Venom from the First Department

Lenox Hill Radiology, PC v Tri-State Consumer Ins. Co., 2010 NY Slip Op 20530 (App. Term 1st Dept. 2011)

I guess now starting to face the onslaught of appeals that it was shielded from in years past, the Appellate Term, First Department has shared some choice words with the no-fault bar.  One of the posters, I believe Sun, quoted the pertinent “observation” of the majority opinion at NFP.  I am not going to quote it here.  I would note that based upon the writing style, it appears that Justice Douglas McKeon authored that opinion.

What was nice is the reader, through an analysis of the majority and dissenting opinion, was given some details as to what the majority considered the bare minimum to establish the proper presumption of mailing.

The majority: “At trial, defendant presented the testimony of an experienced claims examiner, Jennifer Piccolo, who both personally prepared the initial and follow-up verification requests here at issue and possessed first-hand knowledge of defendant’s standard office mailing practice. The witness’s credible and consistent account of the mailing procedures generally followed by defendant, including how the mail was systematically picked up during the work day, when it would “go out,” and what steps would be taken if a verification letter was returned as undeliverable (an event which, the witness noted, did not occur here), “obviated the necessity of producing a witness with personal knowledge of the actual mailing” of defendant’s verification letters (see Badio v Liberty Mut. Fire Ins. Co., 12 AD3d 229, 230 [2004]). Nor was it incumbent upon defendant to produce a witness, such as a mail clerk or other clerical employee, whose duty it was to ensure compliance with its mailing procedures or who possessed personal knowledge of such compliance.

By the way – I am putting the world on notice – if anyone cites to Contemp v. Geico on any papers that cross my desk, you are liable for Part 130 sanctions.  This is the written warning that the rules require.  If you make this argument, withdraw it.  If you want to make it, don’t.  If you practice no-fault, you will probably have crossed this blog so you are on notice.  Thank you.

The dissent (Schoenfeld, J.S.C.) is interesting, and illuminates what was missing from the witnesses’ testimony, yet in the eyes of the majority was sufficient to grant judgment to the defendant:

Q: Personal knowledge as in you observe them do their day to day job with respect to… receipt of mail returned?

A: No.

Q: Nor with any of their other responsibilities with respect to mailing, correct?

A: Correct.”

Justice Schoenfeld – who I had an interesting back and forth with at oral argument in A-Plus v. Mercury (as Plaintiff was counsel was probably smirking), seems to believe that the affiant or witness must observe, on some level, the day-to-day mailing activities.  Again, he is not advocating the “duty to ensure compliance” lingo.  But personal knowledge to him requires someone whose job title involves processing, sorting or observation of the mail procedures.

My observation – and it is only an observation – is that the majority is of the viewpoint that if the opponent of the “mailing” is not going to present evidence that the document was not received, then the Appellate Term does not want to hear it.  The Court seems to be telling us that Civil Court judges have better things to do than to pass on esoteric issues of mailing.  Again, this was just an interesting decision.

The Appellate Division weighs in on the mailing paradigm

People v Abelo,  2010 NY Slip Op 09567 (1st Dept. 2010).

“The evidence which gives rise to the trial error was the testimony of one Kimberly Shaw, a customer representative for the DMV, who was first employed in 2002. She testified to mailing procedures at DMV. Shaw testified that based on an abstract generated on November 23, 2005, defendant’s license had been suspended 57 times on 16 dates between 1983 and 1994 for unpaid tickets. Shaw testified that a driver’s license suspension is mailed to the address on file at the DMV, that such a mailing had occurred in December 1992, and that defendant’s license was suspended on January 4, 1993. The court admitted the 1992 notice of suspension. On cross-examination Shaw acknowledged that she did not work for DMV in 1992, and could not testify concerning standard mailing procedures during that year or those in place in 1993. She also acknowledged that procedures had changed. The court then refused to admit the 1993 suspension notices because Shaw was not familiar with the business practices in place at that time or earlier, but it refused to strike the already admitted 1992 notice.”

