Opinion
604031/03.
Decided July 12, 2005.
In this declaratory judgment action, plaintiff seeks an order declaring that defendants are not entitled to coverage under a personal automobile insurance policy. In this motion, defendants El Chiropractic, P.C. (El Chiropractic), Inwood Hill Medical, P.C. (Inwood Hill), and New Psychology, P.C. (New Psychology) (together, the providers) seek summary judgment (CPLR 3212) dismissing the complaint, as well as judgment on their counterclaims. Plaintiff cross-moves for summary judgment on its complaint.
Background
Defendants Ana Pina, Antonio Medina, and Jack Cambrelen were occupants of a vehicle that was allegedly involved in an August 26, 2003, single-car, accident. The vehicle so involved, was owned by defendant Luis T. Figueroa, and was listed as a covered automobile on policy No. WY459328 (the policy) as issued by plaintiff to Figueroa on July 2, 2003.
According to plaintiff, it received notice of the alleged accident on or about September 3, 2003. Plaintiff asserts that as soon as it became aware of the details of the alleged accident, it deemed the accident suspicious. Plaintiff maintains that its suspicions were raised because: (1) Figueroa was not in the car at the time of the accident; (2) none of the occupants in Figueroa's vehicle had any familial relationship to him; and (3) this claim was the second on the policy, which at the time of the alleged accident had been in force less than 2 months.
Plaintiff contends that because of its suspicions regarding the nature of the accident, it sought examinations under oath (EUOs) of the three occupants of Figueroa's vehicle (i.e., Pina, Medina, and Cambrelen) as well as of Figueroa, the policyholder. Plaintiff has proffered copies of letters, dated September 30, 2003, which were sent to Pina, Medina, Cambrelen, and Figueroa. Those letters contain requests that each of the addressees appear at individually scheduled EUOs. Proof of mailing is proffered only for the letters addressed to Pina, Cambrelen, and Figueroa. See Notice of Cross Motion, Exh. B.
It is uncontroverted that none of Pina, Medina, Cambrelen, or Figueroa appeared at an EUO nor responded to plaintiff's September 30, 2003 written requests. According to plaintiff, follow-up attempts to schedule EUOs were made on October 17, 2003 and November 7, 2003. Plaintiff has included copies of the returned envelopes for the October 17, 2003 letters sent to Pina, Cambrelen, and Figueroa. No proof of mailing, however, is provided for any of plaintiffs' alleged November 7, 2003 letters. When Pina, Medina, and Cambrelen failed to appear at the first scheduled EUO, plaintiff allegedly sought the additional verification of an Independent Medical Examination (IME) for each of those defendants. Plaintiff has proffered letters allegedly sent by "Independent Review Services, Inc." scheduling those IMEs, and later attempting to reschedule them. However, neither proof of mailing nor an affidavit as to mailing is proffered for any of those alleged attempts.
It is uncontested that Pina, Medina, Cambrelen, and Figueroa failed to appear at any of the scheduled dates for an IME, and that, to date, none of the defendants has appeared for an EUO or an IME.
Plaintiff acknowledges that during the time it was attempting to obtain the EUOs and IMEs, plaintiff began receiving bills from the medical and psychological care providers. In response to the bills that were submitted for the assignees Pina, Medina, and Cambrelen, plaintiff wrote that: "[t]here will be a delay in our consideration of the medical bills for this patient because of the following reasons: An examination under oath has been scheduled for some of the parties in this accident. Your bill will be considered when all of the pertinent information has been received."
On November 25, 2003 and November 26, 2003, after Pina, Medina, Cambrelen, and Figueroa failed to appear for any of the scheduled EUOs or IMEs, plaintiff sent denials of all claims to defendant providers (NF-10s). See Notice of Cross Motion, Exh. N.
Plaintiff then initiated this action to seek a declaration that by failing to appear at either the EUOs or IMEs, Pina, Medina, Cambrelen, and Figueroa breached the policy conditions and, thus, were not entitled to coverage for injuries allegedly sustained as the result of the alleged August 26, 2003 accident.
In this motion, defendants contend that they are entitled to full reimbursement, totaling $6398.58 (plus interest and attorney fees), of certain claims assigned to them by Pina and Cambrelen, because: (1) plaintiff's letters deferring a decision on the providers' claim' until the Pina and Cambrelen's appearance at EUOs was insufficient to meet the requirements of Insurance Law § 5106 (a); and (2) plaintiff was required to timely notify the occupants of the vehicle (i.e., Pina, Medina, and Cambrelen) of their rescheduled EUOs and IMEs, and failed to do so.
