[*1]

Law Office of Jason Tenenbaum, P.C., Garden City, N.Y., for appellant.

Joseph Henig, P.C., Bellmore, N.Y., for respondent.

In an action to recover no-fault benefits under a policy of automobile insurance, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Cozzens, Jr., J.), entered January 29, 2014, as denied, as premature, its cross motion for summary judgment dismissing the complaint.

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

On September 25, 2012, the plaintiff’s assignor, Chun Chen, was allegedly involved in an accident that occurred while he was a passenger in an automobile. More than three months later, on January 15, 2013, Chen was admitted to a facility operated by Mount Sinai Hospital (hereinafter the hospital), where he allegedly remained until the next day. On January 31, 2013, Hospital Receivables Systems, Inc. (hereinafter Hospital Receivables), on behalf of the hospital, sent the prescribed “no-fault NF-5 form” request for payment to the defendant Auto One Insurance Company (hereinafter Auto One) with respect to medical treatment which Chen had received at the hospital. Auto One received this form by February 4, 2013.

On February 14, 2013, Auto One sent the hospital a request for additional verification seeking, inter alia, “colored photos of surgery, [c]ervical spine MRI films for 11/15/12 and 12/13/12, [and] [c]omplete prior medical records from Dr. Leonid Reyfman for prior injury in 2011 to include any surgery records and prior MRI films.” Auto One also allegedly sent copies of this request for verification to Chen himself.

In a letter dated March 6, 2013, a representative of Hospital Receivables advised Auto One that “the hospital is not in possession of prior medical records from Dr. Leonid Reyfman including any surgery records and prior MRI Films”; that the hospital was not “in possession of any color photos of the surgery”; and that the hospital “was not authorized to release the actual cervical spine films that are in their [sic] possession.” This letter also indicated that the complete medical records maintained by the hospital referable to its treatment of Chen had been mailed to Auto One on March 5, 2013. Thereafter, Auto One sent a second request for verification dated March 19, 2013. In response thereto, Hospital Receivables, in effect, stated that it had already complied with the verification request.

[*2] In April 2013, the hospital, as assignee of Chen, commenced this action seeking payment of no-fault benefits. As relevant to this appeal, the Supreme Court denied Auto One’s cross motion for summary judgment dismissing the complaint, which was premised on the theory that the existence of outstanding requests for verification rendered the action premature. Auto One appeals.

When a health care provider, as assignee of a no-fault claimant, fails to respond to a verification request, including any follow-up request, “ ’the 30-day period in which to pay or deny the claim does not begin to run, and any claim for payment by the hospital is premature’ ” (Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889, 890 [2007], quoting New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]; see Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 [2005]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 19 AD3d 569 [2005]). Here, Auto One failed to demonstrate its prima facie entitlement to judgment as a matter of law, since the record reveals that the hospital replied to the verification request with respect to those records in the hospital’s possession that it alleged it was authorized to release. In addition, there remain triable issues of fact regarding the “propriety” of some of Auto One’s requests for verification, including whether the items requested existed or were in the possession of the hospital or Chen (Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [1999]; cf. Westchester Med. Ctr. v Progressive Cas. Ins. Co., 43 AD3d 1039, 1040 [2007]). Thus, the Supreme Court properly denied, as premature, Auto One’s cross motion for summary judgment dismissing the complaint.

Given the existence of the triable issues of fact outlined above, there is no merit to the hospital’s contention that we should search the record and award it summary judgment. Mastro, J.P., Chambers, Sgroi and LaSalle, JJ., concur.

[*1]

Mischel & Horn, P.C., New York (Naomi M. Taub of counsel), for appellant.

Jones Jones LLC, New York (Jacqueline R. Mancino of counsel), for respondent.

Judgment, Supreme Court, New York County (Cynthia S. Kern, J.), entered June 10, 2013, for petitioner in the total amount of $39,935.19, and bringing up for review an order, same court and Justice, entered on or about December 12, 2012, which granted the petition to confirm two arbitration awards against respondent, unanimously affirmed, with costs. Appeal from order, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Petitioner’s insured, while driving a van during the course of his employment, was involved in a motor vehicle accident with another vehicle, driven by a nonparty who was insured under a policy issued by respondent. Petitioner paid workers’ compensation benefits to its insured in lieu of no-fault benefits, and then sought “loss transfer” reimbursement from respondent pursuant to Insurance Law § 5105, under the mandatory arbitration procedure. Respondent asserted, as an affirmative defense to petitioner’s claim, that it had disclaimed coverage to its insured on the ground of noncooperation.

