CV-002459-19

Attorneys for Plaintiffs: Economou & Economou, P.C., 85 Cold Spring Road, Suite 200, Syosset, NY 11791 (516) 682-0010

Attorneys for Defendants: Martyn and Martyn, 330 Old Country Road, Suite 211, Mineola, NY 11501 (516) 739-0329

The following papers have been considered by the Court on this special proceeding submitted April 12, 2019

Notice of Petition w/ annexed supporting papers 1
Affirmation in Opposition w/ annexed supporting papers 2
Reply Affirmation 3

Petitioner brings this proceeding seeking an order, pursuant to CPLR 7511(1), vacating the master arbitration award herein, dated November 14, 2018, which affirmed the lower arbitration award, dated August 10, 2018. Petitioner further requests that, upon such award being vacated, it be awarded the amount of $2,027.00, together with statutory interest from December 29, 2016, as well as, costs and attorneys fees.

Specifically, petitioner contends that the master arbitrator’s award was arbitrary, capricious and incorrect as a matter of law in upholding a denial of benefits defense premised upon exhaustion of policy limits notwithstanding that the policy was not exhausted at the time petitioner’s otherwise valid claim was earlier denied in good faith by respondent carrier.

New York public policy strongly favors arbitration (Hackett v Milbank, Tweed, Hadley & McCloy, 86 NY2d 146,155 [1995]; Maross Constr., Inc. v Central New York Regional Transp. Authority, 66 NY2d 341, 346 [1985]). Since the purpose of arbitration is to allow final, binding resolution of parties’ claims without resorting to the courts, the scope of review of an arbitration decision is extremely limited. “Moreover, courts are obligated to give deference to the decision of the arbitrator” (In re N.Y.C. Transit Authority v Transport Workers’ Union of America, Local [*2]100, AFL-CIO, 6 NY3d 332, 336 [2005]).

Judicial review of a master arbitrator’s award is restricted to the grounds set forth in CPLR 7511, except in those instances where the award is $5,000 or more (see Matter of Petrofsky (Allstate Ins. Co.), 54 NY2d 207, 210 [1981]). As applicable in this case, Section 7511(b)(1)(iii) of the CPLR allows the court to vacate an arbitration award upon the application of either party, if it finds that the arbitrator prejudiced the applicant’s right by exceeding the scope of his or her authority in making the award. In no-fault insurance cases, it is the role of the master arbitrator to review the lower arbitration award and determine whether it was made in a rational manner and that it was neither arbitrary nor capricious (see Allstate Ins. Co. v Keegan, 201 AD2d 724, 725 [2d Dept 1994]).

“A master arbitrator exceeds his statutory power by making his own factual determination, by reviewing factual and procedural errors committed during the course of the arbitration, by weighing the evidence, or by resolving issues such as the credibility of the witnesses (see Matter of Smith [(Fireman’s Ins. Co.) 55 NY2d 224 [1982]]” (Id.; see also Matter of Jasser v Allstate Ins. Co., 77 AD3d 751 [2d Dept 2010]). On the other hand, even if the master arbitrator’s decision vacates the lower arbitration award based upon the fact that the lower arbitrator made an error of law, this is within the scope of the master arbitrator’s review, and “the courts are limited in their further review of the master arbitrator’s resolution of that error of law, since we generally will not vacate an arbitrator’s award where the error claimed is the incorrect application of a rule of substantive law, unless it is so irrational as to require vacatur” (Matter of Smith (Firemen’s Ins. Co.) 55 NY2d at 232 [citations and internal quotations omitted] [bold type added]).

Here, there is no claim that the master arbitrator made his own factual determination. Rather petitioner’s contention that the master arbitrator’s decision to affirm the lower arbitration was “contrary to controlling law” (Petition at ¶ 10) is necessarily premised on the contention that, as such, it is “so irrational as to require vacatur” within the meaning of Matter of Smith (Firemen’s Ins. Co.), supra.

Where as here, both the arbitrator and the master arbitrator cited and considered the split between the First and Second Departments on the issue of policy exhaustion and priority of payment (compare Harmonic Physical Therapy, P.C. v Praetorian Ins. Co., 47 Misc 3d 137(A) [App Term 1st Dept [2015]; Alleviation Med. Servs., P.C. v. Allstate Ins. Co., 55 Misc 3d 44 [App Term 2d Dept [2017]), ultimately following the rationale of Harmonic, the master arbitrator’s award cannot be found to be irrational. As the master arbitrator did not exceed his authority in affirming the lower arbitration award, vacatur of that award is not warranted,

Accordingly, petitioner’s motion is denied in all respects, and the master arbitrator’s award is confirmed (CPLR 7511[e]; Matter of Mercury Cas. Co. v Healthmakers Med. Group, PC, 67 AD3d 1017 [2d Dept 2009]).