“The People here argue that, having produced Kimberly Shaw, they satisfied their obligation to produce a witness who was subject to cross-examination. While defendant acknowledges that it was clearly not necessary to produce someone who was employed at the time the notice was mailed, he argues that the People were obligated to produce someone who had at least familiarized herself with the procedures current at the time. Moreover, as defendant argues, the trial court’s refusal to admit the 1993 notices of suspension because Ms. Shaw was unfamiliar with the mailing practices in 1993 was inconsistent with admission of the 1992 notice of suspension. The witness made it clear that she was not familiar with the practice in either year.”

“A witness who on cross-examination denies knowing what procedures were used at the time of mailing does not satisfy the obligation to produce a witness who can be adequately cross-examined concerning notice to defendant. In essence, the notice of suspension was admitted without foundation, and under the facts of this case its admission constituted reversible error.”

I was employed with [BLANK] when the mailing activity occurred

Friendly Physician, P.C. v GEICO Ins. Co., 2010 NY Slip Op 51770(U)(App. Term 2d Dept. 2010)

“Since the affidavit executed by defendant’s claim representative stated that she began working for defendant after the denial of claim forms at issue were allegedly mailed by defendant, and defendant did not otherwise establish the actual mailing of the denial of claim forms or its standard office practices and procedures for the mailing of denial of claim forms [*2]during the pertinent time period, defendant failed to establish that its denial of claim forms were timely mailed

There is no need to specify the particular date a denial was mailed on the affidavit

Point of Health Acupuncture, P.C. v GEICO Ins. Co., 2010 NY Slip Op 51724(U)(App. Term 2d Dept. 2010)

Five bucks says I am going to see this argument again in one of the oppositions sitting on my desk.  Another five bucks says I will see it again next month…and the month after that…..etc.  I mean I still see Contemporary v. Geico cited as if it still represents good law.  So I digress.

Anyway, see below:

“The Civil Court granted plaintiff’s motion for summary judgment and denied defendant’s cross motion, finding that defendant had failed to specify the dates on which its denials were mailed.”

“Contrary to the conclusion of the Civil Court, the affidavit of defendant’s claims division employee was sufficient to establish that the relevant denial of claim forms had been timely mailed in accordance with defendant’s standard office practices and procedures”

I applaud Geico because this rationale for denying summary judgment motions is one that comes up frequently, and is completely incorrect on the law.

Be careful what you ask for: Discovery by summary judgment motion

Elmont Open MRI & Diagnostic Radiology, PC v New York Cent. Mut. Fire Ins. Co., 2010 NY Slip Op 51588(U)(Dis. Ct. Nassau Co. 2010)

I would put this case in the “be careful what you ask for” category, because the insurance carrier got what it sought.  To briefly explain, the insurance carrier filed a summary judgment motion based upon the services lacking medical reasonableness in accordance with a peer review.  Plaintiff put in answering papers, bereft of an affidavit of merit.

District court ruled that the denial was timely mailed, but the submissions in support of the summary judgment motion were insufficient to prima facie establish a lack of medical necessity.  I will get to this point later.

Somebody filed a notice of trial, a demand for a trial de novo was somewhere filed, and now this matter is on for trial.  The insurance carrier seeks to have Plaintiff prove it mailed the claim forms, and to have Plaintiff lay a business record foundation for the admission of the bills into evidence.

At trial, District Court properly forced Plaintiff to lay a business record foundation for the admission of the claim forms into evidence, since Plaintiff never previously cross-moved for partial summary judgment and this issue was never adjudicated.  The District Court, however, properly found that the insurance carrier’s summary judgment motion rendered the mailing issue moot.  The fact is a summary judgment motion is the functional equivalent of a trial.  If an affidavit states a bill was received and was denied, then it is impossible for an insurance carrier to escape that element of a plaintiff’s prima facie case during a later proceeding, i.e., the trial.

But this brings me to the title of my post.  In a medical necessity case, an insurance carrier’s properly supported motion for summary judgment, includes the following: the denials, the affidavit of the claims representative indicating proof of receipt of the bill, the mailing of the denial, the IME or peer report and the underlying medical records.  This documentary evidence affords the medical provider or injured person all the discovery they need to proceed to trial, provided the summary judgment motion is properly defeated.  Furthermore, as seen above, this documentary evidence serves the exact function of verified interrogatories or an unanswered or admitted to Notice to Admit: admission of receipt of the bill and that the claim is overdue.

