Quality Psychological Servs., P.C. v New York Cent. Mut. Fire Ins. Co.

[*1] Quality Psychological Servs., P.C. v New York Cent. Mut. Fire Ins. Co. 2010 NY Slip Op 52081(U) [29 Misc 3d 1228(A)] Decided on November 22, 2010 Civil Court Of The City Of New York, Kings County Levine, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 22, 2010
Civil Court of the City of New York, Kings County

Quality Psychological Services, P.C., a/a/o Ivy Jones, Plaintiff,

against

New York Central Mutual Fire Insurance Company, Defendant.



032581/09



Defendant:Gullo & Associates, LLP

520 86th Street

Brooklyn, NY 11209

.

Plaintiff:Law Offices of Melissa Betancort, P.C.

155 Kings Highway, 3d Floor

Brooklyn, NY 11223

Katherine A. Levine, J.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion

PapersNumbered

Notice of Motion and Affidavits Annexed.............. ..............................1

Notice of Cross-Motion and Affidavits Annexed.. ...............................2

Answering Affidavits............................................................................. .3

Replying Affidavit of defendant.............................................................4

Exhibits.....................................................................................................

Other: .......................................................................................................

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows: [*2]

This case presents another permutation to the court's prior rulings that the notification requirements and time lines contained in the insurance regulations governing verification requests, as contained in 11 NYCRR §§65-3.5 and 3.6, do not apply to independent medical examinations ("IMEs") that are noticed and performed prior to the insurance company's receipt of the statutory claim forms ("pre claim IME's"). Here, the court is asked to decide whether it is reasonable to deny a claim for psychological services based upon an assignor's failure to appear for a acupuncture/chiropractic IME scheduled prior to the defendant's receipt of the instant claim.

Plaintiff Quality Psychological Services, P.C., ("plaintiff" or "Quality Psychological"), a medical services company, commenced this action pursuant to Insurance Law 5106(a) to recover the sum of $1,221.04 for psychological services it provided to its assignor Ivy Jones ("assignor" or "Jones"). Defendant New York Central Mutual Fire Ins. Co., ("defendant" or "NY Central") moves for summary judgment based upon its timely denial that the assignor failed to appear for two IMEs, one scheduled for a date prior to the defendant's receipt of the statutory form claim and another scheduled right after it received the statutory form.

Plaintiff provided medical treatment to its assignor in December 2008 for injuries she allegedly suffered as a result of a motor vehicle accident on November 25, 2008. Prior to its receipt of the claim for psychological services, defendant, by letter dated December 30, 2008, scheduled the assignor for an acupuncture/chiropractic IME to be held on January 14, 2009. The assignor failed to appear on January 14, 2009. On that same date, defendant received a claim for psychological services from plaintiff and, by notice dated January 15, 2009, re-scheduled the assignor's acupuncture/chiropractic IME for February 4, 2009. After the assignor again failed to appear at the scheduled IME, defendant timely mailed out its denial on the grounds that the assignor had failed to attend two scheduled IMEs.

As a condition to coverage under the revised Personal Injury Endorsement ("PIP") "the eligible person shall submit to medical examinations by physicians selected by or acceptable to the insurer...when, and as often as, the Company may reasonably require." 11 NYCRR §65 - 1.1(d) [Sec. I. Conditions, Proof of Claim (b)]. Another condition to coverage under this section is that an eligible person shall, as may reasonably be required, submit to examinations under oath ("EUO") by any person named by the insurer. Id.

Under the same "Conditions" provision, the section provides that "[n]o action shall lie against the [c]ompany unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage." In Inwood Hill Medical, P.C. v. General Assurance Co., 10 Misc 3d 18, 20 (1st Dept. 2005), the First Department ruled that "inasmuch as attendance at a medical examination is a condition of coverage under Section 65-1.1, it follows that an eligible injured person's failure to comply with a request for an IME precludes an action against an insurer for payment of health services provided."

In Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 7 Misc 3d 18, 20 (App. Term, 2d Dept. 2004) aff'd 35 AD3d 720 (2d Dept. 2006), the Appellate Term found that [*3]an insurer had the right to conduct an IME prior to its receipt of the statutory claim form or its statutory equivalent which "under the regulations, trigger the verification process." Since the right to an IME, at this juncture was not afforded by the verification procedures and because "the detailed and narrowly construed verification protocols are not amenable to application at a stage prior to submission of a claim form", Id at 21, the only party that needed to be notified of the pre-claim IME was the assignor-injured party. Fogel, supra, 35 AD2d at 721.[FN1]

Based upon Fogel, this court has ruled that an insurer was not required to send EUO requests to the provider's attorney, as required by the verification procedures, for a pre claim EUO that it wished to conduct. Prime Psychological Services, P.C.(Ortiz) v. Nationwide Property and Cas. Ins. Co., 24 Misc 3d 230 (Civil Ct., Richmond Co. 2009). It has also determined that an insurance company need not notify prospective medical service providers that it will not reimburse them for any services they may provide to an assignor after a determination has been made, pursuant to an independent medical examination ("IME") performed on the assignor, that further medical services are not medically necessary ("Pre-claim IME cut off notice."). Bayside Rehab. & Physical Therapy, P.C. v. GEICO, 24 Misc 3d 542 (Civil Ct., Richmond Co. 2009).

