Law Office of Peter C. Merani, P.C. (Eric M. Wahrburg of counsel), for appellant. Law Office of Damin J. Toell, P.C. (Damin J. Toell of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Carolyn E. Wade, J.), entered June 18, 2014, deemed from a judgment of that court entered November 12, 2015 (see CPLR 5501 [c]). The judgment, entered pursuant to the June 18, 2014 order denying defendant’s motion for summary judgment dismissing the complaint and granting the branches of plaintiff’s cross motion seeking summary judgment and costs, awarded plaintiff the principal sum of $3,793.02 and, among other things, “other costs” in the amount of $250.

ORDERED that the judgment is reversed, without costs, so much of the order entered June 18, 2014 as granted the branches of plaintiff’s cross motion seeking summary judgment and costs is vacated, and those branches of plaintiff’s cross motion are denied.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint on the ground that plaintiff’s assignor had failed to appear for duly scheduled independent medical examinations, and plaintiff cross-moved for summary judgment and for costs and attorney’s fees. By order entered June 18, 2014, the Civil Court denied defendant’s motion and granted the branches of plaintiff’s cross motion seeking summary judgment and costs. A judgment awarding plaintiff the principal sum of $3,793.02 and, among other things, “other costs” in the amount of $250, was entered on November 12, 2015. Plaintiff’s appeal from the June 18, 2014 order is deemed to be from the judgment entered pursuant thereto (see CPLR 5501 [c]).

As defendant’s moving papers failed to establish, as a matter of law, that defendant had timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]) its denial of claim forms, the Civil Court properly determined that defendant was not entitled to summary judgment dismissing the complaint.

We further find that plaintiff’s cross motion papers did not establish either that defendant had failed to timely deny the claims or that defendant had issued timely denial of claim forms that were conclusory, vague or without merit as a matter of law (see Insurance Law § 5102 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]). As plaintiff failed to establish its prima facie case, the branch of its cross motion seeking summary judgment should have been denied. We note that plaintiff failed to demonstrate that defendant or its counsel had engaged in sanctionable conduct (see 22 NYCRR 130-1.1 [c]). Consequently, we also deny the branch of plaintiff’s cross motion seeking costs.

Accordingly, the judgment is reversed, so much of the order entered June 18, 2014 as granted the branches of plaintiff’s cross motion seeking summary judgment and costs is vacated, and those branches of plaintiff’s cross motion are denied.

PESCE, P.J., ALIOTTA and ELLIOT, JJ., concur.

[*1] (July 18, 2018)

Russell Friedman, Lake Success, NY (Dara C. Goodman of counsel), for appellant.

Peter C. Merani, P.C., New York, NY (Eric M. Wahrburg of counsel), for respondent.

In an action pursuant to Insurance Law § 5106 (c) for a de novo determination of claims for no-fault insurance benefits, the defendant appeals from an order of the Supreme Court, Nassau County (James P. McCormack, J.), entered October 19, 2016. The order denied the defendant’s motion pursuant to CPLR 5015 (a) (1) to vacate its default in answering the complaint and pursuant to CPLR 2004 and 3012 (d) to extend its time to answer the complaint.

Ordered that the order is reversed, on the facts and in the exercise of discretion, with costs, and the defendant’s motion pursuant to CPLR 5015 (a) (1) to vacate its default in answering the complaint and pursuant to CPLR 2004 and 3012 (d) to extend its time to answer the complaint is granted.

This action pursuant to Insurance Law § 5106 (c) for a de novo determination of claims for no-fault insurance benefits arises from a motor vehicle accident that occurred on July 28, 2013. Jude M. Blanc allegedly was injured in the accident, and he underwent hip surgery at the defendant hospital. The defendant submitted a claim to the plaintiff insurer for no-fault benefits for the surgery and related care. The plaintiff denied the claim.

The defendant submitted the matter to arbitration. The arbitrator determined that the defendant was entitled to no-fault compensation in the amount of $16,134.83, plus interest and attorney’s fees. The plaintiff appealed the award to a master arbitrator, who affirmed the award.

On January 29, 2015, the plaintiff commenced this action pursuant to Insurance Law § 5106 (c) for a de novo determination of the defendant’s claims for recovery of no-fault benefits. The plaintiff then moved for leave to enter a default judgment because the defendant failed to timely appear or answer the complaint. In an order entered April 21, 2015, the Supreme Court granted the plaintiff’s motion for leave to enter a default judgment. On June 8, 2015, the court entered a default judgment.

In July 2016, the defendant moved pursuant to CPLR 5015 (a) (1) to vacate its default, and pursuant to CPLR 2004 and 3012 (d) to extend its time to answer the complaint. In an order entered October 19, 2016, the Supreme Court denied the motion, and the defendant appeals.

The defendant’s motion was timely made (see CPLR 5015 [a] [1]; 2103 [b] [2]). A defendant seeking to vacate a default pursuant to CPLR 5015 (a) (1) on the ground of excusable default must demonstrate a reasonable excuse for the default and a potentially meritorious defense to the action (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; EMC Mtge. Corp. v Toussaint, 136 AD3d 861, 862 [2016]; Lane v Smith, 84 AD3d 746, 748 [2011]). Here, the defendant demonstrated a reasonable excuse for its default and a potentially meritorious defense to the action (see CPLR 5015 [a] [1]; Matter of Williams v Williams, 148 AD3d 917, 918 [2017]; Matter of Gasby v New York City Hous. Auth./Walt Whitman Houses, 142 AD3d 1018, 1019 [2016]; Youth v Grant, 126 AD3d 893, 893 [2015]). Furthermore, the plaintiff did not assert before the Supreme Court that the defendant’s delay in answering resulted in prejudice, the record does not reflect that the defendant acted willfully, and public policy favors resolution on the merits (see Matter of Gasby v New York City Hous. Auth./Walt Whitman Houses, 142 AD3d at 1019; Youth v Grant, 126 AD3d at 894; Curran v Graf, 13 AD3d 409 [2004]).

