Supreme Court, New York County

10312-04

Weiss, Wexler & Wornow (Cory I. Zimmerman of counsel) for petitioners. Wenig & Wenig (Joseph Szalyga of counsel) for respondent.

James A. Yates, J.

On October 26, 2001, Wayne Wells, an employee of the URS Corporation (URS), was involved in an automobile accident on his way home from work. As a result of the accident, Wells sustained serious injuries and filed a workers’ compensation claim and a no-fault claim for payment of medical bills and lost wages. He also filed a claim for disability benefits with First UNUM Life Insurance Company (First UNUM) and a personal injury action.

Farmers New Century Insurance Company (Farmers) is the no-fault automobile insurance carrier for Mr. Wells. URS was insured by National Union Fire Insurance Company (National) for Workers’ Compensation insurance liability. American International Group Claim Services, Inc., (AIG) handles workers’ compensation claims that URS employees bring under the National policy. AIG denied Mr. Wells workers’ compensation benefits on the ground that he was not injured during the course of his employment. As a result of National’s denial of coverage and pursuant to its insurance policy with the insured, Farmers alleges it paid first-party benefits to Mr. Wells. 11 NYCRR 65.15 [q] [3] [I]. First UNUM , URS and claimant’s major medical insurer also paid monies to Mr. Wells. Since other insurers paid benefits to the claimant, AIG [*2]allegedly alerted the Workers’ Compensation Board of this fact and requested that the Board determine the amounts due as reimbursement from AIG.

On June 10, 2002, the Workers’ Compensation Board issued a decision finding that claimant’s injuries were work-related, entitling him to an award. See Pet. Aff., Ex. C, Workers’ Compensation Board Decision, dated June 14, 2002. On that date, AIG withdrew its objections to claimant’s claim. By application dated January 7, 2004, respondent commenced arbitration proceedings against petitioner at Arbitration Forums, Inc. Farmers claimed it paid no-fault benefits to Mr. Wells from the date of the accident until June 10, 2002 in the amount of $ 55, 460.45, and now was seeking reimbursement from petitioner through arbitration.

After receiving notice of the intent to arbitrate, petitioner commenced this Article 75 proceeding for a stay of arbitration, arguing it could not be obligated to participate in the arbitration. First, petitioner argued that the Workers’ Compensation Board is vested with primary jurisdiction as to the applicability of workers’ compensation or no-fault insurance coverage in work-related motor vehicle accidents. O’ Rourke v Long, 41 NY2d 219, 228 [1976]. Petitioner then contended that the matter was already pending before the Workers’ Compensation Board, that respondent was included and involved in that action and that the only proper forum for determining the amounts, if any, which AIG was responsible to repay to respondent was the Board. In the alternative, petitioner argued that if the court allowed the arbitration to proceed, then the court should add the claimant as an additional respondent in the arbitration proceeding, so that the arbitrator would be able to make an award, if any, against the proper party, the claimant himself. Respondent opposed the petition, arguing that there was no basis for a stay. To avoid inconsistent decisions on the matter, a temporary stay of the arbitration was granted by this Court pending a decision by the Board on the issue of lien priority among the disability carrier, employer, and the no-fault carrier.

On July 29, 2004, a Workers’ Compensation Board hearing was held before Judge Jonathan Frost. Petitioner alleges that respondent failed to submit a brief to the Board explaining the reasons Farmers believed it was entitled to reimbursement. Following the hearing at which Farmers was allowed to participate, a decision was issued on November 19, 2004, finding that no-fault benefits were not reimbursable, as a matter of law, under the Workers’ Compensation statute. See Letter from Joseph W. Szalyga, Respondent’s Counsel, to the Court, dated November 23, 2004; Workers’ Compensation Board Decision, dated November 19, 2004. The Board determined that the disability carrier was liable for paying benefits pending the outcome of the compensation litigation. Because the disability carrier was legally obligated to pay benefits during the period in question and the employer was not obligated to continue wage payments to claimant during the same period, the Board held that the disability carrier’s lien had priority over the employer’s lien. Therefore, the disability carrier was to be reimbursed in full for the period of time in which benefits were paid. After the disability carrier’s lien was satisfied, the employer could be reimbursed for “the difference between the proper compensation rate payable to claimant during that period and the amount reimbursed to the disability carrier.” id. [*3]

Judge Frost also held that the compensation carrier was not entitled to a lien under Workers’ Compensation Law section 29 on the amount of monies claimant received under his employer’s underinsurance coverage. He reasoned that the lien and offset provisions of section 29 could only be applied against recoveries from third-party tortfeasors who were responsible for Wells’ injuries. Furthermore, he found “irrelevant that the underinsured policy claimant received these proceeds from was the employer’s because the employer was not the person whose negligence or wrong caused the claimant’s injuries.” id. citing Shutter v Philips Display Components Co., 90 NY2d 703 [1997]. The case was to continue on the issue of proper awards consistent with the decision.

Respondent argues that the dispute is subject to mandatory arbitration pursuant to Workers Compensation Law 29 (1-a) and the loss transfer provisions of Insurance Law section 5105. Petitioner argues that if respondent made any erroneous payments to claimant, AIG’s remedy is to seek reimbursement of these monies directly from claimant or his medical providers. As well, petitioner contends that if respondent is entitled to reimbursement of any sum of money, it is not entitled to the amount claimed.

By definition, uninsured motorist coverage compensates for “noneconomic” loss and economic loss in excess of basic economic loss, and shall not duplicate any element of basic economic loss. Insurance Law § 3420 [f] [1]. Workers’ compensation benefits by definition are limited to reimbursement for basic economic loss. Workers’ Compensation Law § 10 et seq.

As part of the No-Fault Law, the Legislature enacted section 674 (now section 5105) adopting a new procedure that authorizes first-party benefits with a resulting equitable adjustment between insurers without the need for the formalities applicable to litigation of claims. Matter of City of Syracuse v Utica Mut. Ins. Co., 61 NY2d 691 [1984]. Section 5102 [g] of the Insurance Law defines an insurer as:

“[T] he insurance company or self-insurer, as the case may be, which provides the financial security required by article six or eight of the vehicle and traffic law.”

Insurance Law section 5105 and 11 NYCRR section 65. 10 of the Regulations of the Superintendent of Insurance provide for mandatory arbitration of certain priority of payment or joint coverage situations. That statute reads, in part, as:

“Settlement between insurers. (a) Any insurer liable for the payment of first party benefits to or on behalf of a covered person and any compensation provider paying benefits in lieu of first party benefits which another insurer would otherwise be obligated to pay pursuant to subsection (a) of section five thousand one hundred three of this article or section five thousand two hundred twenty one of this chapter has the right to recover the amount paid from the insurer of any other covered person to the extent that such other covered person to the extent that such other covered person would have been liable, but for the provisions of this article, to pay damages in an action at law. In any case, the right to recover exists only if at least one of the motor vehicles involved is a motor vehicle weighing more than six thousand five hundred pounds unloaded or is a motor vehicle used principally for the transportation of persons or [*4]property for hire.

* * *

(b) The sole remedy of any insurer or compensation provider to recover on a claim arising pursuant to subsection (a) hereof, shall be the submission of the controversy to mandatory arbitration pursuant to procedures promulgated or approved by the superintendent. Such procedures shall also be utilized to resolve all disputes arising between insurers concerning their responsibility for the payment of first party benefits. ”

Insurance Law section 5105 is inapplicable in this matter. The mandatory arbitration provisions are concerned with a party’s status as an insurer or compensation provider. See Pacific Ins. Co. v State Farm Mut. Auto Ins. Co., 150 AD2d 455 [2d Dept 1989]; see also Shutter v Philips Display Components Co., 90 NY2d 703 [1997] . While the statutory scheme requires mandatory arbitration to resolve all disputes arising between insurers concerning their responsibility for the payment of first-party benefits or between compensation providers, the courts have held that a workers’ compensation carrier is not bound to arbitrate a claim by a no-fault insurer for money it was obligated to pay during the time that the workers’ compensation carrier was contesting the claim.

In American Mut. Ins. Co. v Merchants Ins. Group (123 Misc 2d 331 [Sup Ct Onondaga County 1984] ), the court determined that although a good case could be made for including a no-fault insurer’s action to recover from a workers’ compensation carrier within the mandatory arbitration provision of section 674 of the Insurance Law (now section 5105), the statute did not encompass this kind of controversy. “The failure of the Legislature to include a particular situation was an excellent indication that its exclusion was intended.” id. at 332 citing McKinney’s Cons Laws of NY, Book 1, Statutes, § 74. In such cases, the court was not at liberty to supply an omitted provision. id. This matter is not factually distinguishable from American Mut. Ins. Co. v Merchants Ins. Group. That being the case, Farmers does not possess an arbitrable claim against AIG and the demand that arbitration be ordered is denied.

