A Provider's Timely Proof of Claim Does Not Satisfy the 30-Day Notice of Accident Requirement for New York No-Fault Benefits

NO-FAULT – 30-DAY NOTICE OF ACCIDENT REQUIREMENT – 45-DAY PROOF OF CLAIM REQUIREMENT
New York & Presbyt. Hosp. v Country Wide Ins. Co.
(Ct. Apps., decided 10/13/2011) 

Can a health care services provider, as assignee of a person injured in a motor vehicle accident, recover no-fault benefits by timely submitting the required proof of claim after the 30-day period for providing written notice of the accident has expired?  No, says the New York Court of Appeals.

Joaquin Benitez was injured in a traffic accident on July 19, 2008.  He at received medical treatment at New York and Presbyterian Hospital from that date through July 26, 2008.  On the date of his discharge, Benitez signed an Assignment of No-Fault Benefits form under which he assigned to Presbyterian "all rights, privileges and remedies to payment for health care services provided by [Presbyterian] to which [Benitez is] entitled under Article 51 (the No-Fault statute) of the Insurance Law."  Benitez and Presbyterian also executed a completed NYS Form NF-5 (i.e., a hospital facility form). Neither Benitez nor Presbyterian provided the required written notice of accident to his no-fault insurer, Country Wide Insurance Company, within 30 days of the accident as required by the New York insurance regulations (11 NYCRR 65-1.1).

On August 25, 2008, Presbyterian, as assignee of Benitez, billed Country Wide for the sum of $48,697.63. In billing Country Wide, Presbyterian submitted a number of documents, including the required proof of claim (the NF-5 form). Country Wide received the bill and other documents on August 28, 2008, 40 days after the accident. Country Wide denied Presbyterian's claim on the ground it had not received timely notice of the accident under 11 NYCRR 65-1.1, which requires an "eligible insured person" to give written notice to the insurer "in no event more than 30 days after the date of the accident."

Presbyterian brought this action against Country Wide to compel payment of no-fault benefits in the amount of its bill, plus statutory interest and attorney's fees, alleging it had provided timely notice and proof of claim under 11 NYCRR 65-1.1, which requires an insured person's assignee to submit written proof of claim no later than 45 days after the date health care services are rendered. Presbyterian and Country Wide each moved for summary judgment.

Supreme Court granted Presbyterian summary judgment, ruling that the hospital satisfied its notice obligation by timely submitting the proof of claim.  Citing 11 NYCRR 65-3.3 (d), the Appellate Division, Second Department, affirmed (71 AD3d 1009 [2d Dept 2010]), stating "[c]ontrary to the insurer's contention, the hospital's submission of a completed hospital facility form . . . within 45 days after services were rendered satisfied the written notice requirement set forth in 11 NYCRR 65-1.1."  The Court of Appeals granted Country Wide leave to appeal.

In REVERSING the Appellate Division's order, the Court of Appeals agreed with Country Wide's argument that the Appellate Division decision eviscerates the 30-day written notice of accident requirement and that the New York no-fault regulations do not contain any language which provides that submission of a proof of claim for health care services within 45 days excuses the failure to give the threshold notice of accident within 30 days of the accident. The Court rejected Presbyterian's argument that its filing of the hospital facility form within 45 days of the date services were rendered constituted both "proof of claim" and timely "notice of accident".

The "notice of accident" and "proof of claim" under 11 NYCRR 65-1.1 are independent conditions precedent to a no-fault insurer's liability (see Hospital for Joint Diseases, 9 NY3d at 317 ["These regulations require an accident victim to submit a notice of claim to the insurer as soon as practicable and no later than 30 days after an accident. Next, the injured party or the assignee (typically a hospital . . .) must submit proof of claim for medical treatment no later than 45 days after services are rendered" (9 NY3d at 317 [emphasis added] [internal citations omitted])]). By ruling that the notice of accident condition was satisfied based on the plain language of 11 NYCRR 65-3.3 (d), the Appellate Division disregarded the separate and distinct nature and purpose of these requirements. Even more troubling, such a construction effectively reads the 30-day written notice of accident requirement out of the no-fault regulations. But nothing in 11 NYCRR 65-3.3 (d) explicitly dispenses with the 30-day notice of accident requirement. Rather, 11 NYCRR 65-3.3 (d) merely provides that a NF-5 form may constitute the written notice required under the notice of accident provision.