As this matter involves compulsory arbitration, the awards will be upheld so long as there is evidentiary support, and they are not arbitrary and capricious (see Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]). Here, the arbitrators rationally construed Insurance Law § 5105 (a) as providing petitioner insurer a direct right to recover loss transfer reimbursement from respondent, an adverse insurer of a tortfeasor who had a policy in effect at the time of the accident, regardless of respondent’s disclaimer of coverage on noncooperation grounds (see Matter of State Farm Mut. Auto. Ins. Co. v City of Yonkers, 21 AD3d 1110, 1110-1112 [2d Dept 2005]; see also Insurance Law § 5102 [j] [defining “(c)overed person” as having an insurance policy “in effect”]). The loss transfer recovery right of petitioner under Insurance Law § 5105 (a) is separate from the personal right of the insured tortfeasor (and his heirs, assignees, or subrogees) to receive a defense and indemnification from respondent (see Aetna Life & Cas. Co. v Nelson, 67 NY2d 169, 175 [1986]; Matter of Liberty Mut. Ins. Co. [Hanover Ins. Co.], 307 AD2d 40, 42 [4th Dept 2003]; State Farm Mut. Auto. Ins. Co., 21 AD3d at 1110-1112).

[*2] Respondent waived any argument that the arbitrators lacked jurisdiction, since it participated fully in the arbitration proceedings, never sought a stay of the arbitration, and did not raise the argument before the arbitrators or before the Supreme Court (see Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d 578, 583 [1977]; Matter of Philadelphia Ins. Co. [Utica Natl. Ins. Group], 97 AD3d 1153, 1153 [4th Dept 2012], appeal dismissed 20 NY3d 984 [2012]). Nor did respondent assert any argument before the arbitrators that the combined awards exceeded the policy limits. In any event, the argument is unavailing.

We have considered respondent’s remaining arguments and find them unavailing. Concur—Friedman, J.P., Moskowitz, Feinman, Gische and Kapnick, JJ.

[*1]

Civil Court of the City of New York, Kings County, October 5, 2014

APPEARANCES OF COUNSEL

Law Offices of Aloy O. Ibuzor, New York City, for defendant.

Korsunskiy Legal Group, P.C., Brooklyn, for plaintiff.

This case raises anew the seemingly irreconcilable tensions that arise from treating an examination before trial (EUO) as{**56 Misc 3d at 285} both a condition precedent to coverage and as part of the verification procedures. It appears that no court has ruled upon whether an insurance company can issue a denial beyond the 30 day period for failure to appear for an EUO when the insurance company itself has failed to comply with the time lines specified in the verification procedures. This matter was submitted on the issue of whether an insurance company must schedule an EUO of the provider, pursuant to 11 NYCRR 65-3.5 (b), within 15 business days after it completes the assignor’s EUO, and what are the ramifications that flow from a late request for an additional EUO.

Plaintiff Prestige Medical P.C. (plaintiff, provider, or Prestige), a medical provider, brought this action for $2,423.58 for medical services it provided to its assignor Khalil Abdullah (assignor or Abdullah). After the EUO of the assignor was held on February 14, 2012, defendant Travelers Home and Marine Insurance Company (defendant, insurer, or Travelers), by letter dated March 13, 2012, requested an EUO of the provider, and thereafter scheduled the EUO for April 3, 2012. After the provider failed to appear, Travelers issued a follow-up letter, dated April 3, 2012, which rescheduled the EUO for April 23, 2012. After the provider again failed to appear, Travelers issued a denial dated May 9, 2012, based upon the provider’s EUO no-show.

Defendant moves for summary judgment based upon the plaintiff’s EUO no-show and outstanding verification. Plaintiff cross-moves for summary judgment on the grounds that the defendant failed to send out a scheduling letter to the provider for an EUO within 15 business days after holding the EUO of the assignor, as mandated by 11 NYCRR 65-3.5 (b).

In Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC (82 AD3d 559 [1st Dept 2011]), the First Department held that a failure to attend an EUO (or independent medical exam [IME]) is a violation of a condition precedent to coverage which vitiates the policy. The First Department reasoned that since failure to appear for an EUO (or IME) cancels the contract as if there was no coverage in the first instance, an insurer could deny all claims retroactively to the date of loss and outside of the 30 day deadline in which to issue a denial. This court has followed Neomy Med., P.C. v American Tr. Ins. Co. (31 Misc 3d 1208[A], 2011 NY Slip Op 50536[U] [Civ Ct, Kings County 2011]; see also Tarnoff Chiropractic, P.C. v{**56 Misc 3d at 286} GEICO Ins. Co., 35 Misc 3d 1213[A], 2012 NY Slip Op 50670[U] [Nassau Dist Ct 2012] [court within Second Department follows Unitrin holding that denial need not be timely]).

