You've Gotcha Mail -- Appellate Term, First Department, Recommends "Time Out" for No-Fault Litigants

NO-FAULT – VERIFICATION – PROOF OF MAILING – PREMATURE ACTION
Lenox Hill Radiology, PC v. Tri-State Consumer Ins. Co.
(App. Term, 1st Dept., decided 12/30/2010)

Plaintiff MRI provider billed.  Defendant no-fault insurer requested verification.  Plaintiff sued.  At the nonjury trial, in support of its defense that plaintiff's action was premature because it had not responded to defendant's verification requests, defendant  produced the claims examiner who had prepared the verification requests and who testified about the defendant's standard office mailing practices, but acknowledged on cross examination that she had no personal knowledge of the mailroom's actual clerical procedures.  Plaintiff offered no evidence that it had ever responded to the verification requests, arguing only that defendant's proof of mailing of the verification requests was insufficient because the claims examiner who testified at trial did not have personal knowledge of the defendant's actual mail handling procedures.  The trial judge agreed and awarded judgment to plaintiff for $4,390.16.  Defendant appealed.

In REVERSING the judgment and dismissing the complaint, the two-justice majority concluded that defendant presented sufficient evidence at trial of its standard office mailing practice:

The witness's credible and consistent account of the mailing procedures generally followed by defendant, including how the mail was systematically picked up during the work day, when it would "go out," and what steps would be taken if a verification letter was returned as undeliverable (an event which, the witness noted, did not occur here), "obviated the necessity of producing a witness with personal knowledge of the actual mailing" of defendant's verification letters (see Badio v Liberty Mut. Fire Ins. Co., 12 AD3d 229, 230 [2004]). Nor was it incumbent upon defendant to produce a witness, such as a mail clerk or other clerical employee, whose duty it was to ensure compliance with its mailing procedures or who possessed personal knowledge of such compliance see Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [2007]).

What is most notable about this decision, however, is the majority's excoriation of what has become our New York no-fault litigation system:

Before concluding, we would be remiss in failing to note that the facts and circumstances of this action do much to illustrate the disturbing reality that first-party no-fault benefits litigation has become the antithesis of what was supposed to be an expeditious and simplified process for the payment of medical costs for injuries sustained in motor vehicle accidents (see Walton v Lumbermans Mutual, 88 NY2d 211, 214 [1996]).  Too often, lawsuits with a value akin to a small claims action become bogged down by an insistence by one party or another that mailing of routine forms be established with scientific precision, asking judges, already burdened to the breaking point with the veritable legion of no-fault cases overflowing from our court dockets (while very able arbitrators remain underutilized), to require multiple witnesses to be summoned to the courthouse, merely to establish a presumption of mailing, even in the absence of an express denial of receipt of the disputed correspondence. Unfortunately, this class of cases has spawned a body of "gotcha" jurisprudence, marked by a near manic preoccupation with form over substance.

How we have reached this sorry state is of little moment. Perhaps all branches of government need to call a "time out" and, working together, endeavor to construct a workable process to achieve what the framers of the No-Fault statute had in mind when they sought to establish a simplified and expeditious process to reimburse those of our citizenry injured in automobile accidents. For sure, the system now in place is not achieving that laudable aim.

Amen and pass the salt.  Enough already.

Albany, your courts are calling.  Again.  Shall I take a message or will you answer the call this time?

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.

54-Day Delay in Issuing Late Notice Disclaimer Found to Be Unreasonable as a Matter of Law

CGL – UNTIMELY DISCLAIMER – LATE NOTICE – INSURANCE LAW § 3420(D)(2) – PROOF OF MAILING
Mid City Constr. Co., Inc. v. Sirius Am. Ins. Co.
(2nd Dept., decided 2/9/2010)

Waiting 54 days to issue a late notice disclaimer is not "as soon as is reasonably possible", as required by Insurance Law § 3420(d)(2), holds the Appellate Division, Second Department, in this decision.  In AFFIRMING Kings Supreme's award of summary judgment to the insured on its cross claim for declaratory judgment, the Second Department also found that Sirius American Insurance Company failed to raise a triable issue of fact with sufficient proof that it had mailed an earlier disclaimer letter -- only 11 days after having gained sufficient knowledge of facts entitling it to disclaim -- by certified mail, return receipt requested.  An affidavit from a claims representative who did not have personal knowledge of the mailing of the earlier disclaimer letter, coupled with the certified mail receipt, standing alone, were found insufficient to raise a triable issue of fact as to actual mailing of the earlier disclaimer letter:

The defendant Finaly General Contracting Corp., a/k/a Finaly General Contractors, Inc. (hereinafter Finaly), established its prima facie entitlement to judgment as a matter of law on its cross claim for declaratory relief against the defendant Sirius America Insurance Company (hereinafter Sirius) by demonstrating that Sirius did not disclaim coverage "as soon as is reasonably possible" (Insurance Law § 3420[d][2]; see Sirius Am. Ins. Co. v Vigo Constr. Corp., 48 AD3d 450, 452). Finaly showed that Sirius had "sufficient knowledge of facts entitling it to disclaim" by June 10, 2005, at the latest, and that Sirius did not disclaim until August 3, 2005 (see First Fin. Ins. Co. v Jetco Contr. Corp., 1 NY3d 64, 66). In opposition, Sirius failed to raise a triable issue of fact as to whether it sent an earlier disclaimer letter on June 21, 2005, by certified mail, return receipt requested (see Rael Automatic Sprinkler Co., Inc. v Schaefer Agency, 52 AD3d 670, 673). "Generally, proof that an item was properly mailed gives rise to a rebuttable presumption that the item was received by the addressee'" (New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 547, quoting Matter of Rodriguez v Wing, 251 AD2d 335, 336). "The presumption may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed" (Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680). Sirius offered no evidence as to its standard office practices for mailing disclaimer letters, and the affidavit of a claims representative was insufficient to raise a triable issue of fact since he did not have personal knowledge of the mailing of the disclaimer letter (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d at 547; Tracy v William Penn Life Ins. Co. of N.Y., 234 AD2d 745, 748). The certified mail receipt, standing alone, was insufficient to raise a triable issue of fact as to actual mailing (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d at 548; Matter of State Farm Mut. Auto. Ins. Co. [Kankam], 3 AD3d 418, 419; cf. Westchester Med. Ctr. v Liberty Mut. Ins. Co., 40 AD3d 981, 983). Although issues of fact exist as to whether Finaly provided notice of an occurrence "as soon as practicable" (M & N Mgt. Corp. v Nationwide Mut. Ins. Co., 307 AD2d 257, 258), Sirius's "failure to provide notice of disclaimer as soon as is reasonably possible precludes effective disclaimer, even where the insured's own notice of the incident is untimely" (Tex Dev. Co. v Greenwich Ins. Co., 51 AD3d 775, 778; see Osterreicher v Home Mut. Ins. Co. of Binghamton, N.Y., 272 AD2d 926, 927). 

Under New York Insurance Law § 3420(d)(2), an untimely disclaimer or denial will, in effect, excuse an insured's late notice and preclude the assertion of coverage-negating policy exclusions or conditions for bodily injury or death claims arising from New York accidents.  With the prevalence of email as a business communication tool, might liability insurers consider obtaining consent and sending disclaimer and denial letters to their insureds via email as well as mail?  See, NYSID OGC Opinion No. 07-08-17, Electronic distribution by insurers of insurance policies, forms, and bills to insureds ("The Department has consistently encouraged the use of electronic transactions in insurance where there is consent on the part of the insured to enter into an electronic transaction, except to the extent that statutory requirements cannot be satisfied by an electronic transmittal.")  But for better proof of the mailing of the June 21, 2005 letter, Sirius might not have been found to owe defense and indemnification to its insured in the underlying personal injury action.

For other untimely disclaimer decisions discussed on this blog, click here.

SUM Lack of Proof

SUM – CPLR ARTICLE 75 PROCEEDING – CHANGE ENDORSEMENT – OFFICE MAILING PROCEDURE – LACK OF PROOF
Matter of Government Employees Ins. Co. v. Brunner
(2nd Dept., decided 1/19/2010)

GEICO brought this CPLR article 75 special proceeding for a permanent stay of the arbitration of respondent's supplementary uninsured motorists (SUM) coverage claim.  In support of its application, GEICO contended the SUM limits of the policy under which respondent had claimed SUM coverage had been reduced by a policy change endorsement to $25,000/$50,000.   After an evidentiary hearing on the issue, Suffolk Supreme denied GEICO's petition, dismissed the proceeding, and directed the parties to proceed to arbitration.  GEICO appealed.

In AFFIRMING the lower court's judgment, the Second Department agreed that GEICO had failed to prove that the change endorsement was mailed to the policyholder prior to the accident:

The Supreme Court properly concluded that the petitioner failed to meet its burden of proving that an insurance policy endorsement dated October 21, 2005, which purportedly reduced the limits applicable to the uninsured/underinsured motorist endorsement of the relevant policy to the sums of $25,000 per person and $50,000 per accident, was properly mailed to the policy holder prior to the date of the subject accident. The underwriter who testified at the hearing failed to offer "evidence of an office [procedure] geared to insure the likelihood that [the endorsements are] always properly addressed and mailed" (Federal Ins. Co. v Kimbrough, 116 AD2d 692, 692; see Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830; Matter of Transcontinental Ins. Co. v Gibbs, 34 AD3d 488; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547; Lumbermens Mut. Cas. Co. v Gamble, 250 AD2d 540; Matter of Allstate Ins. Co. v Ramirez, 208 AD2d 828, 830; Sea Ins. Co. v Kopsky, 137 AD2d 804; Anzalone v State Farm Mut. Ins. Co., 92 AD2d 238; cf. Kaufmann v Leatherstocking Coop. Ins. Co., 52 AD3d 1010, 1012; Morales v Yaghoobian, 13 AD3d 424, 425; Matter of Metlife Auto & Home v Pennella, 10 AD3d 726).