In other words, these regulations (read alone or in tandem) cannot be interpreted to mean that a hospital/assignee's timely submission of a proof of claim for health services within 45 days of discharge of the injured person excuses the insured/assignor's failure to give the threshold notice of accident within 30 days of the accident, or that health care service providers are exempt from the written 30-day notice of accident requirement. Neither 11 NYCRR 65-1.1 nor 11 NYCRR 65-3.3 (d) contains such language. That is, while 11 NYCRR 65-3.3 (d) allows a completed hospital facility form to satisfy the written notice of accident requirement, the regulation does not provide (or suggest) that a "proof of claim" in that form filed within 45 days of treatment satisfies the 30-day notice of accident requirement where, as here, the form was submitted to Country Wide after the 30-day period has expired.

Recent Appellate Term, Second Department, New York No-Fault Decisions

These eleven Appellate Term, Second Department, New York no-fault decisions were decided on March 10 and posted on March 18, 2010.  Click the case name links to read the full decisions. 

NO-FAULT – CHOICE OF LAW – NEW JERSEY VEHICLE, INSUREDS AND POLICIES
A.B. Med. Servs., PLLC a/a/o Leon Regis v. GEICO Cas. Ins. Co.
(App. Term, 2nd Dept., 9th & 10th Dists., decided 3/10/2010)

Upon the application of a "center of gravity" or "grouping of contacts" analysis, New Jersey law was found to apply to a New York motor vehicle accident that involved a New Jersey registered vehicle, a New Jersey insured, and two New Jersey insurance policies.   Summary judgment to GEICO was properly denied. 

NO-FAULT – JOINT TRIAL
Anthony M. Palumbo, D.C. a/a/o Marc Taly v. Tristate Consumer Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil improperly denied defendant's motion for a joint trial of three providers' separate actions for the same services rendered on the same date at the same location.  Tristate intended to defend all three actions on the ground that the services rendered were not medically necessary, and plaintiff failed to establish that a joint trial would prejudice a substantial right.

NO-FAULT – PROOF OF MAILING – UNANSWERED VERIFICATION REQUESTS
St. Vincent Med. Care, P.C. a/a/o Breyton Squires v. Country-Wide Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

• Plaintiff established its prima facie entitlement to summary judgment because defendant's claims representative conceded receipt of claims in question and the affidavit of plaintiff's billing manager established that the documents annexed to plaintiff's motion were admissible pursuant to CPLR 4518.  
• The affidavit of defendant's no-fault litigation supervisor sufficiently established the timely mailing of the NF-10 denial of claim forms and verification requests since it described, in detail, based on the affiant's personal knowledge, defendant's standard office practices or procedures used to ensure that said documents were properly mailed. 
• Although defendant sent follow-up verification requests on the 30th day after its initial verification requests, rather than waiting the full 30 days before sending its follow-up requests, plaintiff did not respond to those requests, so defendant was entitled to summary judgment on those claims, pursuant to Infinity Health Prods., Ltd. v Eveready Ins. Co. (67 AD3d 862 [2d Dept 2009]).

NO-FAULT – PROOF OF MAILING – MEDICAL NECESSITY
Right Aid Diagnostic Medicine, P.C. a/a/o Tarshia Harrison v. Geico Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

• Plaintiff established its prima facie entitlement to summary judgment because defendant's claims representative conceded receipt of claims in question and the affidavit of plaintiff's billing manager established that the documents annexed to plaintiff's motion were admissible pursuant to CPLR 4518.  
• In opposition to plaintiff's summary judgment motion, defendant established that it had timely mailed its denial of claim form, which denied plaintiff's $911.99 claim on the ground of lack of medical necessity, by submitting an affidavit of an employee with knowledge of defendant's standard office practices or procedures designed to ensure that items are properly addressed and mailed.
• Defendant also raised triable issues of fact by submitting a copy of the affirmed peer review report setting forth a factual basis and medical rationale for the conclusion that the MRI was not medically necessary and presenting evidence that it had already paid plaintiff's claim.

NO-FAULT – TIMING OF EUO REQUEST
St. Vincent Med. Care, P.C. a/a/o Omar Morgan v. Travelers Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Although an examination under oath (EUO) need not be scheduled to be held within 30 days of the receipt of the claim form, the EUO request letter must be mailed within 30 days of the insurer's receipt of the bills in question.  The mailing of Travelers' EUO scheduling letters 52 days after its receipt of three bills from plaintiff was untimely and did not toll Travelers' time to pay or deny those bills, regardless of plaintiff's nonappearance at the requested EUO.

NO-FAULT – MEDICAL NECESSITY OF MEDICAL SUPPLIES  – AFFIRMED PEER REVIEW REPORT
High Quality Med., P.C. a/a/o Robel Thomay v. Mercury Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil (Lebedeff) improperly denied Mercury's cross motion for summary judgment.  The affirmation of plaintiff's doctor did not meaningfully refer to, let alone rebut, the conclusions set forth in the affirmed peer review report Mercury submitted in support of its cross motion, which set forth a factual basis and medical rationale for the conclusion that there was a lack of medical necessity for the medical supplies at issue.  