Accordingly, the Supreme Court improvidently exercised its discretion in denying the defendant’s motion pursuant to CPLR 5015 (a) (1) to vacate its default in answering the complaint and pursuant to CPLR 2004 and 3012 (d) to extend its time to answer the complaint. Chambers, J.P., Austin, Miller and Maltese, JJ., concur.

[*1]

District Court of Nassau County, First District, July 16, 2018

APPEARANCES OF COUNSEL

Thomas Torto, New York City, for defendant.

The Russell Friedman Law Group, LLP, Lake Success, for plaintiffs.

By handwritten stipulation signed by counsel and “So Ordered” by this court on January 18, 2018, a prior disclosure related motion was withdrawn and a submission schedule was entered into to allow consideration of “the sole remaining disclosure issue” without the need to re-notice a new motion or amend the motion being withdrawn. As characterized by the so ordered stipulation, said issue is “whether or not defendant is entitled to depose plaintiff Yan Moshe (Moshe) pursuant to defendant’s Notice to Take his deposition which notice is objected to by plaintiff.”

Thus, before this court is what may be deemed defendant’s motion to compel the deposition of Moshe (see generally CPLR 3124; see also CPLR 3103 [a]).

Plaintiffs bring this plenary action to recover the sum of $10,906.14, said sum being the balance of monies claimed due as loss of earnings for Moshe’s appearance at a November 10, 2015 examination under oath (EUO or deposition) taken in the context of a first-party no-fault insurance claim(s) submitted by Excel Surgery Center, LLC of which Moshe is the owner.

There is no dispute that pursuant to the relevant provisions governing EUOs involving a first-party no-fault insurance claim(s) the deponent is entitled to “loss of [*2]earnings” caused by attendance at the EUO (11 NYCRR 65-3.5 [e]).

As alleged in plaintiffs’ complaint, on or about November 6, 2015—prior to the November 10, 2015 EUO—counsel for Excel advised counsel for Country-Wide Insurance Company that Moshe claimed a loss of earnings of $12,186.14 (complaint ¶ 24). In support thereof, and as previously requested by Country-Wide’s counsel (complaint ¶ 22), Excel’s counsel provided a redacted copy of Moshe’s 2014 joint federal tax return which showed $320,000 in “Wages, salaries tips, etc.” and an additional $2,604,942 in “Rental real estate, royalties, partnerships, S corporations, trusts, etc.” (Complaint ¶ 24; defendant’s {**60 Misc 3d at 925}exhibit D [tax return].)^[FN*] Despite demand for confirmation that full payment would be made at the conclusion of the deposition (complaint ¶ 24), Country-Wide neither committed to payment nor rejected same (complaint ¶ 26). Instead, following the EUO, on or about March 10, 2016, Country-Wide remitted $1,280 as its calculation of Moshe’s loss of earnings (complaint ¶ 36).

The within action was subsequently brought by plaintiffs seeking recovery of the difference between Moshe’s demand ($12,186.14) and Country-Wide’s payment ($1,280). The issue now before the court is whether plaintiff Moshe should be compelled to appear for a “second” deposition, this time addressing how he calculates the $10,906.14, as the unpaid balance still due to him for his loss of earnings incurred by his appearance at the first deposition.

Plaintiffs oppose defendant’s current notice to again depose plaintiff Moshe, contending that the first deposition should have included the “loss of earnings” issue. In effect, plaintiffs would have this court find that defendant’s failure to address the loss of earnings issue in the context of the first-party no-fault insurance claim constitutes a waiver of defendant’s right to now depose him in the context of this action.

The issue appears to be one of first impression.

It is beyond cavil that the purpose of an EUO of a medical provider in the context of a claim for first-party no-fault insurance benefits is to obtain discovery material and necessary to the defense of said claim (North Bronx Med. Health Care v Auto One Ins. Co., 53 Misc 3d 148[A], 2016 NY Slip Op 51625[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016], citing inter alia CPLR 3101 [a]). Accordingly, this was the subject of the examination conducted by defendant on November 10, 2015, and defendant carrier will not be faulted for limiting its deposition to the issues for which the deposition was properly sought.

While 11 NYCRR 65-3.5 (e) establishes and safeguards a medical provider’s right to be paid for appearing at an EUO upon a claim for first-party no-fault insurance benefits, the governing provisions of this section speak in terms of reimbursement. It has accordingly been held that a deponent may{**60 Misc 3d at 926} not seek a flat, up-front fee before appearing (Professional Health Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 51 Misc 3d 143[A], 2016 NY Slip Op 50698[U] [App Term, 2d Dept, 2d, 11th[*3]& 13th Jud Dists 2016], citing 11 NYCRR 65-3.5 [e]). In view of same, the failure of defendant to agree upon the amount of payment in advance of the EUO despite plaintiffs’ efforts in this regard is of no consequence.

