Civil Court of the City of New York, Kings County

089993/09

Michael Weaver, Esq.

Bruno, Gerbino & Soriano, LLP

Attorneys for Defendant

445 Broad Hollow Road, Suite 220

Melville, NY 11747

631-390-0010

Law Offices of Melissa Betancourt, P.C.

Attorney for Plaintiff

155 Kings Highway, 3rd Floor

Brooklyn, New York 11223

718-336-8076

Lisa S. Ottley, J.

This action was commenced by the Plaintiff seeking payment of no-fault party benefits for services rendered on behalf of Sara Mounier pursuant to CPLR 5106(a) of the Insurance Law and Regulation of the New York State Insurance Department (11 NYCRR Sect. 65-1.1 et. seq.).

Defendant moves for an order pursuant to CPLR §3025(b), for leave to amend its Verified Answer, and upon this court granting defendant leave to amend its answer, for dismissal of the complaint pursuant to CPLR §3211(a) 5, under the doctrines of res judicata and collateral estoppel.

Discussion

Leave to amend a pleading pursuant to CPLR 3025(b) should be granted where there is no significant prejudice or surprise to the opposing party and where the proof submitted in support of the motion indicates that the amendment may have merit. See, Edenwald Contr. Co. v. City of New York, 60 NY2d 957 [1983].

Based upon the documents submitted in support of its motion for leave to amend its Verified Answer, the court hereby grants defendant’s motion to amend its Verified Answer. See, Uptodate Medical Service, P.C., v. State Farm Mutual Automobile Insurance Company , 22 Misc 3d 128(A), 880 N.Y.S.2d 227 (AT 2nd, 11th & 13th Judicial Dists., 2009).

Next, this court will address the issue as to whether defendant is entitled to dismissal of the action on the grounds of res judicata and collateral estoppel.

In the case at bar, the defendant-insurer brought an action in Supreme Court, Nassau County, seeking declaratory relief by the filing of a Summons and Complaint which the court deemed to have been duly served upon all the defendants named within the action, which failed to appear and/or interpose or serve an answer in the action. [See, Exh. “A” annexed to defendant’s moving papers herein]. By notice of motion, the defendant herein, and the plaintiff in the Supreme Court action moved pursuant to CPLR § 3215 for an order and judgment granting plaintiff the relief sought upon default, which was granted by the Hon. Anthony L. Parga, on October 1, 2010.

The defendant moves for dismissal of this action for payment of no-fault benefits [*2]on the grounds of res judicata and collateral estoppel, inasmuch as the declaratory judgment held that no coverage existed due to the fact the loss resulted from a staged accident.

Plaintiff argues, that a declaratory judgment granted on default does not have preclusive effect, and therefore, collateral estoppel does not preclude a party from litigating the action.

Although there is case law in support of plaintiff’s argument, the cases in support of plaintiff’s argument are distinguishable from this case. As argued by defendant, in Magic Recovery Med & Surgical Supply, Inc. v. State Farm Mutual Auto Insurance Company, 27 Misc 3d 67, 901 N.Y.S.2d 774 (AT 2nd, 11 & 13th Jud. Dists., 2010), the insurance company failed to name the party in the declaratory action, therefore, the res judicata and collateral estoppel could not be granted. In EMA Acupuncture, P.C. v. Lumbermens Mutual Casualty Company, 27 Misc 3d 141, 911 N.Y.S.2d 692 (AT 2nd, 11 & 13th Jud. Dists., 2010), which was not the basis of a default declaratory judgment, but was based on whether an Order issued on default pursuant to CPLR §3216 which fails to specify whether the dismissal is with prejudice or on the merits, has a preclusive effect.

Recently, this Court in a decision by the Hon. Devin P. Cohen, denied defendant’s motion to dismiss on the ground of collateral estoppel. As in this case, the motion raised the question of the effect of a declaratory judgment order, issued on default with respect to collateral actions seeking to litigate the same issue. Judge Cohen provides a detailed analysis of the applicable law and policies underlying declaratory judgments, collateral estoppel and default judgments. See, Beford Medical Care, P.C., a/a/o Vincent Meyers v. Encompass Insurance Company, 31 Misc 3d 222, 915 N.Y.S.2d 452 [Civ. Ct., Kings Co., 2011].

Interestingly, however, the decision does not address the doctrine of res judicata. Perhaps, the defendant in that case, did not move for dismissal on the ground of res judicata.

