The plaintiff, Quality Medical Care, PC, commenced this action against the defendant, Progressive Casualty Insurance Company, to recover first-party no-fault benefits for medical services rendered to their assignor-insured, Tammy Murphy, the insured pertaining to an automobile policy issued to her on August 2, 2011.

The plaintiff was represented by Scott H. Fisher, Esq., of counsel to the law firm of Israel, Israel and Purdy, LLP, and defendant was represented by Stafford Harmit, Esq., of counsel to the law firm of McCormick & Mattie, PC.

The bench trial in the above-captioned matter was conducted on June 2, 2017. Prior to the taking of any testimony the attorneys for the respective parties introduced a written Stipulation which, in relevant part, acknowledged that plaintiff had timely submitted a complete proof of claim to the defendant on or about August 20, 2012; that the business records of the plaintiff would be admitted into evidence as Exhibit 1 without objection and was attached to the Stipulation; that the business records of the defendant would be admitted into evidence as Exhibit 2 without objection and was attached to the Stipulation; acknowledged that defendant timely mailed a Denial of Claim form to the plaintiff on the date indicated therein, to wit: September 7, 2012, which form was contained within Exhibit 2; and that if any payments have been made by the defendant, the total disputed amount for the underlying bills is $1,979.30; that should there be an award in favor of the plaintiff the award should include statutory interests, attorney fees, costs and disbursements; and that the only issues to be decided at trial are those issues preserved in defendant's denial of claim forms, to wit: based upon an investigation conducted by the defendant, the patient and the insured, Tammy Murphy, is not an eligible injured party on the basis of having violated Part VII-The General Provisions of the automobile policy for having made misrepresentations in the insurance application that constitute a condition [*2]precedent for coverage to be in effect.

The attorney for the plaintiff, Scott H. Fisher, Esq., after having submitted the aforementioned written Stipulation in evidence furthermore stated that the policy was issued on August 2, 2011, and that the patient (and assignor-insured), Tammy Murphy, misrepresented her address in the insurance application.

Essentially, this court must determine whether or not the patient misrepresented her address. Under no-fault law, the burden is on the defendant insurance company to establish the misrepresentation.

Pursuant to the submission of the written Stipulation and the attached evidentiary materials, plaintiff's attorney took the posture that he had made out his prima facie case to entitle payment of the medical fees sought and rested on the record.

The attorney for the defendant insurance company, Stafford Harmitt, Esq., argued that based on the alleged misrepresentation made by the assignor-insured at the time she applied for automobile insurance that the insurance company had the right to deny the claim.

The defendant proceeded with its defense by calling Jerianne Green as a witness. Ms. Green identified herself as a claims adjuster and litigation specialist employed by the defendant for the past 13-½ years. Ms. Green testified that her job responsibilities required her to review lawsuits filed for payment on medical bills and to make the determination whether to pay the bills or to deny them, and if payment was to be denied she would defend the decision denying payment by testifying in Court. Ms. Green testified that she was familiar with the facts and circumstances of the case based on having reviewed the file in preparation for trial.

Without objection by plaintiff, Ms. Green provided a copy of the insurance policy application which was marked as Defendant's Exhibit A. The policy application (Exhibit A) indicated that on August 2, 2011 the patient and the assignor-insured, Tammy Murphy, listed her address as being 116 Bidwell Terrace, Rochester New York 14609. In addition, Ms. Green without objection by plaintiff provided certified copies of two (2) motor vehicle accident reports, NYS Department of Motor Vehicle forms MV-104 and MV-104AN, marked as Defendant's Exhibits B-1 and B-2, respectively.

The significance of defendant's Exhibits B-1 and B-2 is that on the date of the motor vehicle accident, to wit: July 4, 2012, Ms. Tammy Murphy, provided a residential address of 123-65 147 Street, Jamaica New York 11436, to the reporting police officer(s), not the Rochester, New York address she had provided nine (9) months earlier in her insurance application. In fact, according to the defendant's Exhibits B-1 and B-2, Ms. Murphy's residential address on the date of the accident, to wit: July 4, 2012, was based on and corroborated by the address contained in her New York State driver's license and motor vehicle registration certificate.

