Decided on June 8, 2018

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

Decided on June 8, 2018

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

Decided on June 8, 2018

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

Decided on June 8, 2018

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

Decided on June 8, 2018

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

Decided on June 8, 2018

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

[*1]

Mura & Storm, PLLC, Buffalo (Roy A. Mura of counsel), for petitioners-appellants.

Nixon Peabody LLP, Buffalo (Sheldon K. Smith of counsel), for respondent-respondent.

Appeal from an order of the Supreme Court, Erie County (John F. O’Donnell, J.), entered April 20, 2017, in a proceeding pursuant to CPLR article 75. The order denied the petition.

It is hereby ordered that the order so appealed from is unanimously affirmed without costs.

Memorandum: Petitioners issued a number of personal automobile insurance policies that included a Mandatory Personal Injury Protection Endorsement. Respondent, a company that supplies durable medical equipment including a Multi-Mode Stimulator Kit (Kit), supplied the Kit to various patients insured by petitioners. After the patients assigned to respondent their rights under the policies, respondent sought reimbursement from petitioners on behalf of those patients. Petitioners sought information by an informational demand in the form of verification requests, as provided under the 120-day rule (see 11 NYCRR 65-3.8 [b] [3]), including respondent’s acquisition costs and other pricing information for the Kit. Respondent refused to provide that information within the 120 days as required under the rule, maintaining that disclosure thereof would expose trade secrets or proprietary information. In addition, respondent took the position that, when the supplier of the equipment is also the manufacturer of the equipment, the reimbursement is “the usual and customary price charged to the general public” and thus the information requested by petitioners was not necessary for reimbursement. Thereafter, petitioners denied respondent’s claims and, at respondent’s request, the parties proceeded to mandatory arbitration. The arbitrator issued 14 identical awards denying each of respondent’s claims. Respondent appealed the arbitrator’s awards to the master arbitrator, who vacated the arbitrator’s awards and remitted the matters for new hearings.

Petitioners filed the instant CPLR article 75 proceeding seeking to vacate the master arbitration awards, alleging that the master arbitrator, among other things, exceeded his authority. Supreme Court disagreed, and denied the petition. We affirm.

The “role of the master arbitrator is to review the determination of the arbitrator to assure that the arbitrator reached his [or her] decision in a rational manner, that the decision was not arbitrary and capricious . . . , incorrect as a matter of law . . . , in excess of the policy limits . . . or in conflict with other designated no-fault arbitration proceedings” (Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 212 [1981]). This power “does not include the power to review, de novo, the matter originally presented to the arbitrator” (Matter of Allstate Ins. Co. v Keegan, 201 AD2d 724, 725 [2d Dept 1994]). Here, we agree with the court that the master arbitrator properly exercised his authority and limited his review of the arbitrator’s awards to assessing whether the awards were incorrect as a matter of law (see Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 231 [1982]; Petrofsky, 54 NY2d at 210-211). In his awards, the master arbitrator found that the arbitrator had misapplied the 120-day rule, reasoning that, pursuant to that rule, a claimant who responds within the requisite 120-day period with a “reasonable justification” is permitted to have that objection decided by the arbitrator and, if overruled by the arbitrator, is to be afforded the opportunity to produce the requested information and allow the insurer to base its decision on such information (11 NYCRR 65-3.8 [b] [3]). Contrary to petitioners’ contention, the master arbitrator did not impermissibly perform a de novo review of the evidence. Rather, the master arbitrator vacated the arbitrator’s awards based on “an alleged error of a rule of substantive law” (Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828, 829 [2d Dept 2017] [internal quotation marks omitted]). Thus, we conclude that the court’s decision to uphold the master arbitrator’s awards in this case was rational (cf. id.). Present—Whalen, P.J., Peradotto, Lindley, Curran and Troutman, JJ.

[*1]

Thomas Torto, New York (Jason Levine of counsel), for appellant.

Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for respondent.

Judgment, Supreme Court, New York County (Joan M. Kenney, J.), entered February 23, 2017, in favor of respondent, unanimously affirmed, without costs, and the matter is remanded for a determination of respondent’s reasonable attorney’s fees for this appeal. Appeal from judgment entered February 14, 2017, unanimously dismissed, without costs, as superseded by the appeal from the February 23, 2017 judgment.