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.

Bronx Civil Holds that No-Fault Insurer Is Not Obligated to Offer Policy On Motion to Prove EUO Requirement & Certified Mail Creates Same Presumption of Receipt as Regular Mail

NO-FAULT – EXAMINATION UNDER OATH – VERIFICATION REQUESTS – PROOF OF MAILING – PRESUMPTION OF RECEIPT FROM CERTIFIED MAIL
Hastava & Aleman Assoc., P.C. v. State Farm Mut. Auto Ins. Co.
(NYC Civil Ct., Bronx Co., decided 7/2/2009)

State Farm moved in lieu of answering to dismiss the plaintiff health care provider's action on the ground that plaintiff had violated policy conditions by failing to appear for a twice-scheduled examination under oath (EUO).   Plaintiff opposed State Farm's motion, asserting that State Farm had failed to submit a copy of the subject insurance policy in its motion papers, and had failed to demonstrate that EUO letters were sent.

New York City Civil Court Judge Fernando Tapia granted State Farm's motion and dismissed the complaint. On the question of whether State Farm was required to submit a copy of the policy in its motion papers to prove that plaintiff was subject to an EUO requirement, Judge Tapia held:

Revisiting 11 NYCRR § 65-1.1, that section is part of the revised no-fault regulations which took effect on April 5, 2002, and adopted the mandatory Personal Injury Protection ["PIP"] endorsement authorizing EUOs to be incorporated into insurance policies. In other words, compliance to a scheduled EUO is read into the written policy, and the insurer is not required to offer it as evidence to prove its claim.^[FN1] Likewise, in the case at hand, Defendant is not required to include its written policy as part of the record because its defense [of the EUO "no-show"] is found in the Endorsement. Thus, the mandatory Endorsement applies whether or not the written insurance policy actually contains it. Based on the moving papers, the date of accident was on August 27, 2008. According to NY Insurance Law § 3425 (a)(8), "With respect to auto insurance, 'required policy period' means a period of one year from the date as of which a covered policy becomes effective after first issuance or voluntary renewal." Furthermore, under SZ Medical P.C. v. State Farm Mutual Auto Ins. Co., 9 Misc 3d 139(A) (App Term 1st Dept 2005), the date of the written policy's issuance determines if the Endorsement is applicable, and not the date when the plaintiff submits a claim. Applying the above to the instant action, the subject insurance policy contract could be deemed to have been issued/renewed well after April 5, 2002, given that the date of accident occurred well over six years after the effective Endorsement date. It would therefore be duplicative to submit a copy of the policy because its legislative intent was to read the Endorsement into all policies [post-April 5, 2002].^[FN2] As such, Defendant does not need to submit the policy contract because the insurance contact in effect incorporates the Endorsement that authorizes EUOs under 11 NYCRR § 65-1.1.

Plaintiff in the case at bar is therefore in violation of the policy condition requiring submission of EUOs for verification purposes in order to make a determination of first-party benefits because Plaintiff did not appear at the two scheduled EUOs as required by the Endorsement. Accordingly, Plaintiff failed to submit valid proof of claim.

Although it did not "explicitly or implicitly deny [in its pleadings] that it never received the EUO letters", plaintiff also argued that State Farm's motion should be denied because it had not proven in evidentiary form that the two EUO scheduling letters were actually mailed.  On its motion, State Farm submitted affidavits from the calendar clerk of the law firm of State Farm's attorneys and  a State Farm claim representative, who attested her personal knowledge of State Farm's mailing procedures of EUO letters via certified mail.  Plaintiff Plaintiff countered that State Farm had failed to meet its prima facie burden of proving that the two EUO letters were actually mailed because the submitted affidavits were not from individuals who had personally mailed the EUO letters.

In finding that State Farm had sufficiently proven mailing, Judge Tapia found that mailing a certified letter with a return receipt was entitled to the same presumption of receipt as regular first-class mail, even in the absence of the signed returned receipt:

Mailing procedures' technological developments, today, ensure that items are mailed and received so that presumptions can be eliminated. In fact, the USPS has the capacity to reproduce the image of the green return receipt card as a PDF attachment when certified mail is procured via the internet, or else when the sender did not receive the green card back and instead goes to the USPS to follow up on the status of the card. See FN. 9.

