” (Rallis v City of New York, 3 AD3d 525, 526). Plaintiff has not made the necessary showing.

CPLR 901 contains five enumerated “prerequisites”. CPLR §902 lists five additional “considerations”. These will be addressed seriatim.

The first prerequisite set forth in CPLR 901 (a) is that “the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable.” Plaintiff has failed to establish the first prerequisite. Counsel for plaintiff alleges in plaintiff’s memorandum of law that: while plaintiff contends that “the Class certainly numbers in the multiple dozens of entities encompassing hundreds if not thousands of claims on behalf of hundreds and thousands of individual New Yorkers who were injured, and through New York’s DME suppliers, filed claims for reimbursement” (plaintiff’s memo at p. 14), actual evidence showing numerosity is not provided. Class action certification will not be granted until there is a determination of “at least the approximate size of the class.” (82 NY Jur2d, Parties, § 276; see Spatz v Wide World Travel Service, Inc., 80 AD2d 519, 520; Simon v Cunard Line Ltd., 75 AD2d 283, 289).

The second prerequisite set forth in CPLR 901 (a) is that “there are questions of law or fact common to the class which predominate over any questions affecting only individual members.” Plaintiff has failed to establish the second prerequisite as well. Plaintiff contends that “there are no individual issues whatsoever, except as to the amount of damages recoverable by each Class member” (plaintiff’s memo, p. 15). The Court disagrees. There is only one legal question common to the alleged class — whether GEICO breached its insurance contracts with class members by unilaterally reducing the amounts of reimbursement based [*2]upon what GEICO determined was a “reasonable and customary” charge for certain DMEs. All of the other legal and factual questions are case specific.

Each DME transaction must be examined separately to see whether the class member has a prima facie case. First of all, each class member must submit an executed assignment of benefits form and copies of proofs of the claim which were mailed to GEICO. (See Inwood Hill Med. P.C. v Allstate Ins. Co., 3 Misc 3d 1110A, 2004 NY Slip Op 50565U at p. 12). Furthermore, class members “must document the cost of the supplies or equipment to the provider and must show that this cost was paid for the specific supplies or equipment provided to the assignor.” (Careplus Med. Supply Inc. v Allstate Indem. Co., 5 Misc 3d 1002A, 2004 NY Slip Op 51148U at p. 3). Of course, separate assessments of damages must be made for each class member who is found to be entitled to reimbursement.

Additionally, the timeliness of GEICO’s denial of all or part of a class member’s claim must be considered in order to determine whether defenses other than lack of coverage can be raised. The Court of Appeals has held that “an insurer, despite its failure to reject a claim within the 30-day period prescribed by Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3), may assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident.” (Cent. Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199). This would include cases of fraud, which, “if proven, would establish that there was no coverage at all for the claim.” (Carepluss Med. Supply Inc. v State Farm Mut. Auto. Ins. Co., 5 Misc 3d 1014A, 2004 NY Slip Op 51373U at p. 3). It would not, however, include cases of fraud involving excessive DME costs. (See Valley Psychological, P.C. v Liberty Mut. Ins. Co., 2006 NY App Div LEXIS 7500, 2006 NY Slip Op 4480 at p. 2).

The third prerequisite set forth in CPLR 901 (a) is that “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” The third prerequisite has been established. As alleged, “plaintiff and all other members of the Class have virtually identical claims: they all had claims for reimbursement of DMEs reduced by GEICO based upon an average price’ that GEICO unilaterally and illegally implemented” (plaintiff’s memo, p. 17). All that is required is that plaintiff’s claim arise out of the same practice or course of conduct and be based upon the same legal theory as the claims of the other class members. (See Freeman v Great Lakes Energy Partners, 12 AD3d 1170, 1171; Ackerman v Price Waterhouse, 252 AD2d 179, 201; Friar v Vanguard Holding Corp., 78 AD2d 83, 99). Such is the case here.

The fourth prerequisite set forth in CPLR 901 (a) is that “the representative parties will fairly and adequately protect the interests of the class.” Plaintiff has failed to establish the fourth prerequisite. The deposition testimony of Jean M. Francois, owner and President of P.Z.F. Management Co., Inc., d/b/a Globe Surgical Supply, (“Globe” or “PZF”) and the exhibits supplied by GEICO indicate that plaintiff, as the assignee of Remy Gallant, may not be able to [*3]prove Mr. Gallant’s no-fault claim against GEICO. In such case, the class action would fail as well. (82 NY Jur2d, Parties, § 267; see Banks v County of Suffolk, 133 AD2d 438; Estruch v Volkswagenwerk, 97 AD2d 978; Funderburke v Uniondale Union Free Sch. Dist. No. 15, 172 Misc 2d 963, 967, aff’d 251 AD2d 622).