That a dispute might have been anticipated over the sufficiency of defendant’s eventual calculation of deponent’s loss of earnings does not serve to broaden the scope of that deposition beyond the then pending no-fault insurance benefits claim. Rather, the parties’ inability to agree on the amount to be reimbursed rendered the within plenary action the appropriate vehicle for adjudication of this ongoing dispute.

With the commencement of a plenary action comes the defendant’s entitlement to relevant discovery in defense thereof (CPLR 3101 [a]).

Nevertheless, the within plenary action remains an adjunct of the prior claim for first-party no-fault insurance benefits. There is no dispute that Moshe is entitled to be paid for the financial impact of appearing at the first deposition. To now permit a second deposition to be held over a dispute regarding the amount of that impact has the practical effect of reducing by roughly half the recovery intended to be protected by 11 NYCRR 65-3.5 (e). This is so regardless of which party ultimately prevails in fixing the amount of Moshe’s loss of earnings for his appearance at the first deposition.

CPLR 3103 (a) provides that

“[t]he court may at any time on its own initiative, or on motion of any party or of any person from whom or about whom discovery is sought, make a protective order denying, limiting, conditioning or regulating the use of any disclosure device. Such order shall be designed to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts.”

Under the circumstances, the consequences of a second deposition seem inherently unreasonable given the availability of a middle course designed to protect defendant’s right to discovery in the context of this plenary action while recognizing that the action has as its core a claim of financial harm caused by deposing plaintiff.{**60 Misc 3d at 927}

Accordingly, in the discretion of the court plaintiffs are awarded a protective order against the deposition of Yan Moshe. However, defendant may serve interrogatories upon plaintiffs (see CPLR 3130 et seq.).

Footnotes

Footnote *:Although the reported figures are for both Moshe and his spouse, plaintiffs’ counsel maintains that all but $120,000 in the combined income shown on the joint return belongs to Moshe (mem of law at 5).

Decided on July 13, 2018

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Bryan, Cave, Leighton, Paisner, LLP (William T. O’Connell and Daniel Klein of counsel), for appellant. Law Offices of Emilia I. Rutigliano, P.C., for respondent (no brief filed).

Appeal from an order of the Civil Court of the City of New York, Kings County (Katherine A. Levine, J.), entered October 16, 2015. The order denied defendant’s motion to vacate a default judgment of that court entered December 3, 2013 upon defendant’s failure to proceed at trial.

ORDERED that the order is reversed, with $30 costs, and defendant’s motion to vacate the default judgment is granted.

In this action by a provider to recover assigned first-party no-fault benefits arising out of an accident that occurred on December 21, 2009, defendant moved to vacate a judgment, entered December 3, 2013, that had apparently been entered upon its failure to proceed at trial on December 17, 2012. In support of its motion, defendant submitted an affidavit by plaintiff’s assignor in which plaintiff’s assignor admitted that the December 21, 2009 accident underlying this no-fault proceeding had been staged, and an order dated April 26, 2013, from the Supreme Court, New York County, in a declaratory judgment action, entered on default, finding that defendant herein had no duty to pay any no-fault benefits to plaintiff herein and its assignor, among others, with respect to this accident. The Civil Court denied defendant’s motion, finding that defendant had failed to establish a reasonable excuse for its failure to proceed at trial.

Defendant’s motion should have been granted, as defendant demonstrated both a reasonable excuse for its failure to proceed at trial and a meritorious defense (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]).

Accordingly, the order is reversed and defendant’s motion to vacate the default judgment is granted.

WESTON, J.P., ELLIOT and SIEGAL, JJ., concur.

Korsunskiy Legal Group, P.C. (Koenig Pierre of counsel), for appellant. Law Offices of Peter C. Merani, P.C. (Eric M. Wahrburg and Samuel Kamara of counsel), for respondent.

Appeal from a judgment of the Civil Court of the City of New York, Kings County (Robin Kelly Sheares, J.), entered December 11, 2015. The judgment, entered pursuant to a determination of that court that plaintiff had defaulted by failing to comply with a condition for the granting of an adjournment of the trial, dismissed the complaint.

ORDERED that the appeal is dismissed except insofar as it brings up for review the determination that plaintiff had defaulted by failing to comply with the condition for the granting of an adjournment of the trial; and it is further,

ORDERED that the judgment, insofar as reviewed, is reversed, with $30 costs, the determination that plaintiff had defaulted by failing to comply with the condition for the granting of an adjournment of the trial is vacated, and the matter is remitted to the Civil Court for a new determination, following a hearing, of whether plaintiff had satisfied the condition for the granting of an adjournment and for any and all further proceedings, in accordance with this decision and order.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from a judgment dismissing the complaint, which was entered upon the Civil Court’s determination that plaintiff had defaulted by failing to comply with a condition set by the court for granting plaintiff an adjournment of the trial, to wit, that plaintiff provide proof of the funeral [*2]which plaintiff’s counsel alleged his witness had been attending on the scheduled trial date.

We note that, although no appeal lies from a judgment entered on the default of the appealing party (see CPLR 5511), an appeal from such a judgment brings up for review those matters which were the subject of contest below (see James v Powell, 19 NY2d 249, 256 n 3 [1967]), which, in this case, was the Civil Court’s determination that plaintiff had defaulted by failing to satisfy the condition for the granting of an adjournment (see Park Lane N. Owners, Inc. v Gengo, 151 AD3d 874 [2017]; Delijani v Delijani, 100 AD3d 823 [2012]; Matter of Branch v Cole-Lacy, 96 AD3d 741 [2012]; Sarlo-Pinzur v Pinzur, 59 AD3d 607 [2009]).