This now bring me to my last point.  Were the MRI’s referred and prescribed by the chiropractor?  If they were, then the case law seems to be that the medical reasonableness is determined through the shoes of the referring expert.  I discussed this issue in previous posts.  The point being that upholding the medical necessity based solely on Dr. Liguori’s medical records seems to be improper and an end around the chiropractor’s referral for the testing.  Also, were the reviewed documents provided for in the summary judgment motion?  If they were, then summary judgment should have been granted provided: the standard factual basis and medical rationale test was met and the said documents did not negate the peer review, i.e., Hillcrest MRI.

Perhaps this case should be appealed on the latter points?

Why don't Defendant's start to use the Notice to Admit to establish their Prima Facie? Am I missing something?

This was a comment from Jerry Maline, of Richard Lau’s office, State Farm’s in-house counsel.  This is a really astute comment, and got me thinking for a second.  Now, just follow me on this to see if my logic makes sense.

According to the Appellate Term, Second Department, Notices to Admit and Interrogatories cannot be used to establish a prima facie case.  This is because a party cannot admit the genuineness of another party’s documents, as well as use these devices to establish a complete prima facie case.  In practice, this translates to disallowing an insurance carrier to lay a business record foundation for a provider’s bills or an injured person’s bills.

The corollary to this rule is that a medical provider cannot lay a business record foundation for an insurance carrier’s denials.

In contrast to the above, we now have learned that at the Appellate Term, First Department, interrogatories and notices to admit may be used to satisfy a prima facie case, since the genuineness of the bills is not part of a provider’s prima facie case.

Now, in light of the Second Department’s  holding in Urban, viz, that a denial does not have to be “in evidence” in order to preserve the defense set forth on the denial, the only factual issue a denial presents is its timeliness.  We all know that denials, generally, are mailed on the date set forth on the denial or the next business day.  There are some variations out there, but that is the general industry standard.  In light of Central Nassau, it would seem that a provider could be charged with having sufficient knowledge to either admit or deny: 1) whether; and/or 2) when the provider received a denial.  Like anything else, this tactic will only work if the statements set forth on the Notice to Admit are properly drafted.

Since the only issue relating to an NF-10 at the Appellate Term, Second Department, involves the timeliness of the denial, it would seem to follow that a Notice to Admit can satisfy the underlying procedural issues, and allow the insurance carrier to go forward on its substantive defense.  Moreover, since an insurance carrier’s entire prima facie defense does not rest on the timeliness of a denial, it cannot be said that the Notice to Admit would go to the ultimate or heart of the disputed issue.  So, an insurance carrier can successfully use this device to demonstrate timely handling, in my opinion.

As for the Appellate Term, First Department, this is an open question.  Notwithstanding that Court’s holding that a Notice to Admit may itself satisfy a provider’s prima facie case, that court has never opined as to whether a denial must be in evidence, in order to preserve the defenses that are set forth on it.  I would imagine that the Appellate Term, First Department, would probably follow the Presbyterian v. Elrac rule and require that the denial be placed into evidence, before allowing a carrier to go forward on its substantive defenses.

In any event, the Appellate Term, First Department, at worst would only leave unresolved for trial the business record foundation issue involving the denial, besides the substantive defenses.  Admittedly, laying a business record foundation is a far easier burden than showing a document was timely mailed.

Thus, a properly drafted notice to admit should resolve the timeliness issue.  In the Second Department, this would resolve all issues involving the denial of claim form and allow the carrier to go forward on its substantive defense.  In the First Department, this would at a bare minimum eliminate the mailing issue, and possibly leave the business record issue open, as well as the underlying defense to the no-fault claim.

Why don’t Defendant’s start to use the Notice to Admit to establish their Prima Facie? Am I missing something?

This was a comment from Jerry Maline, of Richard Lau’s office, State Farm’s in-house counsel.  This is a really astute comment, and got me thinking for a second.  Now, just follow me on this to see if my logic makes sense.

According to the Appellate Term, Second Department, Notices to Admit and Interrogatories cannot be used to establish a prima facie case.  This is because a party cannot admit the genuineness of another party’s documents, as well as use these devices to establish a complete prima facie case.  In practice, this translates to disallowing an insurance carrier to lay a business record foundation for a provider’s bills or an injured person’s bills.