As well, an insurer can present a claim to recover basic economic loss from the insurer of another covered person, if (a) one of the motor vehicles involved in the accident weighs more than 6, 5000 lbs. unloaded; or (b) is a motor vehicle used for the transportation of persons or property for hire. Under those circumstances, arbitration is mandatory. There was no evidence presented that the vehicles involved in the accident met this condition precedent to arbitration.

The Court, by this decision, does not mean to imply that respondent is not entitled to reimbursement. The decision is limited merely to a finding that the parties have not agreed to arbitration and Insurance Law section 5105 does not impose arbitration upon them.

Accordingly, petitioner’s application to permanently stay the arbitration between the parties is granted and respondent’s cross- motion to dismiss the application is denied.

This constitutes the Decision and Order of the Court.

[*5]Dated: March 31, 2005

New York, New York

_______________________________

JAMES A. YATES, J.S.C.

Civil Court of the City of New York, New York County

18739/2003

For Plaintiff

Leon Kucherovsky Esq.

212 West 35th Street, New York, NY 10001

For Defendant

Megan M. Marchick Esq.

Melli, Guerin & Melli

17 Battery Place, New York, NY 10004

Lucy Billings, J.

Plaintiff provider of medical supplies sues to recover insurance benefits under NY Ins. Law § 5106(a) for nerve stimulating electrodes used by AR Medical Art, P.C., in treating the insured for injuries sustained in a motor vehicle collision. Plaintiff claims the insured assigned it his rights to insurance coverage for these medical supplies. Plaintiff moves for summary judgment on the claim. Defendant, without opposition from plaintiff, cross-moves for summary judgment dismissing the action. For the reasons explained below, the court grants defendant’s motion. C.P.L.R. § 3212(b).

I. PLAINTIFF’S PRIMA FACIE CLAIM FOR FIRST PARTY NO-FAULT

INSURANCE BENEFITS

To recover insurance benefits under New York’s “No-Fault” Insurance Law for medical expenses arising from a motor vehicle collision, plaintiff must establish “the fact and amount of loss sustained.” NY Ins. Law § 5106(a). See, e.g., New York Hosp. Med. Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 AD3d 640, 641 (2d Dep’t 2004); Damadian MRI in Garden City v. Windsor Group Ins., 2 Misc 3d 138, 2004 NY Slip Op 50262 (App. Term 2d Dep’t 2004); Damadian MRI in Elmhurst v. Liberty Mut. Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51700 (App. Term 2d Dep’t 2003). For plaintiff, a provider of medical supplies, to establish that it sustained a loss covered by defendant insurer through admissible evidence, plaintiff must present, in admissible form, the treated patient’s assignment of coverage for the treatment expenses to the provider. C.P.L.R. § 3212(b); Rukaj v. Roth, 237 AD2d 503 (2d Dep’t 1997); Columbus Natl. Leasing Corp. v. Perkin-Elmer Corp., 177 AD2d 1035, 1036 (4th Dep’t 1991); Shaw, Licitra, Eisenberg, Esernio & Schwartz v. Friedman, 170 AD2d 1048, 1049 (4th Dep’t [*2]1991); BKS Assocs. v. Kenny, 151 AD2d 535 (2d Dep’t 1989). See, e.g., Colbourn v. ISS Intl. Serv. Sys., 304 AD2d 369, 370 (1st Dep’t 2003); McDonald v. Tishman Interiors Corp., 290 AD2d 266, 267 (1st Dep’t 2002); Seoulbank, NY Agency v. D & J Export & Import Corp., 270 AD2d 193, 194 (1st Dep’t 2000).

An assignment is a contract, which is ineffective without a signature, which in turn must be attested to. Acevedo v. Audubon Mgt., 280 AD2d 91, 95 (1st Dep’t 2001); Fields v. S & W Realty Assoc., 301 AD2d 625 (2d Dep’t 2003). This requirement is not onerous: the provider’s personnel who obtain the signed assignment at the provider’s facility can authenticate the patient’s signature. Regardless of summary judgment standards, an assignee claiming insurance benefits must submit to the insurer “a properly executed assignment.” 11 N.Y.C.R.R. § 65-3.11(b)(2).

The assignment also confers standing on plaintiff to sue based on defendant’s obligation to pay under an insurance policy issued to plaintiff’s assignor: a related element fundamental to plaintiff’s claim. E.g., Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 (2d Dep’t 1999); Bailey v. Allstate Ins. Co., 243 AD2d 520, 521 (2d Dep’t 1997). If the insured patient, the assignor, had no right to coverage for medical supplies because he never received them or incurred any obligation to pay the supplier for them, he had no rights to assign the supplier. The supplier, the assignee, stands in no better position than the assignor: the assignor assigns no more than he has, and the assignee has no more right or claim than he had. Matter of International Ribbon Mills, 36 NY2d 121, 126 (1975); Trisingh Enters. v. Kessler, 249 AD2d 45, 46 (1st Dep’t 1998); Federal Fin. Co. v. Levine, 248 AD2d 25, 28 (2d Dep’t 1998). Hence plaintiff took its assignment subject to all defendant’s defenses against the assignor. Trisingh Enters. v. Kessler, 249 AD2d at 46.

Here, not only does plaintiff’s witness fail to identify the assignment contract attached to his affidavit or the insured’s signature on the form; this alleged assignment of benefits fails to specify (1) the assignee, that it is in fact plaintiff, (2) the date the collision from which the expenses arise occurred, or (3) the date of the assignment. Thus, even if the contract, the assignor’s signature, and the assignee were identified, nothing indicates that the assignment even postdated the precipitating occurrence, let alone that the assignment pertained to expenses arising from that occurrence.

Plaintiff’s failure to identify the assignment contract or the insured patient’s signature is hardly surprising, because here, the insured was not plaintiff’s patient, but, by plaintiff’s admission, the patient of AR Medical Art, to which plaintiff provided the supplies for which it seeks coverage. The insured patient, the assignor, did not receive the supplies; AR Medical Art did. The assignor did not incur the obligation to pay for them; AR Medical Art did. The insured patient had no right to coverage for supplies he did not receive from plaintiff and was not obligated for; therefore he had nothing to assign plaintiff.

Given the omissions and discrepancies in the claim that plaintiff submitted to defendant and that forms the basis for plaintiff’s claim here, plaintiff has failed to submit a complete claim. 11 N.Y.C.R.R. §§ 65-3.4(c), 65-3.11(b). See, e.g., Ocean Diagnostic Imaging P.C. v. State Farm Mut. Auto. Ins. Co., 5 Misc 3d 53, 54 (App. Term 2d Dep’t 2004); Adam’s Med. Supplies v. Windsor Group Ins. Co., 3 Misc 3d 126, 2004 NY Slip Op 50310 (App. Term 2d Dep’t 2004). A complete claim establishes the “particulars of the nature and extent of the injuries and [health benefits] received.” 11 N.Y.C.R.R. § 65.1-1; Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701 (App. Term 2d Dep’t 2003) (emphasis added). Without the assignee’s name, the claim does not show the party that ultimately incurred the claimed expenses and thus shows no injury. 11 N.Y.C.R.R. § 65.1-1; Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. See, e.g., Colbourn v. ISS Intl. Serv. Sys., 304 AD2d at 370.

The defects in plaintiff’s assignment form, lacking not only the name of any assignee, but other essential facts as to whether the claimed expenses arose from an insured occurrence, at minimum require the denial of plaintiff’s motion for summary judgment. Moreover, insofar as [*3]plaintiff’s own documents supporting its claim reveal that the insured was the patient of AR Medical Art, not plaintiff, and that plaintiff provided the claimed covered supplies to AR Medical Art, not the insured, they affirmatively raise factual issues as to whether the assignor received the supplies and thus was entitled to coverage for them. Amaze Med. Supply v. Eagle Ins. Co., 3 Misc 3d 130, 2004 NY Slip Op 50389 (App. Term 2d Dep’t 2004); King’s Med. Supply v. Allstate Ins. Co., 2 Misc 3d 140, 2004 NY Slip Op 50280 (App. Term 2d Dep’t 2004); Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 139, 2004 NY Slip Op 50279 (App. Term 2d Dep’t 2004). The deficiencies and inconsistencies in plaintiff’s claim, themselves introducing factual issues, in sum, preclude summary judgment in plaintiff’s favor. E.g., King’s Med. Supply v. Allstate Ins. Co., 2 Misc 3d 140, 2004 NY Slip Op 50280; Damadian MRI in Elmhurst v. Liberty Mut. Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51700; S & M Supply Inc. v. Geico Ins., 2003 WL 21960343 at *1, 2003 NY Slip Op 51192 (App. Term 2d Dep’t July 9, 2003); Park Health Ctr. v. Green Bus Lines Inc., 2002 WL 416484 at *1, 2002 NY Slip Op 40029 (App. Term 2d Dep’t Jan. 11, 2002). The further issue is whether any of these defects requires outright dismissal of plaintiff’s action.