“The granting of an adjournment for any purpose is a matter resting within the sound discretion of the trial court” (Matter of Anthony M., 63 NY2d 270, 283 [1984]), and the Civil Court acted within its discretion in conditioning the granting of an adjournment of the trial upon plaintiff’s providing proof of the funeral that its witness had allegedly been attending. However, we find that, in the circumstances presented, the Civil Court improvidently exercised its discretion in not allowing plaintiff’s witness to testify in order to try to provide the required proof. Consequently, we remit the matter to the Civil Court for a hearing to give plaintiff such an opportunity, following which the court shall determine whether it is satisfied with plaintiff’s proof.

Accordingly, the judgment, insofar as reviewed, is reversed, the determination that plaintiff had defaulted by failing to comply with a condition for the granting of an adjournment is vacated, and the matter is remitted to the Civil Court for a new determination, following a hearing, of whether plaintiff had satisfied the condition for the granting of an adjournment and for any and all further proceedings.

WESTON, J.P., ELLIOT and SIEGAL, JJ., concur.

CV-023737-10

For Plaintiff: Marcote & Associates, P.C.

For Defendant: Freiberg, Peck & Kang, LLP

After conducting a no-fault bench trial on the above captioned matter, this Court makes the following findings and conclusions:

At the commencement of the above captioned trial, the attorneys for the respective parties entered into a Stipulation that contained documents to be relied upon by the defendant’s witness, to wit: letters, correspondence, statements, denials and an insurance policy application. Respective counsels acknowledged having examined all documents contained in the Stipulation and agreed that foundation for their introduction had been established and put into evidence, which was marked as Court Exhibit I, which contained documents marked as Exhibits A through J.

In his opening statement, plaintiff’s counsel stated that the above captioned matter involved a rescission of an automobile policy with regard to no-fault law benefits. Plaintiff’s counsel essentially was contesting whether defendant’s witness’ testimony as to the basis for the rescission of the automobile policy and the documentation contained within Court Exhibit I would be sufficient to establish a foundation for the rescission. Plaintiff’s counsel final representation was that the parties would further stipulate that the plaintiff’s claims for medical services rendered had been mailed to the defendant’s insurance company and as such, that the plaintiff established its prima facie case.

Defendant’s counsel stated that the automobile insurance policy referenced by plaintiff’s counsel was a South Carolina policy which resulted in a conflict of laws between South Carolina and New York State with respect to the rescission of the policy. Defendant’s counsel acknowledged that in establishing an automobile insurance policy rescission issued for another state, New York case law placed the burden on the defendant/insurer to establish that the rescission was actually executed, by establishing that the rescission letter was mailed and that the policy premiums were refunded to the insured.

Defendant’s counsel further argued that New York case law did not impose a burden to [*2]establish that any underlying fraud had occurred before establishing a sister state rescission. Defendant’s counsel nonetheless represented that Court Exhibit I provided some proof of the underlying fraud to which defendant’s witness, Barbara Terry, would testify to. Defendant counsel, in his opening statement, also stated that if the automobile insurance policy rescission was found to be proper then the injured party and even the third party, the plaintiff in the above captioned matter, would be precluded from obtaining any insurance benefits. Finally, counsel for the respective parties further stipulated that on November 7, 2007, the defendant insurer had mailed out a rescission letter with two (2) premium refund checks in the amounts of $16,762.76 and $1,562.00, respectively, sent to the policyholder, which the latter cashed. See Exhibit J contained in Court Exhibit I.

This Court’s review of Exhibit A attached to Court Exhibit I, reveals that the November 15, 1999, application for automobile insurance, purportedly submitted by the insured, Jerome McDowell, only lists his name as the motorist. Furthermore, in the “Applicant’s Statement-Read Before Signing” of Exhibit A, Jerome McDowell, certified that, in relevant part, “(a) all operators of my vehicle have been reported to the company and (b) my principal residence/place of vehicle garaging is in South Carolina, ten (10) or more months each year “

Further contained in the Applicant’s Statement is a representation by the insured, Jerome McDowell, that he has applied to the company ” for a policy of insurance as set forth in this application on the basis of the statements contained herein. I agree that such policy of insurance shall be null and void if such information is false, or misleading, or could materially affect acceptance of the risk by the company ” Exhibit A furthermore contains the November 15, 2006, Renewal Declarations which then added the 2000 Dodge Intrepid to the insurance policy. Exhibit A also contains as an attachment the Personal Automobile Policy- South Carolina. In Part F- General Provisions of the policy, there is a termination clause, paragraph 1, that provides that “this policy may be cancelled during the policy period as follows: iii. If the policy was obtained through willful misrepresentation, or concealment of any material fact or circumstances, or fraud.”

The policy’s termination clause in the insurance policy furthermore states in relevant part, “the statements made by you in the application are deemed to be representations. If any representation is false, misleading or materially affects the acceptance of this risk by us, by either willful misrepresentation, omission, concealment of facts or incorrect statements, this policy may be null and void from its inception, whether before or after the loss. We do not provide coverage for any insured who has made fraudulent statements or engaged in fraudulent conduct in connection with any accident or loss for which coverage is sought under this policy.”