The Second Department has also recognized that failure to comply with the insurance policy’s requirement to submit to an EUO or IME “is a material breach of the policy, precluding recovery of the policy proceeds.” (Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2d Dept 2014], citing to Unitrin.) However, the Appellate Term, Second Department, while noting the Unitrin decision, still appears to hold that failure to appear for an EUO or IME is a precludable defense. (Clinton Place Med., P.C. v New York Cent. Mut. Fire Ins. Co., 43 Misc 3d 127[A], 2014 NY Slip Op 50472[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; Clinton Place Med., P.C. v New York Cent. Mut. Fire Ins. Co., 43 Misc 3d 126[A], 2014 NY Slip Op 50468[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014].)

As cogently noted by the Honorable Fred J. Hirsh in Tarnoff, “[a]n EUO is a hybrid between a condition precedent to coverage and verification” (2012 NY Slip Op 50670[U], *5). Most of the provisions relating to EUOs are contained in regulations relating to verification. (Id.; see 11 NYCRR 65-3.5.) Nor does the insurer have an “unfettered right to request an EUO,” as it must have both an objective basis and justification for requesting it. (Id.)

To that end, this court holds that before an insurance company can take advantage of denying the claim beyond the 30 day period pursuant to Unitrin, it must first comply with the notification time lines contained in the verification procedures. 11 NYCRR 65-3.5 (b) authorizes an insurer to request “any additional verification required . . . to establish proof of claim . . . within 15 business days of receipt of the prescribed verification forms” (i.e., the completed application for no-fault benefits [N-F 2 form]) (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 299 [2007]). By properly requesting this additional verification within 15 business days from receipt of the proof of claim form, an insurer may toll the 30 day period in which it must deny the claim. (Prime Psychological Servs., P.C. v Nationwide Prop. & Cas. Ins. Co., 24 Misc 3d 230, 233 [Civ Ct, Richmond County 2009]; see Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723, 724 [Civ Ct, Queens County 2004], citing 11 NYCRR former 65.15 [d] [1].) If the requested verification has not been supplied to the insurer within 30 days after the original{**56 Misc 3d at 287} request, the insurer shall, within 10 days, follow up upon its request for verification either by a telephone call or by mail. (11 NYCRR 65-3.6 [b].)

The insurance regulations provide for EUOs and IMEs as part of an insurer’s “entitlement to ‘additional verification’ following the insurer’s receipt of a provider’s statutory claim forms.” (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 19 [App Term, 2d Dept, 2d & 11th Jud Dists 2004], affd in part 35 AD3d 720 [2006].) Section 65-3.5 (d) provides that if the additional verification required by the insurer is a medical examination, it must be scheduled within 30 days from date of receipt of the prescribed verification forms. (See Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 19 [App Term, 2d Dept, 2d & 11th Jud Dists 2004]; see also Prime Psychological, 24 Misc 3d at 233; All-Boro Med. Supplies, Inc. v Progressive Northeastern Ins. Co., 20 Misc 3d 554 [Civ Ct, Kings County 2008]; Lumbermens Mut. Cas. Co. v Inwood Hill Med., P.C., 8 Misc 3d 1014[A], 2005 NY Slip Op 51101[U] [Sup Ct, NY County 2005].) Where an EUO is requested as additional verification, an insurer must schedule it within a reasonable time frame and as “expeditiously as possible.” (Eagle Surgical Supply, Inc. v Progressive Cas. Ins. Co., 21 Misc 3d 49, 51 [App Term, 2d Dept, 2d & 11th Jud Dists 2008].) An insurer that conducts an EUO has 30 days from the date the EUO is conducted to pay or deny the claim. (Tarnoff, 2012 NY Slip Op 50670, *11, *12; see 11 NYCRR 65-[*3]3.8 [a] [1].)

After the EUO of the assignor was conducted on February 14, 2012, the insurer did not issue a letter requesting an EUO of the provider until March 13, 2012, some 28 calendar days, or 19 business days after the EUO had been conducted. When the provider failed to appear for the scheduled April 3, 2012 EUO, the insurer, on that same day, issued a follow-up letter rescheduling the EUO for April 23, 2012. After the provider again failed to appear, Travelers issued a denial dated May 9, 2012 based upon the provider’s EUO no-show.

