Mega Supply & Billing Inc. v Allstate Ins. Co.
Annotate this CaseDecided on December 30, 2005
Civil Court, Kings County
Mega Supply & Billing Inc., a/a/o Alex Zubaty, Plaintiff,
against
Allstate Insurance Co., Defendant.
95623/04
Delores J. Thomas, J.
In this action brought by a health care provider to recover no-fault benefits as assignee of Alex Zubaty, plaintiff moves for an order granting summary judgment against defendant in the sum of $540.00 plus statutory interest together with statutory attorney's fees.
The No-Fault Law provides for payments for medical supplies provided to a person injured as a result of an accident arising out of the use or operation of a motor vehicle. To recover first-party benefits, a claimant must demonstrate a prima facie entitlement to summary judgment by setting forth proof that it submitted a claim, the fact and amount of losses sustained and that payment of benefits is overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v. Allstate Ins. Co., 5 AD3d 742 [2d Dept 2004]).
It is undisputed that defendant did not pay or deny the claim within the required 30-[*2]day period. Plaintiff contends there was no extension of the time period through verification requests. Although defendant requested an examination under oath (EUO), unless defendant can establish that the policy in effect entitled defendant to conduct an EUO and that it made a timely and proper verification request, tolling does not occur. Policies issued on or after April 5, 2002 must contain the revised prescribed endorsement to entitle the insurer to conduct an EUO (see, SZ Medical P.C. v. State Farm Mutual Auto Ins. Co., 9 Misc 3d 139 [A], 2005 NY Slip Op 51842 [U] [App Term, 1st Dept 2005]). Here, defendant has not demonstrated any basis to toll the 30-day period.
An untimely denial precludes defendant from interposing most defenses including the defense of lack of medical necessity (Amaze Med. Supply Inc. v. Eagle Ins. Co., 2 Misc 3d 139 [A], 2004 NY Slip Op 050279 [U] [App Term, 2d & 11th Jud Dists 2004]). However, defendant is not precluded from asserting the defense that the injuries do not arise out of a covered accident or a defense premised on staged accident fraud (see, Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Metro Med. Diagnostics v. Eagle Ins. Co., 293 AD2d 751 [2nd Dept 2002]). However, to withstand a motion for summary judgment, defendant must raise a triable issue of fact (Alvarez v. Prospect Park Hospital, 68 NY2d 320 [1986]).
The denial of claim form (Exhibit A, annexed to Notice of Motion) states: "All no fault benefits denied based in part on A) the EUO; B) failure to establish proof of claim; C) failure to establish that the injuries arose out of the use and operation of the insured vehicle; and D) the treatment was not causally related to the claimed injuries." In addition, in support of its fraud defense defendant submits the affidavit of Jeffrey Billington, claims adjuster in the no-fault department of defendant insurer. Billington does not state that he is a special insurance investigator or that he is trained in fraud detection. He asserts that plaintiff received aggressive medical treatment for a "relatively minor collision" as a basis for the EUO and to support a fraud claim. Billington concludes there is a "discernable pattern of circumstances and conduct consistent with staging of an accident." He refers to the fact that the assignor sought treatment six days after the accident from a provider other than his personal doctor, that he was referred to get an MRI on an initial visit and that he was involved in a prior accident (four years ago) which was settled by the same attorney now representing plaintiff.
The insurer has the burden to come forward with proof in admissible form to establish the basis for its belief that there is no coverage (see, Mount Sinai Hospital v. Triboro Coach Inc., 263 AD2d 11 [2d Dept 1999]). An insurer's "founded belief" that an accident was staged cannot be based upon unsubstantiated hypotheses and supposition (see, A.B. Medical Services v. Eagle Ins. Co., 3 Misc 3d 8 [App Term, 2d Dept 2003]). The statements made by defendant's counsel in the affirmation in opposition, that the injuries did not arise from the accident and/or that the accident was staged, are not based on personal knowledge and are of no probative value. In addition, the Court finds the assertions made by the claims representative are insufficient to support his finding of a pattern of circumstances and conduct which constitutes fraud. Defendant's belief that treatments were unduly "aggressive" or unnecessary might have been addressed through a defense of lack of medical necessity if there had been a timely denial. Defendant has not submitted any proof specific to the circumstances of the accident to support a "founded belief" that the accident was staged.
Accordingly, plaintiff's motion for summary judgment is granted. The clerk is directed to enter judgment in favor of plaintiff in the sum of $540.00 together with statutory interest and attorney's fees. [*3]
This constitutes the decision and order of the Court.
DATED: December 30, 2005
Brooklyn, New York
DELORES J. THOMAS
Judge Civil Court
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