Decided on September 15, 2016

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

Decided on September 15, 2016

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

Appeal from an order of the Civil Court of the City of New York, Queens County (Cheree A. Buggs, J.), entered January 10, 2014. 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 the branch of defendant’s cross motion seeking summary judgment dismissing plaintiff’s second cause of action 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 complaint.

Contrary to plaintiff’s argument with respect to the claim underlying plaintiff’s first cause of action, the affidavits submitted by defendant were sufficient to give rise to a presumption that defendant’s verification request, follow-up verification request and denial of claim forms had been properly mailed to plaintiff (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). Plaintiff’s argument that defendant did not initially request written verification in time to toll its time to pay or deny this claim, which claim defendant did not deny within 30 days of its receipt, fails, as defendant demonstrated that it had mailed its initial verification request within 15 business days of the date plaintiff claims to have submitted its claim form (see Alev Med. Supply, Inc. v New York Cent. Mut. Fire Ins. Co., 38 Misc 3d 143[A], 2013 NY Slip Op 50258[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]). Furthermore, defendant demonstrated that plaintiff’s assignor had failed to comply with a condition precedent to coverage (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]), in that the affidavit executed by Dr. Russ established, prima facie, that plaintiff’s assignor had failed to appear for independent medical examinations on the dates set forth in the affidavit.

However, as plaintiff argues, defendant has not demonstrated that the claim underlying plaintiff’s second cause of action was timely denied, because it did not demonstrate, as a matter of law, that it had denied the claim within 30 days of its receipt or that it had tolled its time to pay or deny the claim by timely requesting written verification (see Neptune Med. Care, P.C. v Ameriprise Auto & Home Ins., 48 Misc 3d 139[A], 2015 NY Slip Op 51220[U] [App Term, 2d [*2]Dept, 2d, 11th & 13th Jud Dists 2015]). Consequently, the branch of defendant’s motion seeking summary judgment dismissing the second cause of action should have been denied.

Plaintiff failed to demonstrate its prima facie entitlement to summary judgment on its second cause of action, as the affidavit plaintiff submitted in support of its motion failed to establish that this claim 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 a timely denial of claim that was 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 plaintiff’s second cause of action is denied.

Pesce, P.J., Aliotta and Solomon, JJ., concur.

Decided on August 18, 2016

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

Decided on August 18, 2016

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Pamela L. Fisher, J.), entered February 6, 2013. The order, insofar as appealed from and as limited by the brief, denied defendant’s cross motion for summary judgment dismissing the complaint.

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

In this action by providers to recover assigned first-party no-fault benefits, plaintiffs moved for summary judgment and defendant cross-moved for summary judgment dismissing the complaint. The Civil Court denied the motion and cross motion but, in effect, limited the issues for trial, pursuant to CPLR 3212 (g), to defendant’s defense of lack of medical necessity. As limited by its brief, defendant appeals from so much of the order as denied its motion for summary judgment.

In support of the branch of its cross motion seeking summary judgment dismissing so much of the complaint as sought to recover upon the claim by plaintiff AL Acupuncture, P.C. for services rendered August 25, 2008 through September 11, 2008, defendant established that the denial of claim form at issue had been timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). Defendant further demonstrated that it had fully paid AL Acupuncture, P.C. for these services in accordance with the workers’ compensation fee schedule for acupuncture services performed by chiropractors (see Great Wall Acupuncture, P.C. v Geico Ins. Co., 26 Misc 3d 23 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]). As this claim was fully paid, any issue as to the medical necessity of the claim is moot and, thus, the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover upon this claim should have been granted.

In support of the branch of its cross motion seeking summary judgment dismissing the remainder of the complaint, which sought to recover upon claims which had been denied on the ground of lack of medical necessity, defendant submitted a sworn independent medical examination (IME) report, which set forth a factual basis and medical rationale for the doctor’s conclusion that there was a lack of medical necessity for further treatment. Thus, defendant made a prima facie showing of its entitlement to summary judgment dismissing these claims. In opposition to this branch of defendant’s cross motion, plaintiffs submitted an affidavit which failed to meaningfully refer to, let alone sufficiently rebut, the conclusions set forth in the IME report (see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]). In view of the foregoing, and [*2]as plaintiffs have not challenged the Civil Court’s finding, in effect, that defendant is otherwise entitled to judgment on these claims, the branch of defendant’s cross motion seeking summary judgment dismissing the remainder of the complaint should have been granted (see Delta Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2007]).

