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 (Carolyn E. Wade, J.), entered June 7, 2010. The order, insofar as appealed from as limited by the brief, implicitly denied defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is reversed, without 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 cross-moved for summary judgment dismissing the complaint, arguing that plaintiff was not entitled to recover no-fault benefits because the insurance policy had been cancelled prior to the accident. By order entered June 7, 2010, insofar as appealed from as limited by the brief, the Civil Court implicitly denied the cross motion.

On a motion by a defendant insurance company for summary judgment based on a claim that the insurance policy had been cancelled, the initial burden is on the insurer to demonstrate a valid cancellation of the insurance policy. Once the insurance company makes a prima facie showing that it had timely and validly cancelled the policy in compliance with Vehicle and [*2]Traffic Law § 313, the burden shifts to the party claiming coverage to establish noncompliance with the statutory requirements as to form and procedure (see Matter of Auto One Ins. Co. v Forrester, 78 AD3d 1174 [2010]; GEICO Indem. v Roth, 56 AD3d 1244, 1245 [2008]; Matter of State Farm Mut. Auto. Ins. Co. v Cherian, 202 AD2d 434, 435 [1994]). The papers submitted in support of defendant’s cross motion were sufficient to demonstrate, prima facie, that defendant had timely and validly cancelled the insurance policy in question (see Matter of Auto One Ins. Co. v Forrester, 78 AD3d at 1175; GEICO Indem. v Roth, 56 AD3d at 1245; Montefiore Med. Ctr. v Liberty Mut. Ins. Co., 31 AD3d 724, 725 [2006]; Matter of State Farm Mut. Auto. Ins. Co. v Cherian, 202 AD2d at 435), thereby shifting the burden to plaintiff. In opposition to the motion, plaintiff did not raise a triable issue of fact as to the validity of the cancellation (see Matter of Auto One Ins. Co. v Forrester, 78 AD3d at 1175; Tobias v Liberty Mut. Fire Ins. Co., 78 AD3d 928 [2010]).

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 Rios, JJ., concur.
Decision Date: June 11, 2012

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 September 14, 2010, deemed from a judgment of the same court entered September 21, 2010 (see CPLR 5501 [c]). The judgment, entered pursuant to the September 14, 2010 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 $1,310.94.

ORDERED that the judgment is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order 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 the appeal is deemed to have been taken (see CPLR 5501 [c]).

The record establishes that, on December 2, 2008, defendant requested that plaintiff’s assignor appear for an examination under oath (EUO) on January 8, 2009. Plaintiff’s assignor failed to appear for the EUO. However, defendant did not mail a second request until February 12, 2009. As this follow-up request was untimely (see Insurance Department Regulations [11 NYCRR] § 65-3.6 [b]), defendant failed to toll the 30-day claim determination period (Insurance [*2]Department Regulations [11 NYCRR] § 65-3.8 [a] [1]), and, as a result, defendant’s denial of plaintiff’s claim was untimely. Consequently, the Civil Court properly denied defendant’s cross motion for summary judgment, which was based upon the defense that plaintiff’s assignor had failed to appear for an EUO. Inasmuch as defendant raises no issue on appeal with respect to plaintiff’s prima facie case, we do not pass upon the propriety of the Civil Court’s determination with respect thereto.

In light of the foregoing, we need not reach the parties’ remaining contentions.

Accordingly, the judgment is affirmed.
Pesce, P.J., Weston and Aliotta, JJ., concur.
Decision Date: June 11, 2012

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 (Lisa S. Ottley, J.), entered April 27, 2010. The order, insofar as appealed from as limited by the brief, granted defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is reversed, without costs, and defendant’s cross motion for summary judgment dismissing the complaint is denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals, as limited by its brief, from so much of an order of the Civil Court as granted defendant’s cross motion for summary judgment dismissing the complaint.

The affidavit executed by defendant’s claims examiner was sufficient to establish that defendant’s NF-10 forms, which denied plaintiff’s claims on the ground of lack of medical necessity, had been 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]). Plaintiff argues on appeal, as it did in the [*2]Civil Court, that the peer review reports defendant submitted in support of its cross motion for summary judgment were not in admissible form. We agree, as the peer review reports were affirmed by a psychologist, which is not permissible pursuant to CPLR 2106 (see Eagle Surgical Supply, Inc. v Progressive Cas. Ins. Co., 34 Misc 3d 145[A], 2012 NY Slip Op 50151[U] [App Term, 2d, 11th & 13th Jud Dists 2012]; High Quality Med., P.C. v. Mercury Ins. Co., 29 Misc 3d 132[A], 2010 NY Slip Op 51900[U] [App Term, 2d, 11th & 13th Jud Dists 2010]). We note that, although one of the peer review reports contained a notary public’s stamp and signature, it did not include an attestation that the psychologist had appeared before the notary public and been duly sworn (see Eagle Surgical Supply, Inc., 34 Misc 3d 145[A], 2012 NY Slip Op 50151[U]; New Millennium Psychological Servs., P.C. v Unitrin Advantage Ins. Co., 32 Misc 3d 69 [App Term, 2d, 11th & 13th Jud Dists 2011]; cf. Furtow v Jenstro Enters., Inc., 75 AD3d 494 [2010]; Collins v AA Truck Renting Corp., 209 AD2d 363 [1994]). Consequently, this peer review report failed to meet the requirements of CPLR 2309 (b).

As defendant failed to make a prima facie showing of its entitlement to judgment as a matter of law sufficient to shift the burden to plaintiff (see Alvarez v Prospect Hosp., 68 NY2d 320 [1986]), the order, insofar as appealed from, is reversed and defendant’s cross motion for summary judgment is denied.

Pesce, P.J., Weston and Aliotta, JJ., concur.
Decision Date: June 11, 2012

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

Appeal from a judgment of the Civil Court of the City of New York, Kings County (Wavny Toussaint, J.), dated October 22, 2010. The judgment, entered upon a decision dated April 10, 2010, made after a nonjury trial, dismissed the complaint.

ORDERED that on the court’s own motion, the notice of appeal from the decision is deemed a premature notice of appeal from the judgment (see CPLR 5520 [c]); and it is further,

ORDERED that the judgment is affirmed, without costs.

At a nonjury trial in this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s owner testified that he had mailed the claim form in question by certified mail, return receipt requested. However, the certified mail receipt and domestic return receipt which he offered as proof of mailing lacked certain material information. Significantly, the certified mail receipt did not contain amounts for postage and fees, and did not have a clerk identification and date, and the return receipt was not signed by a recipient and did not indicate a date of delivery. Defendant’s witness testified that defendant had not received the claim form in question until after the commencement of the action, some three years after the purported mailing. [*2]

In a decision after trial, the Civil Court found that plaintiff had not established a prima facie case as it had not proved a timely mailing of the claim form in question. A judgment dismissing the complaint was subsequently entered. We deem the notice of appeal from the decision to be a premature notice of appeal from the judgment (see CPLR 5520 [c]).