Plaintiff contends that it was unreasonable for defendant to deny its claim for psychological services based upon the assignor's failure to appear at a pre claim IME for a different medical service over which it had no control or responsibility. Defendant contends that once an assignor breaches a policy condition, it may deny all subsequent claims regardless of whether those claims are for medical services in areas other than the area in which the pre-claim IME was scheduled for. The court agrees with the defendant.

In reaching its decision, the Fogel court relied upon the importance of a timely held IME "in the detection of fraudulent claims." 7 Misc 3d at 20. The "Conditions" section in the Mandatory PIP conditions the right to commence an action against the insurer upon an eligible injured person's ("assignor") compliance with the terms of coverage. Fogel, supra, 7 Misc 3d at 25 (Golia, J., conc. in part and diss. in part). "Where an eligible injured person fails to submit to a reasonably requested IME, the insurance policy, by its terms...affords no coverage for the otherwise eligible injured person." 7 Misc 3d at 25. See, Orr. v Continental Cas. Co., 205 AD2d 599 (2d Dept. 1994) (Under New York law, the insurer has the right to declare the contract at the end where the insured breaches a term upon which the contract was conditioned). Thus, an insured's refusal to comply with a reasonably requested IME at the pre claim stage, which was not opposed or adequately refuted, constitutes a complete defense to the claim warranting dismissal. 7 Misc 3d at 25. [*4]

In Bayside Rehab, supra, this court ruled that when an IME - cut - off determination based upon lack of medical necessity was made prior to the submission of a claim, there was no statutory requirement as to whom the insurer had to notify. The court noted that from a purely logical vantage point, it would be an exercise in futility to require an insurance company to send a pre-claim IME cut-off notice to the assignee since by definition, an insurance company could not prophecize which medical services entity, out of the hundreds which exist in the metropolitan area, an injured party might seek services from. 24 Misc 3d at 548.

In other scenarios under the No - Fault Law, the courts have dismissed claims brought by service providers based upon a breach of a condition precedent by the assignee. Thus, a claim will be dismissed based upon an insurer's assertion of lack of coverage defense that is premised upon an investigator's unrefuted assertion of a "fact or founded belief" that the alleged injury did not arise out of an insured incident. See Central General Hosp. V Chubb, 90 NY2d 195 (1997); A.B. Med. Servs. PLLC v. State Farm Mutual Auto Ins. 2004 NY. Slip Op. 50638(U), 4 Misc 3d 129(A) (App. Term, 2 & 11th Jud. Depts. 2004); A.B. Med. Servs. PLLC v. State Farm Mutual Auto Ins., 7 Misc 3d 822 (Civil Ct., Kings CO. 2005). In the latter case, the court determined, after trial, that the assignors had been involved in staged collisions thus negating any policy of coverage by State Farm. While there was no evidence that the plaintiff assignor participated in the fraud or that the fraud should be imputed to the assignor, "plaintiffs would be the primary beneficiaries of (the) fraud" were they allowed to recover. A.B. Med , supra, 7 Misc 3d at 832. Moreover, "an assignee stands in the shoes of the assignor." Id., citing Arena Constru. Co. v . J. Sackaris & Sons, 282 AD2d 489 (2d Dept. 2001).

Similarly, where the insured patient the assignor had no right to coverage for medical supplies because he never received the supplies or incurred an obligation to pay the supplier for them, he could not assign any rights to the assignee. "The Assignee stands in no better position than the assignor; the assignor assigns no more than he has and the assignee has no more right or claim than he had." T & G Medical Supplies In. v. State Farm, 2005 NY Slip Op. 50636(U), 7 Misc 3d 1017(A) (Civil Ct., NY Co., 2005).

The aforementioned precedent makes it clear that if the eligible insured assignee violates certain terms of the insurance contract, the contract will be voided ab initio, irrespective of any action taken by an assignor medical service provider. Hence, it is irrelevant whether the IME was scheduled for one medical service area and a subsequent claim came in for services in another area. Once the insured assignor fails to perform a condition of the contract, his right to be covered, and hence, the assignee's right to obtain all the privileges that inure to the assignor are voided.

In light of the above, summary judgment is granted to the defendant and the case is dismissed.

Dated: November 22, 2010______________________________

Hon. Katherine A. Levine

[*5]Judge, Civil Court

Footnotes

Footnote 1:See also, All-Boro Inc. v. Progressive Ins. Co., 20 Misc 3d 554 ( Civil Ct., Kings Co., 2008), wherein Judge Sweeney extended this reasoning to EUOs, finding that an insurance company acted within its rights under the endorsement by scheduling an EUO before it had received the claim.