Nassau District Court

28583/04

Randy Sue Marber, J.

Plaintiff moves for an order pursuant to CPLR §3212 awarding the plaintiff summary judgment for $7,567.55, the amount demanded in the complaint, on the grounds that defendant failed to pay or deny its claims within thirty days, and that defendant is precluded from offering any evidence at time of trial in accordance with an April 21, 2005 stipulation. Defendant opposes the motion and cross-moves for summary judgment on the ground that plaintiff failed to rebut defendant’s proof that services were not medically necessary, plaintiff’s failure to cooperate and where the services rendered constitute concurrent care, which cross-motion plaintiff opposes. Defendant also raises the issue of fraud.

Plaintiffs’ assignor, Dian Pringle, allegedly was involved in a motor vehicle accident on March 8, 2004. On multiple dates from March 9, 2004 through July 30, 2004 plaintiff rendered acupuncture “health services” to its assignor in the total amount of $7,567.55. All of said claims were timely submitted and defendant has acknowledged receipt of same. By certified letters dated March 26, 2003[sic] and April 26, 2004, defendant requested that Ahmed Erfan Halima, M.D. as owner of plaintiff, submit to an examination under oath with regard to the submitted claims. An Examination Under Oath of Dr. Ahmed Halima was eventually conducted on July 23, 2004. Plaintiff’s claims were subsequently all denied on September 16, 2004 for the stated reasons:

Your records and testimony indicate that you consistently provide (a) physical therapy and chiropractic services to patients who are receiving services for the [*2]same conditions during the same periods at the same location, without regard to the medical necessity of the services; and (b) diagnostic tests such as electrodiagnostic tests, range of motion test and Current Perception Threshold tests that are of no diagnostic value and/or are not medically necessary. Therefore, your claims are denied for two reasons. First you have materially misrepresented that your services were rendered because they were medically necessary, when in fact they were not. Second your services constitute concurrent care, and you have failed to establish which specialty is most relevant to any patient’s diagnosis.

While concurrent care is not permitted under the Workers Compensation Law, contrary to defendant’s contention listed in its Denial of Claim form, case law has considered it under the No-Fault Law (see, Universal Acupuncture Pain Servs PC v. Lumbermens Mut. Cas. Co., 195 Misc 2d 352, 195 Misc 2d 352, 758 NYS2d 795 [Civ Ct Queens County].

The Court has reviewed defendant’s forty-two (42) Denial of Claim forms, all dated September 14, 2004 containing the above reason for denial, and ascertain that each form contains March 26, 2004 as the “date final verification requested” and July 23, 2004 as the “date final verification received”. It does not appear that defendant renewed its request for an EUO as “additional verification” on receipt of each of the 42 claims from plaintiff. Further, to be timely, the Denial of Claim form had to have been issued within 30 days of the holding of the EUO. As stated by the Appellate Term, 9th and 10th Districts in the case of S&M Supply Inc. v. State Farm, 4 Misc 3d 130A, 791 NYS2d 873,

EUOs are also subject to the same 30-day scheduling period required of independent medical examinations (11 NYCRR 65-3.5[d]), and to virtually identical scheduling and reimbursement conditions imposed on medical examinations (11 NYCRR 65-3.5[e]). Similarly, where an EUO, as a medical examination, has been requested as verification, it is deemed to have been received by the insurer on the day the examination was performed (11 NYCRR 65-3.8[a][1]).

Therefore, defendant’s denials of plaintiff’s claims on September 14, 2004, 53 days after the EUO was conducted on July 23, 2004, were not timely. By its failure to timely issue its Denial of Claim forms, defendant is precluded from proving lack of medical necessity of the services, as well as concurrent care, the reasons given in its Denials.

Plaintiff instituted the within lawsuit by service of a summons and complaint upon defendant on November 17, 2004. Defendant interposed its Answer on December 16, 2004. Plaintiff annexed to its moving papers, an affidavit of service by mail which states that on January 31, 2005, plaintiff served defendant with its Demand for a Verified Bill of Particulars as to the Affirmative Defenses, plaintiff’s Demand for Experts and Notice for Discovery and Inspection.

Plaintiff asserts that on April 21, 2005, the parties entered into a stipulation, which was [*3]not “so ordered” wherein it was agreed that defendant would respond to plaintiff’s written interrogatories and Demand for Discovery and Inspection within 60 days of the date of the stipulation, and in the event of defendant’s failure to respond to plaintiff’s demands, Judgment will be entered against defendant upon the filing of an affidavit of non-compliance. The stipulation likewise states: “Furthermore, plaintiff agrees to fully respond to defendant’s discovery demands or same‘ will be precluded.”(emphasis added) Defendant failed to so respond within said 60 days and plaintiff brought the within motion. Copies of plaintiff’s Demands are annexed to its moving papers. No affidavit of service of, or copy of purported written interrogatories is annexed. Said affidavit of service also includes that it served plaintiff’s Response to Defendant’s Demand for Bill of Particulars, Response to Notice for Discovery & Inspection, Response to Demand for Expert Discovery and Response to Demand for Proof of Filing, Index Number. Copies of said Responses are not included. Defendant, however, has raised no objection with regard to its receipt of same.