NO-FAULT – UNTIMELY PROOF OF CLAIM – 11 NYCRR § 65-3.3(e) NOTICE  – BILL INITIALLY SUBMITTED TO WRONG INSURER
Prestige Med. & Surgical Supply, Inc. a/a/o Michael Martin v. Chubb Indem. Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Kings Civil (Sherman) properly granted defendant's motion for summary judgment.  Defendant's denial of claim form adequately advised plaintiff pursuant to 11 NYCRR § 65-3.3 (e) that its late submission of the claim would be excused if plaintiff provided a reasonable justification for its failure to timely submit the claim within 45 days after the date the supplies at issue had been provided to its assignor.  Plaintiff failed to proffer any explanation as to why it first submitted the claim to another insurance carrier.

NO-FAULT – VACATING DEFAULT JUDGMENT – CPLR 317
Nursing Personnel Homecare a/a/o Evelyn White v. New York Cent. Mut. Fire Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Kings Civil (Garson) improvidently exercised its discretion in denying defendant's motion to vacate the default judgment.  Pursuant to CPLR 317, NYCM met its burden of showing that it did not receive actual notice of the summons in time to defend the action.  NYCM submitted an affidavit from one of its no-fault litigation examiners, who had personal knowledge regarding defendant's practices and procedures in retrieving, opening and filing its mail and in maintaining its files on existing claims. In that affidavit, the no-fault litigation examiner stated that defendant had never received the summons, the complaint or the motion for a default judgment.  NYCM also submitted an affidavit from its litigation examiner in which he stated that the assignor had cancelled her insurance policy with defendant prior to the date of the accident and had not subsequently taken out another insurance policy with NYCM.  

NO-FAULT – MEDICAL NECESSITY OF CHIROPRACTIC TREATMENT – QUESTION OF FACT
Co-Op City Chiropractic, P.C. a/a/o Gloria Fagan v. Mercury Ins. Group
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil properly denied defendant's motion for summary judgment.  Although the affidavit and peer review report of defendant's chiropractor set forth a factual basis and medical rationale for the chiropractor's conclusion that there was a lack of medical necessity for the services rendered, the affidavit of plaintiff's treating chiropractor, submitted in opposition to defendant's motion for summary judgment, was sufficient to demonstrate the existence of a triable issue of fact as to the medical necessity of the services rendered.

NO-FAULT – MEDICAL NECESSITY OF MEDICAL SUPPLIES – UNREBUTTED SWORN PEER REVIEW REPORTS
Favorite Health Prods., Inc. a/a/o Jeoniel Michel v. Geico Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil (Lebedeff) improperly denied defendant's cross motion for summary judgment.  Defendant submitted, among other things, two sworn peer review reports, which set forth a factual basis and medical rationale for the conclusion that there was a lack of medical necessity for the medical supplies at issue.  Defendant's showing that the supplies were not medically necessary was unrebutted by plaintiff.

NO-FAULT – MEDICAL NECESSITY – UNREBUTTED IME REPORT
Advanced Med., P.C. a/a/o Joyce Asiedu v. GEICO Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th Dists., decided 3/10/2010)

Queens Civil (Lebedeff) improperly denied defendant's cross motion for summary judgment.  Defendant sufficiently established that the denial of claim forms were timely mailed in accordance with defendant's standard office practice or procedure, and submitted an affirmation by the doctor who performed the independent medical examination as well as a copy of the independent medical examination report, establishing, prima facie, that with respect to the services at issue in plaintiff's third and fifth causes of action, there was no medical necessity.  Plaintiff did not rebut that evidence.

Appellate Term, Second Department, No-Fault Decisions

NO-FAULT – MAILING – PROVING IME NO-SHOW
Radiology Today, P.C. a/a/o Charles Rawlins v. GEICO Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th, decided 10/23/2009)

Order of Richmond Civil (Katherine Levine, J.) REVERSED.  Defendant's unopposed motion for summary judgment dismissing the complaint should have been granted.

• Affidavit of a manager employed by the independent medical review service retained by defendant to schedule and conduct IMEs sufficiently set forth the standard office practice and procedure for the generation and mailing of IME notices designed to ensure that said notices were properly addressed and mailed.
• The affirmations and affidavits of the medical professionals who were to perform the IMEs established that plaintiff's assignor failed to appear for said IMEs.

NO-FAULT – SUFFICIENCY OF PEER REVIEW
Richmond Radiology, P.C. a/a/o Arkady Polevoy v. GEICO Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th, decided 10/23/2009)

Order of New York Civil (Diane A. Lebedeff, J.) denying plaintiff's motion for summary judgment AFFIRMED. 

