PDG Psychological P.C. v State Farm Mut. Ins. Co.

[*1] PDG Psychological P.C. v State Farm Mut. Ins. Co. 2005 NY Slip Op 50150(U) Decided on February 10, 2005 Civil Court Of The City Of New York, Kings County Nadelson, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 10, 2005
Civil Court of the City of New York, Kings County

PDG PSYCHOLOGICAL PC aao PHILIP DELLA CROCE, Plaintiff

against

STATE FARM MUTUAL INSURANCE CO., Defendant



97383/04

Eileen N. Nadelson, J.

Plaintiff instituted this action for first party benefits pursuant to New York's No-Fault Insurance Law. Plaintiff allegedly provided its assignor with psychological services. Its bill was received by Defendant insurer on August 8, 2003, as evidenced by the statements appearing on its Denial of Claim Form.

According to Defendant, on the same day it received Plaintiff's bill it mailed Plaintiff a verification request. This notice states:

We are writing to advise there will be a delay with regard to the disposition of

your Psychological claim.

Processing of this claim will be delayed pending our receipt of the results of an

independent medical examination scheduled to verify:

the injury is casually related to the motor vehicle accident [*2]

On September 10, 2003, Defendant avers that it mailed a second notice that states:

Pleased be advised we cannot consider payment due to the following:

We are delaying your bill pending the results of the causality IME

Plaintiff denies ever receiving these notices, and Defendant has not provided a legally sufficient proof of mailing said notices to Plaintiff.

On January 13, 2004, more than 30-days after receipt of the claim, Defendant issued its denial of claim, basing its denial of benefits on Plaintiff's "failure to provide requested verification and examination under oath to support the rendition and necessity of services and to establish your entitlement to benefits."

In its response to the instant motion, Defendant asserts that Plaintiff has engaged in a consistent pattern of fraud with respect to billing for psychological services under the No-Fault statute. In support of this contention, Defendant provides a form it sent to the Frauds Bureau of the New York State Insurance Department and the affidavits of various assignors in other claims who indicate that they did not receive the services billed for from Plaintiff. The court notes that no such affidavit is provided for the instant assignor.

11 NYCRR sec. 65-3.3 states that an insurer must either pay or deny a claim for first party benefits under the No-Fault law within 30 days of receipt of a properly completed claim. This 30-day time period may be extended if the insurer requests verification of the claim, and until such verification is received the 30-day period is tolled. See generally Westchester County Medical Center v. New York Central Mut. Fire Ins. Co., 262 AD2d 553, 692 N.Y.S.2d 665 (2d Dept. 1999)

I n order to meet the mandates of the regulations, the insurer must demonstrate that the request for verification was properly mailed to the claimant. See Hospital for Joint Diseases v. Nationwide Mut. Ins. Co., 284 AD2d 374, 726 N.Y.S.2d 443 (2d Dept. 2001). In the instant case, Plaintiff denies ever receiving such requests and Defendant has not refuted that allegation with an affidavit of a person with personal knowledge of the mailing or of the insurer's mailing procedures. Allstate Social Work and Psychological Svcs PLLC v. GEICO General Insurance Co., 2005 NY Slip Op. 50024(U), 2005 WL 107046 (NY City Civ. Ct). Therefore, for this reason alone the court may conclude that the 30-day period prescribed under 11 NYCRR sec. 65-3.3 was not properly tolled.

Furthermore, the wording of the notices as written above do not constitute proper verification requests. The notices, as submitted in the papers to the court, merely state that the processing of the claim will be delayed pending the results of the verification, but nowhere has Plaintiff been specifically asked to verify the claim. Consequently, these notices do not constitute proper verification requests that would toll the 30-day period pursuant to 11 NYCRR sec. 65-3.8. [*3]

However, even though Defendant failed to adhere to statutory time requirements, the court must still address Defendant's argument that Plaintiff's claims are not covered because of fraud. The lateness of a denial or the absence of a required denial does not prohibit the insurer from raising the defense of lack coverage based upon the fact or founded belief that the alleged injury did not arise out of an insured incident. A.M. Medical Services, P.C. v. AIU Insurance Company, 4 Misc 3d 1027A, 2004 NY Slip Op. 5108(U) (Nassau 2004). The issue of fraud is not intended to escape the notice of the court simply because of a late denial. Valley Psychological, P.C. v. Liberty Mutual Insurance Co., 195 Misc 2d 540, 760 N.Y.S.2d 627 (Albany 2002). However, although the affidavits submitted indicate serious problems with Plaintiff's billing practices and services, Defendant has failed to demonstrate any fraud with respect to the instant claim.

All of the documents appearing in the papers refer to different claims with different assignors, and the court cannot rule based on the adage that "where there's smoke, there's fire." The burden is on the Defendant to provide the court with adequate evidence of potential fraud with respect to the parties before it in order for the court to substantiate its decision. Therefore, the court cannot conclude that there was any problem with respect to the claim at bar.

Based on the foregoing, the court is forced to conclude that Plaintiff is entitled to summary judgment in the amount of $1200.92 plus statutory interest, attorney's fees and costs.

Dated: February 10, 2005

__________________________

EILEEN N. NADELSON, J.C.C.