MEDICAL SUPPLIES INC v. NATIONAL GRANGE MUTUAL INSURANCE COMPANY (2005)

The defendant moves for an Order dismissing the case on the ground that the plaintiff lacks standing to prosecute the action.   Plaintiff opposes that motion.

Facts

Plaintiff Health Care Provider, T & G Medical Supplies, Inc. as assignee of Yolette Milford, mailed a bill to defendant, National Grange Mutual Insurance Company, regarding treatment for dates of services it rendered the assignor on 4/21/03, 4/24/03, 4/29/03, 5/1/03, 5/5/03, and 5/6/03.   Defendant received the bill on 6/5/03 and timely denied it on 6/6/03.   Defendant now moves this Court to dismiss the action on the ground that plaintiff has no standing to sue because no valid assignment has been exchanged with the plaintiff's responses to the defendant's discovery demands.

Issue

Does the plaintiff have standing to sue?

Law

To establish a prima facie claim for the recovery of first-party no-fault benefits for medical supplies or equipment, plaintiff assignees must show a policy in effect issued by defendant covering the treated person and motor vehicle collision, assignment of policy benefits, cost of the equipment or supplies, presentation of the claims to the insurer and failure to pay or deny within thirty days (see, 11 NYCRR § 65.15(g)(6);  Westchester Co. Med. Center v. New York Central Mutual Fire Ins. Co., 262 A.D.2d 553, 692 N.Y.S.2d 665 (2nd Dept.1999);  Neuro Care Center II v. Allstate Ins. Co., N.Y.L.J. Jan. 28, 2003 at 19;  Metroscan Imaging v. American Transit Ins. Co., N.Y.L.J. Dec. 10, 1999, at 27 (Civ.Ct. N.Y. Co.);  Vinings Spinal Diagnostic v. Liberty Mutual Ins. Co., 186 Misc.2d 287, 717 N.Y.S.2d 466;  King's Medical Supply Inc., a/a/o of Lilliana Zulunova and Others v. Travelers Property Casualty Corporation, 194 Misc.2d 667, 756 N.Y.S.2d 385).   Plaintiff must demonstrate it has standing to bring the action and that completed proofs of claims were presented to the insurer who failed to pay or deny within thirty days.

Recently, the Appellate Term, Second Department held that admissible proof authenticating an assignor's signature on an assignment form is not necessary to establish its prima facie entitlement to summary judgment (see, AB Medical Services PLLC a/a/o Colon v. Nationwide Mutual Ins. Co., 6 Misc.3d 70, 792 N.Y.S.2d 289 (App. Term 2d & 11th Jud. Dists., 2004)).   It also held that the only thing required of a health care provider/assignee/plaintiff in regards to an assignment is that it submit a “properly executed assignment” on one of four forms.   The four forms the Court names are 1.) the NYS form NF-3 which is the prescribed verification of treatment by the attending physician or other provider of service form;  2.) the NYS form NF-4 which is the prescribed verification of hospital treatment form;  3.) the NYS form NF-5 which is the prescribed hospital facility form, and 4.) the NYS form NF-AOB which is the prescribed no-fault assignment of benefits form (see, AB Medical Services PLLC a/a/o Colon v. Nationwide Mutual Ins. Co., 6 Misc.3d 70, 792 N.Y.S.2d 289, supra;  11 NYCRR 65-3.11(b)(2)).

Courts have also held that a defendant's failure to pay or deny a claim, whether in whole or partially, within the thirty days mandated by the statute, prevents it from alleging any defense related to the adequacy of the claim forms provided by the plaintiff including the lack of necessary signatures on an assignment form (see AB Medical Services PLLC, GA Physical Therapy PC a/s/o Mikhail Smolyanskiy v. CNA Insurance Company, 1 Misc.3d 137(A), 781 N.Y.S.2d 622, 2004 WL 314819, 2004 N.Y. Slip Op. 50061(U) (App.Term, 1st Dept.);  Diagnostic Rehab. Medicine Serv., PC, Assignee of Julio Duran v. Farm Family Casualty Ins. Co., N.Y.L.J., June 29, 2005, at 24, col. 2 (1st Dept.2005)).