Plaintiff, in its complaint, alleges that on February 10, 2001, Remy Gallant was injured in an accident with a GEICO policyholder and that, on July 26, 2001, Gallant purchased a Tens Unit (i.e., a device for relieving pain by electrical stimulation of nerves) from Globe pursuant to a doctor’s prescription [complaint, ¶12]. Plaintiff further alleges that: “The item cost Globe $340.00, and Globe obtained an assignment of Mr. Gallant’s claim in order to obtain reimbursement from [GEICO] under the provisions of the No-Fault Insurance Law” [Id.]. It is additionally alleged that: “On April 30, 2001, Globe submitted a claim to [GEICO], as Mr. Gallant’s assignee, setting forth a balance owed to Globe by [GEICO] … in the amount of $510.00 (which, as provided for in Part E [i.e., 11 NYCRR § 68, Appendix 17-C, Part E] is 150%, or, in this case less than 150%, of $340.00). On May 23, 2001, [GEICO] denied the claim and reimbursed Globe for only $200.00 for that item” [Id., ¶22].

Part of GEICO’s Exhibit G and of Exhibit C to Plaintiff’s Memorandum of Law is Remy Gallant’s claim to GEICO, dated April 30, 2001, for $1,048.25, which includes a Tens Unit for $510.00. Also included as part of these same exhibits is Invoice # 5692 from Certified Health Products, dated July 20, 2000, to Globe which includes a Tens Unit for $340.00. Since this July 20, 2000 invoice is dated almost seven (7) months prior to Mr. Gallant’s February 10, 2001 accident and more than one (1) year prior to the date Globe allegedly sold the Tens Unit to Mr. Gallant, it cannot be accepted as proof of what the Tens Unit allegedly sold to Mr. Gallant cost Globe.

Furthermore, at his February 21, 2006 deposition, Mr. Francois admitted to the practice of submitting the same invoices multiple times. (Transcript, pp. 138, 141-142, 146). Mr. Francois explained that he reuses the same invoices because it’s “convenient.” (Transcript, p. 138). With respect to the Tens Units, Mr. Francois testified that he randomly picks an invoice and sends it over and over. (Transcript, p. 146). Mr. Francois also testified that Globe was never asked by any company to provide a specific invoice corresponding to the exact date of purchase. (Transcript, p. 146). When asked whether he has the invoices for the Tens Units purchased from Certified Health Products which have not been produced, Mr. Francois answered: “I don’t know where they are.” (Transcript, p. 147).

Mr. Francois’ deposition testimony additionally indicates that he will be unable to produce a cancelled check showing that Globe actually paid for the Tens Unit allegedly sold to Mr. Gallant. At his February 21, 2006 deposition, Mr. Francois testified that in the ordinary course of business he would have paid invoices from Certified Health Products by check. (Transcript, p. 159). At the deposition, counsel for GEICO advised Mr. Francois that a subpoena had been sent to Washington Mutual Bank for “all checks drawn on the PZF [*4]Management account from 2000 until mid 2004.” (Transcript, p. 159). Counsel then asked Mr. Francois whether he could “explain why there are no checks to Certified Heath Products in the production from Washington Mutual Bank between the dates of 2000 and early 2004?” (Transcript, p. 160). Mr. Francois responded that he didn’t know. (Transcript, p. 160).

According to counsel for GEICO, Globe’s bank has produced only 6 checks written on PZF’s account to Certified Health Products, none of which relate to the DME transaction at issue. In this regard, Mr. Francois testified that there are no other bank accounts with respect to Globe and/or PZF other than the one at Washington Mutual Bank. (Transcript, p.162). Under the circumstances, the Court cannot find that Globe would make an adequate representative party. Mr. Francois’ practice of using the same invoices over and over again when filing no-fault claims to document the cost of DMEs gives the appearance of insurance fraud and is to be condemned. Furthermore, Mr. Francois’ inability to produce the actual invoice for the Tens Unit allegedly sold to Mr. Gallant and a cancelled check to prove payment adds to that appearance.

The fifth and final prerequisite set forth in CPLR 901 (a) is that “a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” Plaintiff has failed to establish the fifth prerequisite. Pursuant to Insurance Law §5106[b], a no fault claimant has the option of submitting their disputed claim to binding arbitration. Further, a successful claimant is entitled to recover penalty interest at the rate of “two percent per month” plus attorneys’ fees (Insurance Law § 5106 [a]). Plaintiff has not shown how a one-issue class action is superior to the remedies provided to individual claimants by the Insurance Law.

The fifth prerequisite set forth in CPLR 901 (a) additionally ties into the third consideration set forth in CPLR 902, which requires the Court to take into account: “the extent and nature of any litigation concerning the controversy already commenced by or against members of the class.” While plaintiff has failed to present any evidence or information as to this consideration, GEICO has submitted copies of arbitration awards and court decisions showing the existence of litigation and arbitration proceedings concerning the issue sought to be determined in the proposed class action. (See GEICO’s Appendix of Unreported, Out-of-State and Other Legal Authorities, etc.). It is likely that an appellate court will decide the legal issue that is the basis for the proposed class action in the near future — a consideration which weighs against plaintiff’s application.