Also contained within the insurance policy are declarations stating, in relevant part, that by accepting this policy you agree that this policy is issued upon the truth of the information provided by you. Exhibit C of Court Exhibit I contains the March 12, 2007, police accident report listing as the driver of the 2000 Dodge Intrepid, Ngozichakwuu Amadi, residing at 772 Jefferson Avenue, Brooklyn, New York, and listing the vehicle’s owner as Jerome Wallace McDowell, residing at 110 Madison Street, Olanta, South Carolina.

This Court also reviewed Exhibit G of Court Exhibit I, the May 7, 2007, tape recorded telephone interview of Garis McDowell. In said interview, Garis McDowell stated, in relevant part, the following: that he resided at 772 Jefferson Avenue, Brooklyn, New York, for the past approximately seven to eight years; that Ngozichakwuu Amadi, the operator of the 2000 Dodge Intrepid involved in the March 12, 2007, automobile accident has resided together with him for [*3]approximately twelve years and who he considers his common-law wife; that although his brother, Jerome McDowell, the insured and the documented owner of the 2000 Dodge Intrepid, gave him permission to use said vehicle, that the vehicle was kept in Brooklyn, New York, and which he used on and off for years, and that in turn, he had given Ms. Amadi permission on March 12, 2007, to drive the automobile. Garis McDowell further stated that his brother, Jerome McDowell, was aware that he, Garis McDowell, had given Ms. Amadi permission to drive the subject vehicle. Garis McDowell further stated that motor vehicles have been shared by the family. At the conclusion of the interview, Garis McDowell stated that he truthfully answered all questions asked of him and that he understood all questions asked of him.

This Court has reviewed Exhibit H, the September 26, 2007, examination under oath of the insured, Jerome McDowell. In relevant part, Jerome McDowell acknowledged that although he maintained automobile insurance, he denied ever owning the 2000 Dodge Intrepid, although it was insured on his insurance policy, that Mary McFadden, the sister of both himself and Garis McDowell, made all the arrangements to insure the motor vehicles, Jerome could not even state with certainty that he himself was the signatory on the insurance application and that his sister, Mary McFadden had his authorization to sign his name to obtain insurance. Jerome McDowell furthermore stated that as far as the 1960’s all motor vehicle purchases by various family members were placed in his mother’s name and all vehicles were placed on the same insurance policy. Jerome McDowell further stated that Garis McDowell drove the 2000 Dodge Intrepid back and forth from New York to South Carolina, never leaving it for more than three months at a time in South Carolina. Jerome McDowell also stated that he himself never gave permission to his brother Garis McDowell’s “common-law wife”, Ms. Amadi, to drive the subject vehicle as he does not even know her.

This Court then reviewed Exhibit I and Exhibit J, respectively, contained in Court Exhibit I. Exhibit I is the November 7, 2007, rescission letter by the insurer’s Senior Special Investigator, Robert Dwy. Said letter informed the insured, Jerome McDowell, in relevant part, that upon completion of the investigation into the claims, it had been determined that material misrepresentations in the procurement of the automobile insurance policy had been made by Jerome McDowell; that the insurer had issued the insurance policy based upon those misrepresentations in the application for issuance; it appearing that the insured, Jerome McDowell, insured his vehicles for other family members that were never listed on the policy and that the listed vehicles were not garaged in the State of South Carolina.

Senior Special Investigator Robert Dwy concluded his November 7, 2007, letter by stating that “in accordance with the policy terms and as a result of [the] investigation, [the] policy has been voided back to the inception. All moneys paid on [the] policy are being refunded to you. Furthermore, coverage for all claims resultant from the accident of March 12, 2007, is being denied.” Exhibit J documents the payments made to the insured, Jerome McDowell, and received by his attesting to the return of all moneys paid by him on the policy.

On November 17, 2017, a non-jury trial in the above captioned no-fault proceeding was conducted by this Court, wherein in addition to the joint submission into evidence of Court Exhibit I, the defendant insurer called New York Personal Insurance Protection Specialist Barbara Terry as a witness. Ms. Terry testified that her duties for the insurer was to handle any claims that originate for the State of New York pertaining to accidents occurring within New York State. Ms. Terry testified she was familiar with the claim having read the file and that the claim decision was to rescind the policy based on material misrepresentations and fraud. Said [*4]decision was based on the vehicle involved in the accident was not garaged in South Carolina where the policy originated from as it was garaged in New York. This information as to where the subject vehicle was garaged was obtained from statements made by the insured, Jerome McDowell (Exhibit H), and his brother, Garis McDowell (Exhibit G).

Ms. Terry furthermore testified that the insurance policy application never made any indication of Garis McDowell nor Ms. Amadi as additional drivers. Ms. Terry furthermore testified that the failure to list either Garis McDowell or Ms. Amadi as additional drivers was a misrepresentation constituting a material risk to what was insured. As such, Ms. Terry stated that the insurer would not have underwritten the particular policy or insured Jerome McDowell. Ms. Terry also testified that the information provided in the application and for which the insurer relied were misrepresentations made to defraud the insurer.

As to the involvement, if any, of Ms. Amadi pertaining to the misrepresentations made to the insurer, Ms. Terry testified that although the former was not listed as a driver on the policy, that she must have been aware of the misrepresentations on the basis of having resided for twelve years with the insured’s brother, Garis McDowell. This Court rejects Ms. Amadi’s alleged awareness as to the misrepresentation as being based on speculation.

