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]).

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.

(Billing Manager or Corporate Officer) - (Personal Knowledge) = 0(Summary Judgment)

NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS – LACK OF PERSONAL KNOWELDGE OF OFFICE PRACTICES & PROCEDURES – NECESSITY OF MEDICAL SUPPLIES

In Vista Surgical Supplies, Inc. a/a/o Anna Vastardis v. American Protection Ins. Co. (App. Term, 2nd Dept., decided 6/12/2008), Infinity Health Prods. a/a/o Cecelia Morgan v. Amex Assur. Co. (App. Term, 2nd Dept., decided 6/12/2008) and Alur Med. Supply, Inc. a/a/o Douglas Gomez v. Country-Wide Ins. Co. (App. Term, 2nd Dept., decided 6/12/2008) , the Appellate Term AFFIRMED the denial and REVERSED the granting of summary judgment to plaintiff medical providers because:

The affidavit submitted by plaintiff's "billing manager and corporate officer" was insufficient to establish that said person 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 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]). Consequently, the judgment is reversed, the order granting plaintiff's motion for summary judgment is vacated and plaintiff's motion for summary judgment is denied. Infinity Health Prods a/a/o Morgan v. Amex Assur. Co.

In Alur Medical Supply, Inc. a/a/o Douglas Gomez v. Country-Wide Ins. Co., the Appellate Term AFFIRMED the denial of Country-Wide's cross motion for summary judgment because the affirmed IME report submitted in support of that cross motion "did not address the necessity for medical supplies and, therefore, did not establish prima facie that the supplies provided by plaintiff were not medically necessary."

In Vista Surgical Supplies, Inc. a/a/o Anna Vastardis v. American Protection Ins. Co., the Appellate Term AFFIRMED the granting of American's cross motion for summary judgment because the affirmed IME report submitted in support of that cross motion "established prima facie that the supplies furnished by plaintiff were not medically necessary and plaintiff did not present any evidence refuting defendant's prima facie showing[.]"

Admissibility of Claim Form Not Established by Attorney Affirmation

NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS
Struhl a/a/o John Capehart v. Alea N. Am. Ins. Co.
(App. Term, 2nd Dept., decided 5/27/2008)

Kings Civil's grant of summary judgment to plaintiff medical provider REVERSED.

"The affirmation of plaintiff's counsel did not lay a sufficient foundation to establish that what counsel represented to be plaintiff's claim form was admissible under the business records exception to the hearsay rule (see CPLR 4518; 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])."

Business Records Inadmissible Without Basis for Alleged Personal Knowledge Set Forth

NO-FAULT – ADMISSIBILITY OF BUSINESS RECORDS
First Aid Occupational Therapy, PLLC a/a/o Israel Alvarvenga & Travis Fox-Ross v. State Farm Fire & Cas. Co.
(App. Term, 2nd Dept., decided 5/272008)

Kings Civil's grant of summary judgment to plaintiff medical provider REVERSED.

The Appellate Term agreed with State Farm on appeal that the affidavit by plaintiff's employee submitted in support of its motion failed to lay a proper foundation for 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 employee failed to set forth a basis to support her conclusory assertion that she 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."

Provider Fails to Make Prima Facie Showing for Summary Judgment

NO-FAULT – MEDICAL NECESSITY – PRIMA FACIE SHOWING – ADMISSIBILITY OF CLAIM FORMS – SO-ORDERED STIPULATION
Rockaway Med. & Diagnostic, P.C. a/a/o Kareem Bruce v. Utica Mut. Ins. Co.
(App. Term, 2nd Dept., decided 4/30/2008)

Plaintiff medical provider moved for summary judgment on its $1,758.40 in billings, submitting in support of its motion an affirmation from plaintiff's counsel, an affidavit from plaintiff's office services supervisor, and an unaffirmed, undated letter of medical necessity. Defendant Utica Mutual opposed plaintiff's motion based on the asserted inadmissibility of the documents annexed to plaintiff's motion papers and cross-moved for summary judgment based on the plaintiff's assignor's failure to appear for an EUO and plaintiff's asserted breach of a "so-ordered" discovery stipulation (one prepared by counsel and submitted to the judge for a "so ordered" signature).

In REVERSING the lower court's award of summary judgment to the plaintiff, the Appellate Term agreed with Utica Mutual that plaintiff had failed to establish the admissibility of the claim forms annexed to its motion papers:

The affidavit submitted by plaintiff's office services supervisor was insufficient to establish 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. In any event, plaintiff failed to annex to its motion for summary judgment the claim forms upon which it sought to recover. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment.

With respect to Utica Mutual's cross motion, however, the Appellate Term sustained the lower court's denial of that cross motion, holding that Utica Mutual had failed to demonstrate that plaintiff's causes of action were premature (Editor's Note: Utica Mutual apparently must also have asserted an incomplete verification defense). The court also pointed out that plaintiff did not breach the so-ordered discovery stipulation because discovery was stayed during the pendency of plaintiff's summary judgment motion, in accordance with CPLR § 3214(b) and the so-ordered stipulation made no provision for extensions being prohibited without leave of court (Practice Pointer: consider including such a provision in so-ordered discovery stipulations).

The decision says nothing either way about Utica Mutual's defense based on the assignor's failure to appear for an EUO. Don't know what became of that defense or why Utica Mutual apparently argued incomplete verification rather than breach of the EUO condition in support of its cross motion and/or on appeal.