II. DISMISSAL

A.LACK OF COVERAGE

Plaintiff mailed its charges for the supplies to defendant February 11, 2003. Defendant acknowledges receiving the bill February 13, 2003.Within 30 days after a claimant submits its claim for insurance coverage of medical expenses arising from a motor vehicle collision, an insurer must pay or deny the claim. 11 N.Y.C.R.R. § 65-3.8(a)(1); Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d 274, 278 (1997); Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195, 200 (1997); New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d 583, 584 (2d Dep’t 2002); Bonetti v. Integon Natl. Ins. Co., 269 AD2d 413, 414 (2d Dep’t 2000). The insurer may delay payment or denial by requesting verification of the claim from the claimant or a third party. Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d at 279; New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d at 584; New York & Presbyt. Hosp. v. American Tr. Ins. Co., 287 AD2d 699, 700 (2d Dep’t 2001). To suspend the 30 day period for payment or denial, the insurer must request verification within 15 days after receiving the completed claim, by forwarding the prescribed form to the party from whom verification is sought. 11 N.Y.C.R.R. § 65-3.5(b); Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d at 280-81; New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d at 584; Mount Sinai Hosp. v. Triboro Coach, 263 AD2d 11, 16 (2d Dep’t 1999).

Defendant did not pay or deny plaintiff’s claim within 30 days. Nor did defendant request verification, regarding the assignment, the insured’s receipt of the supplies for which plaintiff claimed coverage, or any other facts, within 15 days. Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. Defendant’s employee responsible for plaintiff’s claim attests that, instead, defendant sent a letter dated February 27, 2003, notifying plaintiff:

that we are investigating the circumstances of this accident, as well as your patient’s eligibility for No-Fault benefits under our policy of insurance. As a result, all bills submitted . . . are being delayed pending the outcome of this investigation.

Aff. of Jason Fortier, Ex. D (emphasis added).

At an examination under oath August 11, 2003, plaintiff’s president and sole owner testified that plaintiff provides nerve stimulation electrodes “to the medical facility where the patient goes for treatment,” Aff. of Megan M. Marchick, Ex. K at 50, which is electrical stimulation “in conjunction with physical therapy performed at the doctor’s office”; plaintiff does not provide the supplies or treatment to patients. Id. at 72. Defendant subsequently denied plaintiff’s claim because the injured person was not covered under defendant’s insurance policy.

If the insurer fails to deny a claim timely or to suspend the 30 day time frame by timely and properly requesting verification, the insurer is precluded from later disclaiming liability [*4]based on breach of a policy condition or on exclusion from coverage. Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d at 282-83; Country-Wide Ins. Co. v. Zablozki, 257 AD2d 506, 507 (1st Dep’t 1999); New York Hosp. Med. Ctr. of Queens v. Country-Wide Ins. Co., 295 AD2d at 584; Bonetti v. Integon Natl. Ins. Co., 269 AD2d at 414. These disclaimers are distinguished from a disclaimer based on lack of coverage because no policy is in effect covering the injured person or the incident causing the injury, a defense that is not precluded. 11 N.Y.C.R.R. § 65-3.8(e); Presbyterian Hosp. in City of NY v. Maryland Cas. Co., 90 NY2d at 283; Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d at 199-200; Zappone v. Home Ins. Co., 55 NY2d 131, 137-38 (1982); Bonetti v. Integon Natl. Ins. Co., 269 AD2d at 414.

Although defendant’s investigation yielded plaintiff’s admission that the insured assignor did not receive the supplies for which plaintiff claims coverage, the consequent lack of coverage for the supplies is not because of the absence of a policy covering the assignor or the vehicle or collision involved. While defendant might argue that because plaintiff’s admission demonstrates that the treatment provider, AR Medical Art, incurred the expense for the supplies, the injured party is AR Medical Art, which is not covered by a policy from defendant, the court need not reach that issue.

Regardless of defendant’s investigation, plaintiff’s claim itself establishes the absence of injury to plaintiff’s assignor and the absence of a precipitating vehicle collision. To the extent waiver rules preclude defenses based on defects in the claim not timely raised in the claims process, if plaintiff has injected a fact constituting a complete defense, it estops plaintiff from invoking waiver to avoid that defense. Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. Where defendant demonstrates, through its own evidence or plaintiff’s, that the claimed injury does not arise from an insured incident, this defense is not precluded by the failure to deny the claim or request verification within the requisite periods. Ocean Diagnostic Imaging P.C. v. State Farm Mut. Auto. Ins. Co., 5 Misc 3d at 54; A.B. Med. Servs. PLLC v. State Farm Mut. Auto. Ins. Co., 4 Misc 3d 129, 2004 NY Slip Op 50638 (App. Term 2d Dep’t 2004); A.B. Med. Servs. PLLC v. State Farm Mut. Auto. Ins. Co., 3 Misc 3d 139, 2004 NY Slip Op 50575 (App. Term 2d Dep’t 2004).

B.LACK OF STANDING

These and the other deficiencies in the assignment of benefits to plaintiff, moreover, establish plaintiff’s lack of standing to sue, C.P.L.R. § 3211(a)(3); King’s Med. Supply v. Allstate Ins. Co., 2 Misc 3d 140, 2004 WL 829673 at *1 (App. Term 2d Dep’t Apr. 9, 2004); Rehab. Med. Care of NY v. Travelers Ins. Co., 188 Misc 2d 176, 177 (App. Term 2d Dep’t 2001), which, unlike other defenses, e.g., C.P.L.R. § 3211(a)(5) and (8), is not a waivable defense and may be raised by the court sua sponte. Stark v. Goldberg, 297 AD2d 203, 204 (1st Dep’t 2002); Axelrod v. New York State Teachers’ Retirement Sys., 154 AD2d 827, 828 (3d Dep’t 1989). Regardless whether defendant has objected to plaintiff’s standing, plaintiff may not proceed without it, because its absence negates the court’s authority to adjudicate the litigation. Society of Plastics Indus. v. County of Suffolk, 77 NY2d 761, 769 (1991); Stark v. Goldberg, 297 AD2d at 204; Axelrod v. New York State Teachers’ Retirement Sys., 154 AD2d at 828. The court has no power to act and to right a wrong unless plaintiff’s rights are affected. Society of Plastics Indus. v. County of Suffolk, 77 NY2d at 772-73.

Because the insured assignor did not receive the supplies for which plaintiff claims coverage and did not incur any obligation to pay for them, only AR Medical Art did, the assignor never was injured by defendant’s denial of reimbursement and never would have been, even without the assignment. New York State Assn. of Nurse Anesthetists v. Novello, 2 NY3d 207, 214 (2004); Axelrod v. New York State Teachers’ Retirement Sys., 154 AD2d at 828. Before executing the assignment, he had no stake in pursuing a claim for insurance coverage for the supplies. Society of Plastics Indus. v. County of Suffolk, 77 NY2d at 772. Thus he had no claim of injury or right to compensation to assign plaintiff. Matter of International Ribbon Mills, 36 NY2d at 126; Trisingh Enters. v. Kessler, 249 AD2d at 46; Federal Fin. Co. v. Levine, 248 AD2d at 28. [*5]

Plaintiff’s remedy to secure payment for the supplies is against AR Medical Art. If AR Medical Art in turn passes the charges for the supplies along to its patient, then he may seek coverage of those expenses from his insurer or assign this right to AR Medical Art. The fundamental purpose of New York’s “No-Fault” Insurance Law is to permit persons injured in a motor vehicle collision, not medical services providers in the first instance, to receive reimbursement for resultant medical expenses. NY Ins. Law art. 51; Oberly v. Bangs, 96 NY2d 295, 296 (2001); Argentina v. Emery World Wide Delivery, 93 NY2d 554, 561, 563 (1999); Walton v. Lumbermens Mut. Cas. Co., 88 NY2d 211, 214 (1996). If injured persons free themselves from payment for those expenses by assigning their right to reimbursement to their services provider, that assignment accomplishes the statutory purpose. The assignment here did not accomplish that purpose. Society of Plastics Indus. v. County of Suffolk, 77 NY2d at 774. It purported to give the provider a right to reimbursement that the patient never had nor needed. The principle of standing prohibits precisely what plaintiff seeks to accomplish here: as the patient assignee, pursuing another party’s claim that the patient was prohibited from doing in the first instance. Id. at 773.

