Opinion
Index No.: 303241/12
01-03-2013
AETNA HEALTH PLANS as assignee of LUZ HERRERA, Plaintiff, v. HANOVER INSURANCE COMPANY, Defendant.
Present: Hon.
DECISION/ORDER
The following papers numbered 1 to 6 read on the below motion noticed on August 8, 2012 and duly submitted on the Part IA15 Motion calendar of October 4, 2012:
| Papers Submitted | Numbered |
| Pl.'s affirmation in support of motion, exhibits | 1,2 |
| Defs.'s affirmation in support of cross-motion, exhibits | 3,4 |
| Pl.'s affirmation in opp. to cross-motion, exhibits | 5,6 |
Upon the foregoing papers, Plaintiff Aetna Health Plans, as assignee of Luz Herrera ("Plaintiff") moves for summary judgment on the issue of liability on its claims for breach of contract due to defendant hanover Insurance Company ("Defendant")'s failure to pay Plaintiff's claims for no-fault benefits. Defendant opposes and cross-moves to dismiss the complaint for failure to state a cause of action, and/or for summary judgment pursuant to CPLR 3211(a)(7) and CPLR 3212.
I. Background
On April 25, 2008, Plaintiff's purported assignor, Luz Herrera, was involved in an accident while operating a notor vehicle insured for no-fault coverage by Defendant under policy number A1Y857223. Ms. Herrera also had private medical insurance through Plaintiff-Aetna Health Plan, an ERISA-qualified plan. Plaintiff treated with several different medical facilities after the accident. Plaintiff Aetna paid these bills, even though, as Plaintiff asserts, they should have been submitted to No-Fault. The total amount that Plaintiff-Aetna paid for its assignor's medical treatment was $19.649.10.
Defendant paid no-fault benefits for the medical bills submitted to it by medical providers until 2009, when Defendant advised Ms. Herrera that it would no longer pay for any further medical treatment. Defendant based its denial on two (2) physical examinations conducted at Defendants' request. Ms. Herrera, however, continued to treat for her accident related injuries through October 24, 2011.
On or about March 6, 2009, The Rawlings Company, as the subrogation recovery, company for Plaintiff, wrote to Defendant seeking reimbursement on behalf of Aetna of the medical bills it had paid out in the amount of $19,649,19. Defendant did not respond or issue a denial. On March 9, 2009. Rawlings sent a lien letter to Ms. Herrera advising her that Plaintiff holds a lien, as an ERISA-qualified plan, for payments it made for medical expenses incurred as a result of the motor vehicle accident. On January 6, 2010, Ms. Herrera, through her attorneys, submitted medical bills to Defendant, requesting payment for the bills or a denial. Defendant did not respond or issue a denial to that request.
On April 12, 2010, Ms. Herrera requested AAA Arbitration, seeking payment for the medical expenses paid by Aetna. At arbitration, Defendant conceded that it did not pay the medical bills and conceded that it did not issue any denials for the bills submitted. By decision dated February 14, 2011, however, the arbitrator denied Ms. Herrera's claims, finding that although Defendant did not pay or timely deny the claims, Defendant did not have to deny them because Herrera's private insurance company, Plaintiff-Aetna, already paid the bills, so that the bills were no longer in fact 'bills." If they were to be considered "bills," the arbitrator reasoned that Ms. Herrera lacked standing to make the claim and only Plaintiff-Aetna had standing against Defendant because it had paid the bills. This decision was affirmed by the Master Arbitrator.
In addition to the bills which were the subject of this arbitration, Ms. Herrera's medical providers continued to submit bills for Plaintiff for continued treatment she received as a result of the motor vehicle accident for the period of November 25, 2008 through October 24, 2011 in the additional amount of $23,525.73, paid by Plaintiff-Aetna in addition to the $19,649.19 already paid. On February 6, 2012, Ms. Herrera re-submitted all outstanding bills totaling $43,174.83 to Defendant, requesting payment or a denial.
Based on the foregoing, Plaintiff argues that there is no issue of fact that Defendant breached its contract with Plaintiff's assignor by failing to reimburse Plaintiff for medical expenses it paid out.
Defendant opposes the motion and cross-moves for summary judgment and/or dismissal pursuant to CPLR 3212 and CPLR 3211(a)(7). Defendant argues (1) Plaintiff lacks standing because it is not a "health care provider" underthe statute and thus is not entitled to proceed under the statute; (2) Plaintiff does not have a proper assignment. Ms Herrera has no private right to recover no-fault benefits against Defendant that were paid for by Plaintiff, therefore she had no such right to "assign" to Plaintiff; and (3) Plaintiff cannot bring a cause of action for breach of contract against Defendant, since Plaintiff is not in privity of contract with Defendant, and Plaintiff was not an intended third party beneficiary of Ms. Herrera's contract with Defendant. In support of its motion for summary judgment, Defendant asserts that the "bills" submitted were not actually "bills," and thus Defendant's obligations to respond under the applicable statute were not triggered. Even if the documents are considered "bills," Defendant argues that they were not received within the statutory time frame.
II. Standard of Review
(1) Motion for Summary Judgment under CPLR 3212
"[T]he proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers." Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324 (1986). There is no requirement that the proof for said motion be submitted in affidavit form, rather, the requirement is that the evidence proffered be in admissible form. Muniz v. Bacchus, 282 A.D.2d 387 (1st Dept. 2001). Accordingly, affirmations from attorneys having no personal knowledge of the facts are not evidence and offer nothing more than hearsay. Reuben Israelson v. Sidney Rubin, 20 A.D.2d 668 (2nd Dept. 1964); Erin Federico v. City of Mechanicville, 141 A.D.2d 1002 (3rd Dept. 1988).
Once a movant meets his initial burden, the burden shifts to the opponent, who must then produce sufficient evidence, also in admissible form, to establish the existence of a triable issue of fact. Zuckerman v. City of New York, 49 N.Y.2d 557 (1980). When deciding a summary judgment motion the role of the Court is to make determinations as to the existence of bonafide issues of fact and not to delve into or resolve issues of credibility. Knepka v. Tollman, 278 A.D.2d 811 (4th Dept. 2000).
Lastly, because summary judgment is such a drastic remedy, it should never be granted when there is any doubt as to the existence of a triable issue of fact. Rotuba Extruders v. Ceppos, 46 N.Y.2d 223 (1978). When the existence of an issue of fact is even debatable, summary judgment should be denied. Stone v. Goodson, 8 N.Y.2d 8 (1960).
(2) Motion to Dismiss 3211(a)(7)
In determining a motion to dismiss, the Court's role is ordinarily limited to determining whether the complaint states a cause of action. Frank v. DaimlerChrysler Corp., 292 A.D.2d 118 (1st Dept. 2002). In other words, the determination is not whether the party has artfully drafted the pleading, but whether deeming the pleading to, allege whatever can be reasonably implied from its statements, a cause of action can be sustained. See Stendig, Inc. v. Thorn Rock Realty Co., 163 A.D.2d 46 (1st Dept. 1990); Leviton Manufacturing Co., Inc. v. Blumberg, 242 A.D.2d 205 (1st Dept. 1997)(on a motion for dismissal for failure to state a cause of action, the court must accept factual allegations as true). When considering a motion to dismiss for failure to state a cause of action, the pleadings must be liberally construed (see, CPLR §3026). The court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit into any cognizable legal theory". Leon v. Martinez, 84 N.Y.2d 83, 87-88 (1994). The motion should be denied if, from the pleading's four corners, factual allegations are discerned which taken together manifest any cause of action cognizable at law. McGill v. Parker, 179 A.D.2d 98 (1st Dept. 1992). Factual allegations normally presumed to be true on a motion pursuant to CPLR 3211 (a)(7) may properly be negated by affidavits and documentary evidence. Wilhemlina Models, Inc. v. Fleisher, 19 A.D.3d 267 (1st Dept. 2005).
III. Analysis
At the outset, this court agrees with Defendant that the matter must be dismissed because Plaintiff-Aetna is not a "health care provider" under the statute. In support of the cross-motion, Defendant relies on the unpublished decision Health Insurance Plan of Greater New York a/s/o Jamwantie Chatoredussy v. Allstate Ins. Co., Ind. No. 106881/2006, N.Y. County., 2007 (Kaplan, J.). Although non-binding, the decision is certainly informative since its fact pattern is similar to the case at bar. 11 NYCRR 65-3.11 [a] provides, in relevant part, for the payment of no-fault benefits "directly to the applicant...or upon assignment by the applicant...[to] the providers of health care services." The term "providers of health care services" "logically denotes the specific provider or providers of health care services to the applicant/insured giving rise to the assigned claim." (A.M. Medical Services, P.C. v. Progressive Cas. Ins. Co., 2012 N.Y. Slip. Op. 06902 [N.Y.A.D., 2nd Dept., Oct. 17, 2012]). The Appellate Term has held that where, for example, services are not performed by the billing provider or its employees, but rather by a treating provider who is an independent contractor, the billing provider is not entitled to direct payment of assigned no-fault benefits under 11 NYCRR 65-3.11 [a]. (See Craig Antell, D.O., P.C. v. New York Cent. Mut. Fire Ins. Co., 11 Misc.3d 137[A] [App. Term, 1st Dept. 2006]). In this matter, Plaintiff, a health insurer, is not a "provider of health care services" as contemplated under 11 NYCRR 65-3.11. Health Insurance Plan of Greater New York a/s/o Jamwantie Chatoredussy v. Allstate Ins. Co., Ind. No. 106881/2006, N.Y. County., 2007 (Kaplan, J.). Plaintiff makes no showing that it or its employees provided specific health care services so as to be recognized as a "provider." See also Gen. Counsel Opinion 1-28-2008, which determined that an HMO had no standing as a subrogee to proceed against an automobile operator's no-fault insurer under a claim of equitable subrogation. While the opinion letter from the General Counsel of the State Insurance Department is not binding, (see Aetna Cas. & Sur. Co. v. County of Nassau, 221 A.D.2d 107 [2nd Dept. 1996]), is entitled to deference unless "irrational or unreasonable." A.M. Medical Services, P.C. v. Progressive Cas. Ins. Co., 2012 N.Y. Slip. Op. 06902 [N.Y.A.D., 2nd Dept., Oct. 17, 2012]).
Next, Plaintiff cannot sustain a cause of action against Defendant for breach of contract, even if they established that (1) they provided "bills" to Defendant and demanded payment, and (2) Defendant either ignored the demand or denied payment. Plaintiff is not in privity of contract with Defendant, and has not shown that it was an intended third-party beneficiary of Defendant's contract with Ms. Herrera. Instead, Plaintiff is seeking as a purported assignee to recover its own losses, not those of the insured. (Federal Ins. Co. v. Spectrum Ins. Brokerage Services, Inc., 38 A.D.3d 213 [1st Dept. 2007]).
Moreover, Plaintiff cannot sustain a cause of action under subrogation principles. "Subrogation, an equitable doctrine, allows an insurer to stand in the shoes of its insured and seek indemnification from third parties whose wrongdoing has caused the loss for which the insurer is bound to reimburse." (Kaf-Kaf, Inc. v. Rodless Decorations, Inc., 90 N.Y.2d 654, 659 [1997]). The doctrine is triggered where an insured is driving a car and is hit and injured by another driver, and files a claim with her insurer. In that scenario, the insurer has the right under the common law of subrogation to "stand in the shoes" of the insured and seek remuneration from the third-party driver/tortfeasor for the amount paid to the insured. (ELRAC, Inc. v. Ward, 96 N.Y.2d 58 [2001]). There is, however, no authority permitting a health insurer to bring a subrogation action against a no-fault insurer for sums the health insurer was contractually obligated to pay to its insured. Health Insurance Plan of Greater New York a/s/o Jamwantie Chatoredussy v. Allstate Ins. Co., supra.
IV. Conclusion
For the foregoing reasons, Defendant's cross-motion to dismiss the complaint pursuant to CPLR 3211(a)(7) is granted, and the complaint is dismissed with prejudice. Plaintiff's motion for summary judgment on the issue of liability is therefore denied as moot.
This constitutes the Decision and Order of this Court.
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Hon. Mary Ann Brigantti-Hughes, J.S.C.