As footnoted earlier, the regulation is not specific about the means in which to send substantially equivalent written notices to the required parties; it merely instructs the insurer to "forward" them. See NYCRR § 65-3.5 (a).  In fact, it may very well have been the legislative intent of the NY Insurance Department to be vague in order to avoid enforcement of a particular form of mailing in the event it becomes outdated, which would breed any problems regarding receipt. Until the no-fault regulations streamline its mailing requirement, it is presumed that a properly addressed letter that was mailed was duly delivered to the intended individual when using any method of mailing that the USPS offers, however basic or sophisticated that form of mailing is.

Satisfying no-fault policy conditions does not have to be compromised at the expense of challenging mailing procedures because proof of mailing of verification letters via regular USPS is enough to create a presumption of receipt. In addition, use of certified mail does not create a more demanding presumption of mailing and receipt beyond that of a letter that was properly mailed. The regulations make no distinction between sending a letter via regular mail or via certified mail. 

I get the whole presumption of receipt from a sufficiently proven mailing thing, but using certified mail requires a recipient's signature for delivery, regardless of whether the sender requests a return receipt.  I just learned that this week, after having tried regular, certified return receipt, certified no return receipt, overnight and handwritten envelope with no return address mailing methods to ensure that an insured received my insurer client's EUO letter and notice. All but the handwritten envelope with no return address had been rejected and returned, even the UPS mailing (which required the insured to go to the effort of driving the unopened mailer back to UPS's nearest shipping depot for returning to me).

I don't take issue with the court's ruling in this case, especially since plaintiff apparently did not deny having received the EUO letters (although there is also no mention of State Farm having received the signed return receipts, in which case presumably those would have been submitted on its motion, as well), but when a party uses certified mail with or without return receipt, tracking and confirming delivery is as easy sitting down as a computer with Internet access.  Sending something via certified mail return receipt guarantees either: (1) delivery to the letter's address, as confirmed by the signed return receipt; or (2) non-delivery, as confirmed by the envelope eventually coming back marked either "unclaimed" or "rejected".  A certified envelope coming back is a pretty good clue that there was no receipt, if the letter or item was not also sent or mailed by some other method.

Is there a USPS mailing method in which delivery can be confirmed without requiring the recipient's signature?  Yes, Delivery Confirmation™. I'll be using that method now for sending EUO letters/notices to recalcitrant recipients.  Presumption of receipt is good.  Confirmation of receipt is better.  Acknowledgment of receipt (via a signed receipt) is best.

This Is the Way We Lick the Stamp, Lick the Stamp, Lick the Stamp...

NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS – LACK OF PERSONAL KNOWLEDGE OF OFFICE PRACTICES & PROCEDURES – PROOF OF MAILING – ATTORNEYS' FEES
Horton Med., P.C. a/a/o Steve Williams v. New York Cent. Mut. Fire Ins. Co.
(App. Term, 2nd Dept., decided 7/30/2008)

In REVERSING the Queens County Civil Court's award of summary judgment to the plaintiff, the Appellate Term, Second Department, majority (Patterson and Rios) held that plaintiff's motion for summary judgment should have been denied because the affirmation submitted by plaintiff's billing manager was insufficient to establish that she possessed personal knowledge of plaintiff's office practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff's moving papers.

The majority sustained the denial of New York Central's summary judgment cross motion, however, based on its finding that the affidavit executed by defendant's no-fault litigation examiner failed to establish that New York Central timely mailed its verification requests based upon its standard office practice or procedure designed to ensure that items are properly addressed and mailed.

With respect to the issue of attorneys' fees, the majority noted:

Since the issue is not raised, we do not pass on whether the eighth cause of action, seeking attorney's fees, constitutes a separate cause of action for pleading purposes under the No-Fault Law or whether it is merely an element of the damages recoverable on the substantive causes of action (see generally Rocanova v Equitable Life Assur. Socy. of U.S., 83 NY2d 603, 616 [1994]). We note, however, that even were we to find that it is not a separate cause of action for pleading purposes, we would, upon dismissing said "cause of action," deem the complaint amended to demand attorney's fees as part of the damages sought in each of the remaining causes of action (see Bunker v Bunker, 73 AD2d 530 [1979]).

Justice Golia authored a strong dissent to the majority's disapproval of the affidavit of New York Central's mailing procedures:

My disagreement with my colleagues turns, in large part, on the issue of what constitutes sufficient proof of mailing. I find that the affidavit of Ms. Annie Jordan, defendant's no-fault litigation examiner, is more than sufficient to establish that the verification requests were mailed and that the follow-up requests were timely and properly sent in accordance with the protocols set forth in the regulations. Unlike the facts in Hospital for Joint Diseases v Nationwide Mut. Ins. Co. (284 AD2d 374, 375 [2002]), in which the court found that the "employee had no personal knowledge that the . . . form had been mailed . . .," in this case, Ms. Jordan specifically states that "I have personal knowledge that in compliance with that policy and business duty . . . the verification letters were dated and generated, copies of the verification letters were mailed to Horton Medical P.C., 40 Horton Ave., Lynbrook, N.Y. . . . ."