The first consideration set forth in CPLR 902 requires the Court to take into account: “the interest of members of the class in individually controlling the prosecution or defense of separate actions.” This consideration weighs against plaintiff’s application as well. The Appellate Division, First Department, has held that: “Where . . . a choice of remedies is available to each member of an alleged class, class action status should be denied.” (Martinez v American Export Industries, Inc., 48 AD2d 803; see, also, 82 NY Jur2d, Parties, § 280). The First Department has also held that “the fact that wrongs were committed pursuant to a [*5]common plan or pattern does not permit invocation of the class action mechanism where the wrongs done were individual in nature or subject to individual defenses.” (Mitchell v Barrios-Paoli, 253 AD2d 281, 291; see, also, 82 NY Jur2d, Parties, § 280). As noted above, the Insurance Law provides each claimant with a choice of remedies and the timeliness or untimeliness of GEICO’s denial of coverage will determine what defenses GEICO can raise.

The second consideration set forth in CPLR 902 requires the Court to take into account: “the impracticality or inefficiency of prosecuting or defending separate actions.” Plaintiff has failed to present evidence concerning this consideration. There is no proof that the relatively small amounts of each claim are discouraging any prospective class members from pursuing their claims individually. To the contrary, the arbitration awards and court decisions collected in GEICO’s Appendix of Unreported, Out-of-State and Other Legal Authorities, etc., show that separate actions and arbitrations are being pursued. Thus, this consideration too weighs against plaintiff’s application.

The fourth consideration set forth in CPLR 902 requires the Court to take into account: “the desirability or undesirability of concentrating the litigation of the claim in the particular forum.” Plaintiff has failed to show that this Court is a desirable forum for the proposed class action. With the relatively small amount of each claim, it seems unlikely that claimants from all over New York State would choose Supreme Court, Nassau County, as the forum to litigate their claims. This consideration also weighs against plaintiff’s application.

The fifth and last consideration set forth in CPLR 902 requires the Court to take into account: “the difficulties likely to be encountered in the management of a class action.” This consideration similarly weighs against plaintiff’s application. Once the one common legal issue is decided, each claim would have to be adjudicated separately, with evidence and witnesses coming from all over New York State. Coordinating the mini-trials of numerous small claims would present a logistical and scheduling nightmare.

Inasmuch as plaintiff has failed to establish four out of the five prerequisites for class action certification set forth in CPLR 901 and all five considerations set forth in CPLR 902 weigh against granting class action certification, plaintiff’s application for class action certification is denied.

This decision constitutes the order of the court.

Dated: JULY 19, 2006 THOMAS P. PHELAN

J.S.C.

Locks Law Firm, PLLC

Attn: Seth R. Lesser, Esq.

Andrew P. Bell, Esq.

Attorneys for Plaintiff

110 East 55th Street

New York, NY 10022

Thomas W. Alfano, Esq.

Attorney for Plaintiff

400 Garden City Plaza

New York, NY 11530

Balesi & Donovan, P.C.

Attn: John Balesi, Esq.

Attorneys for Plaintiff

1225 Franklin Avenue

Suite 400

Garden City, NY 11501

O’Melveny & Myers, LLP

Attn: Ralph P. DeSanto, Esq.

Attorneys for Defendant

Times Square Tower

7 Times Square

New York, NY 10036

Supreme Court, Nassau County

018617/05

Joseph Henig, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P. O. Box 1144

Bellmore, NY 11710

Jaffe & Nohavicka, Esqs.

Attorneys for Defendant

40 Wall Street, 12th Floor

New York, NY 10005

Thomas P. Phelan, J.

Motion by plaintiff Mary Immaculate Hospital, a/a/o Thomas Matamoros (Hospital) for an order pursuant to CPLR 3212 awarding it summary judgment is granted.

Cross-motion by defendant Countrywide Insurance Company (Countrywide) for an order awarding it summary judgment dismissing plaintiff’s complaint is denied.

Plaintiff brings this action pursuant to Insurance Law §5101 et seq. to recover no-fault benefits alleged due under an insurance policy issued by defendant Countrywide for $55,105.27 in medical services provided by plaintiff Hospital (as assignee) to Matamoros (as assignor).

The standards for summary judgment are well settled. A court may grant summary judgment where there is no genuine issue of a material fact, and the moving party is, therefore, entitled to judgment as a matter of law (Alvarez v Prospect Hosp., 68 NY2d 320). Thus, when faced with a summary judgment motion, a court’s task is not to weigh the evidence or to make the ultimate determination as to the truth of the matter; its task is to determine whether or not there exists a genuine issue for trial (Miller v Journal-News, 211 AD2d 626).

The burden on the party moving for summary judgment is to demonstrate a prima facie entitlement to judgment as a matter of law by tendering sufficient evidence to demonstrate the [*2]absence of any material issue of fact (Ayotte v Gervasio, 81 NY2d 1062).

However, once this initial burden has been met by movant, the burden shifts to the party opposing the motion to submit evidentiary proof in admissible form sufficient to create material issues of fact requiring a trial to resolve (Alvarez v. Prospect Hosp., 68 NY2d 320).

Plaintiff has submitted prima facie evidence that it served the appropriate no fault billing form and that said claim was not timely paid. Payment by defendant was therefor overdue (Dermatossian v. New York City Transit Authority, 67 NY2d 219, 224; see, New York Hospital Medical Center of Queens v. New York Central Mut. Fire Ins. Co., 8 AD3d 640).