So Ordered.

Dated: June 3, 2019
Hon. Ignatius L. Muscarella
DISTRICT COURT JUDGE

[*1]

The Law Office of Jason Tenenbaum, P.C., Garden City, NY (Roman Kravchenko of counsel), for appellant.

Samandarov & Associates, P.C., Floral Park, NY (Eli Shmulik of counsel), for respondent.

In an action for a judgment declaring that the plaintiff is not obligated to pay certain no-fault insurance benefits, the plaintiff appeals from an order of the Supreme Court, Nassau County (George R. Peck, J.), entered January 18, 2018. The order granted the defendant’s motion pursuant to CPLR 5015 (a) (1) to vacate its default in answering the complaint.

Ordered that the order is affirmed, with costs.

In December 2016, the plaintiff, a no-fault insurance carrier, commenced this action pursuant to Insurance Law § 5106 (c) for a de novo adjudication of a dispute regarding its denial of the defendant’s claim for no-fault insurance benefits for medical services rendered to its assignor. Prior thereto, an arbitrator had determined that the defendant was entitled to no-fault compensation in the amount of $6,759.16, plus interest and attorney’s fees. The plaintiff appealed the award to a master arbitrator, who affirmed the award.

After the defendant failed to timely appear or answer the complaint in this action, the plaintiff moved for leave to enter a default judgment. In an order entered March 13, 2017, the Supreme Court granted the plaintiff’s unopposed motion for leave to enter a default judgment. The court subsequently issued a default judgment dated July 31, 2017.

Thereafter, in September 2017, the defendant moved pursuant to CPLR 5015 (a) (1) to vacate its default. The Supreme Court granted the motion, and the plaintiff appeals.

A defendant seeking to vacate its 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]; Allstate Ins. Co. v North Shore Univ. Hosp., 163 AD3d 745, 746 [2018]). Here, the defendant demonstrated a reasonable excuse for its default (see Allstate Ins. Co. v North Shore Univ. Hosp., 163 AD3d at 746). Moreover, although certain of the evidence submitted by the defendant to demonstrate a potentially meritorious defense was not in admissible form (see generally OneWest Bank, FSB v Singer, 153 AD3d 714, 715-716 [2017]; King v King, 99 AD3d 672, 673 [2012]), the defendant demonstrated a potentially meritorious defense to the action by attaching to its moving papers copies of the arbitration award in which the arbitrator determined that the defendant was entitled to no-fault compensation in the amount of $6,759.16, plus interest and attorney’s fees, as well as copies of arbitration materials reflecting that the plaintiff had appealed the award to a master arbitrator, who affirmed the award. In light of the defendant setting forth evidence that it had previously prevailed before an arbitrator on the merits of its defense, the defendant demonstrated a potentially meritorious defense to the action (see Rosenzweig v Gubner, 2018 NY Slip Op 32393[U], *7-8 [Sup Ct, Kings County 2018]; Matter of Charny [Gliksman], 2002 NY Slip Op 40004[U], *11 [Sup Ct, Kings County 2002]; see generally Bevona v Blue Star Realty Corp., 264 AD2d 586, 587 [1999]; Lawyers Coop. Publ. v Scott, 255 AD2d 952, 952 [1998]; Simpson v Mal Serv. Corp., 205 AD2d 419, 419 [1994]). Accordingly, we agree with the Supreme Court’s determination to grant the defendant’s motion pursuant to CPLR 5015 (a) (1) to vacate its default in answering the complaint.

The plaintiff’s remaining contentions are without merit. Scheinkman, P.J., Dillon, Maltese and LaSalle, JJ., concur.

[*1]

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

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

Order, Supreme Court, New York County (Erika M. Edwards, J.), entered June 22, 2017, which awarded attorneys’ fees in the amount of $749.38, unanimously reversed, on the law, without costs, the award vacated, and the matter remanded for a calculation of reasonable attorneys’ fees in accordance with 11 NYCRR 65-4.10 (j) (4).