She further stated in her affidavit that:

"It is [defendant's] office practice and [defendant's] claims examiners are under a business duty to mail all verification letters to the address applicant lists on the bills on the same day the verification letters are dated and generated. I have personal knowledge that in compliance with that policy and business duty, on 08/24/05, 09/08/05, 09/14/05, 09/28/05, 09/29/05, 10/11/05. 10/14/05, 11/03/05, 11/16/05, 12/19/05, the dates the verification letters were mailed to [plaintiff at] the address listed on the bills. Copies were also mailed to Plaintiff's assignor. I have personal knowledge that the postal service did not return the verification letters as being undeliverable."

As stated by the Court of Appeals in Nassau Ins. Co. v Murray (46 NY2d 828, 830 [1978]), the real question is whether or not the party has established the following:

"office practice must be geared so as to ensure the likelihood that a notice . . . is always properly addressed and mailed."

To the best of my understanding, the only reason that I can intuit as to why the majority finds this affidavit of mailing procedures to be insufficient is that it does not deconstruct the process itself. That is, it does not state that the office procedure entails affixing the proper postage, placing the envelopes in the care and custody of the U.S. Postal Service, etc.

I do not believe that such a strict catechism is necessary in order to trigger the legal presumption of mailing. Indeed, the plain meaning of the word "mailing" in and of itself denotes a process and not a concept. It is applicable only to the U.S. Postal Service. Black's Law Dictionary (8th ed 2004) defines "mail" as a noun meaning:

"one or more items that have been properly addressed, stamped with postage, and deposited for delivery in the postal system."

"Mail" is also defined as a verb to mean:

"to ensure that a letter, package, etc. is properly addressed, stamped, and placed into a receptacle for mail pickup."

It should not be the province of this Court to require that a party to an action recite all the component parts encompassed by the act of this unique word "mailing" in much the same way that "plebes" at a military academy are required to recite all the component elements of the act of "walking" before taking a walk. For the military to require such strict adherence can make sense. For the courts to do so is unreasonable.

Atten-hut! I can see it now. No-fault insurers forming precision mailing drill teams and competing in statewide competitions, perhaps as entertainment for the state legislators during one of their emergency summer budget sessions. Now that would be demonstrative evidence.

Policy Cancellation Prior to Total Fire Loss Upheld

HOMEOWNERS – FIRE LOSS – CANCELLATION NOTICE SUFFICIENCY & PROOF OF MAILING – AGENT E&O
Kaufmann v. Leatherstocking Coop. Ins. Co.
(3rd Dept., decided 6/12/2008)

How many of you would pay $87.40 to receive $92,243? In this case, had the plaintiff-insured made a minimum payment of $87.40 against his overdue homeowners policy premium by September 26, 2004, the fire destruction of his home 10 days later on October 6, 2004 would have been inside, rather than outside, his policy period to the tune of $92,243 in damages. But could've, would've, and should've in this case meant a disclaimer by Leatherstocking based on the policy's pre-loss cancellation, and the insured sued both Leatherstocking and the producing agent.

In AFFIRMING the Otsego County Supreme's grant of summary judgment to both defendants, the Third Department ruled that the cancellation notice was not defective under Insurance Law § 3425(c)(1)(A) for failing to set forth the amount due because that statutory section applies to auto, not homeowners, policies. The appellate court found that, in any event, the cancellation notice had cleary stated the minimum amount due. Additionally, the court credited the affidavits and testimony of Leatherstocking's former president, which established that the installment payment schedule was altered as a result of plaintiff's initial late payment, a circumstance fully disclosed on the billing statements he received, and that he failed to remit the necessary amount to keep the payments current thereafter. The court held:

Leatherstocking clearly met its burden of proving that the final notice of cancellation was properly mailed to plaintiff by submitting proof of the standard operating procedure for mailing such notices, as well as by submitting proof of the actual mailing of such notice to plaintiff through the affidavit of an employee with personal knowledge (see Thibeault v Travelers Ins. Co., 37 AD3d 1000, 1001 [2007]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2001]). Plaintiff's testimony that he never received the final notice is, without more, insufficient to rebut the presumption of receipt (see Badio v Liberty Mut. Fire Ins. Co., 12 AD3d 229, 230 [2004]). Consequently, Supreme Court properly granted summary judgment dismissing plaintiff's contract claims.

With respect to the insured's negligence or errors and omissions (E&O) claims against the producing agent based on the agent's alleged failure to notify the insured that his premium payments were past due, so as to avoid cancellation of the policy, the Third Department held:

Generally, insurance agents are not liable for actions other than obtaining insurance coverage for their insureds, unless a special relationship has been established between the parties (see Curanovic v New York Cent. Mut. Fire Ins. Co., 307 AD2d 435, 438 [2003]). Here, H & B and its principals submitted affidavits and deposition testimony establishing that no special arrangement was made with plaintiff through which they agreed to notify him of past due payments and plaintiff was specifically informed that he would be directly billed by Leatherstocking. Significantly, plaintiff did not submit proof sufficient to raise a question of fact on this issue as plaintiff's deposition testimony indicates that his claim is based upon conversations that he had with one of H & B's principals regarding an unrelated commercial policy. Consequently, Supreme Court properly granted summary judgment dismissing
plaintiff's negligence claim as well.