On cross examination, Ms. Terry acknowledged that the insurer received plaintiff’s bills for acupuncture treatments rendered to Ms. Amadi. When questioned as to the insurer issuing delay and/or denial letters until the investigation was completed, Ms. Terry stated that they were sent but other than the November 7, 2007, rescission letter no such letters were introduced into evidence and defendant insurer’s attorney stipulated on the record hat no specific claim denials of any of the bills in dispute were in evidence. Ms. Terry furthermore testified that none of the claims in connection with the March 12, 2007, accident were ever paid. At the conclusion of her testimony, Ms. Terry acknowledged that no statements were made or taken of the driver, Ms. Amadi, nor was there any request that she submit to an examination under oath.

In order for this Court to render a decision, it would in the first instance have to resolve the conflict of laws between New York law and South Carolina Law. According to plaintiff’s counsel, under New York law there is no preclusion of defenses if a claim is not paid or denied within thirty days. And as stipulated by the parties on the record that once the claims in dispute were mailed to the insurance company, the plaintiff has established its prima faie case and is entitled to payment as no payment nor denial of payment was made by the insurer. In effect, the plaintiff is arguing that by mailing out the claim and with the failure of the insurer to pay the claim or dispute payment of the claim within thirty days of receipt of the claim, the insurer is strictly liable for payment under New York’s No-Fault Law.

According to the defendant’s counsel, the argument is that the applicable law to decide the case is not New York law but South Carolina law. Defense counsel argues that South Carolina law allows the rescission of the insurance policy and also allows the rescission to be made retroactively, including after the occurrence of the accident.

The case of Careplus Medical Supply, Inc., as Assignee of Luis Gomez v Selective Insurance Company of America, 25 Misc 3d 48 [App Term 2009], is instructive as it pertains to a conflict of law, the very issue presented in the case at bar relating to an insurance policy which must be resolved by the conflict of laws relevant to contracts. (see Zurich Ins. Co. v Shearson Lehman Hutton, 84 NY2d 309, 319 [1994]; Matter of Allstate Ins. Co. [Stolarz—New Jersey Mftrs. Ins. Co.], 81 NY2d 219, 226 [1993). The Court of Appeals has adopted a “center of gravity” or “grouping of contacts” approach (Auten v Auten, 308 NY 155, 160 [1954]), which [*5]gives controlling effect to the law of the state that has “the most significant relationship to the transaction and the parties” (Restatement [Second] of Conflict of Laws § 188 [1]). In addition to the traditional determinative factor of the place of contracting, which should be given “heavy weight” in a grouping of contacts analysis (see Haag v Barnes, 9 NY2d 554, 560 [1961]), the places of negotiation and performance, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties are also to be considered (see Zurich Ins. Co., 84 NY2d at 319; Restatement [Second] of Conflict of Laws § 188 [2]). The accident herein occurred in New York. The relevant insurance policy was negotiated and entered into in South Carolina by the insured who lived in South Carolina, for a vehicle which was to be garaged and registered in South Carolina. The assignor, who was driving the insured’s vehicle at the time of the accident, resided in New York.

While “strong governmental interests . . . [may] be considered” (Matter of Allstate Ins. Co. [Stolarz—New Jersey Mfrs. Ins. Co.], 81 NY2d at 226), I find that governmental policy is not an overriding factor under the circumstances presented herein (see e.g. Matter of Eagle Ins. Co. v Singletary, 279 AD2d 56 [2000]). Therefore, upon the application of a “center of gravity” or “grouping of contacts” analysis, I find that the dispositive factors weigh in South Carolina’s favor and, therefore, its law should control (see e.g. Scotland v Allstate Ins. Co., 35 AD3d 584 [2006]; Matter of Eagle Ins. Co. v Singletary, 279 AD2d at 56).

I do not see how any reasonable inference can be drawn from the record, other than it was the intent of the insured, Jerome McDowell, with the knowledge and cooperation of his brother, Garis McDowell, in making false and untrue answers to the questions asked in the insurance policy application to deliberately deceive the insurer and thereby procure the liability insurance. The intent with which misrepresentations of fact are made in the application for automobile liability insurance, may be deduced from the facts and circumstances surrounding the making of the misrepresentations. The 2000 Dodge Intrepid

This Court further credits the testimony of Ms. Terry that the insurer that had Jerome McDowell answered the questions on the insurance application truthfully the insurer would not have accepted the risk and issued the policy of insurance in question. Clearly there is a higher probability of accidents occurring in a congested metropolitan area than in a small rural area which would impact the premiums charged in the respective areas. The subject motor vehicle was never garaged in South Carolina for at least 10-months out of the calendar year and was not driven by the only listed driver, Jerome McDowell.

Defendant established, prima facie, that the underlying Florida automobile insurance policy had been properly rescinded ab initio, in accordance with Florida law, and that there was therefore no coverage available to plaintiff’s assignor. Defendant’s evidence at trial included the submission of Court Exhibit I which contained attached documents labelled Exhibits A through J and the testimony of its litigation specialist and other proof demonstrating that a rescission notice was sent to the assignor-insured and that defendant had returned all premiums paid within a reasonable time after discovery of the grounds for rescinding the policy (see W.H.O. Acupuncture, P.C. v Infinity Prop. & Cas. Co., 36 Misc 3d 4, 6-7 [App Term, 2d, 11th & 13th Jud Dists 2012], citing Leonardo v State Farm Fire & Cas. Co., 675 So 2d 176, 179 [Fla 1996]; see also Hu-Nam-Nam v Infinity Ins. Co., 51 Misc 3d 130 [A], 2016 NY Slip Op 50391[U] [App Term, 2d, 11th & 13th Jud Dists 2016]).