Ms. Green furthermore testified that attributable to the discrepancy in the residential address provided by Ms. Murphy at the time she applied for insurance and the address indicated in the accident report that the defendant insurance company's procedures were to request verification of the address to corroborate and establish that the insurance applicant actually resided at the address stated in the application when the policy was first taken out. Based on the failure of Ms. Murphy to receive correspondence mailed to her by the defendant as said correspondence was returned by the post office as undeliverable and the further failure to provide [*3]any proof of her Rochester, New York residence on the date the policy was taken out the defendant denied the claim for medical services on the basis of fraud and misrepresentation in the insurance application.

Ms. Green acknowledged that she herself never conducted any investigation of Ms. Murphy's residence nor had any involvement with the case other than reviewing the file for purposes of testifying at trial, ie., Ms. Green had no personal knowledge of the matters that she testified about at the trial.

The best that this court can surmise, is that there must be a price differential in the policy premiums charged in Rochester, New York and Jamaica, New York, with the latter premiums being higher as this appears to be the motive attributed by defendant to the plaintiff's assignor, Tammy Murphy, to perpetrate a fraudulent scheme by procuring the subject insurance policy at a reduced insurance premium. The defense asserted by the defendant is that as a consequence Ms. Murphy's medical provider, the plaintiff, is not eligible to recover assigned no-fault benefits.

Assuming arguendo that Ms. Murphy had used a fraudulent scheme to procure insurance the defendant, pursuant to Vehicle and Traffic Law Section 313, would not have been able to terminate the policy by canceling it until after it mailed a notice of termination by regular mail to her as an insurance carrier's common-law right to cancel a contract of insurance pursuant to its provisions may only be effected prospectively. (Matter of Liberty Mutual Insurance Company v. McClellan, 127 AD2d 767, [1987; see also Matter of Cruz v. New Millennium Construction Corp., 17 AD3d 19 [2005]; Matter of MetLife Auto & Home v. Agudelo, 8 AD3d 571 [2005]; Matter of Integon Insurance Company v. Goldson, 300 AD2d 396 [2002]; Matter of Insurance Company of New Amsterdam v. Kaplun, 274 AD2d 293 [2000]). The statute "places the burden on the insurer to discover any fraud before issuing the policy, or as soon as possible thereafter, and protects innocent third parties who may be injured due to the insured's negligence" (Matter of Insurance Company of New Amsterdam v. Kaplun, 274 AD2d 293 [2000]). In this case there has been no allegation nor any proof that the defendant effectively canceled the subject insurance policy pursuant to VTL Section 313 prior to July 4, 2012, the date of occurrence of the accident.

However, in "an action to recover benefits under a policy, the insurance carrier may assert as an affirmative defense that the insured's misrepresentations and/or fraud in obtaining the policy precludes any recovery by the insured" (Matter of Insurance Company of New Amsterdam v. Kaplun, 274 AD2d 293 [2000]). This is essentially the defense that the defendant insurance company, Progressive Casualty Insurance Company, has asserted.

It has been held that health care providers deal with the as assignor-insured at their peril in accepting an assignment of the insured's no-fault benefits. (Matter of Insurance Company of New Amsterdam v. Kaplun, 274 AD2d 293 [2000]). Contrary to plaintiff's contention, the defense of fraudulent procurement of an insurance policy, which is non-waivable and hence exempt from the 30-day preclusion rule, may be asserted as against plaintiff-providers in this action seeking to recover assigned no-fault benefits (Matter of Metro Medical Diagnostics v. Eagle Insurance Company, 293 AD2d 751 [2002]).

