Mercury Cas. Co. v Encare, Inc.

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Mercury Cas. Co. v Encare, Inc. 2011 NY Slip Op 32166(U) July 13, 2011 Sup Ct, NY County Docket Number: 102610/2011 Judge: Saliann Scarpulla Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. ANNEDON711812011 [* 1] -- SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: SAhlANM SCARPULL4 PART Justice Iy INDEX NO. Index Number : 102610/2011 MERCURY CASUALTY CO. MOTION DATE MOTION SEQ NO. vs ENCARE INC. Sequence Number : 001 :otfor IN O W INo(*). 1No(8). DISMISS ACTION Replying Affldavlts Upon the foregoing papem, It is ordered that thls motlon Is C u dd 1k- 4~ ~ J & M ~ FILED NEW YORK COUNTY CLERK'S OFFICE Pe Dated: 1. CHECK ONE: ..................................................................... .......................... .MOTION IS: GRANTED CHECK IF APPROPRIATE: ................................................ 0SETTLE ORDER 2. CHECK AS APPROPRIATE: 3. 1 CASE DISPOSED 0DO NOT POST 0GRANTED IN PART 0OTHER 0SUBMIT ORDER 0FlDUCl ARY APPOINTMENT 0REFERENCE DENIED [* 2] Index No.: 102610/2011 Submission Date: 6/8/20 1 Plaintiff, -against- ENCARE, INC. A/A/O/ ROBERT MANLEY, DECISION AND ORDER Defendant. --------_--_ll-1--_______________111____------------------------------ X For Defendants: Werner, Zaroff, Slotrick, Stem & Ashkenazy 3 60 Merrick Road 360 Merrick Road Lynbrook, NY 11563 For PlaintiE The Law Offices of Jason Tenenbaum, P.C. 595 Stewart Avenue Suite 550 Garden City, NY 11 590 Papers considered in review of motion to dismiss and cross motion for summary judgment: Notice of Motion.. ........................... 1 Aff in Supp of Motion to Dismiss ........ .2 Notice of Cross Motion., ...................3 Aff in Reply ................................. .4 Aff in Opposition to Cross Motion.. .......5 JUL 1 8 2011 FILED - . HON. SALIANN SCARPULLA, J.: NEW YORK COUNN CLERKS OFFICE In this declaratory judgment action, defendant Encare, Inc, ( Encare ) moves to dismiss plaintiff Mercury Casualty Company s ( Mercury ) complaint and Mercury cross moves for partial summary judgment. This action arose out of a December 27, 2007 motor vehicle accident, in which Encare s assignor Robert Manley ( Manley ) was injured. Mercury, an automobile insurance liability carrier, issued non-party Nelson Rodriquez an insurance policy, which included a no-fault endorsement providing coverage to all eligible injured persons in the amount of $50,000. As a no-fault injured person, Manley was entitled to receive no-fault benefits for all necessary expenses. Encare subsequently provided Manley with 1 [* 3] medical-treatment for his injuries and submitted a bill to Mercury for its skilled nursing services and home health care services in an amount totaling $23,760.00. To date, Mercury has paid $10,504.00. After Mercury s failure to pay all charged amounts, Encare submitted the matter to for the American Arbitration Association ( AAA ) adjudication. At a hearing, Mercury asserted that the amount paid to Encare was the usual and customary fee for a home health aide. On November 3,2010, Arbitrator Lucille S. DiGirolomo ruled in favor of Encare and ordered Mercury to pay an additional $9,306.00 for services rendered by Encare to Manley, noting that Mercury s denials of the amounts billed were not on prescribed forms, missing the dates the billing was received by the insurance carrier, and untimely, Further, the arbitrator noted that even if the denials were proper and timely, Mercury did not substantiate its claim that the reimbursement was made in accordance witkthe usual and customary fee for the specific services rendered. On November 19, 2010, via letter, Mercury filed a demand for Master Arbitral review. On February 1, 20 10, the Master Arbitrator upheld the lower arbitrator s ruling. Thereafter, Mercury commenced