The corollary to this rule is that a medical provider cannot lay a business record foundation for an insurance carrier’s denials.

In contrast to the above, we now have learned that at the Appellate Term, First Department, interrogatories and notices to admit may be used to satisfy a prima facie case, since the genuineness of the bills is not part of a provider’s prima facie case.

Now, in light of the Second Department’s  holding in Urban, viz, that a denial does not have to be “in evidence” in order to preserve the defense set forth on the denial, the only factual issue a denial presents is its timeliness.  We all know that denials, generally, are mailed on the date set forth on the denial or the next business day.  There are some variations out there, but that is the general industry standard.  In light of Central Nassau, it would seem that a provider could be charged with having sufficient knowledge to either admit or deny: 1) whether; and/or 2) when the provider received a denial.  Like anything else, this tactic will only work if the statements set forth on the Notice to Admit are properly drafted.

Since the only issue relating to an NF-10 at the Appellate Term, Second Department, involves the timeliness of the denial, it would seem to follow that a Notice to Admit can satisfy the underlying procedural issues, and allow the insurance carrier to go forward on its substantive defense.  Moreover, since an insurance carrier’s entire prima facie defense does not rest on the timeliness of a denial, it cannot be said that the Notice to Admit would go to the ultimate or heart of the disputed issue.  So, an insurance carrier can successfully use this device to demonstrate timely handling, in my opinion.

As for the Appellate Term, First Department, this is an open question.  Notwithstanding that Court’s holding that a Notice to Admit may itself satisfy a provider’s prima facie case, that court has never opined as to whether a denial must be in evidence, in order to preserve the defenses that are set forth on it.  I would imagine that the Appellate Term, First Department, would probably follow the Presbyterian v. Elrac rule and require that the denial be placed into evidence, before allowing a carrier to go forward on its substantive defenses.

In any event, the Appellate Term, First Department, at worst would only leave unresolved for trial the business record foundation issue involving the denial, besides the substantive defenses.  Admittedly, laying a business record foundation is a far easier burden than showing a document was timely mailed.

Thus, a properly drafted notice to admit should resolve the timeliness issue.  In the Second Department, this would resolve all issues involving the denial of claim form and allow the carrier to go forward on its substantive defense.  In the First Department, this would at a bare minimum eliminate the mailing issue, and possibly leave the business record issue open, as well as the underlying defense to the no-fault claim.

Inconsistencies in the proof of mailing end plaintiff's quest for summary judgment

Alur Med. Supply, Inc. v GEICO Ins. Co.,2010 NY Slip Op 51053(U)(App. Term 2d Dept. 2010)

“In the instant case, plaintiff’s motion for summary judgment was supported by the affidavit of plaintiff’s billing manager as well as an annexed certificate of mailing, referred to in the affidavit, which indicated that the subject claim form was mailed to a different insurer. In light of the discrepancies between the affidavit and the annexed certificate of mailing, plaintiff did not establish submission of the claim to defendant (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; see also AKS Med., P.C. v Progressive Ins. Co., 24 Misc 3d 135[A], 2009 NY Slip Op 51494[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). Consequently, plaintiff failed to establish its prima facie entitlement to summary judgment, and its motion should have been denied.”

Assuming that you agree that Plaintiff’s proofs were insufficient to prove the mailing of the bills, then this was the correct disposition.  The failure to establish a movant’s prima racie entitlement to summary judgment requires the denial of the motion regardless of the sufficiency of the answering papers.  This is the standard in all areas of law except no-fault.  The law in no-fault practice in the Appellate Term, Second Department – which is incorrect – is that the a defendant’s admission of receipt of a claim form in its answering papers can “cure” the deficiencies of the plaintiff’s moving papers.  Oleg Barshay, DC, P.C. v. State Farm Ins. Co., 14 Misc.3d 74 (App.Term 2d Dept. 2006).

Who knows if Alur Medical is a quirk or if it represents the new and proper view of the Appellate Term, Second Department?

