Quality Health Supply Corp. v. Amica Mut. Ins. Co.
| Decision Date | 29 October 2021 |
| Docket Number | Index No. CV-736122-16/KI |
| Citation | 73 Misc.3d 1231 (A),156 N.Y.S.3d 704 (Table) |
| Parties | QUALITY HEALTH SUPPLY CORP., a/a/o Shea Evertz, Plaintiff, v. AMICA MUTUAL INSURANCE COMPANY, Defendant. |
| Court | New York Civil Court |
Plaintiff's Firm, Oleg Rybak, Attorney at Law, The Rybak Firm, PLLC 1810 Voorhies Ave, 3rd Fl., Ste. 7, Brooklyn, New York 11235 Telephone: (718) 975-2037 orybak@rybakfirm.com
Defendant's Firm: Lawrence N. Rogak, Attorney at Law, Office of Lawrence N. Rogak LLC, 3355 Lawson Blvd Unit 2, Oceanside NY 11572, Telephone: (516)-763-2996, InsuranceLawyer@yahoo.com
Decision, pursuant to Civil Procedure Law and Rules ("CPLR") § 4213 ("Trial by the Court"), following virtual trial via the Teams application platform, held on September 1, 2021, and trial briefs submitted by counsel representing both parties.
Papers submitted for the above-listed index Received:
Plaintiff's Trial Memorandum of Law August 30, 2021
Defendant's Trial Memorandum of Law August 30, 2021
Plaintiff Quality Health Supply Corp. ("Plaintiff") filed this case against Defendant Amica Mutual Insurance Company ("Defendant") on October 3, 2016 seeking assigned no-fault benefits in the amount of $1,452.56 for services it rendered to Assignor Shea Evertz, as well as statutory interest and attorney's fees, arising from injuries reportedly suffered by the assignor in an automobile accident in Brooklyn on October 1, 2015 while riding as a passenger in Defendant's policy-holder's car See Defendant's Exhibits 1 and 6.1 Defendant filed its answer on or about November 21, 2016. See D. Ex. 2.
By decision dated January 11, 2018, Judge Odessa Kennedy denied Defendant's motion for summary judgment and Plaintiff's cross-motion for summary judgment, finding that there were triable issues of fact as to the defense of non-receipt of certain bills. By decision dated January 7, 2020, that court sua sponte vacated its prior decision and re-addressed both the motion and the cross-motion, adding that it would also address Defendant's motion for summary judgment on the additional ground of policy exhaustion.
With respect to Defendant's argument that it was entitled to summary judgment because its policy limits had been exhausted,2 Judge Kennedy ruled that Defendant's reliance on a payment ledger absent information as to who and how the ledger was created and maintained, failed to meet the evidentiary requirements of CPLR § 4518 (D. Ex. 3). That Court further found that Defendant's references to the payment ledger's entries for "paid date", "service period start" and "service period end" were insufficiently supported with other proof such that the ledger was too ambiguous to make a prima facie showing that Defendant was entitled to summary judgment relief. Accordingly, that Court held that policy exhaustion and receipt of bills remained triable issues of fact thereby denying both motions. (T. at 19-20; D. Ex. 3).
On or about August 30, 2021, both counsel submitted trial memoranda of law in support of their respective positions. Defendant opposes any award to Plaintiff on the grounds that an insurer is not required to make additional payments where the policy limits of $50,000 in basic economic loss insurance coverage have been paid-out/exhausted, as it had done here. Plaintiff asserts entitlement to judgment because it submitted the disputed bills prior to the policy being exhausted and before other claims were submitted that Defendant did pay; therefore, Defendant is precluded from asserting that defense.
On September 1, 2021, this Court conducted a Microsoft TEAMS video trial. The parties stipulated that Plaintiff timely and properly submitted its bills to Defendant before the policy limits were exhausted, and that Defendant neither requested additional verification on the claims nor denied them (T. at 6, 14-15).3 The parties also stipulated that the testimony given by Maryanne Gentile, who was employed by Defendant as a Supervising Claims Representative and who testified on September 1, 2021 in Jules Francois Parisien, M.D. a/a/o Shea Evertz v. Amica Mutual Ins. Co. (CV 736124-16/KI), a case which involved the same attorneys, same accident and same assignor, would be given full force and effect in the instant case (T. 6).
On or about October 9, 2015, Plaintiff provided the assignor with certain medical supplies. See D. Ex. 1. Defendant made one payment to Plaintiff in the amount of $3,337.96 by check dated February 23, 2016. See Exhs. 5 and 6.4 Defendant neither made nor denied payment of several of Plaintiff's bills.5 See Ex. 1.