As stated by the Court of Appeals in In re Petition of New York L.& W.R.R. Co., 98 NY 447, 453 (1885), which case is still cited today:

Parties by their stipulations may in many ways make the law for any legal proceeding to which they are parties, which not only binds them, but which the courts are bound to enforce. They may stipulate away statutory, and even constitutional rights. They may stipulate for shorter limitations of time for bringing actions for the breach of contracts than are prescribed by the statutes, such limitations being frequently found in insurance policies. They may stipulate that the decision of a court shall be final, and thus waive the right of appeal; and all such stipulations not unreasonable, not against good morals, or sound public policy, have been and will be enforced.

(See also, Morse v. Morse Dry Dock & Repair Co., 249 AD 764, 291 NYS 995 [2nd Dept 1936]; Tepper v. Tannenbaum, 83 AD2d 541, 441 NYS2d 470 [1st Dept 1981]; Celtic Medical P.C. v. Liberty Mutual Insurance Co. 11 Misc 3d 1092[A], 2006 NY Slip Op 50825U, [Nassau Dist Ct, 2006]).

The stipulation in this case is not an unreasonable one. Nothing contained therein contravenes good morals or sound public policy. Accordingly, that portion of plaintiff’s motion seeking an order precluding defendant from offering any evidence is granted only with regard to information demanded in its discovery notices not previously provided by defendant, or already in plaintiff’s possession.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers (Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]; Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]) and even in the absence of opposing papers. A motion for summary judgment shall be supported by an “affidavit [*4]by a person having personal knowledge of the facts”, shall recite all the material facts and it shall show that there is no defense to the cause of action or that the defenses have no merit (CPLR §3212[b]). Once the moving party meets his burden, the burden then shifts to the non-moving party to allege such evidentiary facts that raise a genuine and material controversy as to the issue(s) before the Court. Where the opposing party fails to meet his burden and the Court finds no triable issues, the motion will be granted (Iandoli v. Lange, 35 AD2d 793 [1st Dept 1970]). Where the Court determines that a triable issue of fact exists, denial of the motion is the proper course of action (Moskowitz v. Garlock, 23 AD2d 943 [3d Dept 1965])

Plaintiff bases its lawsuit on the ground that it timely submitted its claim forms to defendant which neither paid nor denied them within thirty days in accordance with the Rules and Regulations governing the payment of no-fault benefits (see Insurance Law §5106[a]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742, 774 NYS2d 564 [2004]; A.B. Med. Servs. PLLC v. Lumbermens Mut. Cas. Co., 4 Misc 3d 86, 781 NYS2d 818 [App Term, 2d & 11th Jud Dists 2004]; Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). The Court finds that plaintiff has established its prima facie case.

In addition to the reasons for denial set forth in its Denial of Claim forms as indicated above, in its opposition papers, defendant raises for the first time that the proof of claim forms submitted by plaintiff are improper. Having failed to include this reason in a timely denial of the claim, however, defendant is precluded from raising this defense (see Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d 274, 282, 683 NE2d 1, 660 NYS2d 536 [1997]).

Lastly, defendant also raises questions as to whether plaintiff is fraudulently incorporated in violation of Business Corporation Law §1507 and whether the actual profits from the practice are channeled to the non-physician management company to which it pays a set fee of $40,000 to $43,000 a month. Defendant bases its fraud defense upon the unsigned but duly certified deposition of the plaintiff’s owner, Dr. Ahmed Halima. An unsigned but certified deposition transcript of a party can be used by the opposing party as an admission in support of a summary judgment motion (Newell Co. v Rice, 236 AD2d 843, 844, lv denied 90 NY2d 807). Dr. Halima testified that the management company provides two administrative support persons as well as a receptionist, a technician and two billing persons; it owns the EMG and NCV testing machine as well as CPT testing equipment. The management company is also on the lease for the premises. His testimony indicates that he does not know who prepares the bills or what form is used for billing, and that he knew little about what is actually being performed at his facility. It is well settled that despite an untimely denial, an insurer is not precluded from raising the issue of coverage such as a breach of a condition precedent of the terms of the insurance contract (Presbyterian Hosp. in the City of New York v. Maryland Cas. Co., 90 NY2d 274, 683 NE2d 1, 660 NYS2d 536. [*5]

In addition, the Court notes that proper licensing of a medical provider is a condition precedent to payment (Valley Physical Med. and Rehab v. NY Central Mutual Ins., 193 Misc 2d 675, 753 NYS2d 289 (App. Term 2nd Dept 2002). The Court of Appeals has ruled that under New York State’s No-Fault Insurance Laws, insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises (State Farm Automobile Ins. Co. v. Robert Mallela, 4 NY3d 313, 827 NE2d 758, 794 NYS2d 700). The Mallela III Court followed the Superintendent of Insurance’s promulgation prohibiting the reimbursement of benefits on behalf of unlicensed or fraudulently licensed providers (11 NYCRR 65-3.16[a][12]) (effective April 4, 2002). Accordingly, Mallela III ruled that medical providers fraudulently incorporated are therefore not entitled to reimbursement. While defendant has failed to provide sufficient proof of fraudulent incorporation to award it summary judgment, the question of the fraudulent incorporation raises questions of fact which would preclude summary judgment to the plaintiff.

Accordingly, both plaintiff’s motion and defendant’s cross-motion for summary judgment are denied and that portion of plaintiff’s motion seeking an order precluding defendant from offering any evidence is granted only with regard to information demanded in its discovery notices not previously provided by defendant, or already in plaintiff’s possession.