The decision of a fact-finding court should not be disturbed upon appeal unless it is obvious that the court’s conclusions could not be reached under any fair interpretation of the evidence (see Claridge Gardens v Menotti, 160 AD2d 544 [1990]). The determination of a trier of fact as to issues of credibility is given substantial deference, as the trial court’s opportunity to observe and evaluate the testimony and demeanor of witnesses affords it a better perspective from which to assess their credibility (see Vizzari v State of New York, 184 AD2d 564 [1992]; Kincade v Kincade, 178 AD2d 510 [1991]).

In the present case, the record supports the determination of the Civil Court, based upon its assessment of the credibility of the witnesses and the proof adduced at trial, that plaintiff failed to satisfy its burden of proving that the claim form in question had been timely and properly mailed to defendant. Accordingly, as we find no basis to disturb the Civil Court’s findings, the judgment is affirmed.

Rios, J.P., Pesce and Aliotta, JJ., concur.
Decision Date: June 11, 2012

District Court of Suffolk County, Third District

HUC 2715-11

C. Stephen Hackeling, J.

The defendant’s application for an order dismissing the above captioned action as premature (upon the grounds that plaintiff did not respond to defendant’s verification and follow-up verification requests), is denied. The plaintiff’s cross-motion for summary judgment is granted. The defendant’s affidavits have not adequately demonstrated that defendant timely sent verification requests and follow-up verification requests to the plaintiff. The Court notes that the inadmissable affidavit of Eduardo Morales Carr (improperly notarized) who is positioned in Syracuse, states that he “generated and issued” such requests on certain dates. However, further affidavits indicate that such requests are electronically sent to the centralized administrative team in Harrisburg, Pennsylvania. An insufficient explanation is offered how the letters generated and properly addressed, what procedures are in place to safeguard that all generated requests are actually mailed and to the proper addresses. Further, the affidavit of James R. Snyder, Jr. attempts to describe what occurs in the mailroom, and fails to address postage issues. In sum, the affidavit of Eduardo Morales Carr does not establish by personal knowledge, his mailing of timely requests on dates certain, nor do the affidavits of the defendant, taken as a whole, contain [*2]a sufficiently detailed description of the standard office mailing procedures which give rise to the presumption of mailing. The submitted proof fails to meet even the relaxed standard of proof of mailing established by the Second Department Appellate Division. See, St. Vincents Hospital of Richmond v. Geico, 50 AD3d 1123 (N.Y.AD2d Dept. 2008).

Mallela Discovery As Part Of A Verification Of Claim

Even if defendant’s affidavits could be corrected or evidence introduced at trial to demonstrate that its verification letters were timely mailed; the defendant’s verification requests, seeking inter alia, copies of “sale of shares or transfer of ownership (and) lease agreements” are impermissible and improper requests, and cannot support the finding of a denial “toll” which would permit an award of summary judgment to defendant. Inasmuch as the defense of “fraudulent incorporation” is not subject to the preclusion rule, the defendant may raise this defense in its answer, even if not asserted in the claim denial. The defendant may request relevant written documents pertaining to same as part of post joinder written discovery, or may commence a declaratory judgment action seeking to declare the medical provider ineligible to recover benefits. See, Lexington Acupuncture, P.C. v. General Assurance Co., 2012 WL661685 (NY 2nd Dept. App.Term 11th & 13th Dists. 2012), citing to Midwood Acupuncture P.C. v. State Farm Ins. Co., 14 Misc 3d 131(A) (2d Dept. App. Term 11th & 13th Dists. 2007). Requesting this type of information by way of claim verification is abusive of the no-fault verification process. See, Concourse Chiropractic, PLLC v. State Farm Mut. Ins. Co., 2012 NY Slip Op 50676 (U) 35 Misc 3d 1213 (A) (Nassau Co.Dist. Ct, 2012);involving document discovery as part of an “EUO” demand. Tarnoff Chiropractic, PC v. Geico Ins. Co., 35 Misc 3d 1213(A) (Nassau Co. Dist. Ct. 2012); Dynamic Med. Imaging, PC v. State Farm Mut. Auto Ins. Co., 29 Misc 3d 278 (Nassau Co. Dist. Ct. 2010). It is also contrary to the stated policy of the no-fault legislation which is “to insure prompt payment of medical claims for medical treatment provided to people injured in automobile accidents, regardless of fault”. Fair Price Medical Supply Corp. v. Travelers Indemnity Co., 10 NY3d 566 (NY 2008).

The affidavit of Eduardo Morales Carr, the claims specialist who decided to seek the additional verification in question, provides no good faith basis for seeking corporate status documents. Additionally, the affidavit of Linda Manning does not establish that the defendant had “good cause” to seek fraudulent incorporation documentation at the time the verification requests were generated. Permitting an insurer to obtain written documents such as tax returns, incorporation agreements or leases regarding a potential fraudulent incorporation “Malella” defense as part of the verification process defeats the stated policy and purpose of the no-fault law and carries with it the potential for abuse. See, State Farm Mutual Ins. Co. v. Malella, 4 NY3d 320 (NY 2003) which establishes the parameters of challenging a no-fault claim premised [*3]upon violations of NY Bus. Corp. Law Secs. 1507 and 1508 and NY Educ. Law Sec 6507 (4)(c) and NYCRR 65-3.16 (a)(12). The defendant should not be able to defeat no-fault claims by making onerous and improper non claim related document demands by way of verification.

The Court concurs with its sister Nassau County District Court determinations that “verification” demands as defined by 11NYCRR Sec. 65-3.5(c) are limited to “verifying the claim”. Concourse Chiropractic v. State Farm Ins. Co. cite supra., Judge Hirsch in the Concourse and Dynamic Med. Imaging decisions determined that couching Malella defense discovery in the form of an examination under oath is insufficient to invoke the “verification toll” which would require dismissal of the insurer complaint as premature. Extending this reasoning, Mallela discovery is also inappropriate, even in the absence of an EUO demand, or even if it only involves document production.

Plaintiff’s cross-motion for summary judgment is granted for the amount demanded in the complaint. It is undisputed that defendant received plaintiff’s claims (see affirmation of Frank Marotta, Esq.; exhibits affixed to defendant’s motion papers, affidavit of Eduardo Morales Carr) and has not issued a denial. The verification requests herein did not toll defendant’s 30 day time to deny or pay the claims, as the plaintiff timely responded to the defendant’s request objecting to the Malella discovery request and advising that it was not in possession of said documentation. Such a response meets the requirements under the Insurance Regulations. See 11 N.Y.C.R.R. Sec. 65.15, so as to run the 30 day claim pay/deny time period.

Submit judgment on twenty (20) days notice.

_______________________

J.D.C.

Dated: _________________

District Court of Suffolk County, Second District

BAC 4407-11

Plaintiff Attorney: Baker,Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth

Defendant Attorney: Short & Billy, P.C.

David A. Morris, J.

Upon the following papers numbered 1 to8read on the motion by defendant to strike the notice of trial and to compel discovery;and the cross-motion by plaintiff for a protective orderNotice of Motion and supporting papers1, 2Notice of Cross Motion and supporting papers4, 5Answering Affidavits and supporting papers7Replying Affidavits and supporting papersFiled papers; OtherExhibits- 3; 6; 8(and after hearing counsel in support of and opposed to the motion) it is,

ORDERED that this motion by the defendant to strike the notice of trial (22 NYCRR §212.17(c))

and to compel discovery (CPLR §3124) is granted. The plaintiff’s cross-motion for a protective order (CPLR §3103) is denied. The defendant has been served with a notice of trial although court records do not reflect the filing of a notice of trial with the clerk of the court. In the event that a notice of trial has in fact been filed with the court it will be deemed stricken as the motion is timely (22 NYCRR §212.17(c)) and the matter is not ready for trial as pre-trial disclosure has not been completed. In this regard the defendant’s motion papers include copies of various demands for disclosure, together with affidavits of service, to which the plaintiff has not responded. The plaintiff has not timely challenged the propriety of the demands for disclosure (see CPLR §3120 and §3122). In the absence of a timely objection the plaintiff is obligated to produce the information requested except as to matters which are palpably improper or privileged [*2](Radiology Today, P.C. v. GEICO General Ins. Co., 32 Misc 3d 4). It is well settled that fraudulently incorporated medical corporations are not entitled to reimbursement of no-fault medical benefits and such defense is non-waivable and may be asserted at any time (State Farm Mutual Auto Ins. Co. v. Mallela, 4 NY3d 313; Midwood Acupuncture, P.C. v. State Farm Mutual Auto Ins. Co., 14 Misc 3d 131(A)). The failure to state such a defense with particularity in the answer does not preclude the defendant from seeking pre-trial disclosure related thereto (Medical Polis, P.C. v. Progressive Ins. Co., 35 Misc 3d 139(A); Lexington Acupuncture, P.C. v. General Assurance Co., 35 Misc 3d 42). The defendant has put forth sufficient factual allegations, such as the federal indictment of plaintiff’s principle owner concerning fraudulent medical clinics, warranting such manner of disclosure herein. The defendant is not required to demonstrate good cause for such disclosure as it is material and necessary to its defense (One Beacon Ins. Group v. Midland Med. Care, P.C., 54 AD3d 738). In light of the foregoing the defendant is entitled to an examination before trial of plaintiff’s principle owner (see Medical Polis, P.C. v. Progressive Ins. Co., supra; New Era Acupuncture, P.C. v. State Farm, 24 Misc 3d 134).

Accordingly, the plaintiff is hereby directed to serve full and complete responses to all of the defendant’s demands for disclosure within thirty (30) days from the date of mailing of this order by the court. The plaintiff shall produce its principle owner for an examination before trial within thirty (30) days after serving responses to the demands for disclosure at a time, date and place mutually convenient to the parties.

Dated:June 5, 2012J.D.C.

[*1]

District Court of Nassau County, First District, June 4, 2012

APPEARANCES OF COUNSEL

Epstein, Gialleonardo, Frankini & Grammatico, for defendant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, for plaintiff.

{**36 Misc 3d at 569} OPINION OF THE COURT

Fred J. Hirsh, J.

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

Background

This action involves another variation of what has become an increasingly common and troublesome development in the area of claims to obtain payment of first-party no-fault benefits—insurers requesting a claimant provider furnish as verification information about the claimant provider’s corporate structure and ownership. When the claimant provider fails or refuses to provide the information and commences an action to recover first-party no-fault benefits, the insurer moves for summary judgment dismissing the action on the grounds the claimant provider has not responded to verification requests.{**36 Misc 3d at 570}

These motions raise issues that have been addressed in the no-fault statute (Insurance Law art 51) or the no-fault regulations (11 NYCRR part 65) and which had not previously been addressed in the case law, to wit:

(1) Can a provider object to a verification request?

(2) What is the effect of the objection to the verification request?

Victory Medical Diagnostics, P.C. (Victory) performed a neurological consult and diagnostic testing on Miguel Rojas on March 9, 2011. Rojas assigned his no-fault benefits to Victory. Victory submitted the claim for payment to defendant Nationwide Property and Casualty Insurance Company (Nationwide).

Nationwide received the claim and by letter dated April 5, 2011 requested verification including a copy of Victory’s SS-4, taxpayer identification number (TIN) and completed W-9, copies of any lease agreements or other agreements relating to the use or rental of the facility and/or equipment where the services were rendered, names and addresses of the owners of any past and present billing/management company used by Victory, copies of any written contracts with such company or, if the agreement is oral, a summary of the agreement including the date of commencement and a letter of medical necessity explaining why [*2]the testing was required including an explanation as to how the testing would help aid in developing a treatment plan or change the treatment plan.

Victory responded to Nationwide’s request by providing Nationwide with a copy of its SS-4, TIN acknowledgment, a W-9, a copy of the medical license of Ahmed Adel Elsoury, the physician who performed the diagnostic tests, Dr. Elsoury’s registration certificate indicating he is licensed as a physician in New York through July 31, 2012, a copy of Victory’s certificate of incorporation that lists Dr. Elsoury as Victory’s sole, original shareholder, director and officer and a copy of the certificate of filing acknowledging that Victory’s certificate of incorporation was filed with the Secretary of State on January 3, 2011. Victory did not provide a letter of medical necessity, the leases or the management agreements.

By letter dated May 5, 2011, Nationwide acknowledged receipt of the SS-4, Internal Revenue Service (IRS) TIN, W-9 and other corporate documents. Nationwide’s letter reiterated Nationwide’s request for copies of lease agreements regarding the premises and/or equipment where the services rendered in connection{**36 Misc 3d at 571} with this claim were provided, the name and address of any billing or management company used by Victory and copies of any written agreements between Victory and the billing or management company or a summary of the agreement if the agreement was oral.^[FN1] The letter further advised Victory an insurer may demand verification of the claim and does not have to pay or deny the claim until all requested verification is received. Nationwide advised Victory it would not pay or deny the claim until the remaining items requested by way of verification have been provided. Even though Victory had not provided a letter of medical necessity, Nationwide’s May 5, 2011 letter did not request a letter of medical necessity.

Victory responded to Nationwide’s May 5, 2011 letter by letter dated July 26, 2011. The letter advised Nationwide that Victory considered this verification demand as overly burdensome and an abuse of the verification process. The letter cited the provisions of 11 NYCRR 65-3.2 that state insurers should not request verification unless there is a good faith basis for doing so, claims should be paid promptly and fairly and an insurer should not treat the claimant as an adversary.

The letter requested Nationwide provide Victory with “a detailed explanation of how and why this information is essential to this particular claim as well as a detailed explanation of what has prompted this request pursuant to 11 NYCRR section 65-3.2(e) and section 65-3.16(a).” The letter further requested Nationwide provide an explanation of its good cause basis for requesting this information as well as an itemization of all acts “tantamount to fraud.” The letter then reminded Nationwide of its obligation under 11 NYCRR 65-3.2 (f) to promptly respond to all communications from applicants.

Nationwide responded to Victory’s July 26, 2011 letter by letter dated August 30, [*3]2011. Nationwide’s letter cited to the provisions of the Business Corporation Law that prohibit any person other than a licensed professional from having an interest in the professional corporation and the provision of 11 NYCRR 65-3.5 (c) that grants insurers the right to demand “all items necessary to verify the claim.” The letter stated “Mallela v State Farm Ins. Co. (US District Ct. March 29, 2005)” granted {**36 Misc 3d at 572}insurers the right to look behind the certificate of incorporation’s statement indicating the physician is the owner.^[FN2]

The letter stated Nationwide needed copies of the leases and management agreements to verify that Victory is a legally formed professional corporation. The letter did not advise Victory of Nationwide’s basis for the request or its basis for suspecting Victory was improperly incorporated. The letter concluded by advising Victory the claim will not be considered until the requested material has been provided.

Victory did not respond to Nationwide’s August 30, 2011 letter or provide Nationwide with copies of the leases for the facilities and equipment, management agreements or, if oral, a summary of the management agreements. Nationwide did not pay or deny the claim. Victory commenced this action seeking to recover the unpaid claim.

In support of the motion for summary judgment, Nationwide asserts it requested verification because it could not confirm Victory’s tax identification number with Insurance Services Office, Inc. (ISO); the treating physician, Joseph Raia, owns and treats through multiple other entities; Dr. Elsoury is the listed owner of at least two other medical providers; the address at which the services were rendered has at least four other medical providers; Victory’s billing address is the address for several other medical providers; and Great Liberty Funding Inc. and Wilk Real Estate Ltd. use or used 614 Richmond Road, 2nd Floor, Staten Island, New York 10304 as their address.

Discussion

An insurer must pay or deny a claim in whole or in part within 30 days of receipt or receipt of verification. (11 NYCRR 65-3.8 [a].)

An insurer can extend or toll its time to pay or deny a claim by demanding verification within 30 days of receipt of the claim. (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294 [2007].) An insurer does not have to pay or deny a claim until it receives all timely requested verification. (St. Barnabas Hosp. v American Tr. Ins. Co., 57 AD3d 517 [2d Dept 2008]; Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889 [2d Dept 2007]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2d Dept 2004]; 11 NYCRR 65-3.5 [c].){**36 Misc 3d at 573}

The no-fault regulations do not specifically define or limit the information or documentation an insurer may request through verification. An insurer can request “all items necessary to verify the claim directly from the parties from whom such verification was requested.” (11 NYCRR 65-3.5 [c].) The only limitation on verification [*4]contained in the regulations is an insurer should not “demand verification of facts unless there are good reasons to do so.” (11 NYCRR 65-3.2 [c].) Neither the no-fault law nor the no-fault regulations establish a mechanism or procedure by which a claimant provider can contest or challenge a request for verification on the grounds it is improper, unduly burdensome, unfounded, unnecessary or harassing.

The courts have suggested a provider who receives an improper, unduly burdensome, unfounded, harassing and/or unnecessary verification request can preserve the right to object by responding and objecting to the verification request. (See Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 [2d Dept 1999] [inaction was not a proper response to “unintelligible” verification requests; the provider should have resolved the confusion through further correspondence]; Crescent Radiology, PLLC v American Tr. Ins. Co., 31 Misc 3d 134[A], 2011 NY Slip Op 50622[U] [App Term, 9th & 10th Jud Dists 2011] [a party waives its right to object to an examination under oath (EUO) if it does not object to the EUO request when the request is received];^[FN3] Urban Radiology, P.C. v Tri-State Consumer Ins. Co., 27 Misc 3d 140[A], 2010 NY Slip Op 50987[U] [App Term, 2d, 11th & 13th Jud Dists 2010] [the provider of diagnostic testing should have responded to a verification request seeking a letter of medical necessity by advising the insurer to seek a letter of medical necessity for the diagnostic testing from the referring physician].) These cases suggest a provider can raise and preserve objections to verification requests if the provider advises the insurer it objects to the verification being requested and advises the carrier of the basis of its objection.

The applicant for no-fault benefits should not be treated as an adversary. (11 NYCRR 65-3.2 [b].){**36 Misc 3d at 574}

Mallela material is inherently adversarial. Mallela is the outgrowth of litigation; a declaratory judgment action contesting numerous medical providers’ right to obtain payment of no-fault benefits on the grounds they were improperly incorporated because persons other than those holding the license to practice medicine were the de facto owners of the professional corporation. Mallela information does not assist an insurer in determining whether it should pay the claim. Mallela information is requested to determine if the provider is ineligible to receive payment of no-fault benefits not simply for the claim in question but for all claims.

Insurers should raise Mallela issues and request Mallela information only for good cause where the insurer “can demonstrate behavior tantamount to fraud.” (State Farm Mut. Auto. Ins. Co. v Mallela at 322.) Therefore, before a claimant provider should be required to produce Mallela material, the insurer must have and articulate a good faith and factual basis for seeking the information.

Verification is permitted to investigate the claim (11 NYCRR 65-3.5 [c]). Mallela [*5]material does not involve the investigation of the claim; it involves an investigation of the claimant. The ultimate determination of a successful Mallela action or defense will not determine one specific claim. A successful Mallela action or defense will result in the determination the claimant provider is ineligible to obtain payment of no-fault benefits from any carrier for any claim. (State Farm Mut. Auto. Ins. Co. v Mallela, supra; Matter of Andrew Carothers, M.D., P.C. v Insurance Cos. Represented by Bruno Gerbino & Soriano, LLP, 26 Misc 3d 448 [Civ Ct, Richmond County 2009].)

Nationwide’s reasons for requesting copies of Victory’s leases and management agreements by way of verification do not hold up when scrutinized.

Victory provided Nationwide with a copy of form SS-4 issued by the Internal Revenue Service which contains the employer identification number issued to Victory by the IRS on January 5, 2011. The only reason to verify the information contained on this document on IRS letterhead would be if Nationwide believed this document was a forgery or a fake.