The court failed to consider 11 NYCRR 65-4.10 (j) (4), which applies to this appeal of a master arbitration award. Instead, the court applied 11 NYCRR 65-4.6, the regulation applicable to attorneys’ fee awards at an initial arbitration, and calculated the award as 20% of the arbitration demand of $3,746, awarding $749.38.

Pursuant to Insurance Law § 5106 (a), if a valid claim or portion of a claim for no-fault benefits is overdue, “ ’the claimant shall also be entitled to recover his attorney’s reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to [the] limitations promulgated by the superintendent in regulations’ ” (Matter of Unitrin Advantage Ins. Co. Kemper A. Unitrin Bus. v Professional Health Radiology, 143 AD3d 536, 537 [1st Dept 2016]). Here, in a proceeding for judicial review of an award by a master arbitrator, the attorneys’ fee award “shall be fixed by the court adjudicating the matter” (Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703, 705 [2d Dept 2017], citing Insurance Department Regulations [11 NYCRR] § 65-10 [j] [4]).

Because this is an appeal from a master arbitration award, we remand the matter for a calculation of fees in accordance with 11 NYCRR 65-4.10 (j) (4) (see Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 162 AD3d 407, 408 [1st Dept 2018]). We note that the fees would only apply to this appeal.

In addition, we reject as unpreserved appellant’s claims that it is entitled to further fees for the underlying arbitration under 11 NYCRR 65-4.6 (c) or (d). Concur—Friedman, J.P., Gische, Tom, Webber, Gesmer, JJ.

Law Office of Goldstein & Flecker (Lawrence J. Chanice of counsel), for appellant. Zara Javakov, P.C. (Zara Javakov of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Mary V. Rosado, J.), dated February 7, 2017. The order, insofar as appealed from, denied defendant’s motion to dismiss the complaint pursuant to CPLR 3216.

ORDERED that the order, insofar as appealed from, is reversed, with $30 costs, and defendant’s motion to dismiss the complaint pursuant to CPLR 3216 is granted.

Plaintiff commenced this action to recover assigned first-party no-fault benefits on May 10, 2011. Defendant interposed an answer on June 29, 2011. On August 6, 2015, defendant served plaintiff’s attorney with a 90-day written demand pursuant to CPLR 3216 (b) (3), which was received on August 10, 2015. By notice of motion dated March 11, 2016, defendant moved, pursuant to CPLR 3216, to dismiss the complaint on the ground that defendant had not been served with a notice of trial. In opposition to the motion, plaintiff stated that it had filed a notice of trial on November 23, 2016. It further argued that law office failure was the reason for the delay and that it had a meritorious cause of action. By order dated February 7, 2017, insofar as is relevant to this appeal, the Civil Court denied defendant’s motion, finding that plaintiff had established a “reasonable excuse” for its delay and a meritorious “defense” [sic].

Upon receiving a 90-day demand, a plaintiff must either comply with the demand by filing a notice of trial within 90 days thereafter (see CPLR 3216 [b] [3]; [c]) or move before the default date either to vacate the demand or to extend the 90-day period pursuant to CPLR 2004 (see Felix v County of Nassau, 52 AD3d 653 [2008]; Katina, Inc. v Town of Hempstead, 13 AD3d 343 [2004]; A.M. Med., P.C. v State Farm Mut. Ins. Co., 22 Misc 3d 43 [App Term, 2d Dept, 2d & 11th Jud Dists 2008]). Here, since plaintiff filed a notice of trial more than 90 days after its receipt of the 90-day demand and had not moved prior thereto to vacate the demand or to extend the 90-day period, it was required, in opposition to defendant’s motion to dismiss, to establish both a justifiable excuse for its delay and the existence of a meritorious cause of action (see CPLR 3216 [e]; Baczkowski v Collins Constr. Co., 89 NY2d 499 [1997]; Felix, 52 AD3d 653; A.M. Med., P.C., 22 Misc 3d 43). While a court, in its discretion, may accept a claim of law office failure as an excuse (see CPLR 2005), here, the affirmation submitted by plaintiff’s attorney in opposition to defendant’s motion did not provide a detailed and credible explanation of the law office failure that had caused the delay (see Premier Surgical Servs., P.C. v Allstate Ins. Co., 58 Misc 3d 160[A], 2018 NY Slip Op 50273[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; Bayshore Chiropractic, P.C. v Allstate Ins. Co., 56 Misc 3d 141[A], 2017 NY Slip Op 51121[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Comeau v McClacken, 5 Misc 3d 134[A], 2004 NY Slip Op 51455[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2004]). Consequently, plaintiff’s claim of law office failure did not rise to the level of a justifiable excuse. In view of the foregoing, it is unnecessary to consider whether plaintiff demonstrated the existence of a meritorious cause of action (see generally Levi v Levi, 46 AD3d 519 [2007]; Premier Surgical Servs., P.C., 58 Misc 3d 160[A], 2018 NY Slip Op 50273[U]).