Although the insurer neither paid nor denied the claims within 30 days as required by Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3), and failed to request verification within [*6]the prescribed time frames (see, 11 NYCRR 65.15 [d] [1], [2]) resulting in the plaintiff then commencing the within action, pursuant to Insurance Law § 5106 (a), to recover its assigned no-fault billing charges the insurer’s untimely disclaimer does not preclude it from denying liability on a strict lack of coverage ground.

I am persuaded that an insurer, despite its failure to reject a claim within the 30-day period prescribed by Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3), may assert a lack of coverage defense premised on the fact or founded belief that the automobile policy was void ab initio for fraudulent misrepresentations made in the application for the policy. The denial of liability based upon lack of coverage within the insurance agreement, as framed in part by the litigation strategy and nature of the instant dispute, is distinguishable from disclaimer attempts based on a breach of a policy condition (see, Zappone v Home Ins. Co., supra, 55 NY2d, at 136-137; contrast, Presbyterian Hosp. v Maryland Cas. Co., 90 NY2d 274 [decided today]). Precedent and logical analysis support the extension of the Zappone exception here. Strict compliance with the time requirements of both the statute and regulations may be obviated and the preclusion remedy rendered unavailable when denial of claims is premised on a lack of coverage.

As held by the Supreme Court of South Carolina in Government Employess Insurance Company v Chavis, 254 S.C. 507, the insurer did not have any duty or obligation to investigate the truthfulness of the insured’s statements made in his insurance application and having no prior knowledge that the insured’s statements were untruthful did not constitute a waiver and did not estop the insurer from rescinding the policy for fraudulent misrepresentation. The insurer met its burden to not only show that the insured’s statements were untrue, but that their falsity was known to him, that they were material to the risk and relied upon by the insurer, and that they were made with intent to mislead and defraud the insurer.

Rescission is not merely a termination of a contractual obligation but is the abrogation or undoing of it from the beginning which seeks to create a situation the same as if no contract ever existed. It was also established that prior to the institution of this lawsuit the insured, Jerome MsDowell, accepted a full refund of the policy premium that he had paid to the insurer.

Therefore, the above captioned lawsuit is dismissed with prejudice.

Dated: July 12, 2018
Hon. Armando Montano
Justice, Supreme Court

722422/16

For Plaintiff:
Emilia I. Rutigliano Esq.
Law Offices of Emilia I. Rutigliano, PC.
1733 Sheepshead Bay Rd., Suite 11
Brooklyn, NY 11235

For Defendant:
Robyn Brilliant Esq.
333 W. 39th St, Suite 400
New York NY 10018-1410

RECITATION, AS REQUIRED BY CPLR2219(A), OF THE PAPERS CONSIDERED IN THE REVIEW OF THIS MOTION:

Notice of Motion 1

Notice of Cross-Motion 2

Affirmation in Opposition 3

In an action to recover assigned first-party no-fault insurance benefits, plaintiff moves for summary judgment pursuant to CPLR 3212. Defendant cross-moves for summary judgment seeking dismissal of the complaint. After oral argument, the Court sua sponte vacates order dated November 17, 2017, in place of the following.

To prevail on its motion, plaintiff has the burden to demonstrate by admissible proof that the no-fault claim forms underlying the action were submitted to the defendant, and that either that defendant had failed to deny the claims within the requisite 30-day period, or that defendant had issued timely denials of the claims that were conclusory, vague or without merit as a matter of law (see Insurance Law section 5106[a]; Westchester Med. Ctr. v. Nationwide Mut. Ins. Co., 78 AD3d 1168, 911 N.Y.S.2d 907 [2d Dept., 2010]).

In the case at bar, plaintiff did not establish that defendant had failed to deny the claims within the requisite 30-day period, or that defendant had issued timely denials that were conclusory, vague or without merit as a matter of law. Plaintiff’s motion is accordingly denied.

The basis of Defendant’s cross motion is the failure of plaintiff’s assignor to attend IMES, which constitutes violation of a condition precedent to coverage. (See Stephen Fogel Psychological P.C. v Progressive Casualty Ins. Co., 35 AD3d 720 [2d Dept 2006], affg 7 Misc 3d 18 [App. Term, 2d Dept 2004]). However, to establish proper denial, the insurer must inform the applicant at the time the IME is scheduled, that the applicant will be reimbursed for any lost earnings and reasonable transportation expenditure incurred in attending the IME (11 NYCRR 65-3.5 (e)). Thus, the insurer has the burden to demonstrate that the IME notice contained the requisite reimbursement language. (See Matter of Unitrin Advantage Ins. Co. Kemper A. Unitrin Business v Professional Health Radiology, 143 AD3d 536, 39 N.Y.S.3d 428 [1st Dept 2016]).

In the case at bar, defendant failed to establish that the IME notice sufficiently apprised the assignor of such reimbursement. The reimbursement language merely recites the governing statute which states ” the insurer shall inform the applicant” of the right to reimbursement. The notice is devoid of a plain, affirmative statement, that the applicant has the right to receive such reimbursement.

