LEXINGTON ACUPUNCTURE v. STATE FARM INS CO (2006)

Appeal from an order of the Civil Court of the City of New York, Kings County (Eileen Nadelson, J.), entered March 16, 2005.   The order granted plaintiff's motion for summary judgment and denied defendant's cross motion to dismiss the complaint or, in the alternative, to compel responses to its discovery demands.

Order reversed without costs, plaintiff's motion for summary judgment denied and defendant's cross motion to dismiss the complaint or, in the alternative, compel responses to its discovery demands granted to the extent of directing that plaintiff shall respond to those discovery demands which seek information regarding whether plaintiff was fraudulently incorporated, within 30 days of the date of the order entered hereon, or within such other reasonable period as the parties stipulate to in writing.

In this action to recover $1,400 in first-party no-fault benefits for health care services rendered to its assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted claims, setting forth the fact and the amounts of the losses sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106[a];  Mary Immaculate Hosp. v. Allstate Ins. Co., 5 A.D.3d 742, 774 N.Y.S.2d 564 [2004];  Amaze Med. Supply v. Eagle Ins. Co., 2 Misc.3d 128(A), 2003 N.Y. Slip Op. 51701[U], 2003 WL 23310886 [App. Term, 2d & 11th Jud. Dists.] ).   Contrary to defendant's contention, plaintiff's affidavit was sufficient to establish that it mailed the claims to defendant, and its remaining contentions have no merit.   The burden then shifted to defendant to show a triable issue of fact (see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986] ).

In February 2003, defendant conducted a pre-claim independent medical examination of plaintiff's assignor after which defendant's examiner determined that the assignor needed no more acupuncture as of that date.   Defendant subsequently denied each claim, by denials dated March, April and May 2003, based on a February report finding the lack of medical necessity.   Defendant annexed an unsworn copy of said report to its opposition papers which is in inadmissible form and is, therefore, insufficient to warrant denial of plaintiff's motion for summary judgment (see A.B. Med. Servs. PLLC v. Electric Ins. Co., 7 Misc.3d 130(A), 2005 N.Y. Slip Op. 50542[U], 2005 WL 856957 [App. Term, 2d & 11th Jud. Dists.] ).   Moreover, defendant's June 2003 general denial of claim form is fatally defective since numerous portions thereof are blank/incomplete (see e.g. Nyack Hosp. v. Metropolitan Prop. & Cas. Ins. Co., 16 A.D.3d 564, 791 N.Y.S.2d 658 [2005] ).   Accordingly, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v. Maryland Cas. Co., 90 N.Y.2d 274, 282, 660 N.Y.S.2d 536, 683 N.E.2d 1 [1997] ).   Nevertheless, the defense that plaintiff, a provider of health care services, is not eligible for reimbursement of no-fault benefits (see State Farm Mut. Auto. Ins. Co. v. Mallela, 4 N.Y.3d 313, 794 N.Y.S.2d 700, 827 N.E.2d 758 [2005] ) is not subject to preclusion (see A.B. Medical Servs. PLLC v. Prudential Prop. & Cas. Ins. Co., 11 Misc.3d 137(A), 2006 N.Y. Slip Op. 50504[U], 2006 WL 820395 [App. Term, 2d & 11th Jud. Dists.] ).   Moreover, summary judgment should be denied where the opposition papers set forth that facts essential to justify opposition may exist but cannot then be stated (see CPLR 3212[f] ).

 In Mallela, 4 N.Y.3d 313, 794 N.Y.S.2d 700, 827 N.E.2d 758, supra, the Court of Appeals found that insurers may withhold payment of first-party no-fault benefits provided by fraudulently licensed medical service corporations to which patients have assigned their claims.   Consequently, we find that discovery requests seeking corporate information to determine whether the owners of a medical service corporation are improperly licensed are germane to the question of whether said corporation is eligible for reimbursement.   Pursuant to 11 NYCRR 65-3.16(a)(12), “[a] provider of health care services is not eligible for reimbursement under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such services in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed.”   The Education Law provides that only persons licensed or certified can practice acupuncture in the State of New York (see Education Law § 8212).   The Business Corporation Law provides that each shareholder, director or officer of the corporation must be licensed to practice the profession for which the corporation was organized (see Business Corporation Law §§ 1503[b];  1507).

We find that defendant's papers establish that so much of defendant's discovery requests as seek information regarding whether plaintiff was fraudulently incorporated are material and necessary (see CPLR 3101) and, thus, said papers set forth that facts essential to justify opposition may exist but cannot now be stated.   Consequently, plaintiff's motion for summary judgment is premature pending the completion of discovery (see CPLR 3212 [f] ).  It is noted that plaintiff did not oppose the cross motion in the court below.   Accordingly, plaintiff's motion for summary judgment is denied and defendant's cross motion is granted to the extent of compelling plaintiff to respond to defendant's discovery demands which seek information regarding the ownership, control and licensing of plaintiff corporation, within 30 days of the date of the order entered hereon.

While I agree with the ultimate disposition in the decision reached by the majority, I wish to emphasize that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views.

RIOS and BELEN, JJ., concur. GOLIA, J.P., concurs in a separate memorandum.