This court rules that since defendant failed to abide by the 15 day time frame in which to request additional verification in the form of an additional EUO, as required by 11 NYCRR 65-3.5 (b), it forfeited its right to issue an untimely denial as permitted by the Unitrin decision. The other ramification of Travelers’ untimely request for an additional EUO is the reduction of its time in which to issue its denial after the provider failed to appear for the rescheduled EUO on April 23, 2012.{**56 Misc 3d at 288}

In Nyack Hosp. v General Motors Acceptance Corp. (8 NY3d at 300), the Court of Appeals found that per 11 NYCRR 65-3.8 (j), any deviation from the rules governing verification shall reduce the 30 calendar day period in which an insurer can deny the claim. 11 NYCRR 65-3.8 (l) provides that “[f]or the purposes of counting the 30 calendar days . . . , with the exception of section 65-3.6 [follow-up requirements] . . . , any deviation from the rules set out in this section shall reduce the 30 calendar days allowed.” Since Travelers requested the EUO of the provider 19 days, rather than within 15 days after the EUO of the assignor had been held, its time in which to issue a denial is reduced by four days. Travelers therefore had 26 days from April 23, 2012, or until May 19th, in which to issue a denial. Travelers issued a timely denial on May 9, 2012. Accordingly, Traveler’s motion for summary judgment is granted and the plaintiff’s cross motion for summary judgment is denied.

[*1]

Civil Court of the City of New York, Kings County, October 1, 2014

APPEARANCES OF COUNSEL

Bruno, Gerbino & Soriano, LLP, Melville, for defendant.

Law Office of Stephen Goldblatt, P.C., Brooklyn, for plaintiff.

Defendant’s motion for summary judgment is decided as follows:

Defendant’s motion is granted to the extent that it established the timely and proper generation and mailing of examination under oath (EUO) scheduling letters and plaintiff’s failure to appear on the scheduled EUO dates of January 18, 2013 and February 13, 2013. Defendant also established that the claims were timely denied.

Plaintiff, in opposition, does not challenge the timely mailing of defendant’s EUO [*2]requests or denials or that plaintiff failed to appear on the scheduled dates. Rather, plaintiff objects to the reasonableness of the EUO requests and attaches copies of letters addressed to defendant’s law firm responding to defendant’s EUO requests. In a letter dated January 17, 2013 plaintiff indicates that “there appears to be a disparity between [the position of the law firm] and that of State Farm.” Specifically, plaintiff requests clarification as to whether defendant was requesting both the production of documents and an EUO or whether defendant would consider the production of the documents to be sufficient. It is unclear whether and to what extent defendant responded to this letter as no responsive letter is included in the papers. Plaintiff’s subsequent letter, dated February 7, 2013, objects to appearing for an EUO and indicates that plaintiff believes it has fully met its obligation under the no-fault policy to comply with all reasonable requests for verification. Again, it is unclear whether defendant responded to plaintiff’s correspondence.

This court previously held in Five Boro Psychological & Licensed Master Social Work Servs., PLLC v GEICO Gen. Ins. Co. (38 Misc 3d 354 [Civ Ct, Kings County 2012, Cohen, J.]) that an objection must be timely to be meaningful. Thus, the court found that an objection to EUO requests raised for the first time after the action was commenced was too late to constitute a legitimate response and was insufficient to preserve an objection to reasonableness of those requests (see Five Boro, 38 Misc 3d 354, 357; see also Viviane Etienne Med. Care, P.C. v{**45 Misc 3d at 1035} State Farm Mut. Auto. Ins. Co., 35 Misc 3d 127[A], 2012 NY Slip Op 50579[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). Here, in contrast, plaintiff offers evidence of a timely and specific objection to the reasonableness of defendant’s EUO requests and, as such, is not precluded from raising that objection in opposition to defendant’s motion (cf. Five Boro, 38 Misc 3d 354; see Viviane Etienne Med. Care, P.C., 35 Misc 3d 127[A], 2012 NY Slip Op 50579[U]).

Under the circumstances, plaintiff raises a question of fact with respect to the reasonableness of the EUO requests and whether, if defendant failed to respond, plaintiff’s failure to appear for the EUOs was excusable (cf. Five Boro, 38 Misc 3d 354; see Canarsie Chiropractic, P.C. v State Farm Mut. Auto. Ins. Co., 27 Misc 3d 1228[A], 2010 NY Slip Op 50950[U] [Civ Ct, Kings County 2010, Ash, J.]). The matter shall proceed to trial on the issues of plaintiff’s prima facie case and the reasonableness of defendant’s EUO requests.

[*1]

Civil Court of the City of New York, New York County, September 30, 2014

APPEARANCES OF COUNSEL

Jones Jones LLC, New York City (Agnes Neiger of counsel), for petitioner.

Law Office of Ricky J. Lucyk, Woodbury (Evan Przebowski of counsel), for respondent.

The decision/order on this motion is as follows: Petitioner’s motion to vacate is granted and respondent’s cross motion to confirm is denied.

On December 23, 2013, petitioner filed its petition under article 75 of the CPLR to vacate an award made by arbitrator Mavis Thomas on September 24, 2013. In its papers, petitioner argued that the award made by the arbitrator to respondent was improper because the arbitrator exceeded its power in violation of CPLR 7511 (b). On March 3, 2014, respondent filed its cross motion pursuant to CPLR 7510 to confirm the arbitrator’s award and argued that the arbitrator’s determination was proper as it acted within its permitted discretion.

The facts before the court are not in dispute. Petitioner is a public benefit corporation under the laws of the State of New York and is self-insured. On October 1, 2010, a bus operated by petitioner was involved in a three-car motor vehicle accident with Christina McNamara (subrogor) and Michael Castelluccio. Nonparty Castelluccio was insured by respondent, which provided no-fault benefits to subrogor. In January 2011, subrogor commenced a personal injury action (action No. 1) naming petitioner, Eli Riviera (petitioner’s bus operator) and Michael Castelluccio as defendants. On September 22, 2011, respondent filed for arbitration seeking reimbursement from petitioner for the no-fault benefits paid on behalf of subrogor. While waiting for the resolution of action No. 1, the arbitration proceeding was adjourned on two different occasions. On January 9, 2013, after trial in action No. 1, a jury found, by unanimous verdict, that Eli Riviera was 0% responsible for the motor vehicle accident and that Michael Castelluccio was 100% responsible for the motor vehicle accident. Petitioner and Eli Riviera were found not liable for subrogor’s injuries and were dismissed from the action. An attorney for subrogor served the proposed judgment on petitioner.{**46 Misc 3d at 708}

On September 24, 2013, petitioner and respondent appeared for the arbitration proceeding. For reasons not explained to the court, neither side informed the arbitrator of the jury’s verdict, nor listed any documentation relating to the verdict as evidence in the arbitration. At the hearing, petitioner sought an adjournment to provide the arbitrator with the jury verdict, but its application was denied and the arbitrator refused to consider the jury verdict. The arbitrator’s rationale was that since petitioner had sufficient time to provide the jury verdict as evidence and only did so “at the table,” it would not consider the jury verdict.

Petitioner argues that the decision of the arbitrator should be vacated because it is irrational, arbitrary, and capricious and constitutes the wrong application of relevant law. Specifically, petitioner asserts that by refusing to accept the decision of the jury, the arbitrator exceeded its power pursuant to CPLR 7511 and that the decision by the jury had preclusive effect on the arbitration and is res judicata as to petitioner’s liability and the failure to give preclusive effect to the jury verdict is grounds for the vacatur. Petitioner further contends that the arbitrator’s failure to grant an adjournment for petitioner to formally submit the jury verdict into evidence and the arbitrator’s subsequent failure to even consider the jury verdict constituted an abuse of discretion. Respondent argues that pursuant to the rules of the arbitration, the arbitrator was within its discretion to refuse an adjournment and to refuse to consider the jury verdict first produced at the hearing despite being available for nine months, and that the jury verdict was not binding on the arbitration.

The arbitration in this matter was mandatory as required by statute (see Insurance Law § 5105 [requiring that the sole remedy of actions between insurers involving the recovery of personal injury benefits paid pursuant to the no-fault rules is mandatory arbitration]). In cases of compulsory arbitration, due process requires “closer judicial scrutiny of the arbitrator’s determination” (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]). Under CPLR article 75 a review should include whether the award is supported by evidence or other basis in reason (Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207 [1981]). Awards after mandatory arbitration, upon judicial review, are to be measured according to whether they are rational or arbitrary and capricious (Caso v Coffey, 41 NY2d 153 [1976]). In a mandatory arbitration, the arbitrator’s power derives from the statute which mandates{**46 Misc 3d at 709} upon the parties the arbitration. Consequently, the arbitrator cannot make its decisions with less than substantial evidence, without reasonable basis or in disregard of applicable rules of law (Mount St. Mary’s Hosp. of Niagara Falls v Catherwood, 26 NY2d 493 [1970]).

“Res judicata serves to preclude the renewal of issues actually litigated and resolved in a prior proceeding as well as claims for different relief which arise out of the same ‘factual grouping’ or ‘transaction’, and which should have or could have been resolved in the prior proceeding” (Braunstein v Braunstein, 114 AD2d 46, 53 [2d Dept 1985]; see also Breslin Realty Dev. Corp. v Shaw, 72 AD3d 258 [2d Dept 2010]; Mew Equity LLC v Sutton Land Servs., L.L.C., 37 Misc 3d 1225[A], 2012 NY Slip Op 52161[U] [Sup Ct, Kings County 2012]). Conversely,

“[t]he doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in the prior action or proceeding, and decided against that party or those in privity, whether or not the tribunals or causes of action are the same” (Breslin Realty Dev. Corp., 72 AD3d at 263).

