NY Rehab Pain Mgmt. & Med. Servs., PC v. State Farm Auto Ins. Co.
| Decision Date | 24 May 2016 |
| Docket Number | No. 13672/13.,13672/13. |
| Court | New York Supreme Court |
| Parties | NY REHAB PAIN MANAGEMENT & MEDICAL SERVICES, PC a/a/o Gamel Elshekh, Plaintiff, v. STATE FARM AUTO INS. CO., Defendant. |
Baker Sanders, LLC, Garden City, Attorney for the Plaintiff.
Bruno, Gerbino, & Soriano, LLP, Melville, Attorney for the Defendant.
| Papers | Submitted: |
| Notice of Motion | x |
| Affirmation in Opposition | x |
| Reply Affirmation | x |
Upon the foregoing papers, the Defendant STATE FARM AUTO INS. CO.'s motion (“State Farm”) seeking an order pursuant to CPLR § 3212 granting it summary judgment dismissing the complaint against it or in the alternative, an order pursuant to CPLR § 3212(e) granting it partial summary judgment, is determined as provided herein.
The Plaintiff in this action, N.Y. Rehab Pain Management & Medical Services, P.C. (“NY Rehab”) seeks to recover first party no-fault benefits for services allegedly supplied to its assignor, Gamal Elshekh, to treat him for injuries he allegedly suffered as the result of an automobile accident on December 26, 2008. State Farm maintains that the Plaintiff's failure to appear for an Examination Under Oath (“EUO”) is violative of both the terms and conditions of the applicable insurance policy as well as the No–Fault regulations and entitles it to dismissal of the complaint.
The facts pertinent to the determination of this motion are as follows:
In response to 21 bills submitted by N.Y. Rehab for services it allegedly provided Elshekh on December 29th, 30th and 31st and January 2nd, 3rd, 5th, 6th, 7th, 8th, 9th, 12th, 14th and 17th, by letter dated February 2, 2009, which was allegedly mailed on February 3rd, State Farm allegedly notified N.Y. Rehab that it must submit to an EUO, which would be conducted on March 2, 2009. Similarly, in response to bills submitted by N.Y. Rehab for services it allegedly provided Elshekh on January 17th, 19th, 21st, 26th and 28th, by letter dated February 11, 2009, which was allegedly mailed on February 12th, State Farm allegedly notified N.Y. Rehab that payment for those services would not be made either until it appeared for the previously noticed EUO. A copy of the February 2nd letter was enclosed with that notification. Once again, in response to bills submitted by N.Y. Rehab for services it allegedly provided Elshekh on January 17th, 19th, 21st, 24th, 26th, 27th, 28th and 31st, by letter dated February 17, 2009, which was allegedly mailed on February 18th, State Farm allegedly notified N.Y. Rehab that payment for those services would also not be made until it appeared for the previously noticed EUO and a copy of the February 2nd letter was again enclosed.
Finally, in response to N.Y. Rehab's bills submitted for services it allegedly rendered to Elshkeh on January 28th, and 31st and February 2nd and 4th, by letter dated February 24, 2009, which was allegedly mailed on February 25th, State Farm allegedly notified N.Y. Rehab that payment for those services would not be made until it appeared for the previously noticed EUO and a copy of the February 2nd letter was again enclosed.
State Farm alleges that no one appeared for the EUO on March 2, 2009 and so by letter dated March 5, 2009, which was allegedly mailed on March 6th, State Farm alleges it sent a follow up letter to N.Y. Rehab rescheduling its EUO for March 23, 2009 with respect to the aforementioned bills as well as with respect to additional bills it had received for services N.Y. Rehab allegedly provided Elshek on Febraury 9th, 11th, 13th, 16th, 18th and 23rd.
State Farm alleges that no one appeared for that EUO, either, as a result of which, by notices dated March 31, 2009, which were allegedly accompanied by Explanations of Review, State Farm allegedly notified N.Y. Rehab, via NF–10s, that all of the aforementioned claims were denied based on its policy violation, i .e., its failure to appear for its EUO. Those notices were allegedly mailed on April 1, 2009.
One hundred and eleven additional claims for services rendered between February 9, 2009 and May 18, 2010 were also allegedly denied via NF–10s and accompanied by Explanations of Benefits based upon N.Y. Rehab's failure to provide the verification that had previously been sought, i.e., again, based upon its failure to appear for the EUO on March 2, 2009 and March 23, 2009. Two other bills for services rendered February 4, 2009 and June 11, 2009, in the amount of $ 33.70 each along with statutory interest, were paid on July 9, 2013. Seven other claims for services allegedly rendered to Elshek on January 8, 2009, January 28–31, 2009, January 31, 2009, June 9, 2009 and June 18–22, 2009 were allegedly denied on June 26, 2013 as duplicative and claims for services allegedly rendered on January 26, 2009 and February 2, 2009 were allegedly denied as duplicative on October 13, 2013.