The doctrines of res judicata and collateral estoppel are designed to put an end to a matter once it is duly decided. See, Siegel, NY Practice §442 at 747 [4th Ed.]. Res judicata, or claim preclusion, is invoked when a party, or one in privity with the party, seeks to relitigate a disposition on the merits of claims, or causes of action, arising out of the same, or series of, transactions which were raised, or could have been raised, in the [*3]

prior action. See, Matter of Hunter, 4 NY3d 260 [2005]. Res judicata applies “when a different judgment in the second [action] would destroy or impair rights or interests established by the first. See, Matter of Hunter, 4 NY3d 260 [2005]; Schuykill Fuel Corp. v. Nieberg Realty Corp., 250 NY 304.

In SZ Medical, P.C., Life Chiropractic, P.C., JH Chiropractic, P.C., New Wave Oriental Acupuncture, P.C., a/a/o Clinton Charles v. Erie Insurance Company, 24 Misc 3d 126(A), 889 N.Y.S.2d 884 [AT 2nd, 11th & 13th Judicial Dists., 2009], the court affirmed the dismissal of the case on the lower level, and held the following:

The determination as to whether there was coverage is crucial to both

plaintiffs and defendant herein, and arises out of the same transaction,

i.e., the subject accident (see e.g. Abraham v. Hermitage Ins. Co., 47

AD3d 855 [2008]; Sabatino v. Capco Trading, Inc., 27 AD3d 1019,

1020 [2006]), and a different judgment in the instant action would

destroy or impair rights or interests established by the Supreme

Court judgment (see, e.g. Schuykill Fuel Corp. v. Nieberg Realty

Corp., 250 NY at 306-307). Moreover, the record established that

defendant and the wholly owned subsidiary had the requisite privity

(see, e.g. Spasiano v. Provident Mut. Life Ins. Co., 2 AD3d 1466

[2003]). Consequently, plaintiffs were barred from relitigating the

claim pursuant to the doctrine of res judicata.

Thereafter, the First Department in Pomona Medical Diagnostics, P.C., a/a/o Jarrod Ward v. Metropolitan Casualty Ins. Co., 29 Misc 3d 138(A), 920 N.Y.S.2d 243 (1st Dept., 2010), citing SZ Medical, P.C., Life Chiropractic, P.C., JH Chiropractic, P.C., New Wave Oriental Acupuncture, P.C., a/a/o Clinton Charles v. Erie Insurance Company, 24 Misc 3d 126(A), 889 N.Y.S.2d 884 [AT 2nd, 11th & 13th Judicial Dists.], reversed the lower court’s denial of defendant’s motion for summary judgment, and held: “Contrary to plaintiff’s claim, the Supreme Court judgment is a conclusive final determination, notwithstanding that it was entered on default of plaintiff, since res judicata applies to a judgment taken by default that has not been vacated (see, Trisingh Enters., Inc., v. Kessler 249 AD2d 45 [1998]; Robbins v. Growney, 229 AD2d 356 [1996].

Herein, the plaintiff-provider, as determined by the Supreme Court, was duly served with the Summons and Complaint in the declaratory action, and therefore, judgment was entered in favor of the defendant-insurer, on October 1, 2010, due to the [*4]provider’s failure to serve and file an answer to the Summons and Complaint. There is nothing in the record to indicate that the plaintiffs, Altercare, et .al., have moved to vacate the default judgment in the Supreme Court.

Accordingly, defendant’s motion to dismiss on the ground of res judicata is hereby granted.

This constitutes the order of this Court.

Court Attorney to notify.

Dated: Brooklyn, New York

August 30, 2011

______________________________

LISA S. OTTLEY, A.J.S.C.

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Ben R. Barbato, J.), entered December 14, 2010, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Ben R. Barbato, J.), entered December 14, 2010, reversed, with $10 costs, motion granted and complaint dismissed. The Clerk is directed to enter judgment accordingly.

In this action to recover assigned first-party no-fault benefits, defendant’s documentary submissions established prima facie that it mailed the notices of the independent medical examinations (IME) to the assignor and that the assignor failed to appear (see Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [2011]; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2006]; Apollo Chiropractic Care, P.C. v Praetorian Ins. Co., 27 Misc 3d 139[A], 2010 NY Slip Op 50911[U] [2010]). In opposition, plaintiff failed to raise a triable issue regarding the reasonableness of the requests or the assignor’s failure to attend the IMEs (see Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d at 560; Inwood Hill Med., P.C. v General Assur. Co., 10 Misc 3d 18, 20 [2005]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: August 24, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Kenneth P. Sherman, J.), entered October 7, 2009. The order denied defendant’s motion for summary judgment.