Here, respondent’s subrogor and petitioner litigated, in an earlier court proceeding, the very same claim heard by the arbitrator. Specifically, a court heard the very same facts relating to subrogor’s claim that petitioner was liable for her injuries. A jury evaluated these facts and made the determination that someone other than petitioner was 100% liable for subrogor’s injuries. Hence, the claim brought by respondent in the arbitration, standing in the shoes of subrogor, arose out of the same factual transaction and had been fully litigated and determined by a court prior to the arbitration hearing. The arbitrator’s decision to not give preclusive effect to a final determination made by a court was irrational (Matter of Social Servs. Empls. Union, Local 371 v City of N.Y., Dept. of Juvenile Justice, 82 AD3d 644 [1st Dept 2011]; Motor Veh. Acc. Indem. Corp. v Travelers Ins. Co., 246 AD2d 420 [1st Dept 1998] [based on the principle of res judicata, an arbitrator exceeds his power by conducting a hearing and making an award premised on the same claim as a prior award]; see also Matter of Pinnacle Envt. Sys. [Cannon Bldg. of Troy Assoc.], 305 AD2d 897 [3d Dept 2003] [second arbitration was barred by the doctrine of res judicata as it involved the same parties and precisely the same issues]; Matter of State of{**46 Misc 3d at 710} N.Y. Off. of Mental Health [New York State Correctional Officers & Police Benevolent Assn., Inc.], 46 AD3d 1269 [3d Dept 2007]; Matter of New York Tel. Co. v State Farm Ins. Co., 137 Misc 2d 376 [Sup Ct, NY County 1987]). At bar, since the claim against petitioner had been litigated and a court had rendered a final judgment after jury verdict, by not giving this final judgment and verdict res judicata effect, the arbitrator disregarded applicable rules of law.

This case is distinguished from Matter of Falzone (New York Cent. Mut. Fire Ins. Co.) (15 NY3d 530 [2010]) in several respects. In Falzone, the Court of Appeals held that an arbitrator’s failure to apply collateral estoppel to preclude a determination of an issue resolved in a prior arbitration proceeding was not subject to review by the Court (id. at 535). This case involves the application of res judicata while Falzone involved the application of collateral estoppel. In Falzone, the Court specifically distinguished between the two doctrines and wrote “[s]ince the instant claim involves the doctrine of collateral estoppel, not res judicata, petitioner’s reliance on Appellate Division decisions barring subsequent arbitrations on res judicata grounds is misplaced” (id.). To allow an entire claim involving the same facts and arguments to be re-litigated for a second time is inequitable, a waste of resources and contrary to well-established principles of law. Second, in Falzone the arbitration between the parties was voluntary and not subject to the heightened standard and “more-exacting” review that the Court must undertake following mandatory arbitration. Using the lesser review standard, the Falzone court was only “applying this State’s well-established rule that an arbitrator’s rulings, unlike a trial court’s, are largely unreviewable” (id. at 534). Third, in Falzone the arbitrator declined to give preclusive effect to another arbitrator’s decision. In the instant case, the arbitrator declined to give preclusive effect, or even consider, a final judgment reached by a jury, after trial.

Although neither party provided any satisfactory reason as to why the arbitrator was not informed of the trial court verdict until the day of the arbitration, considering that the arbitration was stayed, specifically because of the ongoing court action, the arbitrator’s decision to refuse to consider the verdict was simply irrational. It is therefore ordered that the petition to vacate arbitrator Mavis Thomas’ determination of September 24, 2013 is granted; and it is also ordered that the matter is remanded back to arbitration in accordance with CPLR 7511 (d) to be{**46 Misc 3d at 711} heard by the same arbitrator; and it is also ordered that respondent’s cross motion is denied.

Decided on September 22, 2014

[*1]

Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Epstein, Gialleonardo, Harms & McDonald, New York, N.Y. (Mickei Milton of counsel), for respondent.

In an action to recover no-fault medical benefits under an insurance contract, the plaintiff appeals from an order of the Supreme Court, Nassau County (Jaeger, J.), dated January 13, 2014, which granted the defendant’s motion to vacate a clerk’s judgment of the same court entered October 25, 2013, which, upon the defendant’s default in appearing or answering the complaint, was in favor of the plaintiff and against the defendant in the principal sum of $25,621.20, and pursuant to CPLR 3012 (d) to extend its time to appear and to compel the plaintiff to accept its late notice of appearance.

Ordered that the order is affirmed, with costs.

A defendant seeking to vacate a default in answering or appearing 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]; Westchester Med. Ctr. v Allstate Ins. Co., 80 AD3d 695, 696 [2011]). The determination of what constitutes a reasonable excuse lies within the trial court’s discretion (see Adolph H. Schreiber Hebrew Academy of Rockland, Inc. v Needleman, 90 AD3d 791, 792 [2011]; Remote Meter Tech. of NY, Inc. v Aris Realty Corp., 83 AD3d 1030, 1032 [2011]).

