A&S Medical, P.C. v. Allstate Insurance, 196 Misc. 2d 322

A&S Medical, P.C. v. Allstate Insurance

196 Misc. 2d 322 | N.Y. App. Term. | 2003

Lead Opinion

OPINION OF THE COURT

Per Curiam.

Order entered October 24, 2001 reversed, with $10 costs, *323plaintiffs motion for summary judgment is granted, and the matter is remitted to Civil Court for (1) the assessment of appropriate attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and (2) the entry of a judgment in favor of plaintiff and against defendant in the principal sum of $450.83, plus appropriate interest and attorney’s fees.

Plaintiff provided a series of orthopedic treatments to its assignor, Reyna Martinez, for injuries sustained in a motor vehicle collision and, on April 12, 1999, submitted a no-fault claim to defendant, the insurer of the vehicle in which Martinez was riding. On July 28, 1999, more than 30 days after plaintiffs submission of its no-fault claim, defendant paid a portion of the claim and rejected the balance ($450.83) on the stated ground that the medical fees charged were excessive. In defense of the ensuing action seeking payment of the remaining balance of the assigned no-fault claim, defendant denied liability not on the basis of excessiveness, but on the ground that it had previously notified Martinez of its determination to deny “all further orthopedist benefits” claimed due in connection with the vehicular accident effective January 26, 1999, based upon a medical examination of Martinez held in December 1998.

Insurance Law § 5106 (a) provides that payment of no-fault first-party benefits “shall be made as the loss is incurred.” The cited section and the corresponding Insurance Department regulations (11 NYCRR 65.15 [g] [3]) preclude a defense of excessive or unnecessary medical treatment by an insurer which has failed to deny a no-fault claim within 30 days (see, Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Country-Wide Ins. Co. v Zablozki, 257 AD2d 506 [1999]), as in the matter before us.

Although defendant argues otherwise, its belated denial of plaintiff’s no-fault claim is not properly “deemed” timely on the basis of its earlier blanket disclaimer of responsibility to reimburse plaintiff’s assignor for further orthopedic treatment, a disclaimer which predated plaintiff’s rendition of the services billed for and the filing of plaintiff’s claim form. “When a provider of medical services submits a claim as assignee of an insured, neither the statute nor the regulations contemplated] the insurer simply sitting mute and failing to act upon the claim, silently and secretly relying upon an earlier denial issued directly to the insured.” (Atlantis Med. v Liberty Mut. Ins. Co., 2002 NY Slip Op 40043[U], *9 [Nassau Dist Ct, *324Mar. 15, 2002].) The contrary construction urged by defendant — effectively authorizing the sub rosa denial of properly filed no-fault claims — is inconsistent with the plain language of Insurance Law § 5106 (a) and, if adopted, would serve to vitiate the so-called 30-day rule embodied in 11 NYCRR 65.15 (g) (3) and to undermine a core objective of the no-fault scheme— “to provide a tightly timed process of claim, disputation and payment.” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 281 [1997].)

To the extent defendant seeks to invoke the general rule that an assignee is subject to the same defenses as would be available against its assignor (see, General Obligations Law § 13-105), the rule, as codified, finds no application in circumstances where, as here, the assigned claim is “regulated by special provision of law” (id.).

Dissenting Opinion

McCooe, J.

(dissenting). I respectfully dissent. Plaintiffs assignor was injured on July 27, 1998 when she was struck by a motor vehicle. She filed a claim for no-fault benefits and a physician examined her on behalf of the defendant insurer. It sent a denial of claim form to plaintiffs assignor stating that “all” further orthopedist benefits would be denied effective January 26, 1999.

On April 12, 1999 plaintiff assignee submitted a bill for physical therapy through February 8, 1999 (and continuing) in the amount of $2,920.66 in connection with the injury. Defendant made a partial payment of $2,469.83 for the services rendered up to January 26, 1999 and issued a partial denial of claim dated July 28, 1999. Plaintiff assignee seeks payment of the balance totaling $450.83.

The issue is whether the defendant insurer was required to send a second denial of claim within 30 days. The majority contends that the 30-day denial of claim rule applies to the claim.

The purpose of time limitations in the No-Fault Law denial of claim procedure is “avoiding prejudice to insureds by providing for prompt payment or disclaimer of claims” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 284 [1997]). “ ‘[I]n the interpretation of statutes, the spirit and purpose of the act and the objects to be accomplished must be considered. The legislative intent is the great and controlling principle.’ (Ferres v City of New Rochelle, 68 NY2d 446, 451 [1986], quoting People v Ryan, 274 NY 149, 152 [1937])” (Matter of Long v Adirondack Park Agency, 76 NY2d 416, 422 *325[1990]). There was no prejudice shown to the injured party. Quite the contrary. She was given notice in advance that payment for services would be terminated on a certain date and payment would be contested if she continued to incur the expense. Nevertheless she continued to receive the service. There was no requirement for the insurer to notify her again of a fact that she was aware of. She is charged with knowledge that at the time she filed the claim that it would be denied. A second denial would be redundant.

The plaintiff stands in the shoes of its assignor. “It is settled law that an assignee stands in the shoes of its assignor and assumes all the conditions and liabilities of the assign [or]” (Comprehensive Foot Care Group v Lincoln Natl. Life, 135 Misc 2d 862, 869 [Civ Ct, NY County 1987, Lebowitz, J.], citing Kaplan v Equitable Life Assur. Socy., 177 Misc 792 [1940], affd 261 App Div 1067 [1st Dept 1941]). This assigned claim is not “regulated by special provision of law” (General Obligations Law § 13-105). The term regulation means restriction. There is no regulation on an assignment of a no-fault claim such as for a negligence action or under section 29 of the Workers’ Compensation Law.

The dissent has only considered the one issue raised and considered by the parties.

The order should be affirmed denying summary judgment and a hearing directed on the issue as to whether the therapy was necessary.

Suarez, P.J., and Schoenfeld, J., concur; McCooe, J., dissents in a separate memorandum.