Accordingly, the order, insofar as appealed from, is reversed and defendant’s cross motion for summary judgment dismissing the complaint is granted.

Pesce, P.J., Aliotta and Solomon, JJ., concur.

Appeal from an order of the Civil Court of the City of New York, Queens County (William A. Viscovich, J.), entered January 16, 2013. The order, insofar as appealed from, granted the branch of plaintiff’s motion seeking summary judgment upon the first cause of action; upon denying the branch of plaintiff’s motion seeking summary judgment upon the second cause of action, made, in effect, CPLR 3212 (g) findings in plaintiff’s favor; and denied the branch of defendant’s cross motion seeking summary judgment dismissing the second cause of action. So much of the notice of appeal as is from the portion of the order which granted the branch of plaintiff’s motion seeking summary judgment upon the first cause of action is deemed to be from a judgment of the same court entered February 13, 2013 awarding plaintiff the principal sum of $750 (see CPLR 5501 [c]).

ORDERED that the judgment is reversed, without costs, so much of the order entered January 16, 2013 as granted the branch of plaintiff’s motion seeking summary judgment on the first cause of action is vacated, and that branch of plaintiff’s motion is denied; and it is further,

ORDERED that the order, insofar as reviewed on direct appeal and insofar as appealed from, is reversed, with $30 costs, and the branch of defendant’s cross motion seeking summary judgment dismissing the second cause of action is granted.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment and defendant cross-moved for summary judgment dismissing the complaint. The Civil Court granted the branch of plaintiff’s motion seeking summary judgment upon the first cause of action; denied the branch of plaintiff’s motion seeking summary judgment upon the second cause of action; denied defendant’s cross motion; and made, in effect, CPLR 3212 (g) findings that the only remaining issue for trial upon the second cause of action was defendant’s proof of mailing with respect to the denial of claim form. A judgment was subsequently entered on February 13, 2013 awarding plaintiff the principal sum of $750. On appeal, defendant argues that plaintiff failed to make a prima facie showing of its entitlement to summary judgment and that the branch of its cross motion for summary judgment dismissing the second cause of action should have been granted.

Plaintiff’s moving papers failed to establish either that defendant had failed to pay or deny the claim within the requisite 30-day period (see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 114 AD3d 33 [2013]), or that defendant had issued a timely denial of claim that was conclusory, vague or without merit as a matter of law (see Insurance Law § 5106 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC [*2]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]). Thus, plaintiff did not establish its prima facie entitlement to summary judgment. As a result, the branch of plaintiff’s motion seeking summary judgment on its first cause of action should have been denied.

In support of the branch of its cross motion seeking summary judgment dismissing the second cause of action, defendant submitted an affidavit by its special investigator which set forth the standard mailing practices and procedures by which he had mailed the denial of claim form at issue to plaintiff, and defendant also submitted a copy of the certified mail return receipt card bearing the subject claim number, which reflected that plaintiff had signed for the envelope which, in accordance with the affiant’s standard office practice and procedure, contained the denial of claim form in question (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). As plaintiff failed to submit an affidavit in opposition to defendant’s cross motion, defendant’s proof that the denial of claim form had been timely mailed to plaintiff was unrebutted. In view of the foregoing, and as plaintiff has not challenged the Civil Court’s finding, in effect, that defendant is otherwise entitled to judgment dismissing the second cause of action, so much of the order as denied the branch of defendant’s cross motion seeking summary judgment dismissing that cause of action is reversed and that branch of defendant’s cross motion is granted (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]).

Accordingly, the judgment is reversed, so much of the order entered January 16, 2013 as granted the branch of plaintiff’s motion seeking summary judgment on the first cause of action is vacated, and that branch of plaintiff’s motion is denied. In addition, the order, insofar as reviewed on direct appeal and insofar as appealed from, is reversed, and the branch of defendant’s cross motion seeking summary judgment dismissing the second cause of action is granted.

Pesce, P.J., Aliotta and Solomon, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, August 18, 2016

APPEARANCES OF COUNSEL

Law Office of Printz & Goldstein, Woodbury (Bryan P. Fauci of counsel), for appellant.

Law Offices of Ilona Finkelshteyn, P.C., Brooklyn (Marina Josovich of counsel), for respondent.

Ordered that the order, insofar as appealed from, is affirmed, with $25 costs.