Accordingly, the order, insofar as appealed from, is reversed and defendant’s motion to dismiss the complaint pursuant to CPLR 3216 is granted.

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

Law Offices of Buratti, Rothenberg & Burns (Leslie A. Emya, Jr. of counsel), for appellant. Gary Tsirelman, P.C., for respondent (no brief filed).

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin S. Garson, J.), entered October 27, 2015. The order denied defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, with $30 costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

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 scheduled independent medical examinations (IMEs). In support of the motion, defendant submitted an affidavit by an employee of the company which had been retained by defendant to schedule the IMEs, which affidavit sufficiently demonstrated that the scheduling letters had been timely mailed to plaintiff’s assignor on August 19, 2011 and September 1, 2011, at a Van Siclen Avenue address (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). Defendant also submitted affirmations and affidavits from medical providers who were to perform the IMEs, which sufficiently established that plaintiff’s assignor had failed to appear for those duly scheduled IMEs (see Stephen Fogel [*2]Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]). In addition, an affidavit executed by defendant’s claims representative demonstrated that the denial of claim forms, which denied the claims based on plaintiff’s assignor’s nonappearance at the IMEs, had been timely mailed (see St. Vincent’s Hosp. of Richmond, 50 AD3d 1123).

In opposition, plaintiff’s counsel argued that the IME scheduling letters had been mailed to the wrong address because plaintiff’s bills, which were annexed to defendant’s moving papers, and the earliest of which was dated October 18, 2011, stated that plaintiff’s assignor’s address was on Chester Street. In reply, defendant submitted a copy of the NF-2 which was sworn to on July 29, 2011, and the police report from the July 17, 2011 accident. Both the police report and the sworn NF-2 stated that the assignor’s address was on Van Siclen Avenue. The Civil Court denied defendant’s motion for summary judgment dismissing the complaint, holding that plaintiff’s claims forms which were annexed to defendant’s moving papers raised an issue of fact as to the mailing of the IME scheduling letters and that defendant could not cure the defect in reply.

While a party moving for summary judgment generally cannot meet its prima facie burden by submitting evidence for the first time in reply, there is an exception to this general rule where, as here, the evidence is submitted in response to allegations raised for the first time in the opposition papers (see Central Mtge. Co. v Jahnsen, 150 AD3d 661 [2017]; Conte v Frelen Assoc., LLC, 51 AD3d 620 [2008]). As a result, the Civil Court erred when it held that the NF-2 and police report annexed to defendant’s reply papers could not be considered in support of defendant’s motion for summary judgment dismissing the complaint. Those documents established that, at the time the IME letters had been mailed to plaintiff’s assignor, the letters had been mailed to the assignor’s address as set forth in the sworn NF-2 and the police report, which was the only address known to defendant at that time.

Since defendant demonstrated that plaintiff’s assignor had failed to comply with a condition precedent to coverage (see 11 NYCRR 65-1.1; Stephen Fogel Psychological, P.C., 35 AD3d at 722) and that defendant had timely denied (see St. Vincent’s Hosp. of Richmond, 50 AD3d 1123) the claim on that ground, the Civil Court should have granted defendant’s motion for summary judgment.

Accordingly, the order is reversed and defendant’s motion for summary judgment dismissing the complaint is granted.

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

Decided on May 23, 2019

Respondent appeals from an order of the Civil Court of the City of New York, New York County (Louis L. Nock, J.), entered on or about November 21, 2018, which granted the petition of Hereford Insurance Company to vacate a master arbitrator’s award.

Per Curiam.

Order (Louis L. Nock, J.), entered on or about November 21, 2018, reversed, with $10 costs, petition denied and the award of the master arbitrator is reinstated.