ORDERED that the order is reversed, without costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order which denied its motion for summary judgment dismissing the complaint.

The affidavit submitted by defendant in support of its motion for summary judgment was sufficient to establish that defendant’s denial of claim forms, which denied the claims at issue on the ground of lack of medical necessity, had been timely mailed in accordance with defendant’s standard office 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, among other things, an affirmed peer review report, as well as an affirmation executed by the physician who had performed the peer review, which set forth a factual basis and medical rationale for the conclusion that there was no medical necessity for the medical supplies at issue. As plaintiff failed to proffer an affidavit from a health care practitioner which meaningfully referred to, let alone rebutted, the conclusions set forth in the peer review report (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]), defendant’s motion for summary judgment should have been granted (see Delta [*2]Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Golia and Rios, JJ., concur.

Steinhardt, J.P., dissents in a separate memorandum.

Steinhardt, J.P., dissents and votes to affirm the order in the following memorandum:

It is undisputed that plaintiff did not submit medical opposition to defendant’s motion for summary judgment, which was based on lack of medical necessity. However, I am of the opinion that the documentation submitted by defendant in support of its motion is insufficient to shift the burden to plaintiff.

“Lack of medical necessity is a defense to an action to recover no-fault benefits, which an insurer may assert pursuant to a timely claim denial, based on . . . a sufficiently detailed peer review report” (Amaze Med. Supply v Eagle Ins., 2 Misc 3d 139[A], 2004 NY Slip Op 50279[U] [App Term, 2d & 11th Jud Dists 2004]). To support a motion for summary judgment, a peer review report must set forth a factual basis and medical rationale sufficient to establish, prima facie, the lack of medical necessity (see Urban Radiology, P.C. v GEICO Gen. Ins. Co., 29 Misc 3d 142[A], 2010 NY Slip Op 52157[U] [App Term, 2d, 11th & 13th Jud Dists 2010]).

In the instant matter, the peer review report of Dr. Ross did not “shed any light” on the assignor’s condition, nor did it state, in any sufficiently detailed manner, the reason the medical equipment at issue was not needed. The reader of the report is at a total loss to determine what actually happened to the assignor and what parts of her anatomy are amiss and in what way. “Bilateral shoulder and left elbow” injuries may range from a complicated fracture to a minor contusion. Without more, the report is conclusory and vague, and insufficient to shift the burden to plaintiff. I therefore vote to affirm the order denying defendant’s motion for summary judgment.
Decision Date: August 16, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Alice Fisher Rubin, J.), entered February 6, 2009. The order, insofar as appealed from, granted the branches of plaintiff’s motion seeking summary judgment as to claims for the sums of $1,205.50 and $1,675 and denied defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is reversed, without costs, the branches of plaintiff’s motion seeking summary judgment as to the claims for the sums of $1,205.50 and $1,675 are 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, plaintiff moved for summary judgment. Defendant opposed the motion and cross-moved for summary judgment dismissing the complaint on the ground that the action, insofar as it pertained to plaintiff’s claims seeking to recover the sums of $1,205.50 and $1,675, was premature because it was commenced before defendant had received responses to its outstanding verification requests, and on the ground of lack of medical necessity as to plaintiff’s claim for $502.63. The Civil Court granted the branches of plaintiff’s motion seeking summary judgment on the $1,205.50 and $1,675 claims, and denied defendant’s cross motion for summary judgment, finding that a triable issue of fact exists as to the medical necessity of plaintiff’s $502.63 claim. This appeal by defendant ensued.

The affidavit of defendant’s litigation representative established that defendant had timely mailed its request and follow-up request for verification in accordance with its standard office practices and procedures to plaintiff and to the doctor who had prescribed the medical supplies at [*2]issue (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 demonstrated that it had not received the requested verification, and plaintiff did not show that the verification had been provided to defendant prior to the commencement of the action. Consequently, the 30-day period within which defendant was required to pay the $1,205.50 and $1,675 claims did not begin to run (see Insurance Department Regulations [11 NYCRR] § 65-3.8 [a]; Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 [2005]; Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2004]), and, thus, plaintiff’s action with respect to the $1,205.50 and $1,675 claims is premature.

With respect to the branch of defendant’s cross motion seeking summary judgment dismissing the complaint insofar as it sought to recover the sum of $502.63, defendant demonstrated that it had timely denied the $502.63 claim on the ground of lack of medical necessity based upon an affirmed independent medical examination (IME) report (see St. Vincent’s Hosp. of Richmond, 50 AD3d at 1124; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d at 17-18). The IME report set forth a factual basis and medical rationale for the doctor’s opinion that there was a lack of medical necessity for the supplies at issue (see Delta Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). As plaintiff failed to submit any medical evidence to rebut defendant’s showing of lack of medical necessity, the branch of defendant’s cross motion seeking summary judgment dismissing the $502.63 claim should have been granted (see Delta Diagnostic Radiology, P.C. v Integon Nat. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Accordingly, the order, insofar as appealed from, is reversed, the branches of plaintiff’s motion seeking summary judgment as to the claims for the sums of $1,205.50 and $1,675 are denied, and defendant’s cross motion for summary judgment dismissing the complaint is granted. Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: August 16, 2011

—[*1] McDonnell & Adels, PLLC, Garden City, N.Y. (Anita Nissan Yehuda of counsel), for appellant.

In an action for a judgment declaring that the plaintiff is not obligated to pay no-fault insurance claims submitted by the defendants, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Battaglia, J.), dated November 25, 2009, as, sua sponte, severed the action with respect to certain defendants and denied those branches of the plaintiff’s motion which were pursuant to CPLR 3211 (a) (3) and (7) to dismiss the defendants’ counterclaims, with leave to renew after joinder of issue on an amended complaint.

Ordered that on the Court’s own motion, the appeal from so much of the order as, sua sponte, severed the action with respect to certain defendants is deemed an application for leave to appeal from that portion of the order, and leave to appeal is granted (see CPLR 5701 [c]); and it is further,

Ordered that the order is modified, on the law, on the facts, and in the exercise of discretion, (1) by deleting the provision thereof severing the action with respect to certain defendants, and (2) by deleting the provision thereof denying that branch of the plaintiff’s motion which was pursuant to CPLR 3211 (a) (7) to dismiss the defendants’ counterclaims, with leave to renew after joinder of issue on an amended complaint, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed from; and it is further,

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

The plaintiff insurance company issues automobile insurance policies in New York State which include coverage under the “no-fault” insurance law (see Insurance Law § 5101 et seq.). The plaintiff commenced this action against John McGee (hereinafter Dr. McGee), a licensed physician, and 12 professional medical service corporations owned and operated by Dr. McGee (hereinafter collectively the PCs), alleging that the PCs were fraudulently incorporated in Dr. McGee’s name when they were actually owned, operated, and controlled by unlicensed persons and their management companies in violation of applicable statutes and regulations. The plaintiff seeks a judgment declaring that it is not obligated to pay outstanding and future no-fault insurance claims submitted by the PCs on the primary theory that they were fraudulently incorporated in Dr. McGee’s name to circumvent New York law prohibiting nonphysicians from sharing ownership in medical [*2]service corporations. The plaintiff also seeks declaratory relief on the alternate theories that the PCs failed to provide requested verification of their eligibility to receive no-fault benefits, failed to attend requested examinations under oath in various actions and arbitration proceedings initiated by them to recover no-fault benefits, and submitted bills seeking payment of no-fault benefits for services that were not provided.

Shortly after the defendants joined issue by serving an answer with counterclaims, the plaintiff moved, inter alia, pursuant to CPLR 3211 (a) (3) and (7) to dismiss the counterclaims. On the return date of the motion, the Supreme Court, sua sponte, raised the issue of severance as to the relief sought against each of the 12 PCs and, at the court’s request, the parties submitted supplemental memoranda on the issue. In the order appealed from, the Supreme Court, among other things, sua sponte, severed the action as to the 12 PCs, but permitted the plaintiff to serve an amended complaint against Dr. McGee and three PCs of the plaintiff’s choosing on a theory of fraudulent incorporation. The Supreme Court also denied those branches of the plaintiff’s motion which were pursuant to CPLR 3211 (a) (3) and (7) to dismiss the defendants’ counterclaims, with leave to renew after joinder of issue on an amended complaint.

The Supreme Court improvidently exercised its discretion in, sua sponte, severing the action as to the 12 PCs, and, in effect, permitting the action to continue only against Dr. McGee and 3 of the 12 PCs. “Although it is within a trial court’s discretion to grant a severance, this discretion should be exercised sparingly” (Shanley v Callanan Indus., 54 NY2d 52, 57 [1981]; see Curreri v Heritage Prop. Inv. Trust, Inc., 48 AD3d 505, 507 [2008]; Lelekakis v Kamamis, 41 AD3d 662, 666 [2007]). Severance is inappropriate where the claims against the defendants involve common factual and legal issues, and the interests of judicial economy and consistency of verdicