Civil Court of the City of New York, Kings County
November 22, 2013
Canon Chiropractic P.C. AAO GEORGE ELLINGTON, Plaintiff,
Attorneys for Plaintiff: Gary Tsirelman, P.C.
Attorneys for Defendant: Cruz & Gangi.
Katherine A. Levine, J.
The apparently novel issue raised at trial was whether defendant MVAIC ("MVAIC") had an obligation to independently verify the address of the assignor George Ellington ("assignor, " "applicant" or "Ellington") after receiving documentation from plaintiff Canon Chiropractic ("plaintiff" "provider" or "Canon") which listed two different addresses for the assignor. Defendant also contends that it did not have to prove that it timely sent the verification requests to plaintiff since it denied the claim based on lack of coverage.
The parties stipulated at trial that plaintiff had made its prima facie case by timely mailing its bills and assignment of benefit form to MVAIC and that defendant had timely mailed its request to qualify letters, which defendant refers to as verification requests, to both the provider and assignor, the latter at 135 Kings 1st Walk, Brooklyn, NY 11233.  The four requests to qualify to the applicant Jorge Ellington stated that he had not yet met the requirements of a qualified person since there were an number of outstanding items that had not been received, and that upon MVAIC's receipt of the items, the assignor would be given "consideration to be a covered person." Among the outstanding items that MVAIC requested from the applicant were an Original Notice of Intention to Make a Claim, fully signed and notarized, a notarized household affidavit, proof of residency, written confirmation of insurance, and a police report. MVAIC mailed almost identical letters to the provider Canon. All the letters ended by stating that"this request for information is necessary to qualify for MVAIC coverage."
Defendant presented as its witness Laura Figueroa who is a qualification examiner for MVAIC. While she did not generate the letters at issue, she was aware of the practices and procedures for generating letters requesting documents that are needed to qualify the applicant for coverage with MVAIC ("letters to qualify"). When the notice of intention to file a claim comes in she ensures that it is handled in compliance with Regulation 68 and contacts the applicant or his attorney for the necessary documents to qualify. The letters were addressed to both Canon at its address and the applicant at 135 Kings First Walk because that was the address indicated on the bills submitted by plaintiff.
Figueroa testified that she only received medical bills regarding the applicant. She testified that there was no coverage for applicant Ellington because "we never received the notice of intent to make a claim, never received a police report of household affidavit." In fact, MVAIC never received anything requested in the letters from either the applicant or the provider. Therefore, the applicant was deemed not to be a qualified person and thus, not a covered person.
On cross, Figueroa admitted to receiving the assignment of benefits forms and the medical records from the plaintiff; the assignment of benefits form indicated that the address of the applicant was 135 Kings Forth (sic) Walk, Brooklyn, NY 11233.  The assignor (applicant) drafted the assignment of benefits and plaintiff Canon generated the bills which contained the Kings First address. This testimony led the Court to state that the "million dollar question" in the case was why would an MVAIC examiner send the letter to qualify to the assigner at the address listed on the bill as opposed to the address listed on the assignment of benefits form and whether there was any procedure in place to ascertain the proper address when the documents revealed two different addresses.
Figueroa responded that the address on the bills was used because that was the first address that the MVAIC person saw. When MVAIC receives documents with two different addresses, its procedure is to investigate by calling the provider or applicant for the proper address and the clerk is supposed to make sure it goes to the right address by calling the medical provider or applicant. She was not sure what happened in this case. If the applicant and the provider give different addresses "there is a problem." She does not know whether MVAIC called Canon in this case, there were no notes on this and she did not work on this particular case. Defendant points out in its brief that the assignment of benefits which lists the proper address "was placed in the middle of the package after the medical records and before the doctor's license." Plaintiff offered no testimony as to why it put the wrong address on the bills.
At issue is which party bears the burden of ensuring that the qualifying letters are sent to the proper address of the assignor and whether the assignor's failure to receive the qualifying letters was fatal when it was clear that the plaintiff provider did receive them.The parties also dispute whether defendant even had to prove that it had timely and properly mailed the verification requests since it denied the claim based on lack of coverage.
MVAIC was created to "provide no-fault benefits for qualified persons for basic economic loss arising out of the use and operation in this state of an uninsured motor vehicle" Insurance Law § 5201). The intent was to afford injured parties the same protections that exist when a tortfeasor involved in a motor vehicle accident been covered by insurance. Englington Med., P.C. v. Motor Veh. Acc. Indem. Corp., 81 A.D.3d 223, 227-28 (2d Dept. 2011). See, Morisi v Motor Veh. Acc. Indem. Corp., 19 A.D.2d 727(2d Dept. 1963). The statutory provisions creating and regulating MVAIC should be liberally construed to serve those ends. Englington supra at 228. See, Mtr of Dixon v Motor Veh. Acc. Indem. Corp., 56 A.D.2d 650, 651 (2nd Dept. 1977).
MVAIC must pay first-party no-fault benefits to a qualified person for basic economic loss arising out of the use or operation in this state of an uninsured motor vehicle. Pursuant to Insurance Law §5221(b)(2) "only qualified person[s]' are entitled to MVAIC no-fault coverage ." See, Mtr of MVAIC v Aetna Cas. & Sur. Co., 89 N.Y.2d 214, 221 (1996). In order for someone who has allegedly been injured (the assignor) to be a "covered person" person under Insurance Law § 5221(b)(2), and hence be eligible for no fault benefits, the person must be a "qualified person" as that term is defined under Ins. Law §5202(b) and must have complied with all of the requirements contained in Insurance Law §5208. First Help Acupuncture, P.C. v. MVAIC, 2012 NY Slip Op 51643(U), 36 Misc.3d 148(a) (App. Term, 2d Dept. 2012) . See, Olmecs Medical Supplies, Inc. v. MVAIC, 2013 NY Slip Op 50218(U), 38 Misc.3d 140(A) (App. Term, 2d Dept. 2013). Among the requirements of Ins. Law §5208 is the submission of a timely sworn notice of intention to make a claim to MVAIC. Olmecs, supra, and the filing of an accident report within 24 hours of the occurrence unless it was "not reasonably possible to make such a report or that it was made as soon as was reasonably possible. " Howard M. Rombon v. MVAIC, 2008 NY Slip Op 52128(U), 21 Misc.3d 131 (A) (App. Ter, 2d & 11th Jud. Dists. 2008). See, Canty v. MVAIC 95 A..D. 2d 509, 511 (2d Dept. 1983). See also, Akita Med. Acupuncture, P.C. v. MVAIC, 14 Misc.3d 405, 408 (Nassau Cty. Dist. Ct. 2006) (failure of claimant to verify that the alleged accident ever occurred or that it was reported to the police within 24 hours disqualifies claimant from receiving MVAIC benefits").
Where any of these requirements have not been met, the plaintiff's assignor is not a qualified person and thus, not a covered person. See, AP Orthopedic & Rehabilitation P.C. v. MVAIC, 2011 NY Slip Op 51448(U), 32 Misc.3d 133(A) (App. Term, 2d Dept 2011) (assignor's failure to provide MVAIC with proof that she was a resident of the State of New York when the accident occurred); See, RAZ Acupuncture, P.C. v MVAIC, 2009 NY Slip Op 52362(U), 25 Misc.3d 138(A) (App Term, 2d, Dists 2009); Five Boro Psychological Servs., P.C. v MVAIC, 2010 NY Slip Op 50647(U), 27 Misc.3d 131(A) (App Term, 2d, 11th & 13th Jud Dists. 2010); (Insurance Law § 5221 (b) (2); Howard M. Rombon, Ph.D., P.C. v MVAIC, supra. Consequently, a condition precedent to the right to apply for payment of no-fault benefits from MVAIC has not been satisfied and a defendant insurer is entitled to summary judgment. See, Five Boro Psychological Servs., P.C. v MVAIC, supra, Akita Medical, supra. In fact, in Olmacs, the Appellate Term held that a plaintiff medical provider does not even make out its prima facie case where it fails to prove that a timely sworn notice of intention to make claim was tendered to MVAIC, as this document is necessary for plaintiff to demonstrate that its assignor was eligible to recover no fault benefits from MVAIC.
Here, plaintiff failed to make out its prima facie case since the record is clear that the assignor never submitted the original notarized Notice of Intention to make a claim, a copy of the police report or other requested items to MVAIC. Thus, the assignor is not a qualified person and is not a covered person under the No - Fault Law. Even assuming that the recent Olmacs case does not require the plaintiff to prove that the assignor is a qualified person on its prima facie case, it is clear that once the defendant establishes that the assignor has not submitted the requisite forms to qualify, the burden switches to the plaintiff medical provider to present evidence that "that it had availed itself of the opportunity" to present the evidence. Cf Jamaica Medical Supply v. NY City Transit Authority, 2012 NY Slip Op 51660(U), 36 Misc.3d 150(A) (App. Term, 2d Dept. 2012). Here, plaintiff offered no such evidence.
MVAIC's instant lack of coverage defense is not subject to the 30 day preclusion rule and may be raised at any time . MVAIC v. Interboro Medical Care & Diagnostic P.C., 73 A.D.3d 667 (2d Dept. 2010); Family Care Acupuncture P.C. 2010 NY Slip Op 51414(U), 28 Misc.3d 1220(A) (Civil Ct., NY Co. 2010). See, Kipor Medicine P.C. v. MVAIC, 23 Misc.3d 948 (Civil Ct., Kings Co. 2009). Therefore, defendant correctly argues that it did not have timely mail the qualifying letters in order to preserve its defense of lack of coverage.