Given the effect of standing on plaintiff’s right of access to the court, standing is a threshold determination, and plaintiff bears the burden to establish standing to adjudicate the claim presented. Id. at 769. In these actions where plaintiff seeks to establish that it sustained a loss through the provision of medical services to a patient covered by defendant insurer, a treated patient’s valid assignment of coverage for the treatment expenses to the provider is key to standing.

C.THE ASSIGNEE’S BURDEN TO ESTABLISH STANDING

As shown, if the assignment is ineffective, the claimant lacks coverage by the assignor’s insurance, a defense not precluded by an untimely denial. Because the assignee has no standing as a plaintiff in litigation without an effective assignment, plaintiff has the burden to establish an effective assignment throughout the litigation, as part of plaintiff’s prima facie case, whether or not defendant has raised the lack of an effective assignment, and at any stage. Part of showing the “loss sustained” is showing that the assignor and hence the assignee of the claim sustained a loss at all. NY Ins. Law § 5106(a). See, e.g., New York Hosp. Med. Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 AD3d at 641; Damadian MRI in Garden City v. Windsor Group Ins., 2 Misc 3d 138, 2004 NY Slip Op 50262; Damadian MRI in Elmhurst v. Liberty Mut. Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51700.

Submission to the insurer of a claim with an assignment has been analogized to submission of a bill establishing an account stated. Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. Yet if a bill does not indicate who it is from (the creditor), or whom it is to (the debtor), or who is obligated to pay whom, the bill does not establish an account stated between the creditor and debtor, regardless whether the debtor has objected. E.g., Schneider Fuel Oil v. DeGennaro, 238 AD2d 495, 496 (2d Dep’t 1997); Maines Paper & Food Serv. v. Restaurant Mgt., 229 AD2d 748, 750 (2d Dep’t 1996). Likewise, if the assignment does not indicate who the insured-assignor is, or who the claimant-assignee is, or who claims coverage under whose insurance policy, the claim is not established, regardless whether defendant insurer has raised the defect. See, e.g., Colbourn v. ISS Intl. Serv. Sys., 304 AD2d at 370. It is impossible for the insurer to acquiesce to the correctness of missing information. See Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701.

1.Prior Authority

The principal decision relied on to relieve plaintiff from the standing requirement is Presbyterian Hosp. in City of NY v. Aetna Cas. & Sur. Co., 233 AD2d 433 (2d Dep’t 1996). First of all, this decision did not conclude that the plaintiff had satisfied its prima facie burden to obtain summary judgment in the plaintiff’s favor, but denied the defendant summary judgment. One of the defendant’s grounds that was insufficient for summary dismissal was the patient’s “defective” assignment. Id. The decision indicates neither what the defect was, nor whether it [*6]even was related to the assignor’s signature or the specification of assignor, assignee, and occurrence. A “defect” is not necessarily a substantive omission and is less likely inadmissible form. More significantly, the defendant did not bear the burden to present the assignment in admissible form as part of its prima facie defense.

This decision in turn relies on St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d 718 (2d Dep’t 1994), and Fabian v. Motor Veh. Acc. Indem. Corp., 111 AD2d 366 (2d Dep’t 1985). The more recent of the two, where the defendant contended the claim was deficient and lacking specificity, provides no detail as to the deficiency or there, whether it was related even to an assignment. St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d at 720. The earlier decision simply held, after trial, that the defendant’s disclaimer of coverage was invalid because the disclaimer did not specify its basis: the insured’s noncooperation. Fabian v. Motor Veh. Acc. Indem. Corp., 111 AD2d at 367.

A.B. Med. Servs. v. CNA Ins. Co., 1 Misc 3d 137, 2004 NY Slip Op 500061 (App. Term 1st Dep’t 2004), taking another leap from St. Clare’s Hosp. v. Allcity Ins. Co., 201 AD2d at 720, held that defendant, by failing to deny the claim timely, waived the absence of signatures, again on the claim forms, again without indication that the absent signatures related to any assignment. Omissions in the claim forms are distinct from plaintiff’s failure to establish, via admissible evidence. that plaintiff is the party that sustained the loss.

This decision in turn relies on Mt. Sinai Hosp. v. Triboro Coach Inc., 263 AD2d at 17, where the defendant’s challenges to the claim forms included lack of medical information as well as absence of signatures. The primary ground for affirming summary judgment to the plaintiff, moreover, was the defendant’s failure to raise the challenges before the lower court. Reference to the failure also to raise the insurer’s challenges within the 10 days for requesting verification, the secondary ground, reveals that any challenges waived in the claims process plausibly relate only to the medical information. 11 N.Y.C.R.R. § 65.15(d)(2) (1999). In fact, where the evidence required for plaintiff to prevail on summary judgment is equated to the evidence required for a complete claim to an insurer, whether or not defendant is precluded from presenting its defense, the defense and evidence at issue relate to the claimed expenses’ medical necessity. See Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701.

2.The Fallacies in Applying That Authority

This action dramatically illustrates why an effective assignment must be established in the litigation, if not in the claims process. Here, even had the insurer requested verification of the assignment, the insured’s signature on the assignment contract, the assignee’s identity, and the dates of the assignment and of the collision precipitating the expenses, these bare details likely would not have revealed that the insured was not the claimant’s patient to whom the claimant provided anything. See New York Hosp. Med. Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 AD3d at 641. Defendant would not have known of the “discrepancy” and the consequent absence of any “loss sustained.” Amaze Med. Supply v. Eagle Ins. Co., 2 Misc 3d 128, 2003 NY Slip Op 51701. Were plaintiff required, for summary judgment, as well as for trial, to authenticate the assignment’s signature, to render the document both admissible and effective, and thus attest to familiarity with the assignor’s signature, Acevedo v. Audubon Mgt., 280 AD2d at 95; Seoulbank, NY Agency v. D & J Export & Import Corp., 270 AD2d at 194; Fields v. S & W Realty Assoc., 301 AD2d 625, the scheme more likely would be exposed:

Q.Do you ever have any contact at all with the patient?

A.No.

Marchick Aff., Ex. K at 50.

Had defendant not delayed to conduct its investigation through an examination under oath, but instead met the deadlines, the insurer would have either (1) requested and received verification of the assignment’s components that were adequate on their face or (2) denied the claim without specifying inadequacies in the assignment document. See New York Hosp. Med. [*7]Ctr. of Queens v. New York Cent. Mut. Fire Ins. Co., 8 AD3d at 641. Without requiring plaintiff to set forth basic evidence for trial or summary judgment, see, e.g., McDonald v. Tishman Interiors Corp., 290 AD2d at 267, and barring the court from unearthing fundamental facts establishing standing, the contortion of the statutory scheme that easily could have happened here will happen.

Since here, the record does conclusively establish that plaintiff is without a claim and is in no position even to raise a factual issue requiring trial, the court grants defendant’s unopposed summary judgment motion and dismisses this action. C.P.L.R. § 3212(b); Hospital for Joint Diseases v. Allstate Ins. Co., 5 AD3d 441, 442 (2d Dep’t 2004). Simply stated, since defendant’s policy covering expenses incurred by plaintiff’s assignor “was never intended to provide coverage” for expenses incurred in a transaction between two other parties, plaintiff and AR Medical Art, “coverage could not be created” by defendant’s late disclaimer. Bailey v. Allstate Ins. Co., 243 AD2d at 521.

DATED: February 4, 2005

______________________________

LUCY BILLINGS, J.C.C.

Civil Court of the City of New York, New York County

43154/03

Plaintiffs: Inwood Hill Medical P.C. and Bronx Neurodiagnostics P.C., as assignees of Jose Rincon

Plaintiffs represented by: Amos Weinberg, Esq., 49 Somerset Dr. S., Great Neck, NY 11020

Telephone: 516-829-3900

Defendant: Allstate Insurance Company

Defendant represented by: Stern & Montana LLP, 115 Broadway, New York, NY 10006

Telephone: 212-532-8100 (Fax 7271)

Shlomo S. Hagler, J.