Going Postal -- Proving Mailing Again Proves Difficult for No-Fault Insurer

NO-FAULT – PROOF OF MAILING – STANDARD OFFICE PROCEDURE
Carle Place Chiropractic a/a/o Lorena Lopez v. New York Central Mut. Fire Ins. Co.
(Dist. Ct., Nassau Co., decided 5/29/2008)

Ugh. Another tedious proof of mailing case, this time going against the insurer.

Good reminder from Nassau County District Court Judge Andrew Engel, though, that there are three distinct methods to demonstrate proof of mailing:

1. to provide an affidavit from an individual with personal knowledge of the actual mailing;
2. where an acknowledgment by the adverse party that it received the subject document serves as an admission; or
3. where the party provides proof of a standard office procedure, which ensures that documents are properly addressed and mailed.

In this case, Nassau County District Court Judge Andrew Engel ruled that defendant New York Central Mutual failed to prove under Methods 1 & 3 that it had timely mailed seven NF-10's to the plaintiff provider based on the lack of medical necessity.

Although NYCM's Litigation Examiner alleged that she was "fully familiar with the facts herein based upon personal knowledge and review of the file that is maintained in the regular course of business by New York Central Mutual Fire Insurance Company", the court noted that her affidavit failed to indicate how she obtained this "personal knowledge." "Knowledge obtained upon a review of files and computer records, however, is not, as [NYCM's examiner] posits, 'personal knowledge.'"

Not sure whether this was a cut-and-paste undersight, but Judge Engel During noted that although MYCM's exminer's affidavit spoke of NYCM's general business practices as respects mailing in 2001, conspicuously absent from NYCM's examiner's affidavit was any allegation that she was familiar with NYCM's record keeping or mailing practices as it existed in 2006, the year in question. "Ms. Absher clearly has not demonstrated her knowledge of such practices and procedures as they existed at the time here in question and cannot establish proper proof of mailing of the denials in question." Judge Engel noted:

In essence, Ms. Absher describes the procedure as an employee taking the denial form, placing it in an envelope which is in turn placed in a bin in a central location in the office, then taken to a bin in the Defendant's mail room, the contents of which are subsequently taken from the mail room to the post office. When stripped of all of its excess verbiage, it appears that the Defendant's mailing procedure is to place the denial form in an envelope and to have someone subsequently mail same. The fact that the envelope containing the denial form is handled by a number of the Defendant's employees and makes a number of stops in the office before it is allegedly taken to the post office in no way ensures that the items are properly mailed. Absent from the Defendant's alleged office procedure is any indication that there exists a practice of comparing the names and addresses on the denial forms with that of the Plaintiff's billing, or the existence of a mailing list used to compare the names and addresses on the denial forms with the items mailed, or whether a list is maintained indicating the number of denial forms generated on a given day along with some identification of the matters in which the denial forms were generated, or whether anyone routinely checked to see if the total number of envelopes mailed matched the number of denial forms generated on a particular day, or a certificate of mailing identifying the items allegedly delivered to the United States Postal Service. * ** The use of any one of these practices or procedures would ensure the document's routine mailing. Without such safeguards, notwithstanding the fact that the Defendant follows the same procedure, there is no way for the efendant, or the court for that matter, to determine whether or not, or to even presume that all denial forms generated by the Defendant on a particular day are actually mailed. The procedure Ms. Absher describes does not take into account the possibility that an item of mail might get misplaced or lost anywhere between the desk at which it is printed and the United States Post Office. If this were to occur, under the practices and procedures described by Ms. Absher, no one would know and the Defendant would have no way of tracking the lost denial forms.

In addition to holding that NYCM failed to prove the mailing of the seven NF-10 forms, Judge Engel concluded that "[f]atally missing [from the negative IME report of NYCM's chiro is] any mention of the applicable generally accepted medical/professional standard and the plaintiff's departure therefrom."

Judge Engel then went on, in effect, to overrule his earlier decisions in Maple Medical Acupuncture, P.C. v. Motor Vehicle Accident Indem. Corp., 15 Misc.3d 1124, 841 N.Y.S.2d 219 (Dist. Ct., Nassau Co., 2007) and Elmont Open MRI & Diagnostic Radiology, P.C. v. Country-Wide Ins. Co., 15 Misc.3d 552, 830 N.Y.S.2d 886 (Dist. Ct., Nassau Co., 2007), to the exent that those decisions previously held that "[t]o make out a prima facie case, the Plaintiff would be obligated to establish the proper submission of the bills in question and the Defendant's failure to either pay or properly deny same within thirty (30) days of receipt thereof[.]" Instead, Judge Engel noted that "it is now widely recognized that plaintiffs establish 'a prima facie showing of their entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received and that payment of no-fault benefits was overdue.'"