Civil Court erred in vacating the master arbitrator’s no-fault award on the ground that it is contrary to a subsequent order rendered by the Supreme Court, New York County, which declared that petitioner-insurer is not liable for no-fault benefits arising from the underlying automobile accident. While the preclusive effect of a pre-arbitration judicial decision may be sufficient to vacate an arbitral award (see Matter of Tokio Mar. & Fire Ins. Co. v Allstate Ins. Co., 8 AD3d 492 [2004]), a post-arbitration judicial determination concerning the insurer’s liability is not one of the limited grounds for vacating an arbitration award (see Matter of Hirsch Constr. Corp. [Cooper], 181 AD2d 52 [1992], lv denied 81 NY2d 701 [1992]). Indeed, if a motion to vacate an arbitration award on this ground could be entertained, “the arbitration award would be the beginning rather than the end of the controversy and the protracted litigation which arbitration is meant to avoid would be invited” (Matter of Mole [Queen Ins. Co. of Am.], 14 AD2d 1, 3 [1961]).

We have considered petitioner Hereford’s alternative grounds for vacating the award and find them unavailing. The master arbitrator’s affirmance of the lower arbitration award was not irrational (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 211 [1981]), nor did it ignore controlling law (see Matter of Global Liberty Ins. Co. v ISurply, LLC, 163 AD3d 418 [2018]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.

732771/17

Attorney for plaintiff:
Oleg Rybak, Esq.
The Rybak Firm PLLC
1810 Voorhies Avenue
3rd Floor Suite 7
Brooklyn, New York 11235

Attorney for defendant
Lawrence N. Rogak, Esq.
Lawrence N. Rogak LLC
3355 Lawson Boulevard
Oceanside, New York 11572

Recitation, as required by CPLR 2219 (a) of the papers considered in the review of this motion:

Notice of Motion and Affirmation in Support 1,2

Notice of Cross-Motion and Affirmation in Support 3,4

Affirmation in Opposition to the Cross-Motion 5

The Court hereby sua sponte vacates its decision and order dated November 15, 2017, and substitutes the following:

In an action to recover assigned first-party no-fault insurance benefits arising from an accident which occurred on October 1, 2015, defendant moves for summary judgment based on plaintiff’s assignor’s alleged failure to appear for an examination under oath (“EUO”) and upon the defense of policy exhaustion. Plaintiff cross-moves for an order: 1) awarding summary judgment in favor of plaintiff pursuant to CPLR 3211(c) or CPLR 3212(a); 2) limiting the issues of fact for trial pursuant to CPLR 3212(g) that the statutory billing forms were mailed to and received by the insurance carrier and that payment of no-fault benefits was overdue; and 3) dismissing defendant’s affirmative defenses pursuant to CPLR 3211(b).

It is well settled that summary judgment is a drastic remedy (See Sillman v. Twentieth Century-Fox Film Corporation, 3 NY2d 395 [1957]), which should not be granted if there is any doubt as to the existence of a triable issue of fact. (See Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223 [1978]). Hence, the court’s function in determining such a motion, is issue finding, not issue determination. (Id. Sillman supra at 404).

To prevail, the movant must establish entitlement to judgment as a matter of law, by submitting admissible evidentiary proof. (See Friends of Animals, Inc. v. Associate Fur Manufacturers, Inc., 46 NY2d 1065 [1979]). Absent such a showing, the motion must be denied regardless of the sufficiency of opposing papers. (See Winegrad v. New York University Medical Center, 64 NY2d 851 [1985]).

EUO NON

APPEARANCE DEFENSE

While plaintiff’s non-appearance at an EUO vitiates defendant’s obligation to provide coverage (see Five Boro Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 39 Misc 3d 141(A), 2013 NY Slip Op. 50753(U) [App Term, 2d Dept, 2d & 11th Jud Dists, 2013]), to show entitlement to summary judgement, defendant must prove that it properly mailed the EUO requests to the plaintiff, who failed to appear for the EUO, and that defendant mailed plaintiff a timely denial. (Interboro Ins. Co. v Clennon, 113 AD3d 596, 979 N.Y.S.2d 83, 2014 NY Slip Op 00092 [2d Dept 2014]).

Proof of mailing may be shown based on actual mailing or that the item was mailed pursuant to the affiant’s standard office practices and procedures designed to ensure proper mailing (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 857 N.Y.S.2d 211, 2008 NY Slip Op 04072 [2d Dept 2008]). Defendant’s affidavit submitted in the case at bar, fails to establish that the described procedures was designed to ensure that the EUO letters were addressed to the correct recipient and properly mailed (see Progressive Cas. Ins. Co. v Infinite Ortho Prods., Inc., 127 AD3d 1050, 7 N.Y.S.3d 429, 2015 NY Slip Op 03340 [2d Dept [*2]2015]).