Nationwide does not indicate where ISO obtains the taxpayer identification numbers contained in its database. Nationwide also does not indicate how up-to-date the ISO database is. Victory was incorporated and its taxpayer identification number was issued only three months before the claim in question was{**36 Misc 3d at 575} submitted. It is entirely possible if not likely that a taxpayer identification number issued to a newly formed professional service corporation would not be in the ISO records.

Nationwide claims the treating physician was Joseph Raia, M.D. Nationwide claims Dr. Raia owns and treats under numerous other entities including Socrates Medical Health, M.D. The record before the court does not contain any entries made by Dr. Raia. The claim form submitted and all the other documents appear to be signed by Dr. Elsoury.

Nationwide offers no proof of Dr. Elsoury’s association with any other medical providers. A doctor may be the principal in more than one medical professional service corporation.

The address at which the services were provided, 82-11 37th Avenue, Jackson Heights, New York is a multistory office building. There is nothing unusual about several medical practices having offices in a multistory office building.

Nationwide did not provide the court with the names of any of the other medical providers that maintain offices at 82-11 37th Avenue, Jackson Heights, New York. Nationwide did not establish that any of these other providers have ever submitted a no-fault claim to Nationwide or any other insurer or if these other providers did submit claims, the claims reflected the medical services were provided in the same office, Room 402, at which Victory provided the services to Rojas.

Nationwide’s claim that Victory has the same billing address as numerous other medical facilities and nonmedical facilities is not supported by the record. Nationwide does not provide the court with evidence that it received no-fault claims from any other medical providers that used 614 Richmond Road, 2nd Floor, Staten Island, New York 10304 as a billing address. Nationwide did not provide the court with any evidence any other medical provider used or uses this address for any purpose.

The records of the Secretary of State indicate there are eight different “Wilk Realty” or “Wilk Real Estate” entities. None of them use 614 Richmond Road, 2nd Floor, [*6]Staten Island, New York 10304 as their address for service of process. Additionally, the Secretary of State’s records indicate Wilk Real Estate Ltd. was dissolved on December 1, 2008, more than two years before Victory was incorporated.

Great Liberty Funding, Inc. was dissolved on July 28, 2009. The records of the Secretary of State indicate Great Liberty{**36 Misc 3d at 576} Funding did not use 614 Richmond Road, 2nd Floor, Staten Island, New York 10304 as its address for service of process. The only currently active corporation using Great Liberty in its name is an active domestic corporation whose principal place of business is in Dutchess County and whose address for service of process is in Wingdale, New York.

Nationwide did not provide evidence establishing Wilk Realty and/or Great Liberty Funding ever used the address 614 Richmond Road, 2nd Floor, Staten Island, New York 10304 for any purpose. Nationwide also fails to establish any relationship between Victory and/or Wilk Realty and Great Liberty Funding.

If the court were to grant Nationwide summary judgment in this situation, the court would be permitting an insurer to request any verification, relevant to the claim or not, and to obtain summary judgment when the provider who had objected to the verification request fails to provide the material to which it objected. A provider must have a method by which it can object to a verification request and preserve the propriety of that request for judicial determination.

If the provider objects to the request for verification, then the issue of whether the requested verification material and the objection were proper are preserved and become questions of fact for the trier of fact. If the insurer can establish it had a reasonable, good faith, factual basis for requesting the verification, then the failure of the claimant provider to furnish the material will result in the dismissal of the action. If the insurer cannot establish a reasonable, good faith, factual basis for requesting the verification, then the insurer will be required to pay the claim.

Nothing herein should be read to preclude Nationwide from asserting a Mallela defense or commencing a declaratory judgment action seeking Mallela relief and obtaining Mallela material in discovery should the insurer have a good faith basis for doing so.

A Mallela defense is nonprecludable. (Lexington Acupuncture, P.C. v General Assur. Co., 35 Misc 3d 42 [App Term, 2d, 11th & 13th Jud Dists 2012].) An insurer who does not request Mallela material by way of verification is not precluded from raising it as a defense in the action or obtaining appropriate discovery should the insurer demonstrate a good faith basis for believing the medical provider is improperly incorporated or if nonprofessionals are the de facto owners of the professional corporation. (Midborough Acupuncture, P.C. v State Farm Ins. Co., 21 Misc{**36 Misc 3d at 577} 3d 10 [App Term, 2d & 11th Jud Dists 2008].) This procedure will make Mallela discovery part of the litigation and will give a claimant provider the ability to object to the production of Mallela material by moving for a protective order (CPLR 3103 [a]), by timely objecting to a demand for Mallela material (CPLR 3122 [a]) or by establishing the material requested is palpably improper. (Five Boro Psychological Servs., P.C. v AutoOne Ins. Co., 27 Misc 3d 89 [App Term, 2d, 11th & 13th Jud Dists 2010].) This procedure will also give the court the opportunity to direct an in camera review of the material to determine if there is a basis for requiring a provider to produce material [*7]relating to its corporate structure and operation, material that would otherwise be irrelevant to an action seeking to obtain payment of no-fault benefits.

Plaintiff’s cross motion for summary judgment is denied. As part of its prima facie proof, plaintiff is required to establish the documents it submitted in connection with its claim for no-fault benefits are business records. (Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 55 AD3d 644 [2d Dept 2008]; Bath Med. Supply, Inc. v Utica Mut. Ins. Co., 23 Misc 3d 141[A], 2009 NY Slip Op 51030[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Bajaj v General Assur., 18 Misc 3d 25 [App Term, 2d & 11th Jud Dists 2007].) Plaintiff did not establish the documents submitted in connection with this claim are business records. (CPLR 4518 [a].)

For the foregoing reasons, defendant’s motion and plaintiff’s cross motion are denied.

Footnotes

Footnote 1: The bill submitted in connection with this claim states Victory’s billing address as 614 Richmond Road, 2nd Floor, Staten Island, New York 10304. The claim reflects the services for which Victory was seeking payment were provided at the facilities of 32nd Avenue Medical P.C., 82-11 37th Avenue, 4th Floor (Room 402), Jackson Heights, New York 11372.

Footnote 2: The proper citation to the action is State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]).

Footnote 3: Crescent Radiology raises other issues regarding objections to an EUO. In Crescent Radiology, the medical provider’s claims were denied and its action to recover no-fault benefits was dismissed because the assignor failed to appear for an EUO. The assignee would not have been able to object to the requested EUO of the assignor because the insurer would not have provided the assignee with notice that the insurer was requesting an EUO of the assignor.

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Lawrence R. Miles, Long Island City, N.Y., for respondent.

In an action to recover no-fault benefits under an insurance contract, the plaintiff appeals, as limited by its notice of appeal and brief, from so much of an order of the Supreme Court, Nassau County (Sher, J.), entered September 1, 2011, as denied its motion for summary judgment on the complaint.