Plaintiff seeks to avoid the ramifications of non-coverage by placing the blame for the assignor's non-compliance with Insurance Law §5208 upon defendant since MVAIC mailed the qualifying letters to the wrong address. However, it was plaintiff's negligence in the first instance, by placing the wrong address on the bills, which caused defendant to mail the letters to the wrong address. MVAIC never received any communications directly from the assignor. The fact that the assignment of benefits form, which was filled out by the assignor and which contained his proper address, was nestled amidst numerous bills with the wrong address is besides the point. MVAIC sent four duplicative notices to Canon apprizing it that the assignor had not yet met the requirements of a qualified person and listing the items that were still outstanding. These letters clearly put Canon on notice that its assignor was not complying with the reporting requirements so that he could qualify as a covered person. These repetitive notices should have triggered the same question that plaintiff argues defendant ignored - did plaintiff provide the proper address to the assignor or was there another address that should have been utilized?
This conclusion is bolstered by the law governing assignment of benefits. As an assignee, plaintiff assumed all the responsibilities of its assignor, especially after it had repeatedly been notified by MVAIC that its assignor still had not met the requirements of a qualified person. The assignment of no fault benefits divests eligible injured persons of their interest in no fault benefits and makes them non-parties to actions commenced by their assignees Doshi Diagnostic Imaging Servs.v State Farm Ins. Co., 16 Misc.3d 42 (App. Term (9th & 10 th Jud. Dists 2007) . See, Cambridge Medical P.C. v Progressive Cas. Ins Co., 29 Misc.3d 186 (Civil Ct., Richmond Co. 2010). An assignee stands in the shoes of an assignor and thus acquires no greater rights than those of its assignor. NY & Presbyterian Hospital v. Country-Wide Ins. Co., 17 N.Y.3d 586592 (2011 ); East Acupuncture, P.C. v. Allstate Ins. Co., 61 A.D.3d 202, 211 (NY A.D.2d Dep't 2009); Family Care Acupuncture, P.C. v. MVAIC., supra, ("Because plaintiff's assignor... never qualified for benefits from MVAIC, his assignee, plaintiff, who stands in his shoes, is not entitled to benefits from defendant either.")
In fact, in the unique realm of no fault law, the assignment of benefits takes on an extraordinary meaning. Rather than there being simple privity between the assignor (eligible injured person) and the assignee (medical provider), there is "a virtual identity of interests by the very existence of the claim. " Magic Recovery Medical & Surgical Supply Inc. v. State Farm, 27 Misc.3d 67, 73 (App. Term, 2d Dept. 2010). The assignor and medical provider share "the same identity when we view a no-fault claim for medical services." Id . The assignment demonstrates a complete assignment of rights and interests by the assignor to the provider. Craniofacial Pain Mgmt. v. NY Cent. Mut. Fire Ins. Co., 186 Misc.2d 309, 310 (Civil Ct. Queens Co. 2000). "[T]he assignee of a claim is the real party in interest and he alone can bring suit" Id.
Furthermore, the objective behind the aforementioned law is the efficient and speedy processing of the no-fault claims. In line with this objective, for example, an insurer need not seek verification from the assignor who has divested his interest in no-fault benefits by assigning his rights to his provider. Cambridge Medical, P.C. v Progressive Cas. Ins. Co., 29 Misc.3d 186 (Civil Ct., Richmond Co. 2010). See, Mia Acupuncture, P.C. v Mercury Ins. Co., 26 Misc.3d 39, 894 N.Y.S.2d 321 (App Term, 2d, 11th & 13th Jud Dists. 2009).
Finally, the scant case law on the ramifications of sending a notice to the assignor at the wrong address appears to turn on the law of assignment and which party caused the wrong address to be utilized by the defendant in the first instance. In Triangle R. Inc v Clarendon, 2010 NY Slip Op 52159(U), 29 Misc.3d 142(A) (App. Term, 2d Dept. 2010), the court granted defendant's motion for summary judgment, despite the fact that copies of verification requests were sent to the assignor at the wrong address. The requests for verification were not rendered a nullity since the requests were sought from the plaintiff provider. In Infinity Health products, Ltd v. Redland Ins. Co., 2013 NY Slip Op 50751(U), 39 Misc.3d 140(A) (App. Term, 2d Dept 2013), the court found that the defendant had failed to demonstrate that IMEs had been properly scheduled when it mailed the IME scheduling letters to the assignor at the wrong zip code. However, there the plaintiff properly listed the assignor's zip code in both the claim forms and assignment of benefits form that it submitted to defendant. See also, Advanced Neurological Care, P.C. v. State Farm, 38 Misc.3d 750, 754 (Dist. Ct. Nass. Co., 2012) (when notice is given to a person's designated agent, that notice is imputed to the agent's principal under the premise that "an agent owes a duty to his principal to forward the notice").
Similarly, in the instant matter the assignor assigned the benefits way before plaintiff submitted the claims and way before MVAIC started sending its qualifying letters. As such, plaintiff stepped into the shoes of the assignor and was obliged not only to correctly transmit the assignor's correct address on its bills to defendant, but to ensure that the assignor complied with its obligation to become a qualified person and hence a covered person entitled to recover no- fault benefits from MVAIC. See, Akita Medical, supra, 14 Misc.3d at 408.
In light of the above ruling, defendant has proven its lack of coverage defense, the assignor is not covered with MVAIC and the case is dismissed.
This constitutes the Decision and Order of the Court.