Respondent commenced an arbitration against petitioner seeking reimbursement of bills for health care services it had rendered to an individual injured in a motor vehicle accident. Petitioner asserted a Mallela defense (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), i.e., that it could withhold payment for the services because respondent was fraudulently incorporated. After a hearing, an arbitrator found that petitioner failed to meet its burden of providing clear and convincing evidence of fraudulent incorporation, and awarded respondent full reimbursement. The award was affirmed by the master arbitrator.

Petitioner argues that it was held to an incorrect standard of proof and that the correct standard is a preponderance of the evidence. However, the award is not subject to vacatur under either standard (see Country-Wide Ins. Co. v TC Acupuncture, P.C., 140 AD3d 643 [1st Dept 2016]; Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d 885, 886-887 [2d Dept 2017]). Petitioner failed to present any evidence that respondent was fraudulently incorporated.

We reject petitioner’s contention that the master arbitrator’s determination affirming the award was irrational because the arbitrator’s failure to set forth his reasons for rejecting petitioner’s Mallela defense precluded meaningful review of the award (see Matter of Guetta [Raxon Fabrics Corp.], 123 AD2d 40 [1st Dept 1987]; Matter of Nationwide Mut. Ins. Co. v Steiner, 227 AD2d 563 [2d Dept 1996]; see also Purpura v Bear Stearns Cos., 238 AD2d 216 [1st Dept 1997], lv denied 90 NY2d 806 [1997]). In any event, the master arbitrator’s determination, which considered the arbitrator’s familiarity with similar cases and past decisions on the issues presented, was rational.

Respondent is entitled to reasonable attorney’s fees for this appeal. Supreme Court has authority to award attorneys fees as this is an appeal from a master arbitration award pursuant to 11 NYCRR 65-4.10 (j) (4), which, in pertinent part, provides: “The attorney’s fee for services rendered in connection with . . . a court appeal from a master arbitration award and any further appeals, shall be fixed by the court adjudicating the matter” (see also Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2d Dept 2017], recalling and vacating Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 139 AD3d 947 [2d Dept 2016]). Accordingly, we remand the matter to Supreme Court for a determination of respondent’s reasonable attorney’s [*2]fees for this appeal. To the extent Country-Wide Ins. Co. v Valdan Acupuncture, P.C. (150 AD3d 560, 561 [1st Dept 2017]) takes a different approach to calculating attorneys’ fees, we decline to follow it. Concur—Renwick, J.P., Manzanet-Daniels, Mazzarelli, Gesmer, Oing, JJ.

Decided on June 1, 2018

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

The Rybak Firm, PLLC (Damin J. Toell of counsel), for appellant. Law Offices of Peter C. Merani, P.C. (Eric M. Wahrburg 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 November 23, 2015. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order is modified by providing that defendant’s cross motion for summary judgment dismissing the complaint is denied; as so modified, the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which denied plaintiff’s motion for summary judgment, and granted defendant’s cross motion for summary judgment dismissing the first through ninth causes of action on the ground that plaintiff’s assignor had failed to appear for duly scheduled independent medical examinations (IMEs) and the tenth cause of action, for services rendered prior to April 1, 2013, on the ground that it sought to recover an amount in excess of the workers’ compensation fee schedule.

Plaintiff correctly argues that the affidavits submitted by defendant did not sufficiently set forth a standard office practice or procedure that would ensure that the denial of claim forms had been timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). As defendant did not demonstrate that it is not precluded from asserting its [*2]defense that plaintiff’s assignor had failed to appear for IMEs (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2009]), or its fee schedule defense (cf. 11 NYCRR 65-3.8 [g] [1] [ii]), defendant is not entitled to summary judgment dismissing the complaint.

Contrary to plaintiff’s further contention, the affidavit plaintiff submitted in support of its motion failed to establish 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 denial of claim forms 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]). As a result, plaintiff’s motion for summary judgment was properly denied.

Accordingly, the order is modified by providing that defendant’s cross motion for summary judgment dismissing the complaint is denied.

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