So Ordered:

DISTRICT COURT JUDGE

Dated:June 13, 2006

CC: Belesi & Conroy, P.C.

Melli, Guerin & Wall, P.C.

Nassau Dist Ct

28582/04

Randy Sue Marber, J.

Plaintiff moves for an order pursuant to CPLR §3212 awarding the plaintiff summary judgment for $7,951.28, the amount demanded in the complaint on the grounds that defendant failed to pay or deny its claims within thirty days, and that defendant is precluded from offering any evidence at time of trial in accordance with an April 21, 2005 stipulation. Defendant opposes the motion and cross-moves for summary judgment on the ground that plaintiff failed to rebut defendant’s proof that services were not medically necessary, plaintiff’s failure to cooperate and where the services rendered constitute concurrent care, which cross-motion plaintiff opposes. Defendant also raises the issue of fraud.

Plaintiffs’ assignor, Shani Myles, allegedly was involved in a motor vehicle accident on January 2, 2004. On multiple dates from January 5, 2004 through April 28, 2004 plaintiff rendered acupuncture “health services” to its assignor in the total amount of $7,951.28. All of said claims were timely submitted and defendant has acknowledged receipt of same. Delay letters were sent to plaintiff upon defendant’s receipt of each bill, claiming that it was investigating the circumstances of the accident, as well as plaintiff’s patient’s eligibility for No-Fault benefits under its policy of insurance. Subsequent letters sent on April 21, 28 and May 6, 2004 indicate that payment was delayed “pending receipt of additional documents and/or testimony recently requested of you in a certified letter from defendant’s Special Investigative Unit.” (copies of the request for additional documents and/or testimony requested [*2]are not included). An Examination Under Oath of Dr. Ahmed Halima, the owner of plaintiff was conducted on July 23, 2004. An unsigned but certified copy of his transcript is included with defendant’s cross-motion papers. . The Court of Appeals has determined that an unsigned but certified deposition transcript of a party can be used by the opposing party as an admission in support of a summary judgment motion ( Newell Co. v Rice, 236 AD2d 843, 844, lv denied 90 NY2d 807).

Plaintiff instituted the within law suit by service of a summons and complaint upon defendant on November 17, 2004. Defendant interposed its Answer on December 16, 2004. Plaintiff annexed to its moving papers, an affidavit of service by mail which states that on January 31, 2005, plaintiff served defendant with its Demand for a Verified Bill of Particulars as to the Affirmative Defenses, plaintiff’s Demand for Experts and Notice for Discovery and Inspection.

Plaintiff asserts that on April 21, 2005, the parties entered into a stipulation, which was not “so ordered” wherein it was agreed that defendant would respond to plaintiff’s written interrogatories and Demand for Discovery and Inspection within 60 days of the date of the stipulation, and in the event of defendant’s failure to respond to plaintiff’s demands, Judgment will be entered against defendant upon the filing of an affidavit of non-compliance. The stipulation likewise states: “Furthermore, Plaintiff agrees to fully respond to defendant’s discovery demands or same’ will be precluded.” Defendant failed to so respond within said 60 days and plaintiff brought on the within motion. Copies of plaintiff’s Demands are annexed to its moving papers. No affidavit of service of, or copy of purported written interrogatories is annexed. Said stipulation of service also includes that it served plaintiff’s Response to Defendant’s Demand for Bill of Particulars, Response to Notice for Discovery & Inspection, Response to Demand for Expert Discovery and Response to Demand for Proof of Filing, Index Number. Copies of said Responses are not included. Defendant, however, has raised no objection with regard to its receipt of same.

As stated by the Court of Appeals in In re Petition of New York L.& W.R.Co., 98 NY 447, 453 (1885), which case is still cited today:

Parties by their stipulations may in many ways make the law for any legal proceeding to which they are parties, which not only binds them, but which the courts are bound to enforce. They may stipulate away statutory, and even constitutional rights. They may stipulate for shorter limitations of time for bringing actions for the breach of contracts than are prescribed by the statutes, such limitations being frequently found in insurance policies. They may stipulate that the decision of a court shall be final, and thus waive the right of appeal; and all such stipulations not unreasonable, not against good morals, or sound public policy, have been and will be enforced.

(See also, Morse v. Morse Dry Dock & Repair Co., 249 AD 764, 291 NYS 995 [2nd Dept 1936]; Tepper v. Tannenbaum, 83 AD2d 541, 441 NYS2d 470 [1st Dept 1981]; Celtic Medical P.C. v. Liberty Mutual Insurance Co. 11 Misc 3d 1092[A], 2006 NY Slip Op [*3]50825U, [Nassau Dist Ct, 2006]).