In response, defendant submits sufficient evidence to create an issue of fact over whether defendant timely denied plaintiff’s claim premised upon an alleged exclusion from coverage where the injury to plaintiff’s assignor occurred while “committing an act which would constitute a felony, or seeking to avoid lawful apprehension or arrest by a law enforcement officer” (see Insurance Law §5103(b)(3); 11 NYCRR 65.1-1).

Defendant, however, fails to provide evidence to establish, prima facie, entitlement to application of the alleged exclusion. Notably absent from defendant’s proof is that the permitted exclusion was in fact incorporated into the insurance policy upon which plaintiff brings its claim for no fault recovery.

The subject exclusion, while statutorily permitted and specifically included in the mandatory endorsement promulgated by the Superintendent of Insurance, is not required. “[A]n insurer may, at its option, delete the exclusion and cover the risk” (Servido v. Superintendent of Ins., 53 NY2d 1042, [1981] revg. on dissenting op. 77 AD2d 70, 80-81 [1st Dept., 1980]). Defendant neither alleges nor establishes the specific contents of its policy with plaintiff’s assignor, Matamoros.

Moreover, defendant provides nothing to demonstrate that Mr. Matamoros was, in fact, committing a felony, or seeking to avoid lawful apprehension or arrest by a law enforcement officer. The affidavit by defendant’s eyewitness establishes only that Matamoros was running at the time of the accident and the Police Accident Report provided by defendant is inadmissible (Holliday v. Hudson Armored Car & Courier Service, Inc., 301 AD2d 392 [1st Dept., 2003]).

Assuming, arguendo, as alleged in the Police Accident Report that “pedestrian [Matamoros] was struck by veh[icle] #1 while trying to flee security at Barnes and Noble” this, nevertheless, does not create an issue of fact regarding the commission of a felony or flight from lawful apprehension or arrest by a law enforcement officer. Mere conclusions and unsubstantiated allegations or assertions are insufficient to defeat summary judgment (Zuckerman v. City of New York, [1980] 49 NY2d 557, 562; Aghabi v. Sebro, 256 AD2d 287 [2nd Dept., 1998]) as are speculation and surmise (Beecher v. Northern Men’s Sauna, 272 AD2d 281 [2nd Dept., 2000]; Lahowin v. Ganley, 265 AD2d 530 [2nd Dept., 1999]).

Accordingly, plaintiff is awarded summary judgment against defendant on its claim for $55,105.27 together with statutory interest from October 15, 2005, statutory attorney’s fees, costs and disbursements.

The Clerk may enter judgment.

This decision constitutes the order of the court.

Dated: JUNE 28, 2006 THOMAS P. PHELAN

J.S.C.

APPEARANCES OF COUNSEL

Supreme Court, Nassau County

005513/05

Law Office of Kenneth M. Mollins, P.C.

Franklin, Gringer & Cohen, P.C.

Attorneys for Plaintiff Long Island Radiology

425 Broad Hollow Road, Suite 215

Melville, NY 11747

Sonnenschein, Nath & Rosenthal, LLP

Attorneys for Defendant Allstate

1221 Avenue of the Americas

New York, NY 10020

and –

Steve Levy, Esq.

Attorney for Defendant Allstate

8000 Sears Tower

Chicago, IL 60606

Rivkin Radler, LLP

Attorneys for Defendant State Farm

EAB Plaza

Uniondale, NY 11556

O’Melveny & Myers, LLP

Attorneys for Defendant GEICO

Times Square Tower

7 Times Square

New York, NY 10036

Stern & Montana, LLP

Attorneys for Defendant American Transit

Trinity Centre — 115 Broadway

New York, NY 10006

Short & Billy, P.C.

Attorneys for Defendant Progressive

217 Broadway, Suite 300

New York, NY 10007

and-

Conrad O’Brien Gellman & Rohn, P.C.

Attorneys for Defendant Progressive

1515 Market Street, 16th Floor

Philadelphia, PA 19102-1916

Cozen & O’Connor

Attorneys for Defendant One Beacon

1900 Market Street

Philadelphia, PA 19103

Thomas P. Phelan, J.

Motion by defendants, and cross-motion by plaintiff, for summary judgment on the issue of whether no-fault insurers may raise lack of medical necessity as a basis to deny claims for reimbursement to radiologists seeking payment for MRI tests provided to no-fault patients pursuant to prescriptions, is determined as follows.

Plaintiff’s further request for class certification pursuant to CPLR 901 and 902 and related relief is denied as premature. [*2]

By order dated November 29, 2005, this Court granted defendants’ motion dismissing the complaint for failure to comply with CPLR 3013. The cross-motion by plaintiff for an order directing that the proposed amended complaint be deemed served in place and stead of the original complaint was granted. The largely undisputed fact pattern underlying this case is as follows.

Plaintiff is a radiology office that performs MRI testing for persons involved in motor vehicle accidents and allegedly eligible for no-fault benefits. MRI testing is done pursuant to a prescription issued by the injured person’s independent treating physician. For payment plaintiff receives an assignment of no-fault benefits from the injured person, and submits claims directly to one of the defendants. Defendants deny numerous claims for payment on the ground of an alleged “lack of medical necessity.”