Finding that plaintiff had demonstrated that its claims were timely submitted and remained unpaid, coupled with NYCM's adjudged failed to prove mailing of its NF-10s, the court granted plaintiff's cross motion for summary judgment.

Note to no-fault insurers -- banish your no-fault examiners to the mailroom for a day. Or a couple. Or a week. Or at least give them a cook's tour of the mailroom. Give them personal knowledge. As much of, or more, personal knowledge than they ever wanted. The first-hand, paper cut, paper dusted, clackety machined kind of personal knowledge of your standard office mailing procedures. Think of it as occupational crosstraining. Or prophylactic LOE on an internal order, so to speak. It might come in handy.

What Part of "No" Did You Not Understand? Provider's Action Dismissed as Premature Based on Billing Counsel's Refusal to Provide Verification

NO-FAULT – OUTSTANDING VERIFICATION REQUESTS – PREMATURE CAUSE OF ACTION – PROOF OF MAILING
Lenox Hill Radiology & MIA P.C. a/a/o Nila Sokol v. Global Liberty Ins.
(NYC Civil, New York Co., decided 5/21/2008)

The med billers over at Baker Sanders may want to tweak their form letters. Or stop suing their providers' no-fault recovery actions in New York Civil.

Here's the riveting screenplay-by-play from New York County Civil Court Judge Arlene Bluth:

Late April, 2007
FADE IN:

EXT. Somewhere in metro NYC (presumably)

Nila Sokol merits mention on a police accident report for her reported involvement in a motor vehicle accident.

FADE OUT.
June 7, 2007
FADE IN:

INT. Lenox Hill Radiology & Medical Imaging Associates, P.C.

Patient Sokol lies still on the MRI machine as it rat-a-tat-tats around her. Twice in fact. Once for $879.72, and the second time for $912.

FADE OUT.
June 12, 2007
FADE IN:

INT. Lenox Hill Radiology & Medical Imaging Associates, P.C.

Patient/assignor Nila again lies on the MRI machine a third time in five days as it rat-a-tat-tats another $878.67-worth around her.

FADE OUT.
Some days prior to June 26, 2007
FADE IN:

INT. Offices of BSBGFM&N

BILLING CLERK/WORD PROCESSOR/LETTER WRITER (V.O.)

Dear Insurance Company:

Although there's no legal dispute that we're aware of yet,

we represent Lenox Radiology blah blah blah...

Three times we verily say to thee,

thou must deal with us, only us, and only us.

Failure to to do may result in unnecessary [sic] litigation.

Any enclosed bills, forms, "doctor's reports, notes and narratives

were prepared solely by the above-referenced provider."

FADE OUT.
July 10, 2007
FADE IN:

INT. Offices of Global Liberty Insurance -- Workspace of no-fault claims examiner Cinnamon Houston

CINNAMON HOUSTON

Dear BSBGFM&N:

Thank you so much for your lovely form letter

and for forwarding your client's bill for $879.72,

which we received on June 26, 2007.

To verify this claim, would you please send us two items:

(1) a letter of medical necessity from the referring physician; and

(2) a claim form, like an NF-3 perhaps, with a valid signature of the provider.

FADE OUT.

July 17, 2007
FADE IN:

INT. Offices of BSBGFM&N

UNNAMED BSBGFM&N ATTORNEY

Re: Verification Compliance

Dear Ms. Houston:

Whatever we gave you was good enough

and this provider is not giving you anything else.

If you need something from someone else,

go ask them. Now pay the bill.

"Any further requests to this provider are deemed unnecessary

and in violation of 11 NYCRR 65-3.2 (c)."

FADE OUT.
August 13, 2007
FADE IN:

INT. Offices of Global Liberty Insurance -- Workspace of no-fault claims examiner Cinnamon Houston

CINNAMON HOUSTON
Dear BSBGFM&N:
Thank you for your July 17, 2007 letter

and stern warning but we really, really

need the stuff we asked for on July 10, 2007.

No kidding.

FADE OUT.

REPEAT THESE LINES TWICE MORE, THE THIRD TIME LEAVING OUT ANY RESPONSE TO THE REQUEST FOR INITIAL AND FOLLOW-UP REQUESTS FOR VERIFICATION.

Sometime after August 10, 2007 and prior to January 1, 2008
FADE IN:

INT. New York City Civil Court Clerk's Office

BSBGFM&N CLERK/PARALEGAL
Good morning. Would you please file this

and the other 3,187 summonses and complaints

that I've brought with me today?

COURT CLERK

Of course I will. Just pile them up over there.

Is this bleach free, recycled paper?

FADE OUT.

Sometime after January 1, 2008
FADE IN:

INT. Offices of Barry & Associates, LLC

DEFENSE ATTORNEY
GLI moves for summary judgment because

it timely requested but received

no verification of the three billings,

making this action premature.

CINNAMON HOUSTON

I personally prepared each verification request,

put each in an envelope,

checked that each was properly addressed,

and put each in my outgoing mail bin.

GLI's regular office practice is that the mail person

comes by at approximately 3:45 each afternoon,

collects and stamps the mail,

and then delivers it to the post office that day.

FADE OUT.

Sometime later
FADE IN:

INT. Offices of BSBGFM&N

BSBGFM&N ATTORNEY
Hold up there, defense attorney.

No summary judgment for you because:

(1) Ms. Houston did not swear that it was her duty

to ensure compliance with GLI's mailing procedures

and did not herself drop each verification request in the mailbox.

(2) In any event, GLI's verification requests were defective

because, even though we three times told it to do so,

GLI sent the verification requests only to us

and not also to our client, the provider.

FADE OUT.

May 21, 2008
FADE IN:

INT. Chambers of Judge Arlene P. Bluth

JUDGE BLUTH
The Court finds Ms. Houston's affidavit explaining preparation

of the verification requests and the mailing procedures with respect

to all of the verification requests (the initial three and the follow-up requests)

sufficient to prove timely and proper mailings.

* * * * *
Although plaintiff's opposition correctly notes that Ms. Houston

did not swear that it was her duty to ensure compliance with defendant's

mailing procedures and that she did not herself drop it in the mailbox,

it is enough that "the defendant submitted admissible evidence

in the form of an affidavit of an employee with knowledge of the defendant's

standard office practices or procedures designed to ensure

that items were properly addressed and mailed".

Ms. Houston's detailed affidavit fulfills this requirement.

The verification requests were sent to the plaintiff's law firm.

A letter properly mailed is presumed to have been received.

Although an associate of that law firm submitted an affirmation in opposition

to this motion, no attempt to rebut the presumption was made;

conspicuously absent from that affirmation is a simple denial

of receipt of the requests for verification.

* * * * *

The affirmant in opposition was in the position to,

but did not, even attempt to rebut the presumption

that plaintiff's law firm received the requests for verification

shortly after Ms. Houston stated that they were mailed.

Therefore, there is no question of fact as to proper mailing of the verification requests.

Having determined that defendant proved its timely and proper mailing

of the requests for verification, the Court turns to the other bases

for plaintiff's opposition. Plaintiff claims that defendant failed to present

a "good reason" why further verification was necessary; this Court disagrees.

This Court does not believe that it is unreasonable to ask for a letter

of medical necessity before a carrier pays more than $2500 for three MRIs

conducted during the course of one week, approximately six weeks

after an alleged accident. Defendant is not required to provide

a blank checkbook to plaintiff. Rather, defendant is entitled to find out

whether and why each MRI was prescribed; in other words,

the carrier is entitled to inquire as to the medical necessity before it pays the bills.

Plaintiff also claims defendant violated 11 NYCRR 65-3.6 (b) * * *

Plaintiff argues that because defendant did not send the follow-up

verification requests both to it and to its attorneys,

the requests are defective. This argument lacks merit.

Because the attorney's cover letter clearly put defendant on notice

that the law firm was the agent for the medical provider for all purposes

with respect to the bill submitted, sending the verification request

to the attorneys was the same as sending the request to the principal.

Accordingly, defendant's notice to the law firm-agent was notice to

the principal-provider as a matter of law. Under the circumstances

presented here, there was no need for the insurer to send another

copy to the principal.

In addition, in interpreting 11 NYCRR 65-3.6 (b), courts have found

that the additional notification to the applicant and its attorney

is required when the verification is requested from a third party,

not when, as here, the verification is requested from the applicant.

"Where verification is sought from a party other than the applicant,

the applicant is entitled to be timely informed of the nature of the

verification sought and from whom it is requested when, after an initial

verification request remains unsatisfied, a follow-up request is necessary".

This Court notes that this very plaintiff advanced the same arguments

that the second verification request was defective because the insurer

did not send an additional notification to the attorney's client/principal,

in Lenox Hill Radiology and Mia, P.C. (Dejesus) v Progressive Casualty Insurance,

Civ Ct, NY County, Index. No. 31019/07 (2008); there, albeit after trial,

Judge Jeffrey Oing also found the argument to be without merit.

Because plaintiff failed to respond to defendant's valid and proper

verification requests, the 30-day period within which defendant had

to either pay or deny the claim did not begin to run.

Therefore, plaintiff's claims for No-Fault benefits are not overdue,

this action is premature and must be dismissed.

For the forgoing reasons, defendant's motion for summary judgment

is granted and plaintiff's complaint is hereby dismissed.

FADE OUT.