Complete Orthopedic Supplies Inc. v. State Farm Insurance Company, 010368/2006

• Decision Date: 14 May 2007
• Docket Number: No. 010368/2006,010368/2006
• Citation: 2007 NY Slip Op 27192,16 Misc.3d 996,838 N.Y.S.2d 861
• Parties: COMPLETE ORTHOPEDIC SUPPLIES, INC., as Assignee of JOSEPH HARRIS, Plaintiff, v. STATE FARM INSURANCE COMPANY, Defendant.
• Court: New York Civil Court

16 Misc.3d 996

838 N.Y.S.2d 861

2007 NY Slip Op 27192

COMPLETE ORTHOPEDIC SUPPLIES, INC., as Assignee of JOSEPH HARRIS, Plaintiff, v. STATE FARM INSURANCE COMPANY, Defendant.

No. 010368/2006

Civil Court of the City of New York, Queens County.

May 14, 2007.

Cohen & Jaffe, Lake Success (Richard S. Jaffe and Stefan Belinfanti of counsel), for plaintiff.

Shapiro, Beilly, Rosenberg, Aronowitz, Levy & Fox, LLP, New York City (Shelly Hefefz of counsel), for defendant.

OPINION OF THE COURT

DIANE A. LEBEDEFF, J.

Currently, torrents of no-fault litigation deluge New York courts and no-fault requests for accelerated judgment swell our motion calendars.¹ Adding to the turmoil is that no-fault summary judgment motions pose undeniable difficulties, in large part, because traditional summary judgment formulations give poor guidance for their ready resolution.

Building a more workable approach to no-fault summary judgment motions requires recognition that the bulk of no-fault summary judgment issues are decided on the sufficiency of the papers and arguments of law regarding specific no-fault technicalities, as well as explicit identification of no-fault variations of traditional summary judgment precepts.² Using that foundation, construction of a series of relevant inquiries produces the following four-step analysis for no-fault summary judgment motions: (1) a threshold review of the three requisite showings of a no-fault plaintiff's prima facie case; (2) an assessment of the insurer's tendered proof of issuance and service of its response, if any; (3) a regulatory compliance review of any properly served insurer response, weighing a response's timeliness, form and substance; and (4), finally, a search for triable issues of fact in relation to any properly preserved, otherwise precludable defenses, as well as of defenses independent of the response process. This decision concentrates on these four areas of inquiry, with amplification and qualifications footnoted.

This same analysis is adaptable to identification of trial issues in no-fault cases and—by starting with the second step—to insurers' motions and cross motions for summary judgment. In relation to the case before the court, the plaintiff's motion and insurer's cross motion for summary judgment are subjected to the above pattern of analysis and, near the end of this decision, special consideration is given to the fee schedule dispute posed.

Step 1: Plaintiff's Prima Facie Threshold Review

As a matter of law, a no-fault plaintiff's summary judgment showing is extremely limited and is free of the normal summary judgment obligation to rebut defenses.³ A no-fault plaintiff's necessary prima facie showing consists of only three scant elements.

First, the claimant must present in its original motion papers the claim and assignment forms it submitted to the insurer (see, A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 127[A], 2005 NY Slip Op 50432[U] [App Term, 2d & 11th Jud Dists 2005] [as to claim form]; see, Inwood Hill Med. P.C. v Allstate Ins. Co., supra, 2004 NY Slip Op 50565[U], *7; T&G Med. Supplies, Inc. v State Farm Mut. Auto. Ins. Co., 7 Misc 3d 1017[A], 2005 NY Slip Op 50636[U] [Civ Ct, NY County 2005]). Second, necessary to a proper evidentiary foundation for the forms and related documents, a supporting affidavit must establish the tendered records are part of plaintiff's business records (see CPLR 4518 [a]; North Acupuncture, P.C. v State Farm Ins. Co., 14 Misc 3d 130[A], 2006 NY Slip Op 52523[U], *2 [App Term, 2d & 11th Jud Dists 2006]).⁴ Third, the no-fault plaintiff must prove that the claim and assignment forms were served upon the insurer.⁵

The adequacy of plaintiff's motion is tested by inspecting the plaintiff's affidavits and exhibits for sufficiency. If these three elements are made out and stand unrefuted, a no-fault plaintiff is entitled to a determination that it has made out its prima facie case.⁶

Step 2: Assessment of Proof of Issuance and Service of Insurer's Denial or Unsatisfied Request

Because no-fault plaintiffs' summary judgment motion papers need not counter pleaded denials and affirmative defenses, insurers bear the entire burden of establishing the existence of cognizable defenses (see generally, Mitchell S. Lustig and Jill Lakin Schatz, Outside Counsel, Summary Judgment Motions: Defending No-Fault Insurer, NYLJ, Oct. 26, 2005, at 4, col 4). This second analytic stage reviews the insurer's opposition papers to determine whether the insurer makes a threshold showing that it preserved a precludable defense or that unsatisfied verification requests exist.

Just as a plaintiff must do, and by reason of similar case law standards, the insurer must advance copies of all relevant communications, prove the service of each, and establish a business record foundation (see, Mitchell S. Lustig and Jill Lakin Schatz, Outside Counsel, Proper Proof of Mailing Under NY No-Fault Law, NYLJ, Oct. 2, 2006, at 4, col 4 [as to insurer's proof of mailing]). If the insurer claims an unsatisfied request is outstanding, the insurer must submit a copy of the original request and a follow-up request, establish issuance and service of the requests, and supply evidence of the failure to respond or cooperate (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2006]; Psychological Practice, P.C. v State Farm Fire & Cas. Co., 16 Misc 3d 12, 13 [App Term, 2d Dept 2007] [general statement of affiant's "personal knowledge" not sufficient factual support to establish failure to appear for examination]).⁷ However, if the insurer issued a denial while a verification request was outstanding, the request is deemed waived and is disregarded (King's Med. Supply Inc. v Kemper Auto & Home Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50450[U], *2 [App Term, 2d & 11th Jud Dists 2005]).

Step 3: Regulatory Compliance Review of Timeliness and Form of No-Fault Insurer's Denial or Verification Requests

If the defendant does establish that it issued and served a denial or verification requests, each communication must be examined to determine if it serves as a proper defense by conforming in timing, form and substance with the requirements of the "Rube-Goldberg-like maze" of the No-Fault Law and the "thicket" of governing Insurance Department regulations (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., supra, 90 NY2d at 286, 280).⁸

In relation to timeliness, the insurer must provide proof of "when the . . . [denial or] request . . . was mailed" (I & B Surgical Supply v New York Cent. Mut. Fire Ins. Co., 16 Misc 3d 4, 6 [App Term, 2d & 11th Jud Dists 2007]), and show mailing within the appropriate time period (see n 2). Typically, an insurer's affidavit refers to the date of printing of the form and describes a procedure which assured a properly addressed envelope containing the form was mailed on that day or the next business day.

As to form and substance of a denial, a "proper denial of claim must include the information called for in the prescribed denial of claim form . . . and must `promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated'" and cannot be amended after the applicable time period has passed (Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664 [2d Dept 2004], quoting General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979]). A denial is deficient if it is "factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law" (id. at 665, quoting Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d Dept 2004]).⁹

In relation to the form of a verification request, it must "request . . . information . . . relative to . . . [the] claim" from the claimant or identify to the claimant the persons or entities asked to provide the information (Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [2d Dept 1999]; Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2d Dept 2005] ["delay" letter explaining investigation underway not a verification request]). Belated litigation objections that such requests are unclear are generally rejected (Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 [2d Dept 1999] ["Any confusion . . . as to what was being sought should have been addressed by further communication, not inaction"]; Metroscan Med. Diagnostics, P.C. v Progressive Cas. Ins. Co., 15 Misc 3d 126[A], 2007 NY Slip Op 50500[U], *2 [App Term, 9th & 10th Jud Dists] [fact of response showed request sufficiently clear]).

On these issues, the court reaches a straightforward determination of law unless some cognizable question of ambiguity is raised by a litigant (compare Foley Prods. v Singer Corp., 133 AD2d 531 [4th Dept 1987] [where no ambiguity in document, no deferral for factual exploration]). Dismissal on the ground of prematurity follows if proper unsatisfied outstanding verification requests are established. Where a proper and timely denial is found, the court proceeds to the next analytic step.

Step 4: Summary Judgment Evaluation of Properly Cognizable Defenses

Only at this final stage are typical summary judgment principles applied to those defenses found preserved and unprecluded, as well as to any independent defenses, with recognition that the defendant bears the burden on such defenses for reasons set forth above.¹⁰ Some defenses can be resolved as a matter of law and others on the basis of evidentiary standards appropriate to the nature of the case. In ruling on such motions, when appropriate, courts should preserve judicial resources and not shy away from granting partial relief as to predicate elements where the record does not support a full determination (CPLR 3212 [e], [g]).

The point upon which opposition papers frequently stumble is the failure to present evidentiary material in admissible form (New York & Presbyt. Hosp. v...