• The doctor performing the peer review did not conclude that he had insufficient information upon which to base a conclusion. Instead, the affirmed report raised a triable issue of fact because "the report clearly indicates that the pertinent [treating] physician's reports and other documentation had been requested and provided for the purpose of conducting a peer review, and the conclusion of lack of medical necessity is based on the peer reviewer's opinion, in effect, that there was no substantiation in the reports and documents reviewed of medical necessity for the [services] provided[.]"

NO-FAULT – PROOF OF MAILING – USE OF WORKERS' COMPENSATION FEE SCHEDULE FOR ACUPUNCTURE SERVICES
New Wave Oriental Acupuncture, P.C. a/a/o Gerard Ikezi v. Government Employees Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th, decided 10/23/2009)

Order of New York Civil (Robin S. Garson, J.) granting summary judgment to plaintiff REVERSED. 

• The affidavit submitted by defendant sufficiently established that the denial of claim forms were timely mailed in accordance with defendant's standard office practices and procedures.
• It was proper for defendant to use the workers' compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which plaintiff was entitled to receive.

NO-FAULT – LEAVE TO AMEND ANSWER – FRAUDULENT INCORPORATION DEFENSE  – COMPELLING DEPOSITION OF PROVIDER'S OWNER
New York First Acupuncture, P.C. a/a/o Anitta Allen v. State Farm Mut. Auto. Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th, decided 10/23/2009)

Order of Richmond Civil (Diane A. Lebedeff, J.) granting defendant's motion to amend its answer to assert a fraudulent incorporation defense and compel plaintiff to produce its owner for a deposition AFFIRMED.

• The Civil Court did not improvidently exercise its discretion in granting defendant's application for leave to amend its answer in order to interpose the affirmative defense of fraudulent incorporation, in the absence of any showing that prejudice or surprise would result therefrom and since the proposed affirmative defense was neither devoid of merit nor palpably insufficient as a matter of law.
• Plaintiff's contention, that the defense of fraudulent incorporation must be asserted in a timely denial of claim form, is without merit. 
• Defendant sufficiently demonstrated that the deposition testimony of plaintiff's owner, Valentina Anikeyeva, regarding plaintiff's corporate structure was material and necessary so as to warrant the granting of the branch of its motion seeking to compel Ms. Anikeyeva's deposition.

Justice Golia's concurring memorandum is worth a look:

While I agree with the ultimate disposition in the decision reached by the majority, I strenuously disagree with the majority gratuitously raising a nonexistent issue, namely that a Mallela defense (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) may be disallowed if "prejudice or surprise would result therefrom." This impression was created by the majority in choosing here to excise an important requirement with regard to the law of amending an answer. The actual statement by the Court of Appeals in McCaskey, Davies & Assoc. v New York City Health & Hosps. Corp. (59 NY2d 755, 757 [1983] [emphasis added, citations and internal quotations marks omitted]) is that, "Leave to amend the pleadings shall be freely given absent prejudice or surprise resulting directly from the delay."

Inasmuch as it is inconceivable that a Mallela defense of fraudulent incorporation could ever create prejudice or surprise that resulted directly from the delay in raising such defense, it is clear that such analysis is unwarranted.

To me, it is extremely unlikely that an individual who creates a fraudulent entity for the purpose of defrauding an insurance company would forget that he/she did so and be prejudiced or surprised when it was discovered. Such would be akin to a person running a "Ponzi" scheme deciding to invest in his own firm because it was obtaining such good results.

So is Dave Gottlieb's observation on Justice Golia's point.  What do you think?  I get Justice Golia's point on the no surprise part, but I guess whether the "absent prejudice or surprise" aspect attaches to an insurer's leave to amend its answer to add a Mallela defense depends on one's definition of "prejudice". 


NO-FAULT – UNTIMELY PROOF OF CLAIM – WAIVER
Delta Diagnostic Radiology, P.C. a/a/o Frank Louigarde v. Interboro Ins. Co.
(App. Term, 2nd Dept., 2nd, 11th & 13th, decided 10/23/2009)

Judgment of Queens Civil (William A. Viscovich J.) in favor of plaintiff AFFIRMED.

• Although plaintiff's claim was submitted more than 45 days after the services at issue were rendered, defendant waived its reliance on the 45-day rule as a basis to deny the claim because defendant had failed to communicate to plaintiff, as required by the No-Fault Regulations, that late submission of the proof of claim will be excused where the applicant can provide a reasonable justification for the late submission. 
• Defendant also failed to demonstrate that discovery was needed in order to show the existence of a triable issue of fact.