Ordered that the order is reversed insofar as appealed from, on the law, with costs, and the plaintiff’s motion for summary judgment on the complaint is granted.

The plaintiff made a prima facie showing of entitlement to judgment as a matter of law by submitting evidence that the prescribed statutory billing form had been mailed to and received by the defendant insurer, which failed to either pay or deny the claim within the requisite 30-day period (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]; NYU-Hosp. for Joint Diseases v American Intl. Group, Inc., 89 AD3d 702, 703 [2011]; Mount Sinai Hosp. v Country Wide Ins. Co., 85 AD3d 1136, 1137 [2011]; Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045, 1045-1046 [2009]).

In opposition to the plaintiff’s motion, the defendant failed to raise a triable issue of fact. A presumption of receipt was created by the certified mail receipt and the signed return receipt card, such that the defendant’s mere denial of receipt was insufficient to raise a triable issue of fact (see New York & Presbyt. Hosp. v Countrywide Ins. Co., 44 AD3d 729, 730-731 [2007]; Westchester Med. Ctr. v Liberty Mut. Ins. Co., 40 AD3d 981, 982-983 [2007]). Further, the defendant’s failure to respond to the no-fault billing within the requisite 30-day period precluded it from raising the defenses that it was not provided with timely notice of the underlying motor vehicle accident or proof of claim (see Bayside Rehab & Physical Therapy, P.C. v GEICO Ins. Co., 24 Misc 3d 542, 545 [2009]; Rockman v Clarendon Natl. Ins. Co., 21 Misc 3d 1118[A], 2008 NY Slip Op 52093[U] [Civ Ct, Richmond County 2008]; Vincent Med. Servs., P.C. v New York Cent. Mut. Fire Ins. Co., 21 Misc 3d 142[A], 2008 NY Slip Op 52442[U] [App Term, 2d Dept 2008]). Finally, although the defense of lack of coverage is not precluded by the defendant’s failure to pay or deny the subject no-fault claim within the requisite 30-day period (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d [*2]312, 318 [2007]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]), here, the defendant’s submissions were insufficient to raise triable issues of fact with respect to a lack of coverage defense (see Mercury Cas. Co. v Encare, Inc., 90 AD3d 475 [2011]; D.S. Chiropractic, P.C. v Country-Wide Ins. Co., 24 Misc 3d 138[A], 2009 NY Slip Op 51584[U] [App Term, 2d Dept 2009]). Accordingly, the Supreme Court should have granted the plaintiff’s motion for summary judgment on the complaint. Rivera, J.P., Belen, Sgroi and Miller, JJ., concur. [Prior Case History: 2011 NY Slip Op 32398(U).]

SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Elizabeth A. Taylor, J.), dated December 15, 2010, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Elizabeth A. Taylor, J.), dated December 15, 2010, reversed, with $10 costs, motion granted and complaint dismissed. The Clerk is directed to enter judgment accordingly.

In opposition to the defendant-insurer’s prima facie showing of entitlement to judgment as a matter of law, plaintiff failed to raise a material issue requiring a trial of its claim for no-fault first-party benefits. The affidavit of plaintiff’s medical billing supervisor, while explaining in general terms the office procedure followed by plaintiff in “document[ing] receipt of [verification] request[s] into our computer system,” failed to set forth any facts tending to indicate that the affiant or anyone else in plaintiff’s billing department in fact checked the “computer system” to ascertain whether the verification letters shown to have been sent by defendant had been “documented” as received. The professed status of plaintiff’s affiant as “custodian” of the case file was insufficient, on this record and without more, to overcome the presumption of receipt created by defendant’s proof of proper mailing of its verification letters (see Nassau Ins. Co. v Murray, 46 NY2d 828, 829-830 [1978]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concur [*2]
Decision Date: May 29, 2012

Supreme Court, Nassau County

12683-11

Law Offices of Bryan M. Rothenberg, Attorneys for Plaintiff.

Gary Tsirelman, Esq., Attorney for Defendant All Boro Psychological Services, P.C.

Montfort, Healy, McGuire & Salley, LLP, Attorneys for Defendant Roxanne Chowdry.

The Rybak Firm, PLLC, Attorneys for Defendants Amega, Inc., Healing Art Acupuncture, P.C., J.C. Healing Touch Rehab PT, P.C., North East Empire Medical, P.C., SS Medical Care, P.C., True Align Chiropractic Care, P.C., and ZG Chiropractic Care, P.C.

Steven M. Jaeger, J.

The following papers read on this motion:

Order to Show Cause and AffirmationX

Notice of Cross Motion and AffirmationX

AffidavitX

Opposition to Defendant’s Cross MotionX

Affirmation in OppositionX

Affirmation in SupportX

Reply in SupportX [*2]

ReplyX

Order to show cause pursuant to CPLR 6301 and 2201 by the plaintiff 21st Century Advantage Insurance Company for an order, inter alia, staying and enjoining all presently pending and future lawsuits and arbitrations instituted as against the plaintiff for (1) the recovery of no-fault benefits; and/or (2) reimbursement for

health care services rendered pursuant to stated automobile insurance polices previously issued by the plaintiff.

Cross motion pursuant by codefendant All Boro Psychological Services, P.C., for an order: (1) dismissing the plaintiff’s complaint to CPLR 3211[a][4]; or alternatively, (2) severing the claims asserted against it pursuant to CPLR 603 and 1002[c]; and/or (3) extending its time to serve an answer to the verified complaint pursuant to CPLR 3012[d] and 2004.

In August of 2011, the plaintiff 21st Century Advantage Insurance Company [“the plaintiff”], commenced the within insurance fraud action as against various no-fault, health care providers and individual defendant-policyholders. The verified complaint alleges in substance that during a ten-month period between June of 2009 and January of 2010, certain individual defendants engaged in a fraudulent scheme to illegally procure approximately ten automobile insurance policies (Cmplt., ¶¶ 5-7; 142; 161, 181, 195).

More specifically, the plaintiff contends, inter alia, that: the named individual defendants and others, applied for the subject policies by telephone or over the internet by using common telephone and facsimile numbers; that the applicants used invalid bank accounts and bogus credit cards to do so; and that thereafter — mostly within 60 days of the policy issuance dates and before non-payment-based cancellation notices could become effective — the fraudulently insured vehicles were involved in “staged,” side-swipe or rear-end type accidents, for which false claims were filed (Keane Aff., ¶¶ 4-8; 10-11; Mirabella Aff., ¶¶ 9-11).

The verified complaint further alleges that after the allegedly false claims were filed, the plaintiff requested information from its insureds and others, and also scheduled examinations under oath [“EUO”], as authorized by the policies (Cmplt., ¶¶ 154-159; 192-195, 249-250, 280). The defendants, however, either failed to appear for the EUOs or testified in an evasive, suspicious and inconsistent manner with respect to the policy application process and the occurrence of the subject accidents (Keane Aff., ¶¶ 9-10; Cmplt., ¶¶ 153-155; 172-[*3]173; 194; 203-204, 229; 280).

