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

[*1]

Appeal from an order of the Civil Court of the City of New York, Kings County (Katherine A. Levine, J.), entered November 21, 2011. The order, insofar as appealed from, upon denying plaintiff’s motion for summary judgment, made, in effect, CPLR 3212 (g) findings in plaintiff’s favor, and denied defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is modified by providing that the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for supplies furnished on October 17, 2008 is granted to the extent of dismissing so much of the complaint as sought to recover for an “E.M.S.,” “EMS Accessories,” “EMS Supply,” and a back massager, and the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for supplies furnished on September 19, 2008 is granted to the extent of dismissing so much of the complaint as sought to recover for a “heating pad”; as so modified, the order, insofar as appealed from, is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment, and defendant cross-moved for summary judgment dismissing the complaint on the ground that it had timely and properly denied the claims at issue based on a lack of medical necessity. Insofar as is relevant to this appeal, the Civil Court, upon denying plaintiff’s motion, made, in effect, CPLR 3212 (g) findings in plaintiff’s favor, denied defendant’s cross motion, and held that the only remaining issue for trial was medical necessity.

On appeal, defendant fails to articulate a sufficient basis to strike the Civil Court’s implicit CPLR 3212 (g) findings in plaintiff’s favor (see EMC Health Prods. as Assignee of Brian Byers v Geico Ins. Co., ___ Misc 3d ___, 2014 NY Slip Op _____ [Appeal No. 2012-1208 K C], decided herewith).

In support of its cross motion, defendant submitted sworn peer review reports which set forth a factual basis and medical rationale for the peer reviewers’ determinations that there was a lack of medical necessity for the supplies at issue. In opposition to defendant’s motion, plaintiff submitted an affirmation by a doctor which was sufficient to raise a triable issue of fact as to whether the supplies, other than the “E.M.S.,” “EMS Accessories,” “EMS Supply” and a back massager furnished on October 17, 2008, and a “heating pad” furnished on September 19, 2008, were medically necessary.

As to the “E.M.S.,” “EMS Accessories,” “EMS Supply” and a back massager furnished on October 17, 2008, and the “heating pad” furnished on September 19, 2008, defendant’s peer reviewers concluded that these supplies were superfluous because plaintiff’s assignor had been receiving physical therapy as well as treatment by a chiropractor and an acupuncturist. In opposition, plaintiff submitted an affirmation by a doctor which failed to meaningfully refer to, let alone sufficiently rebut, these determinations (see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). Since plaintiff has not challenged the Civil Court’s finding, in effect, that defendant is otherwise entitled to judgment, the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for the “E.M.S.,” “EMS Accessories,” “EMS Supply” and a back massager furnished on October 17, 2008 is granted and the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for the “heating pad” furnished on September 19, 2008 is granted (see Park Slope Med. v Praetorian Ins. Co., 39 Misc 3d 141[A], 2013 NY Slip Op 50761[U] [App Term, 2d, 11th & 13th Jud Dists 2013] 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 & 11th Jud Dists 2007]).

Accordingly, the order, insofar as appealed from, is modified by providing that the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for supplies furnished on October 17, 2008 is granted to the extent of dismissing so much of the complaint as sought to recover for an “E.M.S.,” “EMS Accessories,” “EMS Supply” and a back massager, and the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for supplies furnished on September 19, 2008 is granted to the extent of dismissing so much of the complaint as sought to recover for a “heating pad.”

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

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

[*1]

Appeal from an order of the Civil Court of the City of New York, Kings County (Dawn Jimenez Salta, J.), entered November 9, 2011. The order, insofar as appealed from, upon denying plaintiff’s motion for summary judgment, made, in effect, CPLR 3212 (g) findings in plaintiff’s favor, and denied defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is modified by providing that the branch of defendant’s cross motion seeking summary judgment dismissing so much

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 on the ground that it had timely and properly denied the claims at issue based on a lack of medical necessity. Insofar as is relevant to this appeal, the Civil Court, upon denying plaintiff’s motion, made, in effect, CPLR 3212 (g) findings in plaintiff’s favor, denied defendant’s cross motion, and held that the only remaining issue for trial was medical necessity.

On appeal, defendant fails to articulate a sufficient basis to strike the Civil Court’s implicit CPLR 3212 (g) findings in plaintiff’s favor (see EMC Health Prods. as Assignee of Brian Byers v Geico Ins. Co., ___ Misc 3d ___, 2014 NY Slip Op _____ [Appeal No. 2012-1208 K C], decided herewith). Moreover, upon a review of the record, we find that there is a triable issue of fact regarding the medical necessity of the supplies furnished on December 12, 2008. Consequently, the branch of defendant’s cross motion seeking to dismiss so much of the complaint as sought to recover for these supplies was properly denied (see Zuckerman v City of New York, 49 NY2d 557 [1980]).