this action seeking a judgment declaring that it did not owe Encare any additional monies for services rendered by Encare to its assignor Robert Manley, except for interst due on late payments and attorneys fees. In its complaint, Mercury asserted that it paid the reasonable geographic and customary value of the services . . . in accordance with the Workers Compensation fee schedule. Encare now moves to dismiss the complaint, arguing that Mercury failed to state a cause of action under CPLR $32 1 l(a)(7) because Mercury s fee schedule defense is 2 [* 4] precluded as a matter of law. Mercury cross-moves for partial summary judgment, arguing that it paid the usual and customary amount for services rendered in full satisfaction of its obligations and that it was not precluded from asserting a fee schedule defense. Discussion Mercury alleges that Encare s charges were excessive and inconsistent with the usual and customary fees provided in the Workers Compensation fee schedule. A nofault claim must not exceed the legally permissible fee. Insurance Law $5 108(c); see Goldberg v. Corcoran, 153 A.D.2d 113 (2ndDept. 1989); see ulso Jamil M Abraham M D . P.C. v. Country Wide Ins. Co., 3 Misc.3d 130A (N.Y.App. Term, Sup. Ct. 2004). To successfblly invoke a fee schedule defense for non-payment of charges, however, an insurer s denial of a claim must be timely. See P.L.P Acupuncture, P.C. v. Dept. 2008). An insurer Travelers Indem. Co., 19 Misc.3d 126A (N.Y. App. Term, lSt must either pay or deny a claim for no-fault vehicle insurance benefits within thlrty days from the date an applicant provides proof of a claim. See Fair Price Medical Supply Corp. v. Travelers Indem. Co., 10 N.Y.3d 556 (2008); Mount Sinai Hosp. v. Chubb Group o Ins. Companies, 43 A.D.3d 889 (2nd f Dept. 2007). An insurer that fails timely to deny is precluded from offering a defense against payment of that claim. Hosp. for Joint Diseases v. Travelers Prop. Cas. Inc. Co., 9 N.Y.3d 3 12 (2007). A fee schedule defense does not fit into the narrow lack of coverage defense exception to the preclusion rule. See A.B. Med. Sews. PLLC v. Prudential Prop. & Cas. Ins. Co., 11 Misc.3d 137A (N.Y. App. Term, 2 dDept. 2006); Struhl v. Progressive Cas. 3 [* 5] Ins. Co., 7 Misc.3d 138A-(N.Y. App. Term, Znd Dept. 2005). A fee schedule defense, therefore, is only preserved if an insurer has complied with the thirty-day rule and issued a timely denial. Here, the record shows that Mercury failed to issue a timely denial. Mercury does not deny that it failed timely to deny Encare s claims. Instead, Mercury argues that its fee schedule defense should not be precluded because there is no First Department ruling on this specific defense. Mercury, however, has failed to demonstrate any reason for this Court to deviate from the current Appellate Term case law in New York, which provides that a fee schedule defense is precluded if an insurer s denial is untimely, As Mercury s fee schedule defense is precluded, Encare s motion to dismiss the complaint is granted. As Mercury s fee schedule defense is precluded due to a failure to comply with the thirty-day denial rule, Mercury has not asserted a valid cause of action and therefore Encare s motion to dismiss is granted. In accordance with the foregoing, it is 4 ~ I [* 6] ORDERED that the defendant Encare, Inc. ddo Robert Manley s motion to - dismiss the complaint is granted and the complaint is dismissed; and it is further ORDERED that plaintiff Mercury Casualty Company s cross motion for partial summary judgment is denied; and it is further ORDERED the Clerk of the Court is directed to enter judgment accordingly. This constitutes the decision and order of the Court. Dated: New York, New York FILED July 13, 2011 ENTER 5 NEW YORK COUNTY CLERK S OFFICE

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