In this action to recover first-party no-fault benefits, plaintiffs Inwood Hill Medical P.C. (“IHM” or “assignee”) and Bronx Neurodiagnostics P.C. (“BN” or “assignee”) as assignees of Jose Rincon (“Rincon” or “assignor”) move for an order pursuant to CPLR §3212 granting plaintiffs summary judgment against defendant Allstate Insurance Company (“Allstate” or “defendant”) in the sum of $8,418.49. Defendant opposes the motion.

Background

Rincon was allegedly in a motor vehicle accident on April 11, 2002. He allegedly suffered personal injuries and was treated by health care providers IHM and BN. The next day, Rincon assigned to IHM and BN his right to recover benefits from Allstate for health care services rendered to him. (See, Exhibit “C” to the Motion). Plaintiffs then mailed the executed assignment of benefits forms and an application for motor vehicle no-fault benefits (“NF-2”) to Allstate. Between June 20, 2002 and October 16, 2002, IHM and BN mailed several claim forms denominated as “Verification of Treatment By Attending Physicians or Other Provider of Health Service” (“NF-3” or “claim form”) to Allstate. (See, Exhibits “D” & “E” to the Motion).

By letter dated July 18, 2002, Allstate via its counsel sent Rincon a notice to appear for an Examination Under Oath (“EUO”) on August 23, 2002 to verify his claim for no-fault benefits. Thereafter, by letter dated August 22, 2002, Allstate and Rincon agreed to adjourn the EUO from August 23 to September 16, 2002. (See, Exhibit “G” to the Opposition papers). Allstate conducted Rincon’s EUO on September 16, 2002. Allstate also conducted EUO’s of Rincon’s co-claimants, David Villones (Allstate’s policy holder) and Floyd Spencer on August 22, 2002 and September 16, 2002, respectively. (See, Exhibits “C,” “D,” and “E” to the Opposition papers).

Allstate conceded that it received IHM’s and BN’s claim forms and it issued its denials as follows:

[*2]

(See, Exhibits “D” & “E” to the Motion and Exhibit “F” to the Opposition papers).

Specifically, Allstate denied the bulk of plaintiffs’ claim forms by Denial of Claim Forms (“NF-10” or “denials”) dated October 8, 2002, stating that “No-Fault benefits are denied based on EUO (Examination Under Oath) of the Claimant and Failure to Establish proof of claim.” With respect to a $2,619.20 claim form dated July 8, 2002, Allstate denied it on September 18, 2002 for an additional reason “based on [an unproduced] peer review by Dr. Joseph Cole.”

As a result of nonpayment of first-party no-fault benefits, this action ensued by service of a summons and complaint. (See, Exhibit “A” to the Motion). Allstate interposed

an answer with several affirmative defenses asserting, inter alia, a lack of coverage under the applicable insurance policy. (See, Exhibit “B” to Opposition papers, Answer at ¶ 11).

Summary Judgment

The movant has the initial burden of proving entitlement to summary judgment. Winegrad v New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985). Once such proof has been offered, in order to defend the summary judgment motion, the opposing party must “show facts sufficient to require a trial of any issue of fact.” CPLR § 3212(b); Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986); Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595 (1980); Friends of Animals, Inc. v Associated Fur Mfrs., 46 NY2d 1065, 416 NYS2d 790 (1979); Freedman v Chemical Construction Corp., 43 NY2d 260, 401 NYS2d 176 (1977); Spearmon v Times Square Stores Corp., 96 AD2d 552, 465 NYS2d 230 (2d Dept 1983). “It is incumbent upon a [litigant] who opposes a motion for summary judgment to assemble, lay bare and reveal [his, her, or its] proof, in order to show that the matters set up in [the pleadings] are real and are capable of being established upon a trial.” Spearmon, 96 AD2d at 553 (quoting Di Sabato v Soffes, 9 AD2d 297, 301, 193 NYS2d 184, 189 [1st Dept 1959]). If the opposing party fails to submit evidentiary facts to controvert the facts set forth in the movant’s papers, the movant’s facts may be deemed admitted and summary judgment granted since no triable issue of fact exists. Kuehne & Nagel, Inc. v F. W. Baiden, 36 NY2d 539, 369 NYS2d 667 (1975). In addition, an affidavit or affirmation by an attorney or individual who [*3]does not have personal knowledge of the facts is insufficient in support or opposition to the motion as it lacks probative value. Wehringer v. Helmsley Spear, 91 AD2d 585 (1st Dept 1982), affd 59 NY2d 688, 463 NYS2d 417 (1983).

No-Fault Law

History

Approximately thirty years ago, the Legislature enacted sweeping changes to our inadequate tort system of reparations for personal injuries suffered in automobile accidents. This program under Title 18 of the Insurance Law was titled “Comprehensive Automobile Insurance Reparations Act.” (L. 1973, ch. 13, effective February 1, 1974, former Insurance Law ｧ 670, et seq). This legislation is commonly referred to as the No-Fault Law because it provides a plan for compensation of victims of motor vehicle accidents for economic losses without regard to fault or negligence. Montgomery v Daniels, 38 NY2d 41, 378 NYS2d 1 (1975); Overly v Bangs Ambulance, Inc., 96 NY2d 295, 727 NYS2d 378 (2001).

The noble and stated intent of the No-Fault Law was to create a new and improved insurance reparations system:

[W]hich assures that every auto accident victim will be compensated for substantially all of his economic loss, promptly and without regard to fault; [and] will eliminate the vast majority of auto accident negligence suits, thereby freeing our courts for more important tasks. (Governor’s Memorandum of Approval, 1973 N.Y. Legis. Ann. 298). (Emphasis added, quotation marks omitted)

Granger v Urda, 44 NY2d 91, 98, 404 NYS2d 319, 322 (1978). A lynch-pin of the No-Fault Law was the prompt payment of victim’s claims under the so-called “30-day rule” as first-party benefits were “overdue if not paid within thirty-days after the claimant supplies proof of the fact and the amount of loss sustained.” Former Insurance Law § 675(1); Montgomery v Daniels, 38 NY2d 41, 378 NYS2d 1 (1975).

Effective September 1, 1984, the No-Fault Law was re-codified without substantial change from the “Comprehensive Automobile Insurance Reparations Act” to the “Comprehensive Motor Vehicle Insurance Reparations Act” under Article 51 of the Insurance Law. (L. 1984, ch. 367 & ch. 805).

For more than thirty years, the Superintendent of Insurance promulgated regulations implementing the No-Fault Law, which were adopted as Regulation 68 and codified at 11 NYCRR part 65. Matter of Medical Society of the State of N.Y. v Serio, 100 NY2d 854, 768 NYS2d 423 (2003) (“Medical Society II“). In 1999, in an effort to combat abuse of the no-fault laws, the Superintendent proposed an amended Regulation 68. The amended regulation was successfully challenged in the courts. Matter of Medical Society of the State of N.Y., Inc. v Levin, 185 Misc 2d 536 (Sup Ct, N.Y. County 2000), affd 280 AD2d 309 (1st Dept 2001) (“Medical Society I“). However, while the appeal in that case was pending, the Superintendent reinitiated the rule-making process and promulgated another revised Regulation 68, which was also challenged. In Medical Society II, the Court of Appeals upheld the Superintendent’s authority to promulgate the challenged regulations as being fully consistent with Article 51 of the [*4]Insurance Law.

Among the most significant changes adopted in the revised regulations was a reduction in the time frames applicable to the filing of notices and proofs of claim. This was based on the Superintendent’s determination that much of the abuse was associated with the lengthy time frames within which claims could be presented to insurers. Medical Society II, 100 NY2d at 862, 768 NYS2d at 427. The Superintendent also concluded that the shorter time frames would better effectuate the legislative purpose of providing prompt compensation “as the loss is incurred” pursuant to Insurance Law § 5106(a). Id.

The revised regulations reduced the time limit for filing a notice of claim from ninety (90) to thirty (30) days. 11 NYCRR ｧｧ 65-1.1; 65-2.4(b). The revised regulations also reduced the time in which to submit proof of loss due to medical treatment from one hundred eighty (180) to forty-five (45) days, and proof of work loss from “as soon as reasonably practicable” to ninety (90) days. 11 NYCRR ｧｧ 65-1.1; 65-2.4(c). In addition, the revised regulations also increased the time limit for the insurer to seek additional verification requests from ten (10) business days to fifteen (15) business days. 11 NYCRR ｧ 65-3.5(b) and former 11 NYCRR ｧ 65.15(d)(2).

These new regulations have been in effect since April 4, 2002. Medical Society II, 100 NY2d at 862, 768 NYS2d at 427, n 2. This is an important date as the old regulations would apply to a motor vehicle accident occurring prior to April 4, 2002.