A Spate of No-Fault Decisions from the Appellate Term, Second Department

NO-FAULT – NOTARY PUBLIC'S JURAT – TECHNICAL DEFECT – PEER REVIEW – MEDICAL NECESSITY
Complete Orthopedic Supplies, Inc. a/a/o Ana Valencia v. State Farm Mut. Auto. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Queens Civil judgment for plaintiff DME provider on its motion for summary judgment.

REVERSED and State Farm's cross motion for summary judgment was granted. The notary public's jurat was missing the year State Farm's affidavits of mailing were signed. The Appellate Term held that this was a "technical defect" that the Civil Court should have disregarded since it did not prejudice a substantial right of a party, and plaintiff had raised no objection to it. State Farm's affirmed peer review report established prima facie that there was no medical necessity for the supplies provided by plaintiff, which proof plaintiff did not rebut. As a result, State Farm's cross motion for summary judgment dismissing the complaint should have been granted.


NO-FAULT – UNTIMELY SUBMISSION OF CLAIMS
Long Is. Multi-Medicine Group, P.C. a/a/o Sumira Lund v. Travelers Ins. Co.
(App. Term, 2nd Dept., decided 1/8/2009)

Appeal from a Queens Civil judgment for plaintiff on its motion for summary judgment.

AFFIRMED. Civil Court had granted plaintiff's motion based on its finding that Travelers waived its defense of claim submission untimeliness, since it failed to advise plaintiff that the claim would be reconsidered upon a showing of impossibility to timely submit the claims. The Appellate Term affirmed the judgment, not on that ground, but because Travelers' opposition motion papers annexed denial of claim forms that did not correspond to the claim forms upon which plaintiff sought summary judgment. As such, the court held that Travelers had failed to establish that it timely denied the subject claims and, as such, failed to raise a triable issue of fact with respect to the claims at issue.


NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS
Union Physician Healthcare, P.C. a/a/o Christopher Kelly v. Utica Mut. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Kings Civil judgment for plaintiff on its motion for summary judgment.

REVERSED and plaintiff's motion denied. The affidavit by plaintiff's officer submitted in support of plaintiff's motion for summary judgment failed to lay a proper foundation for the admission of the documents annexed to plaintiff's moving papers and, as a result, plaintiff failed to establish a prima facie case. The affidavit submitted by plaintiff's officer was insufficient to demonstrate that he possessed personal knowledge of plaintiff's practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff's moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 15 Misc 3d 144[A], 2007 NY Slip Op 51161[U] [App Term, 2d & 11th Jud Dists 2007], affd 55 AD3d 644 [2008]; Bath Med. Supply, Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists 2007]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]).


NO-FAULT – MVAIC – NOTICE OF CLAIM – INSURANCE LAW § 5208(A)
M.N.M. Med. Health Care, P.C. a/a/o Erick Papillion v. MVAIC
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Queens Civil order denying defendant MVAIC's motion for summary judgment.

REVERSED and MVAIC's motion granted, dismissing the complaint. The filing of a timely affidavit providing MVAIC with notice of intention to file a claim is a condition precedent to the right to apply for payment from MVAIC pursuant to New York Insurance Law § 5208(a). Compliance with the statutory requirement of timely filing a notice of claim must be established in order to demonstrate that the claimant is a "covered person" who is entitled to recover no-fault benefits from MVAIC. MVAIC's submissions in support of its motion for summary judgment made a prima facie showing that plaintiff's assignor failed to timely file a notice of claim. By defaulting on the motion, plaintiff did not demonstrate that its assignor timely filed a notice of claim or sought leave to file a late notice of claim. Thus, MVAIC's motion for summary judgment should have been granted.


NO-FAULT – NOTICE TO ADMIT – PRIMA FACIE CASE SHOWING
All Mental Care Medicine, P.C. a/a/o Augustin Martes v. State Farm Mut. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Vista Surgical Supplies, Inc. a/a/o Tyrone Pearson v. State Farm Mut. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Judgments for State Farm dismissing the complaints AFFIRMED. An admission that defendant received plaintiff's claim form is not a concession of the facts set forth in said claim form (Bajaj v General Assur. Co., 18 Misc 3d 25, 28 [App Term, 2d & 11th Jud Dists 2007]; Midborough Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132[A], 2006 NY Slip Op 51879[U] [App Term, 2d & 11th Jud Dists 2006]). By only submitting the notices to admit and producing no witnesses at trial, plaintiffs failed to make a prima facie case for recovery of no-fault benefits.