To establish the proper mailing of the EUO requests, defendant submits an affidavit from its claim representative, Christina Valentin. Ms. Valentin states that an EUO notice was sent to plaintiff’s assignor, on December 9, 2015, scheduling the EUO for January 6, 2016; and upon assignor’s non-appearance, a follow up notice was sent on January 7, 2016 re-scheduling the EUO for February 9, 2016. Ms. Valentin describes the documents which purport to the be the notices as ” true and accurate copies of the scheduling notices sent by the Law offices of Lawrence N. Rogak LLC” to plaintiff’s assignor.

Contrary to Ms. Valentin’s statement, however, the EUO notices which were attached to defendant’s motion are not generated by the Law Office of Lawrence N. Rogak LLC, but by the Law Firm of Milber Makris Plousadis & Beiden, LLP. Ms. Valentin’s assertions are further erroneous in that the notices seek an EUO of the plaintiff’s employee, Dr. Darren T. Mollo, DC, and not of plaintiff’s assigner, who notably is not even among the named claimants listed in the notices. Thus, defendant fails to establish that it requested an EUO of plaintiff’s assignor, and further, that it accurately addressed and mailed the request to him. Each of said deficiencies, warrants denial of defendant’s motion.

In addition, defendant fails to meet its burden of showing that plaintiff’s assignor failed to appear for the EUOs. (Five Boro Psychological Servs., P.C. v. State Farm Mut. Auto. Ins. Co., 39 Misc 3d 141(A), 2013 NY Slip Op. 50753(U) [App Term, 2d Dept, 2d & 11th Jud Dists, 2013]). Generally, to establish burden of plaintiff’s failure to appear for a scheduled EUO, a statement from an attorney alleging that he or she was present in the office on the relevant dates and that he or she would have been the one to conduct the EUO is sufficient to demonstrate personal knowledge of the no-show (T & J Chiropractic, P.C. v. State Farm Mut. Auto. Ins. Co., 47 Misc 3d 130[A], 2015 NY Slip Op. 50406(U) [App Term, 2d Dept, 2d 11th & 13th Jud Dists, 2015]).

In the instant matter, the only indication of plaintiff’s assignor’s nonattendance at the EUO is defense counsel’s conclusory affirmation in support of the instant motion which is devoid of evidence of his personal knowledge of the alleged non-attendance. Counsel neither indicates whether he was assigned to conduct the EUO nor whether he was present at the EUO. Accordingly, defendant’s motion is further denied on the basis of failure to establish the assignor’s EUO non-appearance.

Moreover, defendant fails to show the timeliness of its denial. “A claim need not be paid or denied until all demanded verification is provided.” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; 11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1].) If plaintiff fails to provide the requested verification within 120 calendar days from the date of the initial request, the insurer may deny the claim. (11 NYCRR 65-3.5 [o]). No-fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim, (11 NYCRR 65-3.8(a)(1)),

According to the denial, the “final verification” requested was on January 31, 2016. Yet, the moving papers contain no verification request, or any document dated January 31, 2016. As discussed above, the only verification requests annexed to defendant’s papers pertain to claimants whose treatment is not at issue in the instant action.

As defendant has failed to establish entitlement to judgment as a matter of law on the issues of proper mailing of the EUO request, the nonappearance of the plaintiff’s assignor at the EUOs and the timeliness of its denial, its motion for summary judgment, based on the EUO [*3]nonappearance is denied.

POLICY EXHAUSTION DEFENSE

Defendant also seeks to dismiss the complaint on the basis that its policy limits have been properly exhausted.An insurer is not required to pay a claim where the policy limits have been properly exhausted (Hospital for Joint Diseases v. State Farm Mut. Auto Ins. Co., 8 AD3d 533 [2nd Dept., 2004]). An insurer’s payment of full monetary limits set forth in the policy, terminates its duties under the contract (Presbyterian Hosp. in City of New York v. Liberty Mut. Ins. Co., 216 AD2d 448 [2nd Dept., 1995]).

Moreover, when an insurer receives claims for more than $50,000, payments for claims that are submitted prior to the exhaustion of the $50,000 shall be made in the order in which each service was rendered or each expense was incurred (11 NYCRR 65-3.15; Alleviation Medical Services, P.C. v. Allstate Ins. Co., 55 Misc 3d 44 [App. Term, 2nd Dept., 2d, 11th & 13th Jud. Dists., 2017]).

