MEDICAL SERVICES PLLC v. State Farm Mutual Automobile Insurance Company, Respondent. (2004)

Appeals by plaintiffs in three related cases from so much of a consolidated order of the District Court, Nassau County (J. Asarch, J.), entered January 2, 2003, as denied plaintiffs' motions for summary judgment.

On the court's own motion, appeals consolidated for purposes of disposition.

Order unanimously affirmed without costs.

In these actions to recover $7,393.37 in assigned first-party no-fault benefits provided its assignors, with the exception of the claim for $290.64 in the action appealed under No. 2003-469 N C, the entire claim asserted in the action appealed under No. 2003-470 N C, and the claim for $358.04 in the action appealed under No. 2003-471 N C, plaintiff established its entitlement to the benefits prima facie, by proof that it submitted the completed statutory forms setting forth “the fact and amount of loss sustained” (Insurance Law § 5106 [a];  Damadian MRI in Elmhurst P.C. v. Liberty Ins. Co., N.Y.L.J., Dec. 29, 2003, 2 Misc.3d 128(A), 2003 WL 23310887 [App. Term, 9th & 10th Jud. Dists.];   see Amaze Med. Supply Inc. v. Eagle Ins. Co., N.Y.L.J., Dec. 29, 2003, 2 Misc.3d 128(A), 2003 WL 23310886 [App. Term, 2d & 11th Jud. Dists.] ).   Defendant's failure timely to deny any of the claims for which a prima facie case is established (Insurance Law § 5106[a];  11 NYCRR 65.15[d][1] ) precluded most defenses thereto (Presbyterian Hosp. in City of N.Y. v. Maryland Cas. Co., 90 N.Y.2d 274, 278, 660 N.Y.S.2d 536, 683 N.E.2d 1 [1997] ).

 However, the preclusion rules does not apply to a defense based on a claim of fraud (Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 N.Y.2d 195, 201, 659 N.Y.S.2d 246, 681 N.E.2d 413 [1997];  Matter of Metro Med. Diagnostics v. Eagle Ins. Co., 293 A.D.2d 751, 752, 741 N.Y.S.2d 284 [2002] ).   Defendant's proof in each case included, inter alia, examinations of the assignors under oath and an investigator's affidavit which revealed significant discrepancies in the assignors' accounts of their activities before and after the accident and irregularities with respect to the insured's various identities and addresses. These triable issues of fact as to whether the automobile accident was staged. Defendant also argued that the assignors' statements raised substantial questions of fact as to whether certain of the medical services were not medically responsive to the injuries reported by the assignors or continued long after the reported symptoms abated, and whether said services were fraudulently provided. Although the Court of Appeals has recognized that “rampant fraud” against no-fault insurers, estimated in the year 2000 to be at 1,700% of 1992 levels, is committed largely by medical benefits providers filing inflated treatment claims for minor or nonexistent injuries (Matter of Medical Socy. of State of N.Y. v. Serio, 100 N.Y.S.2d 854, 861, 864, 768 N.Y.S.2d 423, 800 N.E.2d 728 [2003], we are constrained to conclude that fraudulent claims for excessive or unnecessary medical treatment are subject to the preclusion sanction even where, as here, the services are alleged to have been fraudulently provided (Presbyterian Hosp. in City of N.Y. v. Maryland Cas. Co., 90 N.Y.2d 274, 285, 660 N.Y.S.2d 536, 683 N.E.2d 1 [1997] [“The tradeoof of the no-fault reform still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leashed contestable period and process designed to avoid prejudice and red-tape dilatory practices”]; see also Matter of Medical Socy. of State of N.Y. v. Serio, 100 N.Y.2d at 861 [“the most common example of the manner in which ․ fraud [is] perpetrated consist[s] of exploiting the time lag between the alleged loss and the deadline for submitting proof of the loss, coupled with the reality that insurers are given only 30 days to review and investigate claims before paying them without risk of penalities for denying or delaying a claim”]).

We note that even absent the claim of fraud, the court properly denied summary judgment as to the aforementioned claims for $290.64 and $358.04.   The alleged provider-claimant was Royalton Chiropractic, P.C. (Royalton), on whose behalf the assignor had mxecuted assignment of benefits forms.   However, Royalton is not named as a party plaintiff in either of these two actions, and in the supporting affidavit submitted in each action the deponent, on whose authority the claim forms are sought to be proved, states only that she is an officer of “plaintiff,” presumably A.B. Medical Services PLLC, the only captioned plaintiff.

 The court also properly denied summary judgment as to all claims asserted in No. 2003-470 N C. In an affidavit in support of the motion, Bella Safir alleges merely that she is the “practice and billing manager” and an “officer” of “plaintiff.”   Ms. Safir does not state for which named plaintiff she is a manager and an officer.   Consequently, the affidavit in which Safir states that “plaintiff” provided defendant with complete claim forms is insufficient to establish said fact inasmuch as the affidavit does not lay the necessary foundation for the admissibility of said forms as to any of the named plaintiffs (see A.B. Med. Servs. PLLC v. State Farm Mut. Auto. Ins. Co., 4 Misc.3d 138(A) [App. Term, 9th & 10th Jud. Dists., decided Mar. 12, 2004] ).

Accordingly, in view of the foregoing, plaintiff's motion for summary judgment was properly denied.