Plaintiff’s assignor was injured in a motor vehicle accident while riding in a vehicle which was insured by a New Jersey automobile insurance policy. Plaintiff commenced the instant action to recover, among other things, assigned first-party no-fault benefits for the services it had rendered to its assignor, alleging that its claims were unpaid. Thereafter, plaintiff moved for summary judgment, and defendant cross-moved for summary judgment dismissing the complaint. In support of its cross motion, defendant argued, among other things, that New Jersey law controlled, and that New Jersey law and the subject insurance policy required that the matter be submitted to arbitration. Defendant did not move to compel arbitration pursuant to CPLR 7503 (a). By order entered July 10, 2014, the Civil Court denied both motions, but limited the issue for trial to medical necessity, finding that plaintiff had established that the claims had been mailed to, and received by, defendant and had not been paid, that the substantive law of New Jersey controlled, that the court did not lack jurisdiction, and that arbitration is not mandatory under New Jersey law.{**53 Misc 3d at 61}

As limited by its brief, defendant appeals from so much of the order as denied its cross motion for summary judgment, contending, among other things, that the complaint should have been dismissed because the Civil Court improperly determined that the insurance policy did not mandate dispute resolution.

Since the insurance policy at issue contains a provision that “[t]he policy and any amendments and endorsements are to be interpreted pursuant to the laws of the state of New Jersey,” the substantive law of New Jersey applies (see Natural Therapy Acupuncture, P.C. v Geico Ins. Co., 50 Misc 3d 107, 108 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Bay Med. P.C. v GEICO Ins. Co., 41 Misc 3d 145[A], 2013 NY Slip Op 52084[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]). However, New York’s procedural laws control. In Natural Therapy Acupuncture, P.C. and Bay Med. P.C., this court held that dispute resolution is not mandatory pursuant to New Jersey Statutes Annotated § 39:6A-5.1 (a), as implemented by New Jersey Administrative Code § 11:3-5.1 (a) (see also New Jersey Mfrs. Ins. Co. v Bergen Ambulatory Surgery Ctr., 410 NJ Super 270, 272-273, 982 A2d 1, 2-3 [2009]), which provides that a dispute regarding the recovery of no-fault benefits may be submitted to dispute resolution upon the initiative of either party to the dispute. Similarly, the insurance policy in question provides that a matter may be submitted to dispute resolution “on [*2]the initiative of any party to the dispute.” However, the existence in a contract of an option to arbitrate in the event of a dispute is not a ground to dismiss the complaint in a court action based on that dispute. Rather, where one party commences a court action, the adverse party may seek to exercise the arbitration clause by moving to compel arbitration. If that motion is granted, the court stays the action pending arbitration (see CPLR 7503 [a]). Here, defendant has not moved to compel arbitration (see Natural Therapy Acupuncture, P.C. v Geico Ins. Co., 50 Misc 3d 107 [2015]; Bay Med. P.C. v GEICO Ins. Co., 41 Misc 3d 145[A], 2013 NY Slip Op 52084[U] [2013]). In view of the foregoing, we find no basis to disturb so much of the order as denied defendant’s cross motion for summary judgment dismissing the complaint.

Accordingly, the order, insofar as appealed from, is affirmed.

Solomon, J.P., Aliotta and Elliot, JJ., concur.

500177/16

Attorneys for Plaintiff
Bruno, Gerbino & Soriano., P.C.
Richard C. Aitken
445 Broad Hollow Road, Suite 220
Melville, New York 11747
(631) 390-0010

Attorneys for Laurentia St. Rose
Monfort, Healy, McGuire & Salley
840 Franklin Avenue
P.O. Box 7677
Garden City, New York 11530
(516) 747-4082

Pro Se
Tiesha Thompson

Recitation in accordance with CPLR 2219 (a) of the papers considered on the motion of plaintiff State Farm Mutual Automobile Insurance Company (hereinafter State Farm) filed on April 19, 2016, under motion sequence number two, for an order entering a default against the defendants Accelerated DME Recovery, Inc., ( hereinafter DME), Brookdale Hospital Medical Center, (hereinafter Brookdale Hospital), Brookdale ER PHYS Dept. (hereinafter Brookdale ER), DHD Medical, P.C. (hereinafter DHD), Global Health Pharmacy Corp., (hereinafter Global), Integrated Neurological Associates, PLLC, (hereinafter Integrated), Stand up MRI of Brooklyn, P.C. (hereinafter MRI), and Total Neuro Care, P.C., (hereinafter Neuro) (hereinafter jointly the healthcare providers), pursuant to CPLR § 3215 for failure to appear in the instant action.^[FN1]