In support of the branch of its cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for supplies furnished on January 9, 2009, defendant submitted a peer review report which set forth a factual basis and medical rationale for the doctor’s determination that there was a lack of medical necessity for these supplies, on the ground, among others, that the assignor had already been involved in a physical therapy treatment plan which rendered the supplies unnecessary. In opposition, plaintiff submitted an affirmation by a doctor which failed to meaningfully refer to, let alone sufficiently rebut, this determination (see Pan Chiropractic, P.C. v Mercury Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). Since plaintiff has not challenged the Civil Court’s finding, in effect, that defendant is otherwise entitled to judgment, the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for supplies furnished on January 9, 2009 should have been granted (see Park Slope Med. v Praetorian Ins. Co., 39 Misc 3d 141[A], 2013 NY Slip Op 50761[U] [App Term, 2d, 11th & 13th Jud Dists 2013] 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 & 11th Jud Dists 2007]).

Accordingly, the order, insofar as appealed from, is modified by providing that the branch of defendant’s cross motion seeking summary judgment dismissing so much of the complaint as sought to recover for supplies furnished on January 9, 2009 is granted.

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

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

[*1]

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin Kelly Sheares, J.), entered October 13, 2011. The order, insofar as appealed from, upon denying plaintiff’s motion for summary judgment, made, in effect, CPLR 3212 (g) findings in plaintiff’s favor, and denied defendant’s cross motion for summary judgment dismissing the complaint.

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

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment, and defendant cross-moved for summary judgment dismissing the complaint on the ground that it had timely and properly denied the claim at issue based on a lack of medical necessity. Insofar as is relevant to this appeal, the Civil Court, upon denying plaintiff’s motion, made, in effect, CPLR 3212 (g) findings in plaintiff’s favor, denied defendant’s cross motion, and held that the only remaining issue for trial was medical necessity.

For the reasons stated in EMC Health Prods., Inc. as Assignee of Brian Byers v Geico Ins. Co. (___ Misc 3d ___, 2014 NY Slip Op _____ [Appeal No. 2012-1208 K C], decided herewith), we find that defendant failed to articulate a sufficient basis to strike the Civil Court’s implicit CPLR 3212 (g) findings in plaintiff’s favor. Moreover, upon a review of the record, we find that there is a triable issue of fact regarding the medical necessity of the services at issue (see Zuckerman v City of New York, 49 NY2d 557 [1980]).

Accordingly, the order is affirmed.

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

SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT

Plaintiff appeals from an order of the Civil Court of the City of New York, New York County (Andrea Masley, J.), entered June 4, 2013, which denied its motion for entry of a default judgment against defendants.

Per Curiam.

Order (Andrea Masley, J.), entered June 4, 2013, affirmed, without costs.

The plaintiff insurer commenced the underlying actions, consolidated below, seeking declaratory relief and review by way of trial de novo of five separately issued master arbitrator’s awards issued in favor of defendant medical providers on their claims for first-party no-fault benefits. While Civil Court had jurisdiction to entertain the lawsuit (see CCA 212-a; Brooks v Rivera, 40 Misc 3d 133[A], 2013 NY Slip Op 51191[U] [App Term, 1st Dept 2013]), we sustain the dismissal of the consolidated actions on the merits. De novo review of a master arbitrator’s award is limited to the grounds set forth in CPLR article 75 unless the award is in the amount of $5,000 or more, in which case the dispute is subject to a “plenary judicial adjudication” pursuant to Insurance Law § 5106(b) (see Matter of Greenberg [Ryder Truck Rental], 70 NY2d 573, 576-577 [1987]). Since none of the master arbitrator’s awards giving rise to these actions met or exceeded the statutory threshold sum of $5,000, de novo review was unavailable, and the individual complaints served by plaintiff seeking such relief did not state a viable cause of action. In this posture, the court was warranted in dismissing the consolidated actions upon plaintiff’s motion for entry of a default judgment (see generally Aprea v New York State Bd. of Elections, 103 AD3d 1059, 1061 [2013]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: April 30, 2014

—[*1] Bruno Gerbino & Soriano, LLP, Melville, N.Y. (Mitchell L. Kaufman of counsel), for appellant.

Moshe D. Fuld, P.C., Brooklyn, N.Y. (David Karp of counsel), for respondents.

In an action for a judgment declaring that the plaintiff is not obligated to pay certain no-fault insurance benefits, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Suffolk County (Molia, J.), dated September 28, 2012, as, upon renewal of that branch of its prior motion which was for summary judgment, in effect, declaring that it is not obligated to pay the subject no-fault insurance benefits to the defendants Stracar Medical Services, P.C., Sweetwater Chiropractic, P.C., and Urban Well Acupuncture, P.C., adjourned the matter and directed that those defendants appear and testify at an examination under oath, at a date, time, and place mutually agreed upon by the parties.

Ordered that the order is reversed insofar as appealed from, on the law, upon renewal, the determination in an order of the same court dated December 8, 2010, denying that branch of the plaintiff’s motion which was for summary judgment, in effect, declaring that it is not obligated to pay the subject no-fault claims to the defendants Stracar Medical Services, P.C., Sweetwater Chiropractic, P.C., and Urban Well Acupuncture, P.C., is vacated, that branch of the plaintiff’s motion which was for summary judgment is granted, and the matter is remitted to the Supreme Court, Suffolk County, for entry of a judgment, inter alia, declaring that the plaintiff is not obligated to pay the subject no-fault claims to the defendants Stracar Medical Services, P.C., Sweetwater Chiropractic, P.C., and Urban Well Acupuncture, P.C.; and it is further,

Ordered that one bill of costs is awarded to the plaintiff.

The instant action arises out of an automobile accident that occurred on January 18, 2009, involving a vehicle insured by the plaintiff. The vehicle’s owner and driver, as well as the three passengers allegedly in the vehicle at the time of the accident, assigned their no-fault insurance benefits to certain medical providers, who are the defendants in this action. The plaintiff moved for summary judgment, in effect, declaring that it is not obligated to pay these no-fault benefits to the defendants Stracar Medical Services, P.C., Sweetwater Chiropractic, P.C., and Urban Well Acupuncture, P.C. (hereinafter collectively the assignees). The plaintiff argued that it was entitled to summary judgment because the assignees failed to appear at an examination under oath, as required by the subject insurance policies and, thus, they breached a condition precedent to coverage [*2]under the policies and were not entitled to recover their patients’ no-fault benefits. In an order dated December 8, 2010, the Supreme Court denied that branch of the plaintiff’s motion which was for summary judgment, in effect, declaring that it is not obligated to pay no-fault benefits to the assignees.

The plaintiff moved for leave to renew the subject branch of its motion. In an order dated September 28, 2012, the Supreme Court granted renewal, but thereupon adjourned the matter and directed the assignees to appear and testify at an examination under oath. The Supreme Court determined that the assignees “shall be given a final opportunity to appear for the [examination under oath] sought by plaintiff.” The plaintiff appeals.

Upon renewal, the Supreme Court erred in adjourning the matter and giving the assignees another chance to appear at an examination under oath. “It is well established that the failure to comply with the standard policy provision requiring disclosure by way of submission to an examination under oath, as often as may be reasonably required, as a condition precedent to performance of the promise to indemnify, constitutes a material breach” of the policy, precluding recovery of the policy proceeds (Bulzomi v New York Cent. Mut. Fire Ins. Co., 92 AD2d 878, 878 [1983] see Interboro Ins. Co. v Clennon, 113 AD3d 596 [2014] Argento v Aetna Cas. & Sur. Co., 184 AD2d 487, 487-488 [1992]). In support of that branch of its motion which was for summary judgment, the plaintiff, upon renewal, submitted evidence establishing “that it twice duly demanded an examination under oath” from the assignees, that the assignees twice failed to appear, and that the plaintiff “issued a timely denial of the claims” arising from the assignees’ provision of medical services to the assignors (Interboro Ins. Co. v Clennon, 113 AD3d at 597). Based upon the foregoing, the plaintiff established its prima facie entitlement to judgment as a matter of law (see id.; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2006]).

In opposition to the plaintiff’s prima facie showing, the assignees failed to submit evidence of a reasonable excuse for their noncompliance with the demands for examinations under oath, or of partial performance on their part (see Lentini Bros. Moving & Stor. Co. v New York Prop. Ins. Underwriting Assn., 53 NY2d 835, 836 [1981] Bulzomi v New York Cent. Mut. Fire Ins. Co., 92 AD2d at 878-879). The assignees also failed to raise a triable issue of fact as to the reasonableness or propriety of the demands for the examinations under oath (see Interboro Ins. Co. v Clennon, 113 AD3d at 597). Moreover, “the [assignees’] breach of the policy was not cured by [their] belated expression of a willingness to cooperate which was made more than two years after the loss and only in response to the insurer’s motion for summary judgment” (Johnson v Allstate Ins. Co., 197 AD2d 672, 672 [1993] see Lentini Bros. Moving & Stor. Co. v New York Prop. Ins. Underwriting Assn., 53 NY2d at 836; Azeem v Colonial Assur. Co., 96 AD2d 123, 125 [1983], affd 62 NY2d 951 [1984]). “[A]n insurance company is entitled to obtain information promptly while the information is still fresh to enable it to decide upon its obligations and protect against false claims. To permit [the defendants] to give the information more than [two] years after the [loss] would have been a material dilution of the insurance company’s rights” (Argento v Aetna Cas. & Sur. Co., 184 AD2d at 488).

In view of the assignees’ unexcused and willful failure to comply with the demands for examinations under oath, and the lack of evidence of partial performance, the Supreme Court, upon renewal, should have unconditionally awarded summary judgment to the plaintiff (see Lentini Bros. Moving & Stor. Co. v New York Prop. Ins. Underwriting Assn., 53 NY2d at 837; Matter of New York Cent. Mut. Fire Ins. Co. v Rafailov, 41 AD3d 603, 604-605 [2007] Bulzomi v New York Cent. Mut. Fire Ins. Co., 92 AD2d at 878-879; Argento v Aetna Cas. & Sur. Co., 184 AD2d at 488; cf. V.M.V. Mgt. Co., Inc. v Peerless Ins., 15 AD3d 647 [2005] Avarello v State Farm Fire & Cas. Co., 208 AD2d 483 [1994]).

In light of our determination, we need not reach the plaintiff’s remaining contention.

Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Suffolk County, for the entry of a judgment, inter alia, declaring that the plaintiff is not obligated to pay the subject no-fault benefits to the assignees (see Lanza v Wagner, 11 NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). Dillon, J.P., Hall, Austin and Duffy, JJ., concur.

—[*1] Shayne, Dachs, Sauer & Dachs, LLP, Mineola (Jonathan A. Dachs of counsel), for appellant.

Crisci, Weiser & McCarthy, New York (Jayashri C. Srinivasan Cuffey of counsel), for respondent.

Order, Supreme Court, Bronx County (Mary Ann Brigantti-Hughes, J.), entered on or about January 7, 2013, which granted defendant’s cross motion to dismiss the complaint, and denied plaintiff’s motion for summary judgment on the issue of liability, unanimously affirmed, with costs.

11 NYCRR 65-3.11 (a) provides, in relevant part, for the payment of no-fault benefits “directly to the applicant . . . or, upon assignment by the applicant . . . to [the] providers of health care services.” Plaintiff Aetna Health Plans is not a “health care provider” under the statute, but rather a health care insurer (see A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 101 AD3d 53, 62 [2d Dept 2012] Craig Antell, D.O., P.C. v New York Cent. Mut. Fire Ins. Co., 11 Misc 3d 137[A], 2006 NY Slip Op 50521[U] [App Term, 1st Dept 2006]).

While the No-Fault Law provides a limited window of arbitration between no-fault insurers (see Insurance Law §§ 5105, 5106 [d] Eagle Ins. Co. v ELRAC, Inc., 291 AD2d 272 [1st Dept 2002]), the statutory language does not pertain to a health insurer such as Aetna. Thus, Aetna cannot maintain a claim against defendant under the principle of subrogation (see Health Ins. Plan of Greater N.Y. v Allstate Ins. Co., 2007 NY Slip Op 33925[U] [Sup Ct, NY County 2007]). Nor may Aetna assert a breach of contract claim against Hanover, [*2]since it is not in privity of contract with Hanover, and there has been no showing that it was an intended third-party beneficiary of the contract. Concur—Tom, J.P., Acosta, Freedman and Kapnick, JJ. [Prior Case History: 2013 NY Slip Op 33221(U).]

13-12430

DANIEL WILLIAM DeLUCA, ESQ.

Attorney for Petitioner

3555 Veterans Memorial Hwy

Ronkonkoma, New York 11779

D’AMATO & LYNCH, LLP

Attorney for Respondent

Two World Financial Center

New York, New York 10281

In this Article 75 proceeding, the petitioner Allstate Insurance Company, by its agent Second Look, Inc. (Allstate), seeks a judgment confirming an arbitration award dated October 19, 2012, in the amount of $14,966.02 for a loss transfer claim arising out of a motor vehicle accident that occurred on April 19, 2008. The respondent Fiduciary Insurance Company of America (Fiduciary) has filed a cross petition which seeks a judgment vacating said arbitration award.

The subject accident allegedly occurred when a vehicle owned by Fiduciary’s insured came into contact with a vehicle owned and operated by Allstate’s insured, in which Noshaba Arooj (Arooj) was a passenger. After paying no-fault benefits to Arooj, Allstate filed demands for arbitration seeking to recoup the amount paid for medical treatments for injuries allegedly sustained as a result of the accident. Under the circumstances herein, the rights and obligations of insurers are subject to mandatory arbitration (Insurance Law §§ 5105 and 5221 [b]). It is undisputed that, as a result of Allstate’s initial filing, a prior arbitration award dated March 22, 2010 (Prior Decision) found Allstate’s driver and Fiduciary’s driver each 50% liable for the accident.

Thereafter, Allstate filed a demand for arbitration regarding additional no-fault benefits paid to Arooj. In a decision dated October 19, 2012 the arbitrator awarded Allstate 50% of the amount paid out on Arooj’s behalf based, at least in part, on the finding of liability in the Prior Decision. Allstate indicates that Fiduciary failed to pay the initial arbitration award until a prior petition to confirm was granted, and that this is the second petition against Fiduciary arising out of the same accident.

In its petition, Allstate alleges that the vehicle owned and operated by Fiduciary’s insured was a vehicle for hire which enables Allstate to make a qualified claim for loss transfer, that, pursuant to the rules of Arbitration Forum Inc. (AFI) and the relevant regulations, Fiduciary was required to pay the instant arbitration award within 30 days, and that Fiduciary has failed to pay said award. Allstate further alleges that Fiduciary failed to move to vacate the arbitration award within 90 days pursuant to CPLR 7511, that it is entitled to recover its legal fees on the grounds that Fiduciary has no valid defense or reason for non-payment of the arbitration award, that Fiduciary’s actions are frivolous, and that it is entitled to interest from the date of the arbitration award as well as court costs.

In support of its petition to confirm the subject arbitration award, Allstate submits the decision dated October 19, 2012, a number of prior orders of the court in unrelated proceedings, two pages from the E-Courts website, and an affirmation from its attorney regarding its claim for legal fees. In addition, Allstate submits a copy of a letter, dated April 1, 2011 on Allstate letterhead, which states that Second Look, Inc. “is the duly appointed agent for Allstate Insurance Company to process and collect subrogation claims . . . [and] is authorized to take any administrative/legal actions needed to pursue” such claims.

In her decision dated October 19, 2012, the arbitrator notes that there has been a prior [*2]arbitration award, and “[Allstate] has filed for supplemental amounts. [Fiduciary] in their contentions has challenged liability … [and] contends that they have evidence where [Allstate] has admitted their insured was at fault in the loss … [Fiduciary]’s representative … was advised that the [Prior Decision] is final and binding and … liability … is no longer an issue.” Thus, the arbitrator found that Allstate “proved 50% liability against [Fiduciary]. In the paragraph labeled “Damages Decision,” the arbitrator sets forth the following:

[Allstate] submitted proof of damages as required by [AFI] rules and regulations. [Fiduciary] claims that they did not receive paperwork from [Allstate] to substantiate the amounts claimed, [Fiduciary] made several arguments in regards to the injuries claimed by the injured party but was unable to prove that the payments made were unrelated or excessive. Since [Fiduciary] claims they never received the proof of payment from [Allstate] there is no way they can prove the treatment rendered was unrelated or excessive.

In opposition, Fiduciary submits its cross petition which seeks judgment vacating and setting aside the arbitration award on the ground that the decision was irrational, arbitrary and capricious, and exceeded the arbitrator’s power in that she failed to consider new evidence which proved that Allstate’s driver was 100% liable for the accident, to consider Fiduciary’s evidence as to damages, and to allow a court reporter to record the arbitration hearing in violation of Fiduciary’s due process rights. The Court will address Fiduciary’s cross petition before it reviews Allstate’s petition as it directly opposes the relief sought in the petition, and this may well determine the issues before the Court.

CPLR 7511 (b) (1) sets forth the exclusive grounds for vacating an award where, as here, the aggrieved party participated in the arbitration including, but not limited to, corruption, fraud or misconduct in procuring the award, partiality of an arbitrator appointed as a neutral, or the arbitrator making the award exceeded her power. However, compulsory arbitration awards are subject to closer judicial review than awards resulting from consensual arbitration, “as claimants are denied access to the courts in the first instance” (Rose v Travelers Ins. Co., 96 AD2d 551, 551, 465 NYS2d 64 [2d Dept 1983]; see Matter of Motor Vehicle Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 652 NYS2d 584 [1996]; Matter of Progressive Cas. Ins. Co. v New York State Ins. Fund, 47 AD3d 633, 850 NYS2d 478 [2d Dept 2008]). Here, it undisputed that the controversy between the parties is subject to compulsory arbitration, and that the arbitration process remains Allstate’s sole remedy to recover herein (CPLR 5105 [b]).

It is well settled that an arbitration award in a compulsory arbitration proceeding must be in accord with due process and supported by adequate evidence in the record (see City School Dist. of the City of NY v McGraham, 17 NY3d 917, 934 NYS2d 768 [2011]; Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., supra; Motor Veh. Mfrs. Assn. of U.S. v State of New York, 75 NY2d 175, 551 NYS2d 470 [1990]; Matter of Petrofsky [Allstate Ins. [*3]Co.], 54 NY2d 207, 445 NYS2d 77 [1981]; Matter of Mangano v United States Fire Ins. Co., 55 AD3d 916, 866 NYS2d 348 [2d Dept 2008]). The award also must be rational and satisfy the arbitrary and capricious standard of CPLR Article 78 (Motor Veh. Mfrs. Assn. of U.S. v State of New York, supra; Caso v Coffey, 41 NY2d 153, 391 NYS2d 88 [1976]; Lackow v Department of Educ. (or “Board”) of City of NY, 51 AD3d 563, 859 NYS2d 52 [1st Dept 2008]). An arbitration award may be found to be rational if any basis for the determination is apparent to the court upon reading the evidentiary record before the arbitrator (see Caso v Coffey, supra; Matter of Travelers Indem. Co. v United Diagnostic Imaging, 70 AD3d 1043, 893 NYS2d 899 [2d Dept 2010]; Matter of State Farm Mut. Auto. Ins. Co. v City of Yonkers, 21 AD3d 1110, 801 NYS2d 624 [2d Dept 2005]; see generally Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 356 NYS2d 833 [1974]). In addition, the burden of establishing the invalidity of an arbitration award is on the party challenging it (Caso v Coffey, supra; Lackow v Department of Educ. (or “Board”) of City of NY, supra).Here, Fiduciary contends that the subject decision is irrational because the arbitrator “improperly applied the liability finding in the Prior Decision,” and failed to consider newly discovered evidence that Allstate’s driver was 100% liable for the accident. Fiduciary further contends that, in its investigation in connection with the subject filing for arbitration, it obtained a copy of an ISO Report in which Allstate noted “Insured. Was Speeding Doing 80 MPH. Went Through R,” and that said report is “conclusive proof” that Allstate knew that its insured driver was 100% liable for this accident. Fiduciary alleges that ISO is a “shared comprehensive database where insurers report, among other things, the results of their claims and fraud investigations,” and that said report was not entered into ISO until well after the Prior Decision.

A review of the record reveals that Fiduciary has failed to submit a copy of the police accident report regarding the subject accident in support of its cross petition, that the arbitrators in the Prior Decision and the subject decision considered the police report, and that the arbitrator in the Prior Decision noted that Allstate was “able to prove through the police report that Fiduciary is half at fault for this loss.” Under the heading “What evidence caused you to render this decision and why?” the arbitrator in the Prior Decision stated “based on the police report, [Fiduciary’s driver] was cited for traffic control disregarded.” Under these circumstances, there was a rational basis for the arbitrator’s determination in the second arbitration that the Fiduciary vehicle was 50% liable for the accident (see Matter of Mangano v United States Fire Ins. Co., supra).

Fiduciary’s allegation that the arbitrator did not consider the ISO report, even if true, does not change the result. On review, an award may be found to be rational if any basis for such a conclusion is apparent to the court based upon a reading of the record (see Matter of Travelers Indem. Co. v United Diagnostic Imaging, supra; Matter of State Farm Mut. Auto Ins. Co v City of Yonkers, supra). In any event, Allstate contends that the ISO report is not its final conclusion in its claim and fraud investigation, and that the notation therein is merely the memorialization of the initial statement made by Fiduciary’s driver to Allstate’s examiner. Here, [*4]it is determined that there is sufficient basis for the arbitrator to consider the Prior Decision, which is based on the subject police report, to be convincing evidence regarding the relative culpability of the parties. This is especially true where the record reveals that both parties submitted said police report to the arbitrator in the hearing which is the subject of this proceeding, and Fiduciary does not challenge its probative value.

Fiduciary further contends that the arbitrator “did not hold Allstate to its burden of proof, but inappropriately shifted the burden to Fiduciary to disprove the damages.” As noted above, the arbitrator held that, because Fiduciary claimed that it never received proof of payment from Allstate it could not prove that the treatment rendered to Arooj was unrelated or excessive. It is undisputed that the only evidence submitted by Allstate regarding its damages, and the only evidence considered by the arbitrator in rendering her decision, was Allstate’s payment ledger. Under the heading “What evidence caused you to render this decision and why?” the arbitrator stated “Decision based on … proof of payment submitted,” and the record indicates that the sole item in support of Allstate’s claim for damages was its “payment history.”

Fiduciary asserts that pursuant to AFI’s rules, where a respondent disputes a damages claim, a payment ledger is insufficient to establish damages. In support of this assertion, Fiduciary submits a copy of the “Summary of May 11, 2011 Loss Transfer Advisory Committee Meeting”^[FN1] wherein it is stated that

Per the rules, a payment ledger is sufficient as “minimal” proof of damages should the Respondent not dispute damages. If the Respondent does dispute damages, then additional evidence may be needed to support the amount claimed/sought. In addition, if specific damages are disputed and the arbitrator believes the Respondent’s argument is valid, the arbitrator may adjourn the hearing to require the Applicant to provide the Respondent with a copy of their proofs, specific to the damages disputed.

In addition, Fiduciary contends that AFI arbitrators “are required to look to additional proofs of damages where damages have been disputed by a Respondent as to the reasonableness and necessity of the damages sought by the Applicant.” In support of this contention, Fiduciary submits a copy of AFI’s “Guide For Arbitrators,”^[FN2] wherein it is stated that

If a responding company raises a damages argument in the Disputed Damages section that could be valid, you should review the filing company’s proofs for damages to respond to the challenge. The responding company must provide a valid reason for its challenge — causation, pre-existing damages, reasonable and necessary, ACV versus RCV, etc., and not simply indicate “we challenge all damages.” However, if it provides a valid rationale for the challenge, it should be considered even if the responding company isn’t given the opportunity to itemize it.

It is undisputed that Fiduciary submitted documents which raise the question whether Arooj was truthful regarding her injuries and the need for treatment. More importantly, the arbitrator herself indicates that Fiduciary claimed that it had not received the “paperwork from [Allstate] to substantiate the amounts claimed.” AFI’s “Guide For Arbitrators” addresses this issue as follows: “It must be noted that the responding company is at the mercy of the filing company when it is challenging damages. If the filing company has not provided the responding company with full documentation of the damages it is claiming for recovery, it will be difficult, if not impossible, to itemize exceptions to what it has never seen.”

Here, upon reading the evidentiary record before the arbitrator, it is not apparent to the Court that there is any rational basis for the determination that Fiduciary bore the burden for the alleged failure of Allstate to provide full documentation to Fiduciary regarding its damages, or that an adjournment of the hearing was not warranted. Therefore, that portion of the award was irrational as well as arbitrary and capricious (see Caso v Coffey, supra; Matter of Travelers Indemnity Co. v United Diagnostic Imaging, supra; Matter of State Farm Mut. Auto. Ins. Co. v City of Yonkers, supra). Under these circumstances, the matter is remitted to the arbitrator for a new determination as to the amount of damages recoverable by Allstate herein (see CPLR 7511 [d]).