NO-FAULT – MOTION TO AMEND ANSWER TO ADD AFFIRMATIVE DEFENSES – RES JUDICATA – COLLATERAL ESTOPPEL BASED ON PRIOR ARBITRATION DECISION – FRAUDULENTLY INCORPORATED PC
Uptodate Med. Serv., P.C. a/a/o Jean Alberic v. State Farm Mut. Auto. Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Queens Civil judgment for plaintiff on its motion for summary judgment.

REVERSED, granting State Farm's motion to amend its answer and, upon such amendment, summary judgment dismissing the complaint. The Civil Court improperly denied State Farm's motion to amend its answer to add the affirmative defenses of res judicata and collateral estoppel. Generally, leave to amend a pleading pursuant to CPLR 3025 (b) should be granted where there is no significant prejudice or surprise to the opposing party and where the proof submitted in support of the motion indicates that the amendment may have merit. State Farm sought to add those affirmative defenses because there was a prior arbitration proceeding between the parties in which plaintiff had sought to recover assigned first-party no-fault benefits for services rendered from August 2003 through January 14, 2004, in which proceeding the arbitrator had determined that plaintiff was ineligible to receive reimbursement of no-fault benefits because it was a fraudulently incorporated professional service corporation. Plaintiff did not demonstrate prejudice or surprise from the proposed amendment.

State Farm established that the issue of whether plaintiff was ineligible to receive reimbursement of no-fault benefits because it was a fraudulently incorporated professional service corporation was identical to the issue previously decided by the arbitrator. In opposition to State Farm's cross motion, plaintiff failed to address the branch of the cross motion which sought summary judgment dismissing the complaint on the ground of collateral estoppel. Therefore, plaintiff failed to establish that it did not receive a full and fair opportunity to litigate in the arbitration proceeding. Thus, the branch of defendant's cross motion seeking summary judgment should have been granted.


NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS
V.S. Med. Servs., P.C. a/a/o Mohamad Nazir v. Travelers Ins. Co.
(App. Term, 2nd Dept., decided 1/9/2009)

Appeal from a Queens Civil judgment after non jury trial for Travelers dismissing plaintiff's complaint.

AFFIRMED. While plaintiff produced a witness to testify regarding the claim forms plaintiff sought to have admitted into evidence, because said witness did not testify at all as to the generation of such claim forms, they were not admissible as business records (see CPLR 4518). Accordingly, plaintiff failed to establish a prima facie case (see Bajaj v General Assur., 18 Misc 3d 25 [App Term, 2d & 11th Jud Dists 2007]).

The Inverted Trajectory of a Provider's Late Proof of Claim

NO-FAULT – LATE PROOF OF CLAIM
Joseph Rockman LMT a/a/o Delilah Serrano v. Clarendon Natl. Ins. Co.
(NYC Civil Ct., Richmond Co., decided 10/17/2008)

Question: How often has a court, in any jurisdiction, invoked and followed an inverted trajectory to decide a case? Answer: Never. Before now. I checked LexisNexis. That term hasn't even appeared in a reported decision until this case.

Since I wasn't familiar with its use as a legal decision-making methodology, I looked up and Googled "inverted trajectory". Wasn't in any online dictionary or Wikipedia, so I looked for its meaning in contextual clues. Here's some of what I found:

We believe the inverted trajectories provide at least qualitative information on the subgrid convergence." -- Numerical Simulations of a Dilute Polymer Solution in Isotropic Turbulence, Dissertation Presented to the Faculty of the Graduate School of Cornell University in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy, by Shi Jin, January 2007, p. 80

Consider the point y as being the copy of point x .epsilon. S in F.sub.w at the initial configuration. Point y is fixed in F.sub.w and does not move with set S, but rather it moves relative to S. To an observer placed at the origin of F.sub.s the moving point x .epsilon. S will appear to be fixed while the fixed coordinate system F.sub.w, and the point y fixed in F.sub.w, will appear to be moving according to the inverted motion M(t). In other words, the moving observer will see the inverted trajectory ##EQU2##. -- Description the Background of the Invention Leading to U.S. Patent # 6044306, Methods and apparatus for shaping moving geometric shapes

The trajectories generated by TD group accounted for between 62% and 78% of the variance (featural-upright: R2 = .73, F(1,23) = 60.52, p < .001; featural-inverted: R2 = .62, F(1,23) = 37.53, p < .001; configural-upright: R2 = .79, F(1,23) = 87.41, p < .001), except for the configural inverted trajectory which appeared to be more variable (R2 =.23, F(1,23) = 6.82, p = .016). The control group therefore generated valid cross-sectional developmental trajectories on this task. -- The Development of Visuo-Spatial Processing in Children With Autism, Down Syndrome and Williams Syndrome, Thesis submitted for the degree of Doctor of Philosophy, by Dagmara Annaz, University of London, 2006, p. 167