Notice of Motion
Affirmation in support
Exhibits 1-8

On January 7, 2016, State Farm commenced the instant declaratory judgment action by filing a summons and complaint (hereinafter the commencement papers) with the Kings County Clerk’s office. The complaint alleges the following salient facts: Tiesha Thompson (hereinafter Thompson) is insured under an automobile policy issued by State Farm for a 2012 Chevrolet Tahoe (hereinafter the Tahoe). Laurentia St. Rose (hereinafter St. Rose) claimed that on March 31, 2015, she was a pedestrian involved in an accident with the Tahoe. St. Rose, thereafter, filed for no-fault benefits and received medical services for personal injuries allegedly arising out of the March 31, 2015 accident. The Tahoe owned by Thompson was not involved in the accident of March 31, 2015, nor any other accident that St. Rose can claim personal injuries arising out of. The healthcare provider defendants are entities that treated St. Rose for her injuries that allegedly arose out of the accident on March 31, 2015.

The instant action seeks the following declarations: (1) that the alleged accident of March 31, 2015 is not a covered event under the State Farm policy; (2) that Thompson was not negligent or responsible for the alleged accident of March 31, 2015 or any alleged personal injuries of St. Rose; (3) that State Farm is under no obligation to pay any monies for any alleged medical treatment or economic harm stemming from the alleged accident of March 31, 2015.

State Farm seeks an order pursuant to CPLR 3215 granting a default judgment on its claim for a declaratory judgment as against healthcare provider defendants. CPLR 3215 (a) permits a plaintiff to seek default when the defendant has failed to appear. “On motion for leave to enter a default judgment pursuant to CPLR 3215, the movant is required to submit proof of [*2]service of the summons and complaint, proof of the facts constituting plaintiff’s claim, and proof of the defaulting party’s default in answering and appearance” (Atlantic Cas. Ins. Co. v RJNJ Services, Inc., 89 AD3d 649, 651 [2nd Dept. 2011]). CPLR 3215 (f) states that upon any application for a judgment by default, proof of the facts constituting the claim, the default, and the amount due are to be set forth in an affidavit “made by the party” (HSBC Bank USA, N.A. v Betts, 67 AD3d 735, 736 [2nd Dept. 2009]).

A plaintiff seeking to assert jurisdiction over a defendant must “bear the ultimate burden of proving by a preponderance of the evidence that jurisdiction over the defendant was obtained by proper service of process” (Gottesman v Friedman, 90 AD3d 608, 609 [2nd Dept. 2011] quoting Santiago v Honcraft, 79 AD3d 847, 848 [2nd Dept. 2010]).

The procedure to effectuate service of the commencement papers on Limited Liability Companies is delineated in Limited Liability Company Law § 301 (a). The statute provides in pertinent part that the secretary of state shall be the agent of every domestic limited liability company (see LLC § 302 [a]). Limited Liability Company Law § 302 (a) further provides that in addition to the designation of the secretary of state, each domestic limited liability company or authorized foreign limited liability company may designate a registered agent.

Similarly, the method to effectuate service on corporations is set forth in CPLR 311 and Business Corporations Law § 306 (b) (1). CPLR 311 provides that service upon a corporation shall be made by “delivering the summons on an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service” (CPLR 311). BCL 306 (b) (1) provides that service may be effectuated on corporations by delivery to the Secretary of State.

The affidavits of Heather Morigerato (hereinafter Morigerato), plaintiff’s process server, has established prima facie proof of service of the commencement papers upon six of the healthcare providers pursuant to Limited Liability Company Law § 301 (a) and BCL 306 (b) (1). Morigerato has averred that on January 14, 2016 service of the summons and complaint upon DME, DHD, Global, Integrated, MRI, and Neuro was completed by personal delivery upon the Secretary of State.

The affidavit of Jonathan Cohen (hereinafter Cohen), plaintiff’s other process server, has established prima facie proof of service of the commencement papers upon Brookdale Hospital and Brookdale ER pursuant to CPLR 311. Cohen has averred that Brookdale Hospital was served on January 19, 2016, by personal delivery upon Cecilia Villarama, an administrator in Risk Management Department and authorized agent for receipt of service. Cohen has also averred in a separate affidavit of service that Brookdale ER was served on January 19, 2016, by personal delivery upon Karnie Lee, a manager and authorized agent for receipt of service. A process server’s affidavit ordinarily constitutes a prima facie showing of proper service (S. Point, Inc. v. John, 140 AD3d 1150 [2nd Dept. 2016] citing Aurora Loan Servs., LLC v. Gaines, 104 AD3d 885, 886 [2nd Dept. 2013]). State Farm has established that the healthcare defendants were properly served with the commencement papers.