Finally, Fiduciary contends that its due process rights were violated when the arbitrator refused its request to allow a court reporter to record the subject hearing. Fiduciary fails to cite any authority for its position, and relies instead on conclusory statements in its verified cross petition and an affidavit submitted in support thereof that, because this is a mandatory arbitration process, it was a denial of due process to refuse its request. The only regulation touching on the subject appears in 11 NYCRR § 65-4.5, entitled “No-fault arbitration forum procedure,” which provides in pertinent part in sub-paragraph (l): “Record of proceedings. A stenographic record of the arbitration proceedings shall not be required. However, a party requesting such a record shall inform the other party or parties of such intent, make the necessary arrangements, and pay the cost thereof directly to the person or agency making such record.”

It is undisputed that AFI’s rules do not permit a party to require that a court reporter be present at a hearing. Generally, courts avoid interfering in the arbitral process, and they afford arbitrators wide discretion in procedural matters, which will not be limited absent a compelling [*5]reason (see Matter of Glen Rauch Sec. v Weinraub, 2 AD3d 301, 768 NYS2d 611 [1st Dept 2003]; Matter of Travelers Ins. Co. v Job, 239 AD2d 289, 658 NYS2d 585 [1st Dept 1997]; Avon Prods. v Solow, 150 AD2d 236, 541 NYS2d 406 [1st Dept 1989]). The sworn statement of Fiduciary’s affiant that court reporters have been permitted in other hearings, does not establish that the arbitrator’s denial of the request herein was irrational or violative of Fiduciary’s due process rights. Here, Fiduciary has not established that it informed Allstate of its intent to schedule a court reporter, and made the necessary arrangements pursuant to the subject regulation. More importantly, Fiduciary has not established that arbitration hearings in general, and the subject hearing in particular, cannot be conducted in a fair and rational manner without the aid of a court reporter. In light of the subject regulation, and the absence of an AFI rule permitting a party to require the presence of a court reporter, the determination whether a court reporter is needed generally rests with the arbitrator.

A review of the entire record does not alter the determinations herein. In its petition, Allstate alleges that Fiduciary failed to move to vacate the arbitration award within 90 days pursuant to CPLR 7511, that it is entitled to recover its legal fees on the ground that Fiduciary has no valid defense or reason for non-payment of the arbitration award, and that it is entitled to interest from the date of the arbitration award as well as court costs. Allstate’s first allegation, in which it implies that Fiduciary is not permitted to contest the petition, is without merit. A party may oppose an arbitration award either by motion pursuant to CPLR 7511 (a) to vacate or modify the award within 90 days after delivery of the award or, as here, by objecting to the award on the grounds set forth in CPLR 7511 (b) upon an application to confirm the award notwithstanding the expiration of the 90-day period (see Matter of Brentnall v Nationwide Mut. Ins. Co., 194 AD2d 537, 598 NYS2d 315 [2d Dept 1993]; Karlan Constr. Co. v Burdick Assoc. Owners Corp., 166 AD2d 416, 560 NYS2d 480 [2d Dept 1990]; State Farm Mut. Auto. Ins. Co. v Fireman’s Fund Ins. Co., 121 AD2d 529, 504 NYS2d 24 [2d Dept 1986]). That branch of Allstate’s petition which seeks to recover its attorney’s fees on the ground that Fiduciary’s failure to pay the arbitration award amounts to frivolous conduct is denied. The Court finds that Fiduciary’s failure to pay the subject arbitration award, and its cross petition, are based, in part, upon a potentially valid legal argument, and considering that the cross petition has been granted in part, clearly did not rise to the level of “frivolous conduct” as contemplated by court rules (see CPLR 8303-a; Uniform Rules for Trial Cts [22 NYCRR] § 130-1.1 [a]; S & B Petroleum, Inc. v Gizem Realty Corp., 8 AD3d 550, 778 NYS2d 696 [2d Dept 2004]; Agostini v Sobol, 304 AD2d 395, 757 NYS2d 555 [1st Dept 2003]; Juron & Minzner v State Farm Ins. Co.,303 AD2d 463, 756 NYS2d 428 [2d Dept 2003]; Matter of Christopher, 280 AD2d 546, 720 NYS2d 391 [2d Dept 2001]). Lastly, it is determined that Allstate’s request for interest and court courts must be held in abeyance until a decision is rendered in accordance with this decision.

If an application to vacate an award is denied, the Court must confirm the award (CPLR 7511 [e]). Accordingly, the petition is granted to the extent that the determination of liability in the subject award is confirmed and is otherwise denied. Concomitantly, that branch of the cross motion which seeks judgment vacating the award of damages in the subject arbitration award is granted, and the matter is remitted to the arbitrator, or a substitute, for a determination of [*6]damages in accordance with this decision.

Settle judgment.

__________________________________

Andrew G. Tarantino, Jr.

A.J.S.C.

Footnotes

Footnote 1:Pursuant to 11 NYCRR § 65-4.11(f) governing mandatory arbitration for insurers, a loss transfer advisory committee is charged with regularly reviewing the rules and all other relevant matters involving settlements between insurers and reporting its findings and recommendations to the superintendent of insurance.

Footnote 2:The document submitted includes the notation “Updated: June 27, 2013,” which is subsequent to the subject decision dated October 19, 2012. However, there is no indication in the document that the quoted material has been updated, and Allstate does not contend that the content is inapplicable herein.

SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT

Defendant, as limited by its brief, appeals from those portions of an order of the Civil Court of the City of New York, Bronx County (Joseph E. Capella, J.), entered September 5, 2013, which denied its motion for summary judgment dismissing the complaint or, in the alternative, to compel plaintiff to produce its principal for deposition, and upon searching the record, granted plaintiff summary judgment in the principal sum of $784.40.

Per Curiam.

Order (Joseph E. Capella, J.), entered September 5, 2013, insofar as appealed from, modified by vacating the grant of summary judgment to plaintiff; as so modified, order affirmed, without costs.

The motion court improperly searched the record and awarded summary judgment to plaintiff on its claim for first-party no-fault benefits, in view of the conflicting medical expert opinions adduced by the parties as to the medical necessity of the acupuncture services sued for and plaintiff’s own acknowledgment below that issues of fact exist “warranting a trial” on the issue of medical necessity.

However, we find no abuse of discretion in the denial of defendant’s motion to compel the deposition of plaintiff’s treating provider on this record, which contains an affidavit from the provider explaining the rationale for the underlying acupuncture services, and where defendant failed to set forth an “articulable need” for the provider’s deposition (see Ralph Med. Diagnostics, PC v Mercury Cas. Co., ____ Misc 3d ____, 2014 NY Slip Op 24054 [App Term, 1st Dept 2014]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: April 09, 2014

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 (Dawn Jimenez Salta, J.), entered October 28, 2011, deemed from a judgment of the same court entered January 10, 2012 (see CPLR 5501 [c]). The judgment, entered pursuant to the October 28, 2011 order granting plaintiff’s motion for summary judgment and denying defendant’s cross motion for summary judgment dismissing the complaint, awarded plaintiff the principal sum of $2,597.88.

ORDERED that the judgment is reversed, with $30 costs, the order entered October 28, 2011 is vacated, plaintiff’s motion for summary judgment is denied and defendant’s cross motion for summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order of the Civil Court which granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for summary judgment dismissing the complaint. A judgment was subsequently entered, from which this appeal is deemed to have been taken (see CPLR 5501 [c]).

In support of its cross motion, defendant submitted an affidavit by an employee of the company which had been retained by defendant to schedule independent medical examinations (IMEs), which affidavit established that the scheduling letters had been timely mailed in accordance with that office’s standard mailing practices and procedures (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008] Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Defendant also submitted affidavits by the healthcare professionals who were to perform the IMEs, which affidavits established that plaintiff’s assignor had failed to appear for the duly scheduled IMEs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]). An affidavit executed by defendant’s litigation examiner sufficiently described the standard mailing practices and procedures to establish the timely mailing of the denial of claim forms (see St. Vincent’s Hosp. of Richmond, 50 AD3d 1123; Delta Diagnostic Radiology, P.C., 17 Misc 3d 16).

Since an assignor’s appearance at an IME “is a condition precedent to the insurer’s liability on the policy” (see Stephen Fogel Psychological, P.C., 35 AD3d at 722), the judgment is reversed, the order entered October 28, 2011 is vacated, plaintiff’s motion for summary judgment is denied and defendant’s cross motion for summary judgment dismissing the complaint is granted.

Pesce, P.J., Aliotta and Solomon, JJ., concur.
Decision Date: April 07, 2014

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 (Katherine A. Levine, J.), entered January 13, 2012. The order, insofar as appealed from 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 a provider to recover assigned first-party no-fault benefits, defendant appeals, as limited by its brief, from so much of an order of the Civil Court as denied its cross motion for summary judgment dismissing the complaint. Defendant established that it had timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008] Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]) letters and follow-up letters scheduling examinations under oath (EUOs), and the denial of claim form. Defendant also submitted certified transcripts of the scheduled EUOs, which demonstrated that plaintiff’s assignor had failed to appear. Plaintiff does not claim to have responded in any way to the EUO requests. Consequently, defendant demonstrated that plaintiff had failed to satisfy a condition precedent to defendant’s liability on the insurance policy (see Insurance Department Regulations [11 NYCRR] § 65-1.1; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]).

We note that the Civil Court improvidently exercised its discretion in excluding from consideration the affidavit of Edward Belfield on the ground that the affidavit, while notarized, was not accompanied by a certificate of conformity required by CPLR 2309 (c), as the absence of a certificate of conformity for an out-of-state affidavit is not a fatal defect (see Fredette v Town of Southampton, 95 AD3d 940 [2012] see also Gonzalez v Perkan Concrete Corp., 110 AD3d 955 [2013] Bey v Neuman, 100 AD3d 581 [2012] Smith v Allstate Ins. Co., 38 AD3d 522 [2007]).

Accordingly, the order, insofar as appealed from, is reversed and defendant’s cross motion for summary judgment dismissing the complaint is granted. Weston, J.P., Pesce and Aliotta, JJ., concur. [*2]
Decision Date: April 07, 2014