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers (Alvarez v. Prospect Hospital, 68 NY2d 320 [1986]; Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]) and even in the absence of opposing papers. A motion for summary judgment shall be supported by an “affidavit by a person having personal knowledge of the facts”, shall recite all the material facts and it shall show that there is no defense to the cause of action or that the defenses have no merit (CPLR §3212[b]). Once the moving party meets his burden, the burden then shifts to the non-moving party to allege such evidentiary facts that raise a genuine and material controversy as to the issue(s) before the Court. Where the opposing party fails to meet his burden and the Court finds no triable issues, the motion will be granted (Iandoli v. Lange, 35 AD2d 793 [1st Dept 1970]). Where the Court determines that a triable issue of fact exists, denial of the motion is the proper course of action (Moskowitz v. Garlock, 23 AD2d 943 [3d Dept 1965])

Plaintiff bases its lawsuit on the ground that it timely submitted its claim forms to defendant which neither paid nor denied them within thirty days in accordance with the Rules and Regulations governing the payment of no-fault benefits (see Insurance Law §5106[a]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742, 774 NYS2d 564 [2004]; A.B. Med. Servs. PLLC v. Lumbermens Mut. Cas. Co., 4 Misc 3d 86, 781 NYS2d 818 [App Term, 2d & 11th Jud Dists 2004]; Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). The Court finds that plaintiff has established its prima facie case.

Defendant claims that it extended its time to pay or deny plaintiff’s claims by issuing its delay letters. It has been held that letters from the insurance company to the a claimant, stating that payment was delayed pending completion of the insurance company’s investigation, did not toll the 30-day statutory period for paying or denying the claim (see Mount Sinai Hosp. v. Triboro Coach, 263 AD2d 11, 699 NYS2d 77; Ocean Diagnostic Imaging, P.C. v. Citiwide Auto Leasing Inc., 8 Misc 3d 138[A], 806 NYS2d 446 {8 Misc 3d 1026(A)} ; Melbourne Med., P.C. v. Utica Mut. Ins. Co., 4 Misc 3d 92, 781 NYS2d 819). Therefore, there was no tolling of defendant’s obligation to pay or deny plaintiff’s claims within thirty days of receipt and its subsequent denial of claim forms were untimely.

By its failure to timely issue its Denial of Claim forms, defendant is precluded from proving lack of medical necessity of the services, as well as concurrent care, the reasons given in its November 30, 2004 Denials. While concurrent care is not permitted under the Workers Compensation Law, contrary to defendant’s contention, case law has considered it under the No Fault Law (see, Universal Acupuncture Pain Servs PC v. Lumbermens Mut. Cas. Co., 195 Misc 2d 352, 195 Misc 2d 352, 758 NYS2d 795 [Civ Ct Queens County].

In addition to the reasons for denial set forth in its Denial of Claim forms as indicated [*4]above, in its opposition papers, defendant raises for the first time that the proof of claim forms submitted by plaintiff are improper. Having failed to include this reason in a timely denial of the claim, however, defendant is precluded from raising this defense (see Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d 274, 282, 683 NE2d 1, 660 NYS2d 536 [1997]).

Lastly, defendant also raises questions as to whether plaintiff is fraudulently incorporated in violation of Business Corporation Law §1507 and whether the actual profits from the practice are channeled to the non-physician management company to which it pays a set fee of $40,000 to $43,000 a month. Defendant bases its fraud defense upon the unsigned but duly certified deposition of the plaintiff’s owner, Dr. Ahmed Halima. An unsigned but certified deposition transcript of a party can be used by the opposing party as an admission in support of a summary judgment motion (Newell Co. v Rice, 236 AD2d 843, 844, lv denied 90 NY2d 807). Dr. Halima testified that the management company provides two administrative support persons as well as a receptionist, a technician and two billing persons; it owns the EMG and NCV testing machine as well as CPT testing equipment. His testimony indicates that he does not know who prepares the bills or what form is used for billing, and that he knew little about what is actually being performed at his facility. It is well settled that despite an untimely denial, an insurer is not precluded from raising the issue of coverage such as a breach of a condition precedent of the terms of the insurance contract (Presbyterian Hosp. in the City of New York v. Maryland Cas. Co., 90 NY2d 274, 683 NE2d 1, 660 NYS2d 536.

In addition, the Court notes that proper licensing of a medical provider is a condition precedent to payment (Valley Physical Med. and Rehab v. NY Central Mutual Ins., 193 Misc 2d 675, 753 NYS2d 289 (App.Term 2nd Dept 2002). The Court of Appeals has ruled that under New York State’s No-Fault Insurance Laws, insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises (State Farm Automobile Ins. Co. v. Robert Mallela, 4 NY3d 313, 827 NE2d 758, 794 NYS2d 700). The Mallela III Court followed the Superintendent of Insurance’s promulgation prohibiting the reimbursement of benefits on behalf of unlicensed or fraudulently licensed providers (11 NYCRR 65-3.16(a)(12) (effective April 4, 2002). Accordingly, Mallela III ruled that medical providers fraudulently incorporated are therefore not entitled to reimbursement. While defendant has failed to provide sufficient proof of fraudulent incorporation to award it summary judgment, the question of the fraudulent incorporation raises questions of fact which would preclude summary judgment to the plaintiff.

Accordingly, both plaintiff’s motion and defendant’s cross-motion for summary judgment are denied.

So Ordered:

DISTRICT COURT JUDGE

Dated: June 1, 2006 [*5]

CC: Belesi & Conroy, P.C.

Melli, Guerin & Wall, P.C.

Nassau District Court

13569/05

Randy Sue Marber, J.

Plaintiff moves, pursuant to CPLR §3212, for an order granting it summary judgment in the amount of $1,934.10 demanded in its complaint on the ground of defendant’s willful failure to comply with a discovery stipulation. Non-responsive opposition is submitted by defendant.