Plaintiff’s next hurdle is a showing that DME, DHD, Global, Integrated, MRI, Neuro, Brookdale Hospital, and Brookdale ER failed to appear or answer the complaint (see CPLR 3215). Pursuant to CPLR 320, a defendant appears by serving an answer or notice of appearance, or by making a motion which has the effect of extending time to answer. An appearance shall be made within twenty days after service of the summons is complete (CPLR [*3]320 [a]). The affirmation of Richard C. Aitken, State Farm’s counsel, establishes that Accelerated DME Recovery, Inc., Brookdale Hospital Medical Center, Brookdale ER PHYS Dept., DHD Medical P.C., Global Health Pharmacy Corp., Integrated Neurological Associates PLLC, and Stand up MRI of Brooklyn, P.C. did not interpose an answer to the complaint.

Assuming proper service of the commencement papers, a plaintiff is required to set forth the facts constituting the elements of the claim to succeed on a motion to hold a defendant in default (see CPLR 3215 (f), HSBC Bank USA, N.A. v Betts, 67 AD3d 735, 736 [2nd Dept. 2009]). In support of the instant motion State Farm has submitted, among other things, the affidavit of Michael Higgins (hereinafter Higgins), its claim specialist.Higgins has averred that he conducted and completed an investigation and concluded that the Tahoe and Thompson, its insured, were not involved in the alleged accident of March 31, 2015.

Pursuant to CPLR 3001, the Supreme Court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a “justiciable controversy” whether or not further relief is or could be claimed. To constitute a justiciable controversy there must be a real dispute between adverse parties, involving substantial legal interests for which a declaration of rights will have some practical effect (see Chanos v MADAC, LLC, 74 AD3d 1007, 1008 [2nd Dept. 2010]).

The primary purpose of a declaratory judgment is to stabilize an uncertain or disputed jural relationship with respect to present or prospective obligations (Village of Woodbury v Brach, 99 AD3d 697, 699 [2nd Dept. 2012] citing, Chanos v MADAC, LLC, 74 AD3d 1007, 1008 [2nd Dept. 2010]). “Where there is no necessity for resorting to the declaratory judgment it should not be employed” (Hesse v Speece, 204 AD2d 514, 515 [2nd Dept. 1994] citing James v Alderton Dock Yards, 256 NY 298, 305 [1931]). Furthermore, a declaratory judgment is ex vi termini a judgment on the merits (Dupigny v St. Louis, 115 AD3d 638, 640 [2nd Dept. 2014]). Until disputed questions of fact necessary to be determined before judgment can be rendered are settled, it is plant that rights and legal relations cannot be determined, defined and declared (Id).

“[A] default judgment in a declaratory judgment action will not be granted on the default and pleadings alone for it is necessary that plaintiff establish a right to a declaration against… a defendant.” (Dole Food Co., Inc. v Lincoln General Ins. Co., 66 AD3d 1493 [4th Dept. 2009]; see also Levy v Blue Cross and Blue Shield of Greater New York, 124 AD2d 900, 902 [3rd Dept. 1986] citing Nat. Sur. Corp. v Peccichio, 48 Misc 2d 77, 78 [Sup. Ct., Albany County 1965]). This does not mean that the defendant can frustrate the plaintiff’s claim just by defaulting, which would amount to an absurdity, or, on the other hand, that the defendant will be dragged into court (Connors, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7, CPLR 3001:23). It apparently means only that the plaintiff must nonetheless take the stand to attest to all parts of the claim. In ordinary actions, however, proof on a default application can be made solely on paper (Id.).

State Farm annexed an affidavit of Higgins and examination under oath (EUO) of Thomson, its insured. The EUO was conducted on September 17, 2015 over three months before the instant action was commenced. The EUO is not admissible under CPLR 3117. Moreover, it has been recognized that while the transcripts of examinations under oath may be admissible to defeat a summary judgment motion, they are nonetheless hearsay (Rizz Management Inc. v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 1102(A), 2008 NY Slip Op. 51191(U) [NY Dist. Ct. 2008] citing CPT Medical Service, P.C. v Utica Mutual Insurance, 12 [*4]Misc 3d 237, 811 N.Y.S.2d 909 (Civ. Ct. Queens Co.2006). As such, those statements are inadmissible at trial unless, for example, they are used for impeachment purposes upon cross-examination in the event that such declarant or assignor testifies (Id).