In the case at bar, the defendant moves to dismiss plaintiff's claim on the ground that plaintiff does not have standing to sue because there is no assignment.   This distinguishes it from the cases discussed above where plaintiff moved for summary judgment based on defendant's failure to pay or deny the claim.

In AB Medical Services PLLC, GA Physical Therapy PC a/s/o Mikhail Smolyanskiy v. CNA Insurance Company and Diagnostic Rehab. Medicine Serv., PC, Assignee of Julio Duran v. Farm Family Casualty Ins. Co., defendants failed to pay or deny the claim within the statutory time or to seek verification.   This case is distinguishable from those cases in that defendant received plaintiff's bill on June 5, 2003 and issued a timely denial on June 6, 2003 (see AB Medical Services PLLC, GA Physical Therapy PC a/s/o Mikhail Smolyanskiy v. CNA Insurance Company, 781 N.Y.S.2d 622, supra;  Diagnostic Rehab. Medicine Serv., PC, Assignee of Julio Duran v. Farm Family Casualty Ins. Co., N.Y.L.J., June 29, 2005, at 24, col. 2, supra ).

Plaintiff argues that defendant's motion should be denied because it failed to state any deficiency regarding the assignment in its denial, thereby waiving any defense not included in the denial.¹

 Standing to sue is one of the basic elements in any action.   Notably, without it, you are not entitled to begin an action (See Black's Law Dictionary 712 [7th ed. 1999] ).   As such, the issue of standing can not be waived even if a defendant fails to object to the issue of standing beforehand.  (See Stark v. Goldberg, 297 A.D.2d 203, 204, 746 N.Y.S.2d 280 (1st Dept. 2002);  Axelrod v. New York State Teachers' Retirement Sys., 154 A.D.2d 827, 828, 546 N.Y.S.2d 489).   In order to establish standing in a No-Fault claim, plaintiff health care providers must produce “properly executed” assignments of insurance benefits, signed by the patient naming the provider as assignee (see 11 NYCRR 65-3.11(b)(2);  A.B. Medical Services PLLC v. Highland, N.Y.L.J., May 27, 2003, at 21, col. 3;  Advanced Medical Rehabilitation P.C. v. Travelers Property Casualty Insurance Co., N.Y.L.J., March 25, 2004, at 19, col. 3;  T & G Med. Supplies, Inc. v. State Farm Mut. Auto. Ins. Co., 7 Misc.3d 1017(A), 2005 N.Y. Slip Op. 50636(U), 2005 WL 1021510).   Like any contract, the assignment should reflect the names of the assignor and assignee, the date the accident leading to treatment occurred, the signatures of both parties, and the date the assignment took place (see, T & G Med. Supplies, Inc., 2005 N.Y. Slip Op. 50636(U), supra ).   In fact, the assignment of benefit form provided by New York State Department of Motor Vehicle provides blank spaces for the patient/assignor's name, for the health care provider/assignee's name;  for the date of the accident;  for the signatures and addresses of both assignor and assignee;  and for the date of the assignment (See NYS form NF-AOB).   The form clearly illustrates that the particular information requested is required in order for the assignment to be deemed valid and for plaintiff to have standing to sue.   In this case, the assignment in question happens to be on a NYS form NF-AOB ² and the only section of the assignment that is completed is the signature of the alleged assignor.   Conspicuously absent is the name of the party receiving the assignment, who in the future would have standing to bring an action.

Conclusion

Upon a review of all the papers, the Court finds that defendant made out a prima facie case of its entitlement to summary judgment.   Specifically, defendant argues that plaintiff has not established that it has standing to maintain this action.   The undated assignment it provided does not contain the name of the assignor, the signature of the assignee or the date of the alleged occurrence ³ .  Upon a reading of the purported assignment, one is not certain who the alleged assignor is delegating her rights to or when she did so.   The assignment also fails to state when she suffered the injuries leading to the need for medical supplies.   These defects in the alleged assignment of benefits to plaintiff illustrate its lack of standing to maintain this action.

Accordingly, defendant's motion is granted and the action is dismissed.

The foregoing shall constitute the Decision and Order of the Court.

FOOTNOTES

1.   See paragraph § 4 of plaintiff's affirmation in opposition.

2.   See Exhibit C of moving papers, a copy of the assignment of benefit form.

3.   See Exhibit C of the moving papers-the assignment.

MANUEL J. MENDEZ, J.