State Farm maintains that after an investigation by its Special Investigative Unit, it determined that it had a reasonable and objective basis to request an EUO to ascertain whether N.Y. Rehab was entitled to collect no-fault benefits under 11 NYCRR 65–3.16(a)(12). More specifically, in support of its motion, State Farm has submitted an affidavit of its investigator Joseph Farrington who attests that he had reason to believe that N.Y. Rehab might be fraudulently incorporated as the purported owner of the facility was suspected of being a nominal owner. See, State Farm Mut. Auto. Ins. Co. v. Robert Mallela, 4 NY3d 313 (2005).
In support of its motion, State Farm has submitted copies of all of the letters sent to N.Y. Rehab accompanied by Certificates of Mailing Lists indicating that correspondence was sent on each of the cited dates to “NY REHAB PAIN MANAGEMENT' at “32–44 31st ST, Long Island City, N.Y. 11106.”
State Farm has also submitted the affidavit of David Warfel who attests in detail to State Farm's business practices and procedures which lead to the creation of the all of the notices allegedly sent to N.Y. Rehab, including the letters dated February 2, 2009, February 11, 2009, February 17, 2009, February 24, 2009, March 5, 2009 and March 31, 2009. He also attests to the creation of the NF–10 denial of claim forms denying claims for services provided from February 9, 2009 up to and including May 18, 2010.
While State Farm relies on the Certificates of Mailing issued by the United States Post Office, standing alone, they establish only that something was mailed to N.Y. Rehab on the dates in question, however, they do not establish what was mailed.
Nevertheless, State Farm has submitted an affidavit of George Perry attesting to the procedures regarding both the creation and the mailing of requests for EUOs as well as for additional verification and denials that were in place at the pertinent times. He explains how those documents are generated and how the Claim Service Assistant(s) compile them in packages for mailing, create the Certificates of Mailing logs, bundle the envelopes along with the corresponding log and places them in a bin for pick up by its mail department. He explains that beginning in April 2008, State Farm has, in its ordinary course of business, paid for and secured a Certificate of Mailing from the United States Post Office for all letters containing requests for EUO and/or additional verification as well as for denials or NF–10s. The Post Office places a postmark on the Certificates of Mailing log indicating the date on which it took possession of the listed envelopes and those Certificates are returned to State Farm's Office where they are maintained.
State Farm has also submitted the affidavit of Kevin O'Leary, Esq ., of Bruno, Gerbino & Soraiano, LLP, the attorneys for State Farm. He attests that he was present at the office where the EUOs were scheduled on March 2, 2009 and March 23, 2009. He attests that had someone from N.Y. Rehab appeared at the office on either of those dates, the receptionist would have so notified him and he would have either conducted the EUO himself or assigned another attorney to do so. He attests that no one appeared on either of the dates on behalf of N.Y. Rehab and that no one contacted his office to confirm or reschedule the EUOs, either.
It is well established that summary judgment may be granted only when it is clear that no triable issue of fact exists. (Alvarez v.. Prospect Hospital, 68 N.Y.2d 320 [1986] ) A party seeking summary judgment bears the initial burden of demonstrating its entitlement to judgment as a matter of law by submitting evidentiary proof in admissible form. (Zuckerman v. City of New York, 49 N.Y.2d 557, 562 [1980] ) A failure to make that showing requires the denial of that summary judgment motion, regardless of the adequacy of the opposing papers. (Ayotte v. Gervasio, 81 N.Y.2d 923 [1993] ) If the movant makes a prima facie showing, the burden shifts to the opposing party to produce evidentiary proof sufficient to establish the existence of material issues of fact. (Alvarez v. Prospect Hospital, supra at 324) “[T]o defeat a motion for summary judgment the opposing party must show facts sufficient to require a trial of any issue of fact.' “ (Friends of Animals v. Associated Fur Manufacturers, Inc., 46 N.Y.2d 1065, 1067–1068 [1979], quoting CPLR § 3212, subd. [b] ) “On a motion for summary judgment, facts must be viewed in the light most favorable to the non-moving party”. (Ortiz v. Varsity Holdings, LLC, 18 NY3d 335, 339 [2011] )
11 NYCRR 65–1.1provides as follows:
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