Included in Exhibit 1 of the written Stipulation is a photocopy of the New York State motorist license to the assignor-insured, Tammy M. Murphy, as well as a New York State insurance identification card issued to her on or about October 27, 2011, by Progressive, defendant in the above-captioned matter. Ms. Murphy's driver's license was issued to her on July [*4]22, 2010, and lists her residence at said time as 123-65 147 Street, Jamaica New York 11436. Therefore on August 2, 2011, the time that the insurance application was submitted Ms. Murphy's residence address on file with the New York State Department of Motor Vehicles was in Jamaica, New York. Said driver's license had been issued a little over a year at the time that Ms. Murphy submitted her application for insurance, which application was admitted into evidence without objection by the plaintiff and was marked Defendant's A in evidence. It is furthermore noted by this court that the motor vehicle sought to be insured by Ms. Murphy on August 2, 2011, was a 2005 Mitsubishi Gallant which according to the insurance application was garaged in ZIP Code 14609, i.e., Rochester, New York.

Also included in Exhibit 1 of the written Stipulation is a New York State insurance identification card issued by Progressive on October 27, 2011, to Ms. Murphy for a 2008 Dodge, as a "REPLACEMENT VEHICLE". By issuing a New York State insurance identification card to Ms. Murphy on October 27, 2011, reflecting the Jamaica, New York residential address Progressive Casualty Insurance Company had actual notice that she was no longer residing in Rochester, New York, as of said date. As such the plaintiff, had eight (8) months prior knowledge that Ms. Murphy was residing in New York City prior to the July 4, 2012, motor vehicle accident.

The record is devoid of what actions, if any, the defendant took in regards to Ms. Murphy's automobile insurance policy after having actual knowledge that she was residing in Jamaica, New York. Apparently, the defendant subsequent to the automobile accident decided to disclaim payment of Ms. Murphy's medical bills on the purported basis that at the time the application for insurance was submitted by her that she provided a false residential address.

While it is difficult to determine Ms. Murphy's actual residence at the time she applied for automobile insurance as the only evidence adduced at trial was based on documentary evidence there is no evidence attesting to her intent. What is known is that at the time of issuance of a driver's license Ms. Murphy represented to the New York State Department of Motor Vehicles that she was residing in Jamaica, New York. That in filing out an on-line application for insurance Ms. Murphy provided the Rochester, New York address and not the address contained on her driver's license. Is this a manifestation that Ms. Murphy had relocated to Rochester, New York, and failed to notify the New York State Department of Motor Vehicles of her change in residence? In any event, Ms. Murphy registered a 2005 Mitsubishi in late July or early August 2011 utilizing her address in Rochester, New York. Then within three (3) months time Ms. Murphy registered a replacement vehicle, the 2008 Dodge, for which on October 27, 2011, she was issued another insurance identification card by Progressive which contained the same Jamaica, New York address as reflected in her driver's license. On July 4, 2012, the date of the accident Ms. Murphy provided the Jamaica, New York address to the police officers who filled out the accident reports and as contained not only on her driver's license but most importantly on the insurance identification card issued by Progressive three (3) months after procuring an automobile insurance policy. Ms. Murphy did not have Progressive issue an insurance identification certificate for the replacement motor vehicle on October 27, 2011, with the Rochester, New York address. As such, this court does not conclude that Ms. Murphy had any intent to provide a false and fraudulent residential address when filled out the insurance application to obtain automobile insurance.

Any financial benefit to Ms. Murphy for the three (3) month period that the 2008 Dodge was registered in Rochester, New York would have been minimal. The defendant having actual notice that Ms. Murphy was residing in Jamaica, New York should have at a minimum upwardly adjusted the insurance policy premium. If Ms. Murphy had any motive to pay lower premiums then query why the replacement vehicle was not registered by Ms. Murphy in Rochester, New York.

This court holds that the defendant, Progressive Casualty Insurance Company has failed to meet its burden of proof that the assignor-insured, Ms. Murphy, provided a false and fraudulent residential address on August 2, 2011, on her insurance application. Therefore the plaintiff, Quality Medical Care, PC, is entitled to a money judgment in the amount of $1,979.30, plus costs and disbursements and statutory interest.