In the case at bar, to demonstrate the policy’s exhaustion based on priority of payment when defendant received the bill, defendant relies on a payment “ledger” which it contends is admissible based on its claim examiner’s statement that the document is “a true and accurate copy of the payment ledger maintained on this claimant.” Defendant, however does not satisfy the evidentiary requirements of CPLR §4518 absent information regarding who or by whom the ledger was created or maintained, or whether the data in the ledger was recorded contemporaneously or soon after the occurrence. As defendant must prove its defense in admissible form, the failure to establish the evidentiary foundation of the ledger, which is the essence of its policy exhaustion defense, warrants denial of its motion.

Aside from its inadmissibility, the ledger’s ambiguity, further prevents defendant from demonstrating the exhaustion defense. The ledger does not specify when defendant received any of the prior bills leading to the exhaustion of the policy, but contains vague headings such as ‘paid date,’ ‘service period start’ and ‘service period end’ without proof that any of the headings represent the date that defendant in fact received or paid the bill at issue.

Finally, defendant fails to establish that its exhaustion of policy defense was based on proper priority of payment of claims. The term “claims,” in the priority of payment regulation excludes claims that are incomplete because verification requests are outstanding (Nyack Hospital v. General Motors Acceptance Corp., 8 NY3d 294 [2007]). Consequently, while an insurer awaits verification of an unverified claim, it may pay subsequently received verified claims, even if that will result in exhaustion of the policy before the requested verification is finally received (Id.).

In the instant matter, defendant admits receipt of the bills at issue on December 16, 2015, when, as per the ledger, the entire $50,000 policy was still available to pay claims since no claims had been yet been paid. Since defendant has failed show that the 30-day period it had to pay the bill was tolled by a properly mailed verification request or by non-compliance with such verification, it failed to justify its nonpayment within the 30-days.

Defendant has failed to establish as a matter of law either the defense of EUO non-appearance or that of policy exhaustion. Thus, its motion for summary judgment is denied.

PLAINTIFF’S CROSS-MOTION

In opposition to the plaintiff’s cross-motion for summary judgment, defendant attaches a copy of a decision in Budget Truck Rental, LLC v. Mollo, Index No.: 150666/15 [Sup. Court, NY County, Lebovits, J.] which included a finding that the time that plaintiff in this case was not [*4]properly incorporated when it submitted its billing in that case which arose from a November 7, 2013 accident and therefore not entitled to payment for those bills.

If it is proven in this case that the plaintiff was ineligible to receive payment as of the date services were rendered, that would constitute a defense. (See, e.g., State Farm Mut. Auto. Ins. Co. v. Mallela, 4 NY3d 313 [2005]) Although the defendant presents no denial of claim on this basis of improper or fraudulent incorporation of the plaintiff, it is nonwaivable and may be asserted at any time notwithstanding the absence of a timely denial. (Lexington Acupuncture, P.C. v. General Assur. Co., 35 Misc 3d 42 [App Term, 2d Dept 2012]). Accordingly, there are material issues of fact as to plaintiff’s corporate status at the time that services were rendered necessitating the denial of plaintiff’s cross-motion.

All of the motions before this court are denied with one exception. Plaintiff’s cross-motion pursuant to pursuant to CPLR 3212(g) is granted only to the extent that it has been established that the bills at issue were mailed to and received by the defendant.

Dated: May 17, 2019
______________________
ODESSA KENNEDY
Judge of the Civil Court

[*1]

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

In an action pursuant to Insurance Law § 5106 (c) for a de novo determination of claims for no-fault insurance benefits, the plaintiff appeals from an order of the Supreme Court, Nassau County (Robert A. Bruno, J.), dated December 9, 2016. The order denied the plaintiff’s motion for summary judgment on the complaint and, upon searching the record, awarded summary judgment to the defendant.

Ordered that the order is modified, on the law, (1) by deleting the provision thereof denying that branch of the plaintiff’s motion which was for summary judgment on so much of the complaint as, in effect, sought a determination that the amount of no-fault insurance benefits sought by the defendant was not in accordance with the workers’ compensation fee schedule, and substituting therefor a provision granting that branch of the motion, and (2) by deleting the provision thereof searching the record and awarding summary judgment to the defendant; as so modified, the order is affirmed, with costs payable to the plaintiff.