The reimbursement language is further obscured in very fine italicized print, which is inexplicably, smaller than the print used in the remainder of the letter, and potentially unreadable, thus facially deficient.

Moreover, the presentation of the language in the notice, potentially creates ambiguity and confusion regarding the origin of the language. There is no explanation in the notice, that the reimbursement language is recitation of statute or a legal requirement. The only reference to the governing statute, is that the letter ‘e’, immediately appears before the reimbursement language, presumably signifying the end of the citation, 11 NYCRR 65-3.5 (e). However, said letter would be meaningless, if not perplexing, to applicants who lack the requisite legal training to decode its meaning.

For the foregoing reasons, plaintiff’s motion and defendant’s cross motion are denied as both parties failed to establish entitlement as a matter of law.

Dated: July 6, 2018
ODESSA KENNEDY
Judge of the Civil Court

The Rybak Firm, PLLC (Damin J. Toell of counsel), for appellant. Law Office of Goldstein & Flecker (Lawrence J. Chanice of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Katherine A. Levine, J.), entered April 8, 2016. The order granted the branch of defendant’s cross motion seeking summary judgment dismissing the complaint on the ground of lack of coverage and implicitly denied plaintiff’s motion for summary judgment.

ORDERED that the order is modified by providing that the branch of defendant’s cross motion seeking summary judgment dismissing the complaint on the ground of lack of coverage is denied, and the matter is remitted to the Civil Court to determine the remaining branch of defendant’s cross motion; as so modified, the order is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment, and defendant opposed the motion and cross-moved for summary judgment dismissing the complaint on the ground of lack of coverage, in that defendant had cancelled the policy, for nonpayment of the premium, prior to the accident at issue. In the alternative, defendant, in effect, sought partial summary judgment dismissing so much of the complaint as sought to recover sums that were in excess of the amounts permitted by the workers’ compensation fee schedule. By order entered April 8, 2016, the Civil Court granted the branch of defendant’s cross motion seeking summary judgment dismissing the complaint on the ground of lack of coverage without addressing the remaining branch of the cross motion, and implicitly denied plaintiff’s motion for summary judgment.

While defendant asserts that Virginia law applies to this case, as the insurance policy had been obtained in Virginia, and it insured a Virginia resident and vehicle, defendant failed to demonstrate that it had mailed its cancellation notice in accordance with its office practices and procedures (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]) “by registered or certified mail,” as required by the applicable statute (Va. Code Ann. § 38.2-2208 [A] [1] [a]). Consequently, the Civil Court should have denied the branch of defendant’s cross motion seeking summary judgment dismissing the complaint on the ground that defendant had properly cancelled the policy and that there was, therefore, no coverage at the time of the accident at issue.

As the remaining branch of defendant’s cross motion was not addressed by the Civil Court, we remit the matter to the Civil Court to determine that branch of defendant’s cross motion.

With respect to plaintiff’s motion for summary judgment, contrary to plaintiff’s contention, plaintiff failed to demonstrate its prima facie entitlement to judgment as a matter of law, as the proof submitted in support of its motion failed to establish either that the claims at issue had not been timely denied (see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498 [2015]), or that defendant had issued timely denials that were conclusory, vague or without merit as a matter of law (see Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]).

Accordingly, the order is modified by providing that the branch of defendant’s cross motion seeking summary judgment dismissing the complaint on the ground of lack of coverage is denied, and the matter is remitted to the Civil Court to determine the remaining branch of defendant’s cross motion.

WESTON, J.P., ELLIOT and SIEGAL, JJ., concur.

Law Office of Jason Tenenbaum, P.C. (Jason Tenenbaum of counsel), for appellant. Lewin & Baglio, LLP (Brendan Kearns of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Terrence C. O’Connor, J.), entered December 14, 2015. The order, insofar as appealed from, denied the branches of defendant’s motion seeking summary judgment dismissing the complaint or, in the alternative, to compel plaintiff to appear for an examination before trial.

ORDERED that the order, insofar as appealed from, is modified by providing that the branch of defendant’s motion seeking to compel plaintiff to appear for an examination before trial is granted, and the examination shall be held within 60 days of the date of this decision and order, at such time and place to be specified in a written notice by defendant of not less than 10 days, or at such other time and place as the parties may agree upon; as so modified, the order, insofar as appealed from, is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from so much of an order of the Civil Court as denied the branches of defendant’s motion seeking summary judgment dismissing the complaint or, in the alternative, to compel plaintiff to appear for an examination before trial (EBT).

Upon a review of the record, we agree with the Civil Court’s determination that there is a triable issue of fact regarding the medical necessity of the services at issue (see Zuckerman v City of New York, 49 NY2d 557 [1980]). Consequently, defendant was not entitled to summary judgment dismissing the complaint. However, as defendant’s moving papers established that [*2]defendant had served plaintiff with a notice for an EBT, which examination was material and necessary to defendant’s lack of medical necessity defense (see Great Wall Acupuncture, P.C. v General Assur. Co., 21 Misc 3d 45, 47 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2008]), the branch of defendant’s motion seeking to compel plaintiff to appear for an EBT should have been granted (see CPLR 3101 [a]).

Accordingly, the order, insofar as appealed from, is modified by providing that the branch of defendant’s motion seeking to compel plaintiff to appear for an examination before trial is granted.

WESTON, J.P., ELLIOT and SIEGAL, JJ., concur.