Insurance Law § 5106(a)

The general framework for payment of first-party benefits derives from Insurance law § 5106(a). It states as follows:

(a) Payments of first-party benefits and additional first-party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the 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 by the superintendent in regulations.

[*5]Regulation 68, 11 NYCRR ｧ 65

The Insurance Department is the governmental agency responsible for the administration of Article 51 of the Insurance Law. In this capacity, the Superintendent of Insurance, interpreting Insurance Law § 5106, promulgated Regulation 68 and codified it under 11 NYCRR ｧ 65. These regulations contain the specific details for payment of first-party benefits such as notice requirements, claim procedures, follow-up requirements and payment or denial of claims. The courts defer to the special expertise of the Insurance Department in interpreting the Insurance Law except where “the regulation runs counter to the clear wording of a statutory provision [and the regulation then] should not be accorded any weight (citations omitted).” Kurcsics v Merchants Mutual Ins. Co., 49 NY2d 451, 459, 426 NYS2d 454, 458 (1980).

Four sections of these regulations ｧｧ 65-2.4, 65-3.5, 65-3.6 and 65-3.8 form the blueprint or outline for processing of first-party no-fault claims.

The process begins when an injured party provides notice to the insurer within thirty days after the date of the accident. 11 NYCRR § 65-2.4(b). This notice requirement may be deemed satisfied when the injured party submits an “Application for Motor Vehicle No-Fault Benefits (NYS Form NF-2).” The injured party or that party’s assignee (i.e., health care provider) must submit a “written proof of claim” to the insurer for health service expenses within forty-five days after the date services are rendered, and submit proof of work loss within ninety days. 11 NYCRR § 65-2.4(c). For proof of claim for health service expenses, the health care provider usually submits a “Verification of Treatment by Attending Physician or Other Provider of Health Service (NYS Form NF-3),” or less commonly, “Verification of Hospital Treatment (NYS Form NF-4),” or “Hospital Facility Form (NYS Form NF-5).”

Within ten business days after receipt of the completed no-fault application (NF-2), the insurer must forward verification forms for health care or hospital treatment (NF-3, NF-4 or NF-5) to the injured party or that party’s assignee. After receipt of the completed verification of health care or hospital treatment forms (NF-3, NF-4 or NF-5), the insurer may seek “additional verification” or further proof of claim from the injured party or that party’s assignee within fifteen business days thereof. 11 NYCRR § 65-3.5(b). For instance, the insurer may seek an independent medical examination (“IME”) of the injured party which must be held within thirty calendar days from receipt of the initial verification forms (11 NYCRR § 65-3.5[d]), or an examination under oath (“EUO”) which “must be based upon the application of objective standards so that there is specific objective justification supporting the use of such examination.” 11 NYCRR § 65-3.5(e). The injured party must be reimbursed for “any loss of earnings and reasonable transportation expenses.” Id. Of course, the insurer may seek various medical documentation as proof of claim within the prescribed fifteen business days. Id.

If any requested additional verification (e.g., IME, EUO or other medical documentation) has not been supplied to the insurer thirty calendar days after the original request, the insurer shall, within ten calendar days, follow-up with the recalcitrant party “either by telephone call, properly documented in the file, or by mail.” 11 NYCRR § 65-3.6(b). “At the same time, the insurer shall inform the applicant and such party’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” Id. [*6]

After receipt of the notice and proof of claim, the onus then shifts to the insurer to pay or deny the claim within thirty calendar days. 11 NYCRR § 65-3.8(a)(1) & (c). No-fault benefits are overdue if not paid within thirty calendar days. Id. Hence, this is called the “30-day rule.” If the insurer denies the claim, it often uses a prescribed “Denial of Claim Form (NF-10)” providing a detailed explanation for the denial.

Much confusion has arisen relating to the method of counting the thirty calendar days described in 11 NYCRR § 65-3.8(j). It states as follows:

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

Example: Where an insurer sends an application for motor vehicle no-fault benefits 15 days after notice is received at the address of the insurer’s proper claim processing office instead of five business days, the 30 calendar days permitted by subdivision (a) of this section are reduced to 20 calendar days.

The best case discussing the method of counting vis-a-vis the 30-day rule is Keith v Liberty Mutual Fire Ins. Co., 118 AD2d 151, 503 NYS2d 441 (2d Dept 1986). “Although the clock does not begin to run on the thirty-day calendar day requirement until the insurer receives all of the necessary verification . . . the insurer’s lack of diligence in obtaining the verification may reduce the thirty-day period even before verification is obtained.” Keith, 118 AD2d at 154, 503 NYS2d at 443. In that case, the insurer was four business days late in requesting verification of hospital records. The Appellate Division, Second Department held that the insurer’s thirty calendar days to pay or deny the claim must be reduced by four days, leaving twenty-six days. Id. However, the Appellate Division also applied the insurer’s follow-up requirements for verification requests set forth in our current regulations, 11 NYCRR § 65-3.6(b), which may be excluded by the plain wording of the regulation. The inconsistency may be resolved by stating that the insurer’s time is not reduced where it sought the additional verification requests late but within the prescribed thirty calendar days (i.e., more than fifteen business days and up to twenty-nine calendar days which would not effectively reduce the thirty days to zero). Where the insurer either seeks additional verification requests or even provides a time to respond outside the thirty calendar days, the proverbial clock has run and there is no need to resort to the 11 NYCRR § 65-3.8(j) counting requirement. A contrary interpretation of the regulation would run counter to the clear wording of Insurance Law § 5106(a) providing for the strict 30-day rule. See, Kurciscs v Merchants Mutual Ins. Co., 49 NY2d 451, 426 NYS2d 454 (1980). [*7]

Prima Facie Case

There is a growing debate as to what constitutes the prima facie case in first-party no-fault benefits actions. See, Metroscan Imaging v American Transit Ins. Co., NYLJ, December 10, 1999, at 27, col 5 (Civ Ct NY County, Smith, J.); Neuro Care Center II v Allstate Ins. Co., NYLJ, January 28, 2003, at 17, col 5 (Civ Ct NY County, Billings, J.).

To establish a prima facie case, plaintiffs have the burden of proof of demonstrating (1) standing to bring the action; and (2) the submission of completed proofs of claims to defendant which defendant did not pay or deny within thirty days.

Standing

Standing is defined as “a party’s right to make a legal claim or seek judicial enforcement of a duty or right.” Black’s Law Dictionary, Seventh Edition, 1999. The United States Supreme Court nicely articulated the meaning of standing as follows:

Have the appellants alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions? This is the gist of the question of standing.

Baker v. Carr, 369 US 186, 204, 82 S Ct 691, 703 (1962) (Brennan, J.).

First-party no-fault benefits actions are no different and require standing to be addressed. Where the injured party assigned his/her claim to a health care provider or hospital, such assignment of benefits forms must be provided as part of the prima facie case. At the very least, the assignment of benefits forms must include the assignor and assignee’s name, the date of the accident, and be signed and dated by the assignor. The plaintiffs’ burden in proving standing is satisfied once they submit properly completed assignment of benefits forms. Defendant must then come forward with evidence of a deficiency or a claimed defect in the assignment or such defense will be waived unless it was alleged in the insurer’s denial of claim. See, Presbyterian Hospital v Aetna Casualty & Surety Co., 233 AD2d 433, 650 NYS2d 602 (2d Dept 1996), lv dismissed 89 NY2d 1030, 658 NYS2d 245 (1997); Quality Medical Healthcare, P.C. v Lumberman’s Mutual Casualty Co., 2002 N.Y. Slip Op 50098(U), 2002 WL 496433 (App Term 1st Dept, March 19, 2002). An example of a waivable defect is the inclusion of a “reservation of rights” provision in the assignment of benefits form. See, Park Health Center a/a/o Sharpe v Eveready Ins. Co., 2001 N.Y. Slip Op 40665(U), 2001 WL 1807733 (App Term 2d & 11th Jud Dists, December 17, 2001).

This analysis may be best analogized to the defendant’s waiver of personal jurisdiction defenses. Plaintiffs must present a completed affidavit of service to satisfy their service requirements. The affidavit of service raises a presumption of delivery which may be either rebutted or waived. See, Slater v Congress of Racial Equality, Inc., 48 AD2d 623, 367 NYS2d 789 (1st Dept 1975).

[*8]Proof of Claims

Plaintiffs must submit completed proofs of claims in similar form to the NYS NF-3, 4, or 5 Forms. Significantly, the forms provide the defendant with the name of the policyholder, name and address of the provider, policy number, date of accident, date of health care service, place of service, description of treatment/service rendered and charges billed. The NF-3 and NF-4 forms also contain an assignment of no-fault benefits option that may be executed by the injured party.