On this motion defendants argue that in the context of the no-fault statute and the regulations thereunder, “medical necessity” is a prerequisite for payment. They conclude therefore, that they have every right to deny plaintiffs’ claims on the ground of “lack of medical necessity.” This Court agrees with defendants’ argument, but not their conclusion.

The no-fault statute embodied in Insurance Law §5102(a)(1) defines the “basic economic loss” for which the statute was designed to provide payment as “All necessary expenses incurred for: (I) medical, hospital, . . . surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services . . .” Like the no-fault law, the regulations promulgated thereunder expressly state that basic economic loss comprises medical expenses which are “necessary” [11 NYCRR 65-1.1].

The purpose of the no-fault law was to “remove the vast majority of claims arising from vehicular accidents from the sphere of common-law tort litigation, and to establish a quick, sure and efficient system for obtaining compensation for economic loss suffered as a result of such accidents” [Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 214(1996) citing L 1973, ch13; Governor’s Mem. approving L 1073, ch 13, 1973 NY Legis Ann at 298].

Overall, the no-fault law is a compromise: prompt payment for basic economic loss to injured persons regardless of fault, in exchange for a significant limitation on litigation [Pommells v Perez, 4 NY3d 566, 570-71 (2005); see also Oberly v Bangs Ambulance Inc., 96 NY2d 295, 298 (2001)(No fault legislation was adopted to assure prompt and full compensation for economic loss, and non-economic loss for serious injury)].

To implement the legislative aim of curtailing delay and reducing expense, the regulations are written to encourage prompt payment of claims, to discourage investigation by insurers, and to penalize delays [Dermatossian v New York City Transit Authority, 67 NY2d 219, 225(1986)].

The court system is inundated with no-fault claims litigation [Vladimir Zlatnick, [*3]M.D.,P.C. v Geico, 2 Misc 3d 347(Civ Ct, Queens Cty, 2003); Ostia Medical P.C. v Geico, 1 Misc 3d 907(A)(Dist. Ct, Nassau Cty, 2003); see Karen B. Rothenberg and Jennifer R. Rapaport, No-Fault: The Litigation Epidemic, N.Y.L.J., 1/5/2004, p.4, col. 4]. As one court has noted, neither insureds nor insurers benefit from uncertainties engendered by scores of judges retrospectively attempting to exercise medical/professional judgment in these no-fault cases [Citywide Social Work & Psy. Serv., PLLC, v Travelers Indemnity Co., 3 Misc 3d 608 (Civ Ct., Kings Cty, 2004)].

One of the primary defenses litigated by the insurers is the alleged “lack of medical necessity.” The various plaintiffs in such cases present a prima facie case by proof of submitted claims (setting forth the fact and amounts of the losses sustained) and overdue payments [All County Open MRI & Diagn. Radiology P.C. v Travelers Ins. Co., 11 Misc 3d 131(A)(N.Y.Sup.App. Term 2006); Delta Diagnostic Radiology, P.C. v Progressive Cas. Ins. Co., 11 Misc 3d 136 (A)(N.Y.Sup.App. Term 2006); A.B. Medical Services PLLC v Liberty Mut. Ins. Co., 10 Misc 3d 128 (A) (N.Y.Sup. App. Term 2005)].

The burden then shifts to the insurer, who must prove that its denial was timely and that the medical services or supplies in question were not medically necessary [Nir v Allstate Ins. Co., 7 Misc 3d 544, 546 (Civ Ct., Kings Cty., 2005); Healing Hands Chiropractic, PC v Nationwide Assurance Co., 5 Misc 3d 975(Civ Ct., N.Y.Cty, 2004)]. To withstand summary judgment, the insurer’s proof must set forth a sufficiently detailed factual basis and medical rationale for the claim’s rejection [Nir at 546; AB. Medical Services PLLC ; Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128(A)(N.Y.Sup, App. Term, 2003)].

Most of the cases do not address the legal issue of the availability of the “lack of medical necessity” defense where the medical supplier or diagnostic tester is not the treating physician, but instead complies with the instructions found in a prescription from the treating physician. As noted in this Court’s earlier decision, only two courts squarely consider the issue, and they reach different conclusions.

In West Tremont Medical Diagnostics v Geico, [8 Misc 3d 423, 427 (Civ. Ct., Richmond Cty, 2005)], the Court noted in dicta, that this defense should not be available to insurers in connection with claims made by diagnostic centers. There, the Court expressly held, after trial, that the defendant insurer had failed to meet its burden of proof on the defense of lack of medical necessity.

The court’s broader reasoning was expressed as follows:

There is nothing in the No-Fault statute that indicates that the treating physician needs to get pre-approval testing before referring the patient for MRI’s or any other diagnostic modalities. Therefore, to deny First Party benefits, on the basis of lack of medical necessity, to the diagnostic center that does not come to a diagnosis based upon a physical examination of the patient can be found to be in derogation of the purpose [*4]and intent of the Insurance No-Fault Benefits statute which is expedient payment of benefits to automobile victims. . . . Therefore, in a matter, such as the instant case, wherein the usual and customary medical procedure was utilized by the examining physician in referring a patient involved in a motor vehicle accident for radiological tests after a physical examination, and the patient assigned her rights to the diagnostic radiological establishment for reimbursement of No-Fault benefits, the affirmative defense of lack of medical necessity should not be available as the diagnostic center does not make an independent medical evaluation of the patient and the denial of benefits to the diagnostic establishment is in derogation of the intent of the Insurance Law §5106.