It is interesting also to look at the Liapunov stability. If we invert the velocities at a certain time and also perturb randomly the positions (about 1%) we observe a substantial stability of the inverted trajectory at any energy density (Figs. (6a,6b)). This contrasts with the presence of exponentially divergent orbits in the large energy density region (positive Liapunov exponents); however this could be an effect of spacial localization oí chaotic regions, even if this behavior is far from being understood. -- Dynamics and Statistics in High Dimensional Hamiltonian Systems, Stefano Isola, Roberto Livi, Stefano Ruffo, Dipartimento di Fisica dell 'Universitá di Firenze and INFN Sezinone di Fi renze, Largo E. Fermi 2, 1-50125 Firenze Italy

Okay..., those didn't help much. It was a description of table tennis (ping pong) ball spins that finally did it for me -- a vigorous backspin apparently imparts an inverted trajectory to (and increases the distance traveled of) the ball.

Thus enlightened, I returned to study Richmond County NYC City Civil Court Judge Katherine Levine's decision in this case, which begins: "This case invokes the inverted trajectory that must be followed when an insurer raises the defense that a medical services provider has failed to timely submit its proof of claim. "

This claim involved a bill dated 4/17/07 for services rendered four and a half years earlier in October and November 2002. Clarendon asserted that the first time it learned about this claim was when plaintiff served Clarendon's law office with a summons and complaint dated August 16, 2007, which attached a chart referring to the 4/17/07 bill, but did not attach that bill. Clarendon claimed that its counsel received the actual bill when they received discovery in a related case involving the same medical provider on or about, October 10, 2007. Clarendon then issued a denial of that bill on November 7, 2007, within 30 days of its receipt of it.

Having been found to have timely denied the bill, Clarendon successfully argued on motion that plaintiff provider failed to submit its proof of claim (i.e., the bill) within 180 days (this case was decided under the "old" regulation) of the relevant dates of service. Judge Levine found that the "generic" affidavit of Dr. Rockman failed to state that he actually mailed the particular claims at issue on December 12, 2002, and his recital of his office practices did not establish, by admissible proof, that that procedure was in fact followed on that date. Moreover, "[f]atally missing from plaintiff's papers is a copy of the medical claim dated in 2002 that was purportedly mailed on December 13, 2002." Judge Levine reasoned:

Specifically, Dr. Rockman averred that it is his office's customary practice that after the envelope containing the bill is delivered to the U.S post office, a photocopy of the bill and supporting documents are then placed in the appropriate patient file and a notation is made on the file confirming the date and amount of the bill and the date the bill was mailed. He then alleged that the bills which are subject of this lawsuit were mailed on 12/13/02. However, as set forth above, plaintiff has failed to produce the bill that was purportedly mailed in December 2002 or even the notation that was made on the file concerning the mailing, and none of the documents that plaintiff did produce in support of its motion contain any reference to a mailing in December 2002. In fact, the only bill that plaintiff did produce for the dates of service in question is dated April 17, 2007, and plaintiff has offered no evidence concerning the mailing of the 2007 bill. As such, plaintiff has failed to produce any evidence that could be introduced at trial so as to defeat defendant's motion for summary judgment.

Given the aforementioned reasoning, plaintiff's cross-motion for summary judgment is denied. Along this line, it should be noted that plaintiff has failed to establish its prima facie right to judgment as it has failed to demonstrate its timely and proper submission of the claims in question See, Presbyterian Hospital, supra , 90 NY2d 274 (1997), Elmont Open MRI & Diagnostic Radiology v. Geico, 2008 NY Slip Op. 50113U, 18 Misc 3d 1117A (Dist. Ct., Nassau Co. 2008). As set forth above, plaintiff has failed to provide admissible proof of mailing of the purported bill dated December 2002. Furthermore, plaintiff has offered no evidence whatsoever to lay a foundation for the admission of the bill dated April 17, 2007. See, e.g. Complete Orthopedic Supplies v. State Farm Ins. Co., 16 Misc 3d 996 (Civil Ct. Queens Co. 2007). concerning the mailing of the bill dated April 17, 2007 that it has been able to produce.

End point of the inverted trajectory in this case: summary judgment for Clarendon, dismissing the complaint.

NYC Civil Holds That No-Fault Insurer Not Required to Introduce the Policy to Assert/Rely on 45-Day Proof of Claim Requirement

NO-FAULT – 45-DAY PROOF OF CLAIM REQUIREMENT – PROOF OF REVISED NO-FAULT ENDORSEMENT
Dana Woolfson LMT, a/a/o Tania Rega v. Government Employees Ins. Co.
(NYC Civil, New York Co., decided 8/6/2008)

July 31, 2006 accident. Policy covering the accident was issued after April 5, 2002, the effective date of revised-revised Regulation 68 (the one reducing the proof of claim requirement from 180 to 45 days). Plaintiff conceded that she submitted bills to GEICO for payment more than 45 days after their dates of service. GEICO denied payment and plaintiff sued.

At trial, although the parties stipulated that the policy in question had been issued after April 5, 2002, GEICO did not produce and introduce a copy of the policy that was in effect on the accident date. Plaintiff argued that GEICO could not rely on the lessened 45-day proof of claim requirement without introducing the policy. GEICO countered that because the revised PIP endorsement is mandatory under the new regulations, it applies whether or not the policy actually contains it, and so it is not necessary to produce the policy.

New York County NYC Civil Court Judge Arlene Bluth agreed with GEICO, finding the introduction of the policy at trial to be not necessary to prove that it contained the mandatory endorsement:

In support of its position, the defendant relies upon the very recent Appellate Term, Second Department case Eagle Chiropractic, P.C. v Chubb Indem. Ins. Co., 19 Misc 3d 129(A) , 859 NYS2d 902 (2008), which holds that because the policy was issued after April 5, 2002, the Endorsement was mandatory and the defendant need not prove that the policy contained the Endorsement. Plaintiff did not distinguish Eagle on its facts, and indeed, on page 4 of her post-trial memorandum acknowledges that if this Court were bound to follow Eagle, then defendant would win. Instead, plaintiff claims that the law is different in this department. Plaintiff maintains that this Court must follow SZ Medical P.C. v State Farm Mutual Auto Ins. Co., 9 Misc 3d 139(A), 2005 NY Slip Op 51842(U) (App Term 1st Dept 2005), which requires a finding for plaintiff.

Plaintiff asserts that SZ Medical requires that a defendant always produce the policy in order to support its position that the new regulations apply. By taking language out of context, plaintiff misreads the holding of SZ Medical. Indeed, there is no split between the appellate terms because SZ Medical and Eagle both hold that once it is established that the policy was issued on or after April 5, 2002, then the new regulations must apply.

In SZ Medical, plaintiff moved for summary judgment on its prima facie case for claims submitted between December 2002 and April 2003; defendant opposed, claiming the new regulations applied. The trial court denied summary judgment, finding that because plaintiff submitted the claims after April 5, 2002, the new regulations applied. In reversing, the Appellate Term simply made clear that the date the policy was issued determines if the new regulations are applicable, not the date when plaintiff submits its claims. The defendant in that case did not come forward with proof of when the policy was issued, and there is no indication that this crucial date could have otherwise been determined; the Appellate Term granted plaintiff's motion for summary judgment.

Here the defendant need not produce proof that the policy was issued after April 5, 2002 because the parties stipulated to that fact. Had there been no stipulation, however, the fact remains that the earliest date that the policy covering this July 31, 2006 accident could have been issued was July 31, 2005; this was more than three years after the effective date of the new regulations. Even if the insurance policy lacked the mandatory Endorsement, then the applicable provisions of the Insurance Law or the applicable regulation, which "has the force of law" (Raffellini v State Farm Mut. Auto Inc. Co., 9 NY3d 196, 201, 848 NYS2d 1, 4 [2007]), are deemed to be part of the policy as though written into it. See also McKinney's Insurance Law § 3103 (a) (even if the policy or provision is "in violation of the requirements or prohibitions of this chapter it shall be enforceable as if it conformed with such requirements or prohibitions"); Trizzano v Allstate Ins. Co., 7 AD3d 783, 780 NYS2d147 (2 Dept 2004) (auto policy); Tag 380 LLC v ComMet 380 Inc., 10 NY3d 507, 860 NYS2d 433 (1st Dept 2008) (fire policy).

Where, as here, it is clear that the policy is subject to the new regulations, the mandatory Endorsement is read into the policy and the defendant is not required to produce it. Accordingly, after trial, the Court awards judgment in favor of defendant Government Employees Insurance Company and against plaintiff Dana Woolfson, LMT. The complaint is dismissed with prejudice.

I know, I know. Usually courts will deem policies to include mandatory policy provisions that are no less favorable or more favorable to insureds or policy beneficiaries. Admittedly, there is something a bit odd in a court reading a more restrictive provision into a policy without seeing proof that it was actually in there.

Nevertheless, the takeaway point on this case and issue should be to bring and introduce a representative copy of the policy on a dispositive motion or at trial, and not rest the case's outcome on a court adopting this same position, especially in venues outside of the Second Department.