Next, plaintiffs must show that these claims were mailed to the insurer. This can be accomplished in one of at least three ways. First, plaintiffs may provide an affidavit of service and/or proof of mailing. Second, plaintiffs may provide proof of a standard office practice or procedure designed to ensure that claims are properly addressed and mailed. See Amaze Medical Supply Inc. a/a/o Tsigelman v Allstate Ins. Co., 3 Misc 3d 133(A), NYLJ, June 2, 2004, at 27, col 6, 2004 NY Slip Op 50447(U), 2004 WL 1197345 (App Term 2d & 11th Jud Dists, May 20, 2004). Lastly, the date the claim was received as specified on the Denial of Claim (NF-10) form serves as an admission by the insurer and is sufficient proof of mailing. A.B. Medical Services PLLC v New York Central Mutual Fire Ins. Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 50507(U), 2004 WL 1302031 (App Term 2d & 11th Jud Dists, May 26, 2004); Ocean Diagnostic Imaging, P.C. a/a/o Grishchenko v Lumbermens Mutual Casualty Co., NYLJ, June 2, 2004, at 27, col 3, 2004 NY Slip Op 50510(U), 2004 WL 1301952 (App Term 2d & 11th Jud Dists, May 26, 2004).

Once plaintiffs show that properly completed claim forms were submitted to the insurer, they must then demonstrate that the claims were not paid or denied by the insurer within thirty calendar days of receipt thereof, as discussed below.

30-Day Rule

The Court of Appeals in the landmark case of Presbyterian Hospital in the City of N.Y. a/a/o DiGuisto v Maryland Casualty Co., 90 NY2d 274, 282, 660 NYS2d 536, 542 (1997), declared that “an insurer may be precluded from interposing a statutory exclusion defense for failure to deny a claim within 30 days as required by Insurance Law § 5106(a).” The Court of Appeals explained that the strict construction of the “30-day rule” was intended as a “trade-off of the no-fault reform [which] still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leased contestable period and process designed to avoid prejudice and red-tape dilatory practices.” Presbyterian, 90 NY2d at 285, 660 NYS2d at 542.

Lately, the courts have liberally interpreted the plaintiffs’ burden as to require only submission of “complete proofs of claims to defendant which defendant did not pay or deny within 30 days.” Amaze Medical Supply Inc. a/a/o Darlington v Allstate Ins. Co., 2 Misc 3d 134(A), 2004 NY Slip Op 50211(U), 2004 WL 758248 (App Term 2d & 11th Jud Dists, March 26, 2004). See also, Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists); Amaze Medical Supply, Inc. v Colonial Penn Ins. Co., NYLJ, March 3, 2004, at 26, col 1, 2004 NY Slip Op 50471(U), 2004 WL 1243410 (App Term 2d & 11th Jud Dists, March 3, 2004); A.B. Medical Services PLLC a/a/o Suzolyanski v CNA Ins. Company, 1 Misc 3d 137(A), 2004 NY Slip Op 50061(U), 2004 WL 314819 (App Term 1st Dept, February 11, 2004); Damadian MRI in Elmhurst, P.C. a/a/o [*9]Jones v Liberty Mutual Ins. Co., 2 Misc 3d 128(A), 2003 NY Slip Op 51700(U), 2003 WL 23310887 (App Term 9th & 10th Jud Dists, Dec. 24, 2003); A.B. Medical Services PLLC a/a/o Boliere v Lumbermens Mutual Casualty Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 24194, 2004 WL 1301910 (App Term 2d & 11th Jud Dists, May 26, 2004); A.B. Medical Services PLLC v New York Central Mutual Fire Ins. Co., NYLJ, June 2, 2004, at 27, col 4, 2004 NY Slip Op 50507(U), 2004 WL 1302031 (App Term 2d & 11th Jud Dists, May 26, 2004); Amaze Medical Supply Inc. a/a/o Bermudez v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003); Amaze Medical Supply Inc. a/a/o Tsigelman v Allstate Ins. Co., 3 Misc 3d 133(A), NYLJ, June 2, 2004, at 27, col 6, 2004 NY Slip Op 50447(U), 2004 WL 1197345 (App Term 2d & 11th Jud Dists, May 20, 2004); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002) (“plaintiff health care provider established a prima facie case by the submission of statutory forms of proof of claim and the amount of the loss . . .” [citations omitted]).

Moreover, the Appellate Term, First Department has recently held that due to an untimely denial, the insurer “waived any defenses relating to the adequacy of plaintiffs’ claim forms, including the alleged absence of necessary signatures.” A.B. Medical Services PLLC a/a/o Suzolyanski v CNA Ins. Co., 1 Misc 3d 137(A), 2004 NY Slip Op 50061(U), 2004 WL 314819 (App Term 1st Dept, February 11, 2004).

The rationale for this standard was best expressed by the Appellate Term, Second Department in both Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003) and Damadian MRI in Elmhurst, P.C. a/a/o Jones v Liberty Mutual Ins. Co., 2 Misc 3d 128(A), 2003 NY Slip Op 51700(U), 2003 WL 23310887 (App Term 9th & 10th Jud Dists, Dec. 24, 2003), as follows:

The situation may be analogized to an account stated where, upon the insurer’s failure to timely and properly deny the bill as embodied in the claim form, the insurer is presumed to have acquiesced to its correctness, thereby rendering the insurer liable thereon.

However, the Court of Appeals has also held that an untimely disclaimer or denial does not prevent the insurer from raising a lack of coverage defense “premised on the fact or founded belief that an alleged injury does not arise out of an insured incident.” Central General Hospital a/a/o Mandrels v Chubb Group of Ins. Cos., 90 NY2d 195, 199, 659 NYS2d 246, 248 (1997). Thus, even if the insurer fails to pay or deny a claim within thirty days of its submission, it may still raise a lack of coverage defense.

Medical Necessity

Courts have held that plaintiffs need not demonstrate medical necessity as part of their prima facie case. Dermatossian v New York City Transit Authority, 67 NY2d 219, 224, 501 NYS2d 784, 787 (1986) (“A claimant to receive payment need only file a ‘proof of claim’ . . [*10]. and the insurers are obligated to honor it promptly or suffer the statutory penalties”); A.B. Medical Services PLLC v Geico Ins., 2 Misc 3d 26, 773 NYS2d 773 (App Term 2d Dept 2003) (“We have rejected arguments that a no-fault benefits claimant is obligated to prove the treatment’s medical necessity, at the claim stage or in support of its motion for summary judgment in a subsequent action on the claim [citations omitted]”); Choicenet Chiropractic, P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672(U), 2003 WL 1904296 (App Term 2d & 11th Jud Dists, January 23, 2003); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002).

The insurer may raise the defense that a claimed procedure was not medically necessary with a timely denial pursuant to the 30-day rule. Presbyterian, 90 NY2d 274, 282, 660 NYS2d 536, 542 (1997); Liberty Queens Medical, P.C. v Liberty Mutual Ins. Co., 2002 NY Slip Op 40420(U), 2002 WL 31108069 (App Term 2d & 11th Jud Dists, June 27, 2002). If there is an untimely disclaimer or denial in derogation of the 30-day rule, the insurer’s lack of medical necessity defense is precluded. Amaze Medical Supply Inc. a/a/o Darlington v Allstate Ins. Co., 2 Misc 3d 134(A), 2004 NY Slip Op 50211(U), 2004 WL 758248 (App Term 2d & 11th Jud Dists, March 26, 2004).

Furthermore, in support of or opposition to a summary judgment motion or at trial, the defense that the claim was not medically necessary must be supported by sufficient factual evidence or proof and cannot simply be conclusory. Amaze Medical Supply Inc. v Eagle Ins. Co., 2 Misc 3d 128(A), 2003 N.Y. Slip Op 51701(U), 2003 WL 23310886 (App Term 2d & 11th Jud Dists, December 24, 2003); Choicenet Chiropractic, P.C. v Allstate Ins. Co., 2003 NY Slip Op 50672(U), 2003 WL 1904296 (App Term 2d & 11th Jud Dists, January 23, 2003).