This Court understands that West Tremont is being appealed to the Appellate Term, and the record herein includes the amicus brief (annexed to defendants’ reply papers) filed by the Attorney General’s office on that appeal.

By contrast, in Precision Diagnostic Imaging P.C. v Travelers Ins. Co.[8 Misc 3d 435 (Civ.Ct.,NYCty, 2005)], the Court found the no-fault statute clearly and unambiguously mandates that “claimants may only be reimbursed for necessary’ medical services.”Therefore, the Court reasoned that there was no need to look to the legislative purpose or history of the statute, expressly rejected the dicta in West Tremont, and concluded that “the defense of medical necessity is available against all medical providers” (Precision Diagnostic at 439). The Court further noted that “to permit medical providers to receive reimbursement even when the insurer has proven that the service was not medically necessary would encourage fraud, rather than combat it (Id.). As defendant in Precision Diagnostic had provided prima facie evidence that the test was not medically necessary and plaintiff failed to submit in opposition evidentiary proof in admissible form, defendant was awarded summary judgment dismissing plaintiff’s claim.

This Court acknowledges that to require insurers to make reimbursements without regard to medical necessity would inflate costs and encourage fraud. In view of the plain language of the no-fault statute and the regulations thereunder, this Court agrees with defendants that “lack of medical necessity” is a defense which must be available to insurers in no-fault cases. However the inquiry does not end here. A remaining and critical issue presented is: against whom may the defense be raised?

On this issue, the statute and the regulations are silent. Troubling is the fact that radiologists perform tests that are prescribed by others. In Omega Diagnostic Imaging, P.C. v State Farm Mut. Auto Ins. Co. [8 Misc 3d 715 (Civ. Ct., Kings Cty, 2005)], the insurer challenged a prescription by a chiropractor for an MRI of the injured party’s knee . While not couched in terms of the availability of the “lack of medical necessity defense,” the Court in Omega Diagnostic expressed concerns similar to those of plaintiff herein. The Omega Diagnostic Court considered “whether there is a legal duty imposed on the medical supplier or provider to investigate the authority of the author of the prescriptions it fills in order to receive [*5]first party no-fault benefits for the services it provides.” The Court found no legal authority on point, and concluded that it was not unreasonable for plaintiff therein to perform the MRI prescribed by the licensed chiropractor therein.

It is this Court’s opinion that the results in West Tremont and Omega Diagnostic comport with the underlying intent of the no-fault statute, that claims be processed quickly and efficiently, and that economic losses be fully compensated. As noted in West Tremont, there is no statutory or regulatory pre-approval requirement for radiology tests requested by treating physicians in no-fault cases. Furthermore it makes no sense to argue “lack of medical necessity” against radiologists, because they do not assess medical necessity. Radiologists neither examine the no-fault patient, nor render a pre-test diagnosis. Any diagnostic opinion is based on the radiological test. To require radiologists to render a pre-test diagnosis would cause significant delay in treating the injured.

As suggested in Omega Diagnostic, a radiologist should not be required to investigate every prescription for radiology tests in order to receive no-fault payments for tests admittedly performed.

Overall, this Court finds, that where a prescription for a radiology test has been provided by a treating physician or licensed medical provider in a no-fault case, the prescription should render a challenge on the grounds of “lack of medical necessity” unavailable against the radiologist. The prescription establishes medical necessity for the purposes of the radiologist.

The insurers’ recourse should lie against the treating physician or medical provider. An insurer who can prove that a radiology test is unnecessary or duplicative, should be able to challenge through subrogation the treating physician or medical provider who prescribed the test [see generally Pavone v Aetna Cas.& Sur. Co., 91 Misc 2d 658 (Sup Ct., Monroe Cty, 1977).

Based on the foregoing, defendants’ motion for summary judgment is denied, and that branch of plaintiff’s cross-motion for summary judgment is granted.

Plaintiff additionally cross-moves for class certification pursuant to CPLR 901 and 902, identifying the proposed class as:

all radiologists and radiology practices that have been denied no-fault benefits in the last six (6) years for MRI’s performed where said denial is based on lack of medical necessity, peer review or any other denial however worded based on the tests’ lack of medical necessity. (Mollins affirmation in support of cross-motion, par. 9.)

“In determining whether to grant class certification, plaintiffs must satisfy five prerequisites under CPLR 901(a) by competent evidence in admissible form (citations omitted)” [Feder v Staten Island Hosp., 304 AD2d 470 (1st Dept. 2003); see, Hazelhurst v [*6]Brita Products Co., 295 AD2d 240, 241(1st Dept. 2002)]. Specifically, the prerequisites are:

1. the class is so numerous that joinder of all members, whether otherwise required or permitted is impracticable;

2. there are questions of law or fact common to the class which predominate over any questions affecting only the individual members;

3. the claims or defenses of the representative parties are typical of the claims or defenses of the class;

4. the representative parties will fairly and adequately protect the interests of the class; and

5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy.

[CPLR 901(a); Small v Lorillard Tobacco Co. Inc., 94 NY2d 43, 54 (1999)]. The prerequisites of CPLR 901(a) are to be liberally construed [Wilder v May Dept. Stores Co., 23 AD3d 646 ( 2nd Dept. 2005); Tosner v Town of Hempstead, 12 AD3d 589( 2nd Dept. 2004)].

In addition, the Court must also consider the five factors set forth in CPLR 902, which are:

1. the interest of members of the class in individually controlling the prosecution or defense of separate actions;

2. the impracticability or inefficiency of prosecuting or defending separate actions;

3. the extent and nature of any litigation concerning the controversy already commenced by or against members of the class;

4. the desirability or undesirability of concentrating the litigation of the claim in the particular forum; and

5. the difficulties likely to be encountered in the management of a class action.

The decision whether to certify a class action is vested in the sound discretion of the trial court (Small at 52; Wilder at 649), and any error should be resolved in favor of allowing the class action [Wilder at 649; Kidd v Delta Funding Corp., 289 AD2d 203 ( 2nd Dept 2001)]. Class certification must be based upon a proper factual record [Klein v Robert’s American Gourmet Food, Inc., 28 AD3d 63 (2nd Dept. 2006)]. [*7]

In this case the Court agrees with defendants that some discovery is needed before certification can be resolved [see Dougherty v North Fork Bank, 301 AD2d 491 (2nd Dept. 2003); Negrin v Norwest Mortgage, Inc., 293 AD2d 726 (2nd Dept. 2002)]. As to the very first prerequisite of numerosity, plaintiffs state “the number of denials in New York State for MRI’s based on lack of medical necessity from all of these Defendants probably exceeds a few hundred thousand” (Mollins affirmation in support of cross-motion, par. 17). The evidentiary basis for this statement is not identified. Similarly, the factual basis for plaintiff’s assertion that it will adequately protect the interests of the class is not provided, and the record contains little information regarding plaintiffs’ attorney’s qualifications to represent a class.

Based on the foregoing, that branch of plaintiff’s cross-motion which seeks class certification is denied without prejudice to renewal.

The parties are reminded that a certification conference is scheduled to be held before the undersigned on June 16, 2006 at 10:30 A.M.

This decision constitutes the order of the court.

Dated: JUNE 7, 2006 THOMAS P. PHELAN

J.S.C.

APPEARANCES OF COUNSEL

Supreme Court, Nassau County

017608-05

Steven M. Jaeger, J.

Upon the foregoing papers, defendant’s motion pursuant to CPLR §602 severing

plaintiff’s causes of action is denied. The issue raised is whether plaintiff should be permitted to join unrelated assigned claims for no-fault benefits.

The four causes of action in plaintiff’s complaint seek to recover no-fault benefits for each of four unrelated claimants who received treatment by the same medical provider, plaintiff Westchester Medical Center (hereinafter “Medical Center”). The claimants were each covered under a uniform policy of insurance issued by the same insurance company, defendant Liberty Mutual Insurance Company (hereinafter “Liberty”), and each allegedly assigned their right to no-fault benefits to the Medical Center.

The plaintiff further alleges that no-fault billing was mailed to defendant in a timely manner and that the bills remain unpaid. The New York State No-Fault Law, Insurance Law §5106(a) imposes upon insurers a prescribed time frame for settling bodily injury claims covered by a policy of bodily injury liability insurance:

“Payments of first party benefits and additional first party benefits shall be made as the loss if incurred. Such benefits are overdue if not paid within thirty days after the [*2]claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied. All overdue payments shall bear interest at the rate of two percent per month. If a valid claim or portion was overdue, the claimant shall also be entitled to recover his attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated b the superintendent in regulations.

The defendant argues that since the respective injuries of the claimants were unrelated, the accidents took place on various dates, and each claim submitted by the assignee was handled in a distinct manner, the causes of action should be severed. Defendant further argues that if the causes of action are not severed, it would involve mini-trials as to the individual claims.

While defendant’s Answer alleges numerous affirmative defenses as to procedure under the no-fault statute and, among others, medical necessity and fraudulent conduct, the Answer was verified by counsel and the motion was supported

only by an affirmation of counsel. There was no evidentiary proof nor an affidavit by a person with knowledge of the facts herein.

CPLR §601 encourages and permits joinder with as many claims as one plaintiff might have against one defendant, regardless of whether such claims are unrelated or inconsistent. Collins v. Telcoa Intern. Corp., 283 AD2d 128, 131 (2d Dept. 2001). CPLR §1002(a) states: “Persons who assert any right to relief jointly, severally, or in the alternative arising out of the same transaction or occurrence, or series of transactions or occurrences, may join in one action as plaintiffs if any common question of law or fact would arise.”