With respect to one policy transaction in particular, the complaint avers that the “unlisted” driver who was actually operating the insured’s vehicle during the accident (which occurred nine days after the policy was issued), appeared for an EUO and testified that: inter alia, he was offered money by the named insured to become involved in an accident; that specifically, he was instructed to rear-end another vehicle; and that he was then told by the named insured to apply for no- fault therapy benefits after the accident occurred (Cmplt., ¶¶ 203-204).

The plaintiff asserts that in sum, and based on its investigation, none of the individual defendants provided evidence demonstrating that the policy applications and ensuing accidents were bona fide — as opposed to intentionally staged, sham incidents designed to defraud the plaintiff (Keane Aff., ¶¶ 11-12).

The plaintiff’s verified complaint sets forth five causes of action and demands, among other things, declaratory relief rescinding and/or voiding the policies (Cmplt., ¶¶ 325- 361).

In light of its assertion that the subject policies were fraudulently obtained and void, the plaintiff thereafter declined to reimburse certain health care providers who supplied no-fault medical services to the insured defendants (Cmplt., ¶¶ 56-140). As a result, approximately 100 of those health care providers later commenced no-fault reimbursement actions against the plaintiff in the New York City Civil Court (Mirabella Reply Aff., ¶ 6).

In December of 2011, the plaintiff moved by order to show cause (with temporary restraining order) to enjoin the prosecution and/or commencement of all actions and arbitrations — pending or to be commenced in the future — arising out of the issuance of the subject policies (OSC, ¶¶ [a]-[c]).

Upon receipt of the plaintiff’s papers, the Court signed the proposed temporary restraining order contained therein, which effectively stayed all current and future actions and/or arbitrations pending the return date of the plaintiff’s main application (Jaeger, J.).

Codefendant All Boro Psychological Services, P.C [“All Boro”] has opposed the plaintiff’s application and also cross moved for stated relief, including dismissal of the plaintiff’s complaint pursuant to CPLR 3211[a][4] based on a Civil Court reimbursement action it commenced against the plaintiff. Alternatively, All Boro has requested a severance (CPLR 603; 1002[c]), and if that relief is denied, All Boro has sought leave to file a late answer to the verified complaint (see, CPLR 2004; 3012[b]).

With respect to its CPLR 3211[a][4] dismissal claim (“another action [*4]pending”), All Boro asserts that in June of 2011 a few months before the plaintiff commenced this action — it instituted its own no-fault, reimbursement action against the plaintiff in the New York City Civil Court (Chin Aff., ¶¶ 2—6; Exh., “3”). The All Boro Civil Court complaint alleges in sum, that All Boro provided covered, no-fault medical services to one of the individual defendants in this action, “Shameeka Moore” (Chin Aff., ¶¶ 2—6; Exh., “3”). According to All Boro’s Civil Court complaint, despite due demand, the plaintiff has declined to pay the sum of $1181.73 — the amount allegedly now due and owing for the health care services it rendered.

A number of additional, non-moving providers have also opposed the plaintiff’s motion, i.e., codefendants Amega, Inc., Healing Art Acupuncture, P.C.; J.C. Healing Touch Rehab PT, P.C.; North East Empire Medical, P.C.; SS Medical Care, P.C.; True Align Chiropractic Care, P.C.; True Align Chiropractic Care P.C., and ZG Chiropractic Care, P.C — and also Roxana Chowdhry (a non-insured alleged accident victim).

The plaintiff’s order to show cause is now before the Court for review and resolution. The order to show cause should be granted. All Boro’s cross motion is granted to the limited extent indicated below.

Preliminarily, although the plaintiff cites to, inter alia, CPLR 2201 as authority for its application, CPLR 2201 applies to stays issued in matters pending before the motion Court (e.g., Peluso v Red Rose Rest., Inc., 78 AD3d 802, 803; St. Paul Travelers Ins. Co. v. Nandi, ___Misc.3d___, 2007 WL 1662050, at 8 [Supreme Court, Queens County 2007]; Siegel, New York Practice, § 256, at 435-436 [4th ed] see, New York Cent. Mut. Ins. Co. v. McGee, ___Misc.3d ___, 2009 WL 4068474, at 6 [Supreme Court, Kings County 2009], modified on different grounds, 87 AD3d 622 see also, Autoone Ins. Co. v. Manhattan Heights Medical, P.C., ___Misc.3d.___, 2009 WL 2357009, at 2-3 [Supreme Court, Queens County 2009]). Here, the plaintiff’s order to show cause demands relief enjoining actions and arbitrations pending in a variety of different forums. Accordingly, the motion is properly viewed as one for a preliminary injunction — to which the requirements prescribed by Article 63 are therefore applicable (St. Paul Travelers Ins. Co. v. Nandi, supra see also, Mercury Cas. Co. v. Inger Grant Lynbrook Adv Acupuncture, supra, 2011 WL 4874666 [Supreme Court, Nassau County 2011]; New York Cent. Mut. Ins. Co. v. McGee, supra cf., Urban Radiology, P.C. v. GEICO Ins. Co., ___Misc.3d.___, 2010 WL 3463018, at 2-3 [New York City Civil Court 2010]).

With respect to those requirements, “[a] party seeking the drastic remedy of [*5]a preliminary injunction has the burden of demonstrating, by clear and convincing evidence, (1) a likelihood of ultimate success on the merits, (2) the prospect of irreparable injury if the provisional relief is withheld, and (3) a balancing of the equities in the movant’s favor” (Perpignan v. Persaud, 91 AD3d 622, 623 see also, Nobu Next Door, LLC v. Fine Arts Housing, Inc., 4 NY3d 839, 840 [2005]; Aetna Ins. Co. v. Capasso, 75 NY2d 860, 862 [1990]; Doe v. Axelrod, 73 NY2d 748, 750 [1988]). However, conclusive proof is not required (Arcamone-Makinano v. Britton Property, Inc., 83 AD3d 623; 624; Ying Fung Moy v Hohi Umeki, 10 AD3d 604, 605), and the mere existence of an issue of fact will not itself be

grounds for the denial of the motion (see, CPLR 6312[c]; Reichman v. Reichman, 88 AD3d 680, 681; Ruiz v Meloney, 26 AD3d 485, 487).

“The decision to grant or deny a preliminary injunction lies within the sound discretion of the Supreme Court” (91-54 Gold Road, LLC v. Cross-Deegan Realty Corp., 93 AD3d 649).