A review of the moving papers shows that this action was commenced by a summons and complaint on May 26, 2005 for unpaid bills for medical services rendered to its assignor on December 8, 2004 and submitted to defendant no-fault carrier in the amount of $1,934.10. Defendant acknowledged receipt of plaintiff’s bill on December 30, 2004 and issued its denial dated January 10, 2005 for the stated reason, “NoFault (sic) benefits for the above named provider are denied because the provider failed to substantiate the necessity for the medical services rendered. Please see attached report on[sic] Edward Weiland on 1/5/05 of[sic] which this denial is based.” An Answer was interposed on July 21, 2005, together with various discovery demands. Plaintiff responded to defendant’s demands on August 16, 2005, and on that date served its Notice for Discovery and Inspection on defendant.

On October 31, 2005, the parties entered into a stipulation, which was not “so ordered” wherein it was agreed that defendant would produce all outstanding discovery on or before 60 days of the date of the stipulation, which states: “Failure by defendant to do so will result in defendant being precluded from offering such’ evidence at the time of trial.” The Court interprets “such” evidence as meaning that requested in the outstanding discovery. Plaintiff’s attorney identifies in her affirmation, the discovery demanded to be “plaintiff’s Notice for Discovery and Inspection”. Defendant failed to so respond within said 60 days and plaintiff [*2]brought on the within motion.

As stated by the Court of Appeals in In re Petition of New York L.& W.R.Co., 98 NY 447, 453 (1885), which case is still cited today:

Parties by their stipulations may in many ways make the law for any legal proceeding to which they are parties, which not only binds them, but which the courts are bound to enforce. They may stipulate away statutory, and even constitutional rights. They may stipulate for shorter limitations of time for bringing actions for the breach of contracts than are prescribed by the statutes, such limitations being frequently found in insurance policies. They may stipulate that the decision of a court shall be final, and thus waive the right of appeal; and all such stipulations not unreasonable, not against good morals, or sound public policy, have been and will be enforced.

(See also, Morse v. Morse Dry Dock & Repair Co., 249 AD 764, 291 NYS 995 [2nd Dept 1936]; Tepper v. Tannenbaum, 83 AD2d 541, 441 NYS2d 470 [1st Dept 1981]; Celtic Medical P.C. v. Liberty Mutual Insurance Co. 11 Misc 3d 1092[A], 2006 NY Slip Op 50825U, [Nassau Dist Ct, 2006]).

The stipulation in this case is not against good morals or sound public policy, and therefore, will be enforced by this Court.

Defendant has responded to the within motion, but has failed to provide any of the demanded discovery. Its opposition relates to timely denial of the claims based on a peer review. An affirmed copy of the peer review report of Edward Weiland, M.D. is provided with defendant’s opposition, together with an affidavit of Phyllis Faraguna, a claims representative for defendant and a person with personal knowledge of the preparation and mailing of the denial of claims. Plaintiff’s attorney, in her Reply affirmation, asserts that Ms. Faraguna’s affidavit is improper and insufficient as she is not the individual handling this claim and does not state the source of her “personal knowledge” with regard to this claim. The Court has reviewed the affidavit and concludes that it contains sufficient factual information describing how defendant’s regular office practices and procedures for mailing denials are geared as to ensure the likelihood that the denial of claim is always properly addressed and mailed. Further, there is no sworn statement from plaintiff that the denial of claim was never received, and in fact, annexes to its moving papers a copy of Dr. Weiland’s report which was attached to defendant’s denial of claim form.

As stated in AVA Acupuncture P.C. v. Elco Administrative Services Co., 10 Misc 3d 1079(A), Slip Copy, 2006 WL 286854 (NY City Civ. Ct.,2006):

“It is also worthy of note that, although the Second Department in Hospital for Joint Diseases v. Nationwide Mutual Ins. Co. (284 AD2d 374) found the defendant’s proof of mailing to be inadequate (id., at 374), it reversed the lower court’s granting of the defendant’s motion for summary judgment, but let stand the lower court’s denial of the plaintiff’s motion for summary judgment. One might suspect, therefore, that a showing on mailing insufficient to support granting a party’s motion for summary judgment might, nonetheless, be sufficient to warrant denial of the other party’s summary judgment motion (See Hospital for Joint Diseases v. New York City Transit Authority, 16 AD3d 376, 376-77 [2d Dept 2005].)”

While plaintiff has established by proof that it submitted to defendant claim forms, setting [*3]forth the fact and the amount of the loss sustained, it has failed to prove that payment of no-fault benefits was overdue, and therefore, has not established a prima facie case, sufficient to grant it summary judgment.

A review of the documents exchanged between the parties as indicated in the moving papers before the Court reveal that there is sufficient documentation already in the parties’ possession to enable a trial to go forward without the precluded evidence covered in plaintiff’s Notice for Discovery and Inspection.

Accordingly, that portion of plaintiff’s motion seeking an order precluding defendant from offering any evidence is granted only with regard to information demanded in its discovery notices not previously by defendant, or already in plaintiff’s possession.

So Ordered:

Dated: May 30, 2006

DISTRICT COURT JUDGE

cc: Robert E. Dash, Esq.

Law Office of Karen C. Dodson

Nassau District Court

27730/02

Randy Sue Marber, J.

Defendant moves, pursuant to CPLR §3212, for an order granting summary judgment dismissing plaintiff’s complaint for its willful failure to comply with a discovery stipulation. No opposition is submitted by plaintiff.

A review of the moving papers shows that this action was commenced by a summons and complaint in July, 2002 for unpaid medical bills submitted to defendant no-fault carrier on behalf of its assignor in the amount of $3,389.72. An Answer was interposed in August, 2002, together with various discovery demands including a Demand for Verified Bill of Particulars and Combined Demands. Plaintiff failed to respond to defendant’s demands, and on or about June 9, 2005 defendant moved pursuant to CPLR §3126 for an Order of Preclusion against plaintiff. On July 27, 2005 defendant withdrew its motion and plaintiff agreed, in a stipulation, to respond to defendant’s discovery demands within sixty (60) days or be precluded from offering evidence at trial. Plaintiff failed to so respond with said sixty (60) days and defendant brought the within motion.

As stated in Tepper v. Tannenbaum, 83 AD2d 551, 441 NYS2d 470 (1st Dept 1981):

Parties by their stipulations may in many ways make the law for any legal proceedings to which they are parties, which not only binds them, but which the courts are bound to enforce…and all such stipulations not unreasonable, not against good morals or sound public policy, have been and will be enforced (Matter of New York, Lackawanna & Western R.R. Co., 98 NY 447, 453; see, also, Morse v. Morse Dry Dock & Repair Co., 249 AD 764; 2A [*2]Weinstein-Korn-Miller, NY Civ Prac, par 2104.02).

The stipulation in this case is not an unreasonable one. Nothing contained therein contravenes good morals or sound public policy.

A review of the Notice for Discovery and Inspection reveals that defendant sought from plaintiff:

1. A copy of the assignment of benefits executed by the assignor.

2. A copy of the invoices submitted by plaintiff to the defendant for services and/or supplies provided to the assignor.

3. A copy of the letter(s) of medical necessity for the services and/or supplies provided to the assignor.

4. A copy of the medical chart for the assignor.

While a copy of the assignment of benefits executed by plaintiff’s assignor was annexed to plaintiff’s summons and complaint, none of the additional documents demanded were provided. Inasmuch as plaintiff has agreed to be precluded from offering evidence at trial concerning same, without such documents, it will be unable to make out its prima facie case.

The Court finds that the plaintiff has failed to produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which it rests its claim.

Accordingly, based on the foregoing and plaintiff’s failure to oppose this motion, defendant’s motion is granted and the within action is dismissed.

So Ordered:

Dated: May 9, 2006DISTRICT COURT JUDGE

CC: Baker, Sanders, Barshay, Grossman,

Fass, Muhlstock & Neuwirth, P.C.

Troy & Troy, P.C.

Nassau Dist Ct

34030/02

Anthony W. Paradiso, J.

Plaintiff moves for summary judgment to recover no-fault benefits. The defendant opposes the motion. For the reasons that follow, the motion is granted.

The plaintiff rendered medical services to the defendant’s insured from August 15, 1997 through December 20, 1997, allegedly relating to an automobile accident that occurred on July 8, 1997. The plaintiff submitted three claims to the defendant for payment of first-party no-fault benefits. Each claim was timely denied. Defendant denied payment for all services rendered prior to September 17, 1997 on the basis that it conducted a medical audit and “there is no support for the medical necessity of this equipment or test/service.” Defendant denied payment for all services rendered after September 17, 1997 based on the insured’s failure to appear for a physical examination originally scheduled for that date.

“While the timely denials defendant submitted in the claim stage constituted sufficient denials based on the defense of lack of medical necessity, defendant must, nevertheless, submit proof in admissible form to rebut plaintiff’s prima facie showing to oppose a motion for summary judgment” (A.B. Medical Services PLLC v Lumbermens Mutual Casualty Co., 4 Misc 3d 86, 87 [App Term, 2d Dept 2004]). Inasmuch as defendant solely submitted the affirmation of its [*2]attorney in opposition to plaintiff’s motion for summary judgment and did not submit a sworn peer review report to support its allegation of lack of medical necessity for the services rendered, it failed to oppose the motion by proof in admissible form and cannot defeat plaintiff’s entitlement to summary judgment on that basis (see id.).

Likewise, the defendant offered no admissible proof that its denials based upon the insured’s failure to comply with a request for a physical examination were predicated upon a properly mailed verification notice (see Summit Psychological, P.C. v General Assurance Company, 9 Misc 3d 8, 9-10 [App Term, 2d Dept 2005]). The affidavit of Saneela Khan did not establish how or when the IME notice was mailed, and therefore no presumption of mailing can be attributed to her averments (see id.).

While the plaintiff is clearly entitled to judgment in the amount of $924.38 for the medical services provided, the court must determine when interest began to accrue on this amount. The accrual date often urged by medical providers seeking no-fault payments is 30 days after an insurer receives a proper proof of claim. In contrast, insurers often point to 11 NYCRR 65-3.9(c) (and its predecessor, 11 NYCRR 65.15[h][3]) to support the argument that interest should not accrue until the no-fault claimant requests arbitration or institutes a lawsuit when that claimant has not done so within 30 days after receipt of the denial. Here, the plaintiff submitted claims on November 5, 1997, December 8, 1997 and January 14, 1998 which were timely denied on November 12, 1997, December 12, 1997 and January 22, 1998, respectively. However, the plaintiff did not commence suit for the recovery of these payments until September 6, 2002, well over four years later.

Judge Milagros A. Matos of the Civil Court, Kings County, grappled with this very issue in East Acupuncture, P.C. v Allstate Ins. Co., 8 Misc 3d 849 (2005). Judge Matos compared the language of 11 NYCRR 65.15(h)(1) (now 11 NYCRR 65-3.9[a]), dealing with the interest rate to be applied to overdue payments due “an applicant or an assignee,” with the language of 11 NYCRR 65.15(h)(3) (now 11 NYCRR 65-3.9[c]), which limits the interest accrual date on such payments where “an applicant” does not request arbitration or institute a lawsuit within 30 days after receipt of the denial of claim. Judge Matos accepted the argument of the plaintiff therein that the Superintendent of Insurance, when promulgating the regulations at issue, specifically and intentionally distinguished between “an applicant” and “an assignee.” According to Judge Matos, “[u]nder a strict interpretation of the regulation at issue, 11 NYCRR 65.15(h)(3) does not apply to assignees” (East Acupuncture at 852). The court found the omission of the word “assignee” to be “a clear indication that the Superintendent intended to exclude assignees from this section’s application” (id.).

Deferring to the Superintendent’s supposed interpretation, the East Acupuncture court would not, by implication, read into the regulation “a limitation for which no sound reason can be found” (id. at 853). As such, Judge Matos concluded that unlike an insured/assignor, a medical provider/assignee was not limited to interest from the date it commenced a belated suit for the recovery of no-fault benefits, but rather could avail itself of the earliest possible interest accrual date.

This court respectfully disagrees with Judge Matos’ conclusion. Although courts will defer to an agency’s interpretation of a statute it is charged with administering where the [*3]application of the statute involves knowledge and understanding of underlying practices or entails an evaluation of factual data and inferences to be drawn therefrom (see Kurcsics v Merchants Mutual Ins. Co., 49 NY2d 451, 459 [1980]), a court must not blindly accept a statutory interpretation that has no reasonable basis in the law (see id. at 458-59; O’Brien v Spitzer, 24 AD3d 9, 14 [2d Dept 2005]). Here, the interpretation accepted by the court in East Acupuncture runs counter to the stated objectives of the statutory no-fault scheme, i.e., prompt compensation for losses incurred by accident victims, reduced burdens on the courts, and lower premiums for motorists (see Medical Society of the State of NY v Serio, 100 NY2d 854, 860 [2003]). As the Court of Appeals observed in Walton v Lumbermens Mutual Casualty Co., 88 NY2d 211, 214 (1996), the no-fault law’s purposes “were 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.” The interpretation attributed to the Superintendent in East Acupuncture encourages delayed suits and thrusts an unjustified financial burden on insurance companies who are forced to pay years worth of punitive interest payments that are eventually reflected in higher insurance premiums (see Kuscsics, 49 NY2d at 457). Since this interpretation frustrates a core and essential objective of the regulations, “that is, to provide a tightly timed process of claim, disputation and payment” (Presbyterian Hospital v Maryland Casualty Co., 90 NY2d 274, 281 [1997]), it should not be accepted (see id.; Kuscsics at 458; see e.g. Crump v Unigard Ins. Co., 100 NY2d 12, 17 [2003]).

Moreover, the Superintendent’s purported distinction between an insured/assignor and a medical provider/assignee with regard to the interest accrual date on a belated suit constitutes an unwarranted abrogation of the common law. It is settled law that an assignee stands in the shoes of the assignor and acquires no greater rights than those possessed by the assignor (see International Ribbon Mills, Ltd. v Arjan Ribbons, Inc., 36 NY2d 121, 126 [1975]). This general principle “remains alive and well today in [n]o-[f]ault actions” (CPT Medical Service, P.C. v Utica Mutual Ins., 2006 NY Slip Op 26098 [Civ Ct, Queens County 2006]; see e.g. A.B. Medical Services PLLC v Commercial Mutual Ins. Co., 2006 NY Slip Op 26118 [App Term, 2d Dept 2006] [health care provider deals with an assignor-insured at its own peril in accepting an assignment of no-fault benefits and acquires no greater rights than an assignor-insured whose recovery is precluded due to fraud]). As the Court of Appeals remarked in Gottlieb v Kenneth D. Laub & Co., 82 NY2d 457, 464 [1993]: “The common law is never abrogated by implication, but on the contrary it must be held no further changed than the clear import of the language used in a statute absolutely requires” (see Statutes §301[a]). It simply cannot be said that Insurance Law § 5106(a), which expresses the legislature’s mandate regarding the fair settlement of no-fault claims, “absolutely requires” the irrational interpretation that would reward a dilatory assignee such as the plaintiff herein with an interest windfall permitted under the East Acupuncture rationale. This is especially so in light of the Superintendent’s duty to promulgate rules intended to “better effectuate the legislative purpose of providing prompt compensation as the loss is incurred'” (Medical Society of the State of NY v Serio, 100 NY2d at 862, quoting Ins. Law § 5106[a]).

Accordingly, the plaintiff shall have judgment in the amount of $924.38 with interest at two percent per month from September 6, 2002 (see 11 NYCRR 65-3.9[a], [c]), as well as [*4]attorneys’ fees calculated in accordance with 11 NYCRR 65-4.6.

So Ordered:

District Court Judge

Dated: May 3, 2006

cc:Sanders, Grossman, Fass & Muhlstock, P.C.

Jaffe & Nohavicka

Nassau Dist Ct

00980/04

Israel, Israel & Purdy

11 Grace Avenue, Suite 111

Great Neck, NY 11021

Law Offices of Samuel K. Rubin

PO Box 9040

Bethpage, NY 11714

Howard S. Miller, J.

Pursuant to CPLR 3212, Plaintiffs move unopposed for summary judgment on their respective claims ^[FN1] for statutory interest and attorneys’ fees on no-fault claims that Defendant allegedly paid, but paid late. Before reaching the merits of the motion, the Court ^[FN2] must resolve the question of whether Plaintiffs may properly “bundle” a series of de minimis actions that are related only by the Defendant’s allegedly common response to the claims underlying those actions.

In support of their position on that threshold issue, Plaintiffs cite a recent Kings County Supreme Court decision, Aviyon Medical Rehabilitation, P.C. v Allstate Insurance Co., 2004 NY Slip Op 50819(U) [Sup Ct, Kings County, Aug. 2, 2004]. That decision, however, involved only one Plaintiff, and as such it is distinguishable. The instant action more closely resembles Bender v Underwood, 93 AD2d 747 [1st Dept. 1983], a case that was distinguished by the Court in Aviyon, supra.

Analysis begins with CPLR 1002, which permits joinder of plaintiffs who assert a right to relief arising out of “the same transaction, occurrence, or series of transactions or occurrences.” The question thus is whether the Defendant’s allegedly common response to a series of otherwise unrelated claims can be considered to create a “series of transactions” within the meaning of CPLR 1002. On that question, the Second Department has most recently held that the answer is no. (See, Mount Sinai Hospital et al. v MVAIC, 291 AD2d 536, 738 NYS2d 247 [2d Dept 2002]; cf., Hempstead Gen. Hosp. v Liberty Mutual, 134 AD2d 569 [2d Dept 1987]). Therefore, this action would not survive a motion to sever, if the Defendant had made one.

The remaining question is whether the Court should nevertheless grant summary judgment because the Defendant has not opposed the instant motion and has made no motion to sever. On that question, some authority appears in the holding of the Nassau County Supreme Court in St. Luke’s Roosevelt Hospital, et al., v Allstate Insurance Company, Sup Ct, Nassau County, Jan. 8, 2003, McCarty, J., Index No. 3936/02. In that decision, Justice McCarty denied a summary judgment motion by a similarly-bundled group of plaintiffs, on the ground that the practice of bundling enabled plaintiffs to gain access to the court system at a discounted rate, thereby depriving the courts of needed revenue. On the question of whether the added fee revenue, from splitting this action into four actions, would make up for the costs of the additional burden to the court system thereby caused, the undersigned will defer to the judgment of Justice McCarty. Justice McCarty in any event believes that the Court system has a financial interest in its own right in denying motions such as the instant one.

The undersigned is more concerned about the de minimis aspect of each of the bundled claims. Each of the claims individually, with one possible exception, is not worthy of the expenditure of public resources involved in a full civil action. The de minimis principle is a [*2]matter of public policy. The Court should not allow the policy to be circumvented by bundling a series of essentially unrelated trivial claims. A large box of trifles is still a trifling matter. In the end, each cause of action has to be adjudicated individually by the trier of fact, and if each cause of action is de minimis, the trier of fact is wasting public resources even if there might be a few economies of scale in trying a large group at once.

The Court also notes in passing that, in the event that the Defendant had raised a triable issue of fact, there probably could not be a joint trial of the claims in this action even if CPLR 1002 allowed it. That is because the Defendant’s actions in one instance would probably be inadmissible, in a trial of its actions on a separate occasion, because of irrelevance and possible prejudice to the jury. Thus, there would be few, if any, economies of scale in allowing claims such as these to be bundled.

In ruling as it does, the Court is mindful of the purpose of the no-fault laws. In enacting the no-fault laws, the State Legislature clearly wanted to give insurance companies an incentive to pay no-fault claims promptly. To the extent that insurance companies are allowed to procrastinate in paying claims and not suffer the statutory penalty because it is uneconomical for plaintiffs to pursue it, the statutory purpose of the no-fault laws may be frustrated.

The answer lies in a legislative or regulatory solution, however, not in a judicial solution that permits medusan lawsuits. One such legislative solution might be an amendment to the Commercial Claims provisions of Article 18-A of the Uniform District Court Act, to allow no-fault claims under a certain amount to be pursued as commercial claims. If a particular insurance company is engaged in a persistent course of such conduct, a class action might also be in order.

In the meantime, the motion for summary judgment is denied on the grounds that the action is based on a series of de minimis claims that may not be joined under CPLR 1002. The Plaintiff is given leave to move to sever all Plaintiffs except for Lyang Acupuncture, P.C., and to renew the motion for summary judgment as to that Plaintiff.

So Ordered.

Footnotes

Footnote 1:The claims respectively are $81, $76, $56, $18, $18, and $209 (the latter on behalf of Lyang Acupuncture, P.C.).

Footnote 2:as it advised Plaintiff’s counsel on the return date of the motion