Defendant's Exhibits 5 and 6 demonstrate that Defendant made payments to providers of services or equipment beginning on or about February 22, 2016, with the last payment on or about October 24, 2016. Maryanne Gentile, was in charge of processing no-fault claims testified that Defendant paid-out $50,000 on behalf of Assignor Evertz, which was the personal injury protection ("PIP") limit on the policy and thereby exhausted the policy benefits when it was reached on October 24, 2016 (T. at 27, 33, 36, Jules Francois Parisien M.D. a/a/o Shea Evertz v. Amica Mutual Ins. Co. , CV 736124-16/KI, Sept. 1, 2021).6
Gentile testified that, even after the policy was exhausted, certain payments were made, but that these were expense-related payments and not claim-related payments, i.e., loss payments, that go towards the treatment of the claimant (T. at 51-52, CV 736124-16/KI; D. Ex. 5). She testified that a loss payment is one typically made to a service provider and the amount paid goes towards the $50,000 limit, whereas the expense payments are other types of fees, such as for an Independent Medical Examination ("IME") and to pay defense counsel (T. at 52, CV 736124-16/KI).
Issues Presented:
Whether Plaintiff is entitled to reimbursement, despite the policy payout limit of $50,000 having been reached by the Defendant.
Positions of the Parties:
Plaintiff argues that Defendant cannot argue policy-exhaustion as a reason for not paying its claims when it initially denied payment on other grounds prior to the policy being exhausted. In support of its argument, Plaintiff first cites New York's no-fault insurance rule/regulation 11 New York Codes, Rules and Regulations ("NYCRR") § 65-3.15 for the principle that payments for basic economic loss shall be made to the applicant and/or assignee in the order in which each service was rendered or each expense was incurred, provided claims therefor were made to the insurer prior to the exhaustion of the policy. Plaintiff cites Nyack Hosp. v. General Motors Acceptance Corp. , 8 N.Y.3d 294, 301, 832 N.Y.S.2d 880, 864 N.E.2d 1279 (2007) as treating 11 NYCRR § 65-3.15 as a "priority-of-payment rule" meaning that if Plaintiff has submitted a fully-verified claim to Defendant-insurer, Defendant must pay Plaintiff ahead of any other unpaid verified claims or expenses incurred later, up to the policy's limits.
Plaintiff cites Alleviation Med. Servs. v. Allstate Ins. Co. , 55 Misc 3d 44 (App. Term 2017), aff'd on other grounds, 191 A.D.3d 934 (2d Dep't 2021), for its application of the priority-of-payment rule and the Nyack Hosp. decision, where the Court found that:
by denying the claim, defendant implicitly declared that the claim at issue was fully verified. As we read Nyack Hosp. to hold that fully verified claims are payable in the order they are received, defendant's argument—that it need not pay the claim at issue because defendant paid other claims after it had denied the instant claim, which subsequent payments exhausted the available coverage—lacks merit. (Defendant's Trial Memorandum at 2 [quoting Alleviation Med. Servs. , 55 Misc 3d at 45 ]).
Plaintiff argues that Defendant cannot argue policy-exhaustion as a reason for not paying its claims when it failed to timely seek verification or timely deny the bills and paid claims to other providers ahead of Plaintiff's claims before the $50,000 threshold was reached.
Plaintiff further argues that the Appellate Term's decision in Alleviation Med. Servs. , followed by its decisions in several other cases including but not limited to Island Life Chiropractic, P.C., v. Commerce Ins. Co. , 56 Misc 3d 129(A) (App. Term, 2d Dep't 2017), requires this Court to find that "Defendant is prohibited from alleging as a defense to payment that the underlying insurance policy is exhausted for all claims that Defendant denied on other grounds prior to exhaustion." (Plaintiff's Trial Memorandum at 3).7 Following that assertion, Plaintiff is seeking payment for its bills of $699.00, $398.00 and $355.56 for services it provided on October 27, 2015, which it billed on or about November 12, 2015, for a total of $1452.56.
Defendant acknowledges that the Appellate Term in Alleviation Med. Servs. v. Allstate rejected Allstate's argument that policy exhaustion warranted summary judgment for previously received claims that had been denied. However, Defendant contends the Appellate Term did not hold that a policy exhaustion defense is precluded if not raised previously (see Defendant's Trial Memorandum of Law at pp. 3-4). Defendant further argues that the "different grounds" relied upon by the Appellate Division in affirming Alleviation Med. Servs. was that "Allstate failed to prove, in its summary judgment motion, that its policy was exhausted " (see Defendant's Trial Memorandum of Law at p.4). Defendant was not precluded from interposing a defense of policy exhaustion, it must only show that it did not "pick and choose in bad faith" as to which providers are paid prior to exhaustion (T. at 18-19).
Discussion:
New York's No-Fault insurance regulations provide that payments for basic economic loss shall be made to the applicant and/or assignee on account of any single accident and not exceed $50,000, at which point the policy-limit is deemed exhausted. See NY Ins. Law § 5102(a) ; 11 NYCRR §...
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