With these principles in mind, and in the exercise of its discretion, the Court agrees that the plaintiff has established its entitlement to the injunctive relief sought. It is settled that “[a] deliberate collision caused in furtherance of an insurance fraud scheme is not a covered accident” (State Farm Mut. Auto. Ins. Co. v. Laguerre, 305 AD2d 490, 491 see, Matter of Liberty Mut. Ins. Co. v Goddard, 29 AD3d 698, 699; Eagle Ins. Co. v. Davis, 22 AD3d 846, 847; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 752).

At bar, the plaintiff’s submissions include the affidavit of its Special Investigator, Sandra Keane, who was involved in the investigation, and the plaintiff’s 361 paragraph, complaint (verified by Ms. Keane), which provides a highly fact-specific, case-by case description of, inter alia, the manner in which the policies were acquired; the insured defendants’ alleged non-cooperation, and other relevant transactional facts depicting the allegedly suspicions and questionable nature of the applications made and the accidents which later occurred (see, Autoone Ins. Co. v. Manhattan Heights Medical, P.C., supra, 2009 WL 2357009, at 2-3 cf., Felsen v. Stop & Shop Supermarket Co., LLC, 83 AD3d 656, 657). These non-conclusory factual assertions are sufficient to prima facie establish a likelihood of success on the merits of the plaintiff’s fraud-based claims, i.e., that the policies were fraudulently acquired and therefore subject to rescission (Autoone Ins. Co. v. Manhattan Heights Medical, P.C., supra; St. Paul Travelers Ins. Co. v. Nandi, supra, 2007 WL 1662050, at 8).

The plaintiff has additionally demonstrated that the requested injunctive [*6]relief will serve to minimize repetitive litigation and arbitrations in which the same, potentially dispositive defenses and claims relating to the disputed policies will be raised (Autoone Ins. Co. v. Manhattan Heights Medical, P.C., supra). Similarly, and, “in view of the multiplicity of lawsuits and the possible inconsistent outcomes in the absence of an injunction, [the] plaintiff has established the elements of irreparable injury and the balancing of the equities in its favor” (St. Paul Travelers Ins. Co. v. Nandi, supra, 2007 WL 1662050, at 8).

Contrary to the plaintiff’s contentions, however, “[t]he Second Department has repeatedly emphasized that CPLR 6312[b] clearly and unequivocally requires the party seeking an injunction to give an undertaking'”(Schneck v. Schneck,___, Misc 3d.___, 2008 WL 5192626, at 6 [Supreme Court, Nassau County 2008], quoting from, Glorious Temple Church of God in Christ v. Dean Holding Corp., 35 AD3d 806, 807; 6312[b] see also, 91-54 Gold Road, LLC v. Cross-Deegan Realty Corp., supra, 93 AD3d 649, 650; Putter v. Singer, 73 AD3d 1147, 1149; Buckley v. Ritchie Knop, Inc., 40 AD3d 794, 796; Massapequa Water Dist. v. New York SMSA Ltd. Partnership, ___ Misc 3d.___, 2008 WL 779259 at 9 [Supreme Court, Nassau County, 2008])(Mirabella [Opp] Aff., ¶ 16).

Therefore, and as a condition to the granting of the above-referenced injunctive relief, the plaintiff shall file an undertaking as directedbelow in accord with the dictates of CPLR 6312(b)(Schneck v. Schneck, supra, 2008 WL 5192626, see also, Massapequa Water Dist. v. New York SMSA Ltd. Partnership, supra, 2008 WL 779259 at 9 [Supreme Court, Nassau County, 2008]; Buckley v. Ritchie Knop, Inc., supra).

Turning to All Boro’s cross motion, that branch the motion which is to dismiss the complaint based on the Civil Court reimbursement action should be denied (CPLR 3211[a][4]). In the exercise of its broad discretion pursuant to CPLR 3211[a][4](see, Clark v. Clark, 93 AD3d 812, 815), the Court agrees that dismissal of the subject action based on the pending, Civil Court matter is unwarranted, since, inter alia, the two actions lack the requisite degree of identity

in terms of the issues presented and the relief sought (Clark v. Clark, supra, at 815; Goldman v A & E Club Props., LLC, 89 AD3d 681, 683).

All Boro’s alternative demand for relief — denominated as a request for a severance — appears to be miscast (CPLR 603, 1002[c]). In substance, a severance is a discretionary measure which is “sparingly” exercised so as to minimize prejudice where, inter alia, common factual and legal issues are lacking and/or where a single trial of differing claims would negatively effect a substantial right [*7](Herskovitz v Klein, 91 AD3d 598, 599; New York Cent. Mut. Ins. Co. v. McGee, supra, 87 AD3d at 624; Bentoria Holdings, Inc. v Travelers Indem. Co., 84 AD3d 1135, 1137; Cole v Mraz, 77 AD3d 526, 528; Quiroz v Beitia, 68 AD3d 957, 960 see generally, Shanley v Callanan Indus., 54 NY2d 52, 57 [1981]).

Here, however, All Boro is apparently making the opposite claim; namely, that common legal and factual issues do, in fact, exist (see, Chin Reply Aff., ¶¶ 1-4). Where commonality exists, courts have denied severance requests, reasoning “that the interests of judicial economy and consistency of verdicts will be served by having a single trial” (Herskovitz v Klein, supra; Golden Eagle Capital Corp. v Paramount Mgt. Corp., 88 AD3d 646, 648; Quiroz v Beitia, supra, 68 AD3d 957, 960). Alternatively, to the extent that All Boro is arguing that its Civil Court action should be exempted from the subject injunction (Chin Reply Aff., ¶¶ 1-2), that result would be inconsistent with the Court’s granting of that remedy and could reintroduce the potential for conflicting results which the injunction was, in part, designed to minimize (cf., St. Paul Travelers Ins. Co. v. Nandi, supra, 2007 WL 1662050, at 8).

Lastly, that branch of the All Boro’s cross motion which is for leave to file a late answer, in the form annexed to its motion papers, is granted as unopposed (Chin Reply Aff., Exh., “1”).

The Court has considered the parties’ remaining contentions and concludes that they do not support an award of relief beyond that granted above.

Accordingly, it is,

ORDERED that the plaintiff’s motion for a preliminary injunction is granted to the extent that terms of the temporary restraining order previously approved by the Court shall be continued during the pendency of the subject action, and it is further,

ORDERED that the plaintiff shall post an undertaking in the sum of $50,000.00 pursuant to CPLR 6312(b) within twenty (20) days of the date of this Order, and if such undertaking is not posted, the order to show cause is denied, and it is further,

ORDERED that the cross motion pursuant by codefendant All Boro Psychological Services, P.C., is granted to the limited extent that its application to serve the proposed answer annexed to its moving papers is granted, and the cross motion is otherwise denied.

The foregoing constitutes the decision and order of the Court.

Dated: May 24, 2012 [*8]

________________________________________

STEVEN M. JAEGER, A.J.S.C.