This action pursuant to Insurance Law § 5106 (c) arises from a motor vehicle accident that occurred on February 6, 2013. Christopher Krull allegedly was injured in the accident, and he underwent spinal fusion surgery performed by P. Jeffrey Lewis of the defendant, Buffalo Neurosurgery Group. The defendant, as assignee of Krull, submitted a claim to the plaintiff insurer for no-fault insurance 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 principal sum of $11,352.46, plus interest and attorney’s fees. The plaintiff appealed the award to a master arbitrator, who affirmed the award.

On August 19, 2015, the plaintiff commenced this action pursuant to Insurance Law § 5106 (c) for a de novo determination of the defendant’s claims for no-fault insurance benefits. The plaintiff then moved for summary judgment on the complaint. In an order dated December 9, 2016, the Supreme Court denied the motion and, upon searching the record, awarded summary judgment to the defendant, concluding that the master arbitrator had properly affirmed the award of benefits to the defendant in the principal sum of $11,352.46, plus interest and attorney’s fees. The plaintiff appeals.

Insurance Law § 5106 (c) permits a de novo adjudication of a no-fault insurance claim where the master arbitrator’s award is $5,000 or greater, exclusive of interest and attorney’s fees (see 11 NYCRR 65-4.10 [h] [1] [ii]; Matter of Greenberg [Ryder Truck Rental], 70 NY2d 573, 577 [1987]). Here, we agree with the Supreme Court’s denial of that branch of the plaintiff’s motion which was for summary judgment on so much of the complaint as, in effect, sought a determination that it was not obligated to pay the defendant no-fault benefits relating to Krull’s surgery, since the surgery was not medically necessary. The peer review reports submitted in support of that branch of the motion failed to demonstrate, prima facie, that the surgery performed on Krull was not medically necessary (see Global Liberty Ins. Co. v W. Joseph Gorum, M.D., P.C., 143 AD3d 768 [2016]; Amherst Med. Supply, LLC v A. Cent. Ins. Co., 41 Misc 3d 133[A], 2013 NY Slip Op 51800[U] [App Term, 1st Dept 2013]; cf. AutoOne Ins./Gen. Assur. v Eastern Is. Med. Care, P.C., 136 AD3d 722 [2016]; Cortland Med. Supply, Inc. v 21st Century Centennial Ins. Co., 46 Misc 3d 136[A], 2014 NY Slip Op 51886[U] [App Term, 1st Dept 2014]). In light of the plaintiff’s failure to meet its prima facie burden, we need not consider the sufficiency of the opposing papers on that issue (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Global Liberty Ins. Co. v W. Joseph Gorum, M.D., P.C., 143 AD3d at 770).

We agree with the Supreme Court’s determination that the plaintiff established its prima facie entitlement to judgment as a matter of law on that branch of its motion which was for summary judgment on so much of the complaint, as, in effect, sought a determination that the amount of the benefits sought by the defendant was not in accordance with the workers’ compensation fee schedule (see Oleg’s Acupuncture, P.C. v Hereford Ins. Co., 58 Misc 3d 151[A], 2018 NY Slip Op 50095[U] [App Term, 2d Dept 2018]; Compas Med., P.C. v 21st Century Ins. Co., 57 Misc 3d 132[A], 2017 NY Slip Op 51228[U] [App Term, 2d Dept 2017]; Renelique v Allstate Ins. Co., 57 Misc 3d 126[A], 2017 NY Slip Op 51141[U] [App Term, 2d Dept 2017]; Dynasty Med. Care, P.C. v 21st Century Advantage Ins. Co., 55 Misc 3d 141[A], 2017 Slip Op 50597[U] [App Term, 2d Dept 2017]; Alleviation Med. Servs., P.C. v State Farm Mut. Auto. Ins. Co., 47 Misc 3d 149[A], 2015 NY Slip Op 50778[U] [App Term, 2d Dept 2015]). Contrary to the court’s determination, however, the defendant, in opposition to that prima facie showing, failed to raise a triable issue of fact (see Renelique v Allstate Ins. Co., 57 Misc 3d 126[A] [2017]; Dynasty Med. Care, P.C. v 21st Century Advantage Ins. Co., 55 Misc 3d 141[A] [2017]). Accordingly, that branch of the plaintiff’s motion should have been granted.

Since the defendant’s submissions were not sufficient to establish that the arbitrator and the master arbitrator were correct in awarding the defendant no-fault insurance benefits in the principal sum of $11,352.46, the Supreme Court should not have searched the record and awarded summary judgment to the defendant. Rivera, J.P., Austin, Cohen and Iannacci, JJ., concur.