As to the merits of the attempt to establish a “prima facie” case, to wit, whether plaintiff’s proofs were sufficient, on its face to establish the bill was mailed, the question really should be whether the discrepancy in plaintiff’s proofs was minstrel or manifest.  Too many times, the courts in this area of law punish both sides for leaving out a word, phrase, or misspelling something when the issue involves the mailing of a document.  In this case, the discrepancy was manifest; thus, nobody can disagree that the Court, in the first instance, properly denied plaintiff’s motion for summary judgment.

Inconsistencies in the proof of mailing end plaintiff’s quest for summary judgment

Alur Med. Supply, Inc. v GEICO Ins. Co.,2010 NY Slip Op 51053(U)(App. Term 2d Dept. 2010)

“In the instant case, plaintiff’s motion for summary judgment was supported by the affidavit of plaintiff’s billing manager as well as an annexed certificate of mailing, referred to in the affidavit, which indicated that the subject claim form was mailed to a different insurer. In light of the discrepancies between the affidavit and the annexed certificate of mailing, plaintiff did not establish submission of the claim to defendant (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; see also AKS Med., P.C. v Progressive Ins. Co., 24 Misc 3d 135[A], 2009 NY Slip Op 51494[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). Consequently, plaintiff failed to establish its prima facie entitlement to summary judgment, and its motion should have been denied.”

Assuming that you agree that Plaintiff’s proofs were insufficient to prove the mailing of the bills, then this was the correct disposition.  The failure to establish a movant’s prima racie entitlement to summary judgment requires the denial of the motion regardless of the sufficiency of the answering papers.  This is the standard in all areas of law except no-fault.  The law in no-fault practice in the Appellate Term, Second Department – which is incorrect – is that the a defendant’s admission of receipt of a claim form in its answering papers can “cure” the deficiencies of the plaintiff’s moving papers.  Oleg Barshay, DC, P.C. v. State Farm Ins. Co., 14 Misc.3d 74 (App.Term 2d Dept. 2006).

Who knows if Alur Medical is a quirk or if it represents the new and proper view of the Appellate Term, Second Department?

As to the merits of the attempt to establish a “prima facie” case, to wit, whether plaintiff’s proofs were sufficient, on its face to establish the bill was mailed, the question really should be whether the discrepancy in plaintiff’s proofs was minstrel or manifest.  Too many times, the courts in this area of law punish both sides for leaving out a word, phrase, or misspelling something when the issue involves the mailing of a document.  In this case, the discrepancy was manifest; thus, nobody can disagree that the Court, in the first instance, properly denied plaintiff’s motion for summary judgment.

It is about time.

Elmont Open MRI & Diagnostic Radiology, P.C. v State Farm Ins. Co., 2010 NY Slip Op 50829(U)(App. Term 2d Dept. 2010)

“Appeal from an amended order of the District Court of Nassau County, First District (Andrew M. Engel, J.), dated July 17, 2008.”

“In support of its motion, plaintiff submitted defendant’s affirmed peer review reports and argued that plaintiff was entitled to summary judgment because the peer review reports did not adequately set forth a medical justification to support the peer review doctor’s conclusions that the services at issue were not medically necessary. In opposition to plaintiff’s motion, defendant established that its denial of claim forms, which relied upon the peer review reports, were timely (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). Contrary to the conclusion of the District Court, we find that the peer review reports set forth a sufficient factual basis and medical rationale to demonstrate the existence of an issue of fact as to medical necessity (see B.Y., M.D., P.C. v Progressive Cas. Ins. Co., 26 Misc 3d 135[A], 2010 NY Slip Op 50144[U] [App Term, 9th & 10th Jud Dists 2010]; see also A.B. Med. Servs., PLLC v Country-Wide Ins. Co., 23 Misc 3d 140[A], 2009 NY Slip Op 51016[U] [App Term, 9th & 10th Jud Dists 2009]). Accordingly, plaintiff’s motion for summary judgment should have been denied (see Zuckerman v City of New York, 49 NY2d 557 [1980]).”

It is nice to see Judge Engel’s treatise on State Farm’s mailing fall one case at a time.  I will admit that I am biased, since I was on the losing end of Acupuncture Prima Care, P.C. v. State Farm, 17 Misc.3d 1175 (App. Term 2d Dept. 2007).  Other than that and an unsuccessful challenge to the sufficiency of the peer review, this case does not add anything to our jurisprudence.