As a result, the only admissible testimony in support of a declaratory judgment is Higgins’ affidavit. The Higgins’ affidavit, however, consists of his conclusions based on an investigation which relies primarily on hearsay evidence. Consequently, although State Farm has established that the healthcare provider defendants are in default in answering the complaint it has not established its right to a declaration (Dole Food Co., Inc. v Lincoln General Ins. Co., 66 AD3d 1493 [4th Dept. 2009]). State Farm is directed to file a note of issue and present its proof at an inquest.

State Farm Mutual Automobile Insurance Company’s motion for a declaratory judgment against defendants Accelerated DME Recovery, Inc., Brookdale Hospital Medical Center, Brookdale ER PHYS Dept., DHD Medical P.C., Global Health Pharmacy Corp., Integrated Neurological Associates PLLC, Stand up MRI of Brooklyn, P.C., based on their default in answering the complaint is denied.

The foregoing constitutes the decision and order of this court.

Dated: August 16, 2016

Hon. Francois A. Rivera
J.S.C.

Footnotes

Footnote 1: At oral argument the plaintiff conceded that it accepted a late answer and was no longer seeking a default against from DME and DHD.

Appeal from a judgment of the Civil Court of the City of New York, Queens County (Richard G. Latin, J.), entered July 29, 2014. The judgment, insofar as appealed from as limited by the brief, entered pursuant to so much of an order of the same court as, upon granting plaintiff’s motion for summary judgment, directed that the judgment include an award of statutory interest pursuant to Insurance Law § 5106 (a), in the sum of $15,457.93, computed from April 30, 2002.

ORDERED that the judgment, insofar as appealed from, is modified by deleting the provisions thereof computing statutory interest pursuant to Insurance Law § 5106 (a) from April 30, 2002 and awarding interest in the sum of $15,457.93, and by providing that interest be computed from August 30, 2013; as so modified, the judgment, insofar as appealed from, is affirmed, without costs, and the matter is remitted to the Civil Court for a recalculation of the statutory interest pursuant to Insurance Law § 5106 (a) in accordance herewith, and the entry of an appropriate amended judgment thereafter.

Plaintiff commenced this action to recover assigned first-party no-fault benefits in April 2002. By order dated July 3, 2014, the Civil Court granted plaintiff’s motion for summary judgment and directed that the judgment include statutory interest. A judgment was entered pursuant to that order, which awarded plaintiff, among other sums, the principal amount of $5,255.74 and $15,457.93 in statutory interest (see Insurance Law § 5106 [a]), computed as of April 30, 2002. On appeal from the judgment, defendant limits its arguments to the award of statutory interest, contending that, due to plaintiff’s inaction, it should not have been awarded statutory interest or, in the alternative, that statutory interest should not begin to accrue until August 30, 2013, when plaintiff served a motion to compel discovery.

Where a provider does not commence a no-fault action within 30 days of receipt of the insurer’s denial of claim form, the Insurance Department Regulations provide that statutory prejudgment interest (see Insurance Law § 5106 [a]) does not begin to accumulate until an action is commenced (11 NYCRR 65—3.9 [c]). If an action has been commenced, statutory interest accumulates “unless the applicant unreasonably delays the … court proceeding” (11 NYCRR 65—3.9 [d]). In this case, plaintiff took no meaningful action to prosecute the case until it served a motion to compel discovery on August 30, 2013. Plaintiff should not be rewarded for its years of inaction by receiving a windfall of interest (see V.S. Med. Servs., P.C. v Travelers Ins. Co., 49 Misc 3d 152[A], 2015 NY Slip Op 51760[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Aminov v Country Wide Ins. Co., 43 Misc 3d 87 [App Term, 2d Dept, 2d, 11th & 13th [*2]Jud Dists 2014]).

Accordingly, the judgment, insofar as appealed from, is modified by deleting the provisions thereof computing statutory interest from April 30, 2002 and awarding interest in the sum of $15,457.93, and by providing that interest be computed from August 30, 2013. The matter is remitted to the Civil Court for a recalculation of the statutory interest pursuant to Insurance Law § 5106 (a) and the entry of an appropriate amended judgment thereafter.

Pesce, P.J., Solomon and Elliot, JJ., concur.