Here, the defendant established a reasonable excuse through an employee’s affidavit, which attested to a clerical oversight regarding the delay in forwarding the summons with notice to its attorney (see Westchester Med. Ctr. v Allstate Ins. Co., 80 AD3d at 696; Perez v Travco Ins. Co., 44 AD3d 738, 739 [2007]; Sound Shore Med. Ctr. v Lumbermens Mut. Cas. Co., 31 AD3d 743 [2006]). Furthermore, the defendant demonstrated a potentially meritorious defense to the action. Accordingly, in light of the foregoing, as well as the public policy favoring the resolution of cases on the merits, the defendant’s lack of willfulness, and the absence of any prejudice to the plaintiff, the Supreme Court providently exercised its discretion in granting the defendant’s motion to vacate the default judgment, to extend its time to appear, and to compel the plaintiff to accept its late notice of appearance (see CPLR 3012 [d]; NYU-Hospital for Joint Diseases v Praetorian Ins. Co., 98 AD3d 1101, 1102 [2012]; Westchester Med. Ctr. v Allstate Ins. Co., 80 AD3d at 697). Rivera, J.P., Hall, Sgroi and Maltese, JJ., concur.

Decided on September 16, 2014

[*1]

District Court of Nassau County, First District, September 8, 2014

APPEARANCES OF COUNSEL

Robert P. Macchia & Associates for defendant.

Israel, Israel & Purdy, LLP for plaintiff.

Defendant moves for summary judgment in this action to recover first-party no-fault benefits.

Background

This motion raises the issue of whether a no-fault carrier that has previously denied the eligible injured party (EIP) all further no-fault benefits based upon an independent medical examination (IME) can request the EIP appear for an examination under oath (EUO) when a medical provider submits claims for payment of no-fault benefits for medical treatment provided after the IME cutoff.

Cecilio Pablo-Rodriguez was injured in a motor vehicle accident that occurred on January 9, 2011. He received treatment for the injuries sustained in the motor vehicle accident from Hempstead Regional Chiropractic, P.C. and Orthomed Care, P.C.

He assigned his right to receive no-fault benefits for the treatment provided by Hempstead to Hempstead and for treatment provided by Orthomed to Orthomed which submitted the claims for treatment provided to Rodriguez to defendant Allstate Insurance Company for payment.

The claims involved in this action and motion involve chiropractic treatment provided to Rodriguez by Hempstead during{**45 Misc 3d at 748} the period March 12, 2012 through April 23, 2012 and physical therapy treatment provided to Rodriguez by Orthomed during the period March 26, 2012 through April 23, 2012.

The parties do not dispute the claims were timely filed and timely denied.

The denials for the claims involved in this action all denied the claims on the grounds Rodriguez failed to appear for an EUO scheduled for July 28, 2011, August 15, 2011 and September 19, 2011. The denials also stated the claims were being denied because the amounts billed were not in accordance with the no-fault fee schedule and on the grounds of any previously issued denial.

By letter dated July 15, 2011, Allstate’s attorney requested Rodriguez appear for an EUO on July 28, 2011.

By letter dated July 27, 2011, Rodriguez’s attorney advised the attorney for

Allstate Rodriguez would not be produced for an EUO on July 28, 2011 or at any other time because all no-fault benefits had previously been denied based upon an IME.^[FN*] The letter further stated Rodriguez would not be produced because there was already pending litigation. The letter stated if there was information relevant to the claim that was needed other than an EUO, Rodriguez’s attorney would work with Allstate’s attorney in obtaining or providing the information.

Despite the letter from Rodriguez’s attorney advising Allstate’s attorney Rodriguez would not be produced for an EUO on July 28, 2011, Allstate’s attorney sent two additional letters, one dated July 28, 2011 requesting Rodriguez appear for an EUO on August 15, 2011 and one dated September 2, 2011 requesting Rodriguez appear for an EUO on September 19, 2011.

The parties admit Rodriguez did not appear for the EUO on any of the scheduled dates.

Allstate asserts it is entitled to summary judgment because it timely denied the claims on the grounds Rodriguez failed to appear for an EUO.

Hempstead and Orthomed assert since all no-fault benefits had been denied based upon the IME cutoff, the request for an{**45 Misc 3d at 749} EUO was abusive and improper. Since Allstate had already denied Rodriguez all further no-fault benefits based upon an IME, Allstate did not have an objective basis to request Rodriguez appear for an EUO. Hempstead and Orthomed further assert since Rodriguez’s attorney timely objected to Rodriguez being produced for an EUO Allstate must demonstrate it had an objective basis for seeking to conduct an EUO.