The purpose of this policy of liberal joinder is to prevent multiplicity of suits so that the aggrieved party can obtain relief in one action. Saunders v. Saunders, 54 Misc 2d 1081 (Supreme Ct Kings Co. 1967). “It is also intended to reduce the caseload of the courts and its personnel and avoid unnecessary expenditure of time, money and manpower.” Aviyon Medical Rehabilitation v. Allstate Insurance Co., 4 Misc 3d 1011(A), 2004 NY Slip Op 50819(U)(Supreme Ct Kings Co. 2004).

CPLR §603 provides, however, that a court may order severance “in furtherance of convenience or to avoid prejudice.” The decision whether to grant a severance pursuant to CPLR §603 is a matter of judicial discretion, which will not be disturbed on appeal absent an abuse of discretion or prejudice to a substantial right of the party seeking severance. Anderson v. Singh, 305 AD2d 620 (2d Dept. 2003); Finning v. Niagra Mohawk Power Corp., 281 AD2d 844 (3rd Dept. 2001); Aviyon Medical Rehabilitation, supra.

The Appellate Division, Second Department held in the leading case that when “…the claims arise out of a uniform contract of insurance and involve interpretation of the same no-fault provisions of the Insurance Law…” joinder of 29 claims by one assignee-plaintiff was proper under CPLR 1002(a). Hempstead General Hospital v. Liberty Mutual Ins. Co., 134 AD2d 569 (2d Dept. 1987). Defendant Liberty relies on [*3]Mount Sinai Hospital a/a/o Jefferson v. MVIAC, 291 AD2d 53 (2d Dept. 2002), for the proposition that in actions for reimbursement of no-fault benefits with multiple assignees and assignors, the claims must be severed, where there is no common contract of insurance and no other similarity except that no-fault benefits were not paid.

However, Liberty’s reliance on Mount Sinai, supra, is misplaced. It is distinguishable from the instant case because in Mount Sinai both the assignees and assignors were different. While the Appellate Division approved severance as a “provident exercise of discretion”, it modified the order appealed from to join two causes of action on behalf of the same assignor-claimant, citing Hempstead General Hospital. The instant case involves only one assignee-provider and four unrelated assignors-claimants, similar to but less than the 29 in Hempstead General Hospital, supra.

More recently, the Second Department, in Poole v. Allstate Insurance Co., 20 AD3d 518 (2d Dept. 2005), severed 47 unrelated claims brought by one assignee against one insurance company. The Court not only cited Hempstead General Hospital without disapproval, but in its ruling held joinder of 47 claims in a single trial to be an “improvident exercise of discretion” because it was “unwieldy” and potentially confusing to a trier of fact. See also, Radiology Resource Network v. Fireman’s Fund Insurance Co., 12 AD3d 185 (1st Dept. 2004)(68 claims severed); cf, Aviyon Medical Rehabilitation, supra (36 claims appropriately joined).

While there may be support for granting severance in no-fault actions, which Liberty mis-characterizes as controlling on this Court, analysis of the cases suggests that Hempstead General Hospital has never been overruled by the Second Department and that severance remains a matter of judicial discretion based upon a weighing of all the circumstances in a particular case.

For instance, the Appellate Term has cited Radiology and Mount Sinai with approval in granting severance in a number of recent cases. Metro Med v. MVAIC, 6 Misc 3d 136A, 2005 NY Slip Opinion 50238 (U)( App Term 2d Dept. 2005)(3 claims); S.I.A. Med. v. GEICO, 8 Misc 3d 134A, 2005 NY Slip Opinion 51170(U)(App Term 2d Dept. 2005)(11 claims); Berger v. Liberty Mutual, 10 Misc 3d 139A, 2005 NY Slip Opinion 52204(U)(App Term 2d Dept. 2005)(14 claims). While Liberty argues that these decisions are binding on this Court and overrule Hempstead General Hospital, such argument is baseless. As a court of original jurisdiction, this Court is bound by stare decisis to follow determinations of the Appellate Division or the Court of Appeals. Ross Bicycles, Inc v. Citibank, 149 AD2d 330 (1st Dept. 1989); People v Young, 82 Misc 2d 964 (Nassau County Ct 1975).

Not only has the Second Department not overruled Hempstead General Hospital, but even the First Department, in Radiology, supra, reconciled its ruling by explaining that Hempstead General Hospital “…does not stand for the proposition that the granting of a severance motion…is an abuse of judicial discretion.” The standard applied in all of the cited cases remains the appropriate exercise of judicial discretion and the analysis remains focused on the circumstances in each particular case.

Although the facts of each cause of action herein may be different, each involves the same provider, the same insurance company, the same insurance contract, and common questions of the application and interpretation of Insurance Law §5106(a). Defendant has failed to submit any proof or documentary evidence to the contrary. [*4]Conclusory allegations (only made by counsel) that the claimants engaged in fraudulent conduct or that treatment was not medically necessary is an insufficient basis to sever these four actions. Considering all of these factors, the Court finds that the joinder of only four (4) assignors-claimants does not impose an undue burden on defendant nor would it likely create confusion for the trier of fact.

Accordingly, defendant’s motion to sever is denied.

This shall constitute the Decision and Order of the Court.

Dated: March 17, 2006

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STEVEN M. JAEGER, A.J.S.C.