Fraud

No-fault insurance fraud is a rising and significant problem. The Court of Appeals listed alarming statistics as follows:

Between 1992 and 2001, reports of suspected automobile insurance fraud increased by 275%, the bulk of the increase occurring in no-fault insurance fraud. Reports of no-fault fraud rose from 489 cases in 1992 to 9,191 in 2000, a rise of more than 1700%. No-fault fraud accounted for three quarters of the 16,902 reports of automobile-related fraud received by the Insurance Department’s Frauds Bureau in 2000, and more than 55% of the 22,247 reports involving all types of insurance fraud. In 1999, the Superintendent established a No-Fault Unit within the Frauds Bureau to focus specifically on no-fault fraud and abuse. By one estimate, the combined effect of no-fault insurance fraud has been an increase of over $100 per year in annual insurance premium costs for the average New York motorist.

Medical Society II, 100 NY2d at 861, 768 NYS2d at 426. [*11]

Notwithstanding the above, where a defense is based on fraud, the defendant insurer must allege in detail the particular facts constituting the wrong as mandated by CPLR § 3016(b). The general standard the insurer must assert for a lack of coverage or fraud defense is one “premised on the fact or founded belief that the alleged injury does not arise out of an insured incident” but was a deliberate event staged in furtherance of a scheme to defraud the insurer. Central General Hospital v Chubb Group of Ins. Cos., 90 NY2d at 199, 659 NYS2d at 248. See also, Metro Medical Diagnostic, P.C. v Eagle Ins. Co., 293 AD2d 751, 741 NYS2d 284 (2d Dept 2002). Thus, the insurer has the burden to come forward with proof in admissible form to establish “the fact” or “foundation for its belief” that the alleged incident was a staged event to defraud the insurer. Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d 11, 699 NYS2d 77 (2d Dept 1999). Indeed, unsupported conclusions and “suspicions” as well as “unsubstantiated hypotheses and suppositions” are insufficient to raise a triable issue of the assignor’s alleged fraud. See, A.B. Medical Services PLLC v Eagle Ins. Co., 3 Misc 3d 8, 776 NYS2d 434 (2d Dept 2002); A.B. Medical Services PLLC v Lumbermen’s Mutual Casualty Co., NYLJ, September 30, 2003, at 17, col 1 (Civ Ct Kings County, Schack, J.); Bonetti v Integan National Ins. Co., 269 AD2d 413, 703 NYS2d 217 (2d Dept 2000); Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists); A.M. Medical P.C. v New York Central Mutual Ins. Co., 2 Misc 3d 1012(A), NYLJ, April 29, 2004, at 19, col 1, 2004 N.Y. Slip Op 50298(U), 2004 WL 869595 (Civ Ct Queens County, Butler, J.) (“low impact report” failed to show that incident was a staged event to defraud the insurer).

There is a dearth of case law to provide guidance as to what is required for the insurer to establish a fraud defense. The Appellate Division, Second Department stated that “an expert’s affidavit will usually [but not always] be necessary to effectively establish the basis of an insurer’s founded belief.” Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d at 20, 699 NYS2d at 84 (emphasis added). Also, where it is proven that the vehicles were involved in several collisions within a short period of time after the insurer issued insurance policies for vehicles registered to the insured, that may satisfy the definition of “founded belief.” State Farm Mutual Automobile Ins. Co. v Laguerre, 305 AD2d 490, 759 NYS2d 531 (2d Dept 2003). The proof adduced may be an affidavit of the investigator who has personal knowledge of the alleged fraud investigation and affidavits from individuals involved in the collisions and/or the police accident report for each of the collisions, if any. Id.; Melbourne Medical, P.C. a/a/o Cabreja v Utica Mutual Ins. Co., NYLJ, June 11, 2004, at 30, col 6 (App Term 2d & 11th Jud Dists).

Specificity of Denial of Claim

It is well settled law that to deny or disclaim coverage for bodily injuries, an insurer must give written notice “as soon as is reasonably possible” to the injured party and the insured with a high degree of specificity of the grounds on which the denial or disclaimer is predicated. See, Insurance Law § 3420(d); General Accident Ins. Group v Cirucci, 46 NY2d 862, 414 NYS2d 512 (1979); State Farm Mutual Automobile Ins. Co. v Cooper, 303 AD2d 414, 756 NYS2d 87 (2d Dept 2003). The Court of Appeals concisely explained the need for specificity as follows:

Absent such specific notice, a claimant might have [*12]difficulty assessing whether the insurer will be able to disclaim successfully. This uncertainty could prejudice the claimant’s ability to ultimately obtain recovery. In addition, the insured’s responsibility to furnish notice of the specific ground on which the disclaimer is based is not unduly burdensome, the insurer being highly experienced and sophisticated in such matters.

General Accident Ins. Group v Cirucci, 46 NY2d at 864, 414 NYS2d at 514. Therefore, the insurer is limited to the specific grounds alleged in its written Denial of Claim.

Discussion

Plaintiffs have demonstrated their prima facie case by submitting executed assignment of benefits forms and completed copies of proofs of claims which were mailed and received by the defendant, but not paid or denied within thirty days of receipt. (See Exhibits “C,” “D,” & “E” to the Motion). The burden then shifts to the defendant to demonstrate the existence of a material issue of fact. See, Alvarez v Prospect Hospital, 68 NY2d 320, 508 NYS2d 923 (1986).

Inasmuch as the lack of coverage defense may essentially be asserted at any time, defendant really does not argue that plaintiffs’ claims were timely denied, but rather that “Mr. Rincon’s [assignor’s] injuries did not arise from the accident, or that the accident may have been staged.” (See Affidavit of Maureen Carbone, Claim Representative, in Opposition to Motion, sworn to on April 21, 2004, at ¶ 7). Defendant’s claim representative bases this conclusion on EUO testimony of Rincon as well as his two co-claimants, Villones and Spencer, as follows:

i)The claimants declined medical treatment at the scene of the accident, did not seek treatment at any hospital, and waited approximately 2-5 days to seek treatment at the same clinic where they received similar to identical treatment. (Rincon Tr: 59, 62; Villones Tr: 40, 48; Spencer Tr: 50, 53)

ii)Claimants missed minimal, if any, time from work as a result of the accident. (Rincon Tr: 10; Spencer Tr: 11)

iii)Claimants did not consult with their regular physicians or medical centers in regard to the accident. (Rincon Tr: 37; Villones Tr: 16; Spencer Tr: 26)

iv)Claimants set forth sharply discrepant accounts as to the arrangements for and purpose of their meeting on the day of the accident, how much time elapsed before the accident occurred after having entered the vehicle, whether [*13]or not the adverse vehicle fled the scene of the accident, how the police were alerted to the scene, and how they learned of the clinic. (Rincon Tr: 43-45, 51-52, 58, 63; Villones Tr: 21-22, 37-38; Spencer Tr: 33-36, 41, 50, 52).

(See Affidavit of Maureen Carbone, Claim Representative, in Opposition to Motion, sworn to on April 21, 2004, at ¶ 6).

In this case, the minor discrepancies in the testimony as well as the claimants’ minimal work loss and use of the same clinic, are insufficient as a matter of law to demonstrate a triable issue as to a fraud defense “premised on the fact or founded belief that the alleged injury does not arise out of an insured incident.” Central General Hospital v Chubb Group of Ins. Cos., 90 NY2d at 199, 659 NYS2d at 248. Defendant failed to present either competent evidence such as expert testimony (e.g., peer review report) that the alleged injuries were not causally related to the accident or even an investigator’s report. Mount Sinai Hospital v Triboro Coach Inc., 263 AD2d at 20, 699 NYS2d at 84. The sum and substance of the defendant’s defense is based on “unsubstantiated hypotheses and suppositions.” A.B. Medical Services PLLC v Eagle Ins. Co., 3 Misc 3d 8, 10, 776 NYS2d 434, 436 (2d Dept 2002).

Moreover, the defendant’s explanation in the denial of claim forms justifying the denial “based on EUO testimony,” is vague and lacks the “high degree of specificity” on which the denials must be predicated. See, Insurance Law § 3420(d); CPLR § 3016(b); General Accident Ins. Group v Cirucci, 46 NY2d 862, 414 NYS2d 512 (1979).

Conclusion

Based on the foregoing, this Court grants plaintiffs summary judgment against defendant in the sum of $8,418.49 with statutory interest at a rate of two percent per month and attorneys’ fees of 20% thereof. 11 NYCRR ｧ§ 65-3.9(a) & 65-3.10; St. Clare’s Hospital v Allstate Ins. Co., 215 AD2d 641, 628 NYS2d 128 (2d Dept 1995). Submit judgment on notice to all parties.

The foregoing constitutes the decision and order of this Court. Courtesy copies of this decision and order have been mailed to counsel for the parties.

Dated: New York, New York________________________________

June 18, 2004J. C. C.