Discussion

A person making application for no-fault benefits “may reasonably be required [to] submit to examinations under oath” upon request of the no-fault insurance carrier. (11 NYCRR 65-1.1 [d] [Section I, Conditions, Proof of Claim].)

Appearance at an EUO is a condition precedent to coverage. (IDS Prop. Cas. Ins. Co. v Stracar Med. Servs., P.C., 116 AD3d 1005 [2d Dept 2014]; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2d Dept 2006]; Flow Chiropractic, P.C. v Travelers Home & Mar. Ins. Co., 44 Misc 3d 132[A], 2014 NY Slip Op 51142[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2014].) A carrier may deny all claims for no-fault benefits after a party fails to appear for an EUO if the carrier issues a timely denial asserting the failure to appear for the EUO as the basis of the denial. (Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2d Dept 2009], lv denied 13 NY3d 714 [2009]; cf. Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559 [1st Dept 2011], lv denied 17 NY3d 705 [2011].)

Allstate timely denied the claims on the grounds Rodriguez failed to appear for an EUO.

[1] However, Rodriguez objected to the EUO when it was demanded. (See Crescent Radiology, PLLC v American Tr. Ins. Co., 31 Misc 3d 134[A], 2011 NY Slip Op 50622[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2011].) When the party who is requested to appear for an EUO timely objects to appearing for the EUO, the carrier must establish it had an objective standard for requesting the EUO. (See Hillside Open MRI, P.C. v Allstate Ins. Co., 44 Misc 3d 132[A], 2014 NY Slip Op 51143[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2014]; 11 NYCRR 65-3.5 [e].) Allstate offers no explanation or objective basis for its request Rodriguez appear for an EUO after Rodriguez’s attorney objected to the EUO.

A carrier can assert multiple grounds for denying a no-fault claim. A carrier may assert both precludable and non-precludable defenses to a no-fault claim.

[2] {**45 Misc 3d at 750}Plaintiff’s assertion that a carrier cannot request an EIP appear for an EUO after the EIP’s medical benefits have been denied based upon an IME is without merit. The relevant provisions of the no-fault regulations (11 NYCRR 65-1.1) do not limit or condition in any way a carrier’s right to request an EUO. The only conditions on an EUO are it must be conducted at a time and place reasonably convenient to the applicant and the applicant must be advised that he or she will be reimbursed for any loss of earnings or travel expenses incurred in complying with the request. (11 NYCRR 65-3.5 [e].) The no-fault law and regulations do not prevent a carrier that has denied no-fault benefits based upon an IME from requesting an EUO of the EIP if the EIP continues to receive medical treatment after the IME cutoff and the provider continues to submit the no-fault claims for payment.

An IME cutoff is not a complete defense to the action. The testimony of the physician, chiropractor or other medical provider who performed the IME may be sufficient to rebut the presumption of medical necessity that attaches to a timely filed no-fault claim. (Amato v State Farm Ins. Co., 40 Misc 3d 129[A], 2013 NY Slip Op 51113[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2013].) The testimony of the medical professional that performed the IME could be rebutted by testimony adduced on cross-examination and/or by testimony from a rebuttal witness that meaningfully refers to and rebuts the findings and conclusions of the medical professional who performed the IME. (See Promed Durable Equip., Inc. v GEICO Ins., 41 Misc 3d 19 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; Baybenson Chiropractic, LLC v Clarendon Natl. Ins., 39 Misc 3d 141[A], 2013 NY Slip Op 50756[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013].)

The testimony obtained from the EIP at a post IME cutoff EUO could be relevant to the defense of the claim submitted after the IME cutoff. The carrier could choose to pay the claims submitted after the IME cutoff based upon the testimony of the EIP at an EUO.

If a party wants to contest or object to a request for an EUO, it must do so when the EUO request is made. (Hillside Open MRI, P.C. v Allstate Ins. Co.; Crescent Radiology, PLLC v American Tr. Ins. Co., 31 Misc 3d 134[A], 2011 NY Slip Op 50622[U].) Since Rodriguez contested Allstate’s request for an EUO when it was made, the issue of whether Allstate had an objective basis for requesting an EUO has been preserved. (See Victory Med.{**45 Misc 3d at 751} Diagnostics, P.C. v Nationwide Prop. & Cas. Ins. Co., 36 Misc 3d 568 [Nassau Dist Ct 2012].)

Since Rodriguez objected to the request for the EUO and Allstate has not established it had an objective basis for requesting Rodriguez appear for an EUO, defendant’s motion for summary judgment is denied.

Footnotes

Footnote *:Neither party provided the court with copies of any claims relating to treatment provided by either Hempstead or Orthomed before the claims at issue in this action, copies of the denials issued in connection with those claims or a copy of the IME report that may have served as the basis of the denial of prior claims.

Decided on August 22, 2014