Discussion
Pursuant to CPLR 3212, the movants and cross-movant each seek summary judgment.
Under that section, a movant must establish entitlement to a court's directing judgment in its favor as a matter of law. See Alvarez v. Prospect Hosp., 68 NY2d 320 (1986). "[I]t must clearly appear that no material and triable issue of fact is presented" ( Glick Dolleck, Inc. v. Tri-Pac Export Corp., 22 NY2d 439, 441), because summary judgment is a drastic remedy that should not be invoked where there is any doubt as to the existence of a triable issue or when the issue is even arguable. See Zuckerman v. City of New York, 49 NY2d 557, 562 (1980).
Insurance Law § 5106 (a) governs the payment of no-fault benefits to claimants, and requires that, "[p]ayments of first party benefits . . . shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained." Regulations regarding these requirements are contained in 11 NYCRR 65.15 (g) (3), i.e., "[w]ithin 30 calendar days after proof of claim is received, the insurer shall either pay or deny the [no-fault] claim in whole or part."
However, a provider that claims standing as the result of an assignment of benefits is entitled to recover for services rendered only when a properly executed assignment is proffered. See 11 NYCRR 65-3.11(b)(2); see also TG Medical Supplies, Inc. v. State Farm Mut. Auto. Ins. Co., 7 Misc 3d 1017 (Civ Ct, NY County 2005); Doshi Diagnostic Imaging Services v. Progressive Ins. Co., 7 Misc 3d 1003 (Dist Ct, Nassau County 2005). Such assignment must include at least "the assignor and assignee's name, the date of the accident, and be signed and dated by the assignor." Inwood Hill Medical P.C. v. Allstate Ins. Co., 3 Misc 3d 1110, 1110 (Civ Ct, NY County 2004).
It is only after providers offer proof of their standing that their claims can be considered. In this motion, defendant providers have proffered two assignments for Pina (to Inwood Hill and to El Chiropractic), and one complete and one incomplete assignment for Cambrelen (the complete assignment is to El Chiropractic). See Notice of Cross Motion, Exh.D. No other complete assignments have been proffered. It has previously been held that the No-Fault law regulations, including those regarding assignments, are to be strictly construed ( see Presbyterian Hosp. in City of New York v. Atlanta Cas. Co., 210 AD2d 210 [2nd Dept 1994]; see also Doshi Diagnostic Imaging Services v. Progressive Ins. Co., supra), and, therefore, this court will only consider for payment those claims set forth pursuant to complete valid assignments. Those claims are as follows:
Patient Provider Dates of Service Amount of Claim
Pina In wood Hill 9/9/03 $154.30
Pina In wood Hill 9/10-11, 9/15-19, 9/24540.80
Pina In wood Hill 9/10, 9/15, 9/17 9/19, 9/24371.45
Pina In wood Hill 9/1080.02
Pina In wood Hill 9/16440.22
Pina In wood Hill 9/24230.09
Pina El Chiropractic 9/9-11, 9/15-19 9/24324.34
Cambrelen El Chiropractic 9/9-11, 9/15-19 9/24324.34
Further, because plaintiff, in its cross motion, is seeking an order declaring that all claims by the defendant providers on behalf of Pina, Medina, and Cambrelen are not covered under Figueroa's policy, the providers were obligated to proffer assignments from those defendants to prove standing to assert those claims. Because the providers have not so proffered, any claims by the providers for services to Pina, Medina and Cambrelen that are not listed above are dismissed.
As to the above claims for which complete assignments have been proffered, once the provider has proved its standing to recover for services, a court may then consider whether an insurer has made a timely denial of a claim. Failure of an insurer to make a timely denial of benefits within 30 days of receipt of a claim or to request verification of the claim will result in a defendant insurer waiving all defenses, except for those of lack of coverage and fraud. See Presbyterian Hosp. v. Maryland Casualty Co., 90 NY2d 274 (1997); see also New York and Presbyterian Hosp. v. Allstate Ins. Co., 12 AD3d 579 (2nd Dept 2004). Because plaintiff here has not alleged fraud or lack of coverage in its complaint, it was required to make a timely denial of defendants' eligible claims or to pay them to the appropriate provider.
Plaintiff maintains that it received notice of the accident on September 3, 2003. See Scriber Affirmation, ¶ 6. However, the providers' claims (as submitted on NF-3s) were not submitted until various dates in October and November of 2003. If an insurer seeks verification of the claim after receipt, the insurer may, within 10 business days after receipt of a claim, "forward to the parties required to complete them, those prescribed verification forms it will require prior to payment of the initial claim." 11 NYCRR 65-3.5 (a). Because defendants have not proffered any claims as the result of the alleged August 26, 2003 that were submitted to plaintiff in September 2003, this court holds, as a matter of law, that if the proffered September 30, 2003 letters were sent to Pina, Medina, Cambrelen, and Figueroa, those letters were timely requests for verification.
Both EUOs and IMEs are included as additional verification for the purposes of the Insurance Law. See 11 NYCRR 65-1.1 (d) and 11 NYCRR 65-3.5 (d).
"In order to meet the mandates of the regulations, the insurer must demonstrate that the request for verification was properly mailed to the claimant." PDG Psychological PC v. State Farm Mut. Ins. Co., 6 Misc 3d 1022, 1022 (Civ Ct, NY County 2005). Plaintiff has proffered sufficient proof that the September 30, 2003 letters were properly mailed to Pina, Cambrelen, and Figueroa.
No proof of mailing is proffered for any letters to Medina, but, in their counterclaims, the providers are not seeking to recover for services rendered to Medina.
Once Pina, Cambrelen, and Figueroa failed to respond to the letters allegedly sent by plaintiff, plaintiff was required to make follow-up attempts at verification. The Regulation that requires insurers to follow-up if verification has not been received (i.e., 11 NYCRR 65-3.6[b]) provides that follow-up requests for attendance at EUOs must be sent within 40 calendar days of the original request. See also Ocean Diagnostic Imaging P.C. v. Lumbermens Mut. Cas. Co., 7 Misc 3d 135 (AT, 2 and 11, 2005).
Because the EUOs were scheduled to be held on October and 7th and 8th of 2003, if the October 17, 2003 follow-up letters requesting attendance at rescheduled EUOs were actually sent to Pina, Cambrelen and Figueroa, they too were timely. Plaintiff has proffered sufficient proof that the October 17, 2003 letters were properly mailed to Pina, Cambrelen, and Figueroa so that those letters may serve as the follow-up verification requests. However, timeliness of the verification request is not the only consideration when a court reviews a no-fault claim. The content of the verification request must also be reviewed. "An insurer must stand or fall on reasons for denial stated in the NF-10" ( King v. State Farm Ins. Co., 218 AD2d 863 [3rd Dept 1995]), and any request for verification must be judged in that light. See Lee v. American Transit Ins. Co., 304 AD2d 713 (2nd Dept 2003). Here, there is no question that, given the suspicions of the insurer/plaintiff, as listed above, the requests for EUOs were reasonable and directly related to the disclaimer reasons stated in the NF-10s.
An insurer's notification to the provider that the claim is pending while verification is sought is also subject to court scrutiny. See Ocean Diagnostic Imaging P.C. v. Lumbermens Mut. Cas. Co., supra. "[A]n insurer may not rely on a letter . . . that merely informs a claimant that a decision on the claim is delayed pending an investigation, . . . without specifying a particular form of verification and the person or entity from whom the verification is sought." Melbourne Medical, P.C. v. Utica Mut. Ins. Co., 4 Misc 3d 92, 92 (App Term, 2d 11th Jud Dists 2004). It is uncontested that, as respects the claims asserted by the providers, plaintiff sent letters listing the claim and alleged accident victim, and stating that "[t]here will be a delay in our consideration of the medical bills for this patient because . . . [a]n examination under oath has been scheduled for some of the parties in this accident." This verbiage, which contains the name of the claimant and the type of verification requested, is sufficient to toll the-30 day period for filing of the NF-10s.
Defendants further contend that plaintiff's NF-10s were not sufficiently specific nor timely. Because an insurer's time to respond to a claim does not begin to run if a claimant fails to respond to an insurer's timely request for verification ( see St Vincent's Hosp. of Richmond v. American Transit Ins. Co., 299 AD2d 338 [2nd Dept 2002]; see also Stephen Fogel Psychological, PC v. Progressive Cas. Ins. Co., 7 Misc 3d 18 [App Term, 2d 11th Jud Dists 2004]), plaintiff's delay until November 25, 2003 and November 26, 2003 to send out the NF-10s was not consequential.
"An NF-10 must be made with a high degree of specificity of the grounds on which the disclaimer is predicated and an insurer will not be permitted to assert a defense not specifically made in the NF-10." Universal Acupuncture Pain Services P.C. v. Lumberman's Mutual Casualty Co., 195 Misc2d 352, 352 (Civ Ct, Queens County 2003); see also Metropolitan Radiological Imaging P.C. v. State Farm Ins. Co., 7 Misc 3d 675 (Civ Ct, Queens County 2005); All-County Medical Diagnostic P.C. v. Progressive Cas. Ins. Co., ___ Misc 3d ___, 795 NYS2d 434 (Dist Ct, Nassau County 2005).
Plaintiff has included copies of the NF-10s allegedly sent to defendants regarding the claims in question. A review of that document is indispensable to deciding whether its content is sufficient to give notice to a claimant of the specific reasons for an insurer's denial of a claim. This court holds, as a matter of law, that the NF-10s in question, which state that the claims were denied based upon the claimants' failure to appear at the scheduled independent medical examination ( see Notice of Cross Motion, Exh. N) were sufficiently specific to deny the claims assigned by Pina and Cambrelen.
Defendants finally deny that the alleged NF-10s were mailed to either defendant Inwood Hill or to New Psychology. Defendants do not deny that the NF-10s were timely mailed to El Chiropractic. Although plaintiff has not proffered proof of mailing of such notices to Inwood Hill, plaintiff has offered the affidavit of Christine Hemingway (Hemingway), a claims representative in the employ of plaintiff, who contends that she has personal knowledge that plaintiff "timely and properly issued NF-10 forms denying all of the [providers'] bills."
Because this court has held above that New Psychology has no standing to assert claims on behalf of either Pina or Cambrelen, the only question is whether the NF-10s were timely mailed to Inwood Hill. Hemingway's affidavit is sufficient to raise a question of material fact as to whether such NF-10s were timely mailed to Inwood Hill. Therefore, what is to be determined at trial is limited to whether or not the NF-10s as respects Pina and Cambrelen were timely mailed to Inwood Hill.
The question then becomes what are the ramifications of Pina and Cambrelen's failure to appear at any of the scheduled EUOs or the IMEs. If allegedly injured persons fail to appear at scheduled EUOs and IMEs rebuts the presumption of medical necessity of a provider's service. See Stephen Fogel Psychological, PC v. Progressive Cas. Ins. Co., supra. Although failure to appear rebuts the presumption of the medical necessity of Inwood Hill's treatment of Pina and Cambrelen, it does not require dismissal of the action. Id. A question of fact is raised, and the provider is still entitled to show medical necessity of the treatment at trial. See Millennium Medical Diagnostics, P.C. v. Liberty Mut. Ins. Co., 2001 WESTLAW 1803470 (AT, 2 and 11, 2001), affd 306 AD2d 388 (2nd Dept 2003); see also SM Supply Inc. v. Peerless Ins. Co., 6 Misc 3d 127 (AT, 2 and 11, 2004).
Lastly, this court must address plaintiff's intimation that there may have been fraud involved in these claims. See Copy of Newspaper Article attached to Notice of Cross Motion, Exhibit O. Although an insurer is "not precluded from asserting the defense that the alleged injuries were causally unrelated to the accident" ( Ocean Diagnostic Imaging P.C. a/a/o Nataliya Gerber v. New York Cent. Mut. Fire Ins. Co., 7 Misc 3d 132(A), 132 (AT, 2 and 11, 2005), and this court is mindful of the ever-increasing number of fraudulent claims arising out of the no-fault law ( see Stephen Fogel Psychological, PC v. Progressive Cas. Ins. Co., supra), the gratuitous inclusion of an article on widespread fraud taking place in automobile accidents in this State has no relevance to this action. Plaintiff has not alleged fraud in its complaint, nor has it proffered any evidence that Pina, Medina, Cambrelen, Figueroa, or any of the providers committed fraud. Therefore, although it is true that fraud or lack of coverage would negate the requirement that an insurer deny a "no-fault" claim within 30 days, those exceptions are not applicable here.
Order
Accordingly, it is hereby
ORDERED that defendants' motion for summary judgment is denied; and it is further
ORDERED that plaintiff's cross motion for summary judgment is granted only to the extent of declaring that plaintiff has no obligation to pay any claims assigned by Antonio Medina to Inwood Hill Medical, P.C., New Psychology, P.C., and El Chiropractic, P.C., as well as dismissing the counterclaims of: (1) New Psychology, P.C. for services provided to Ana Pina and Jack Cambrelen; and (2) Inwood Hill Medical, P.C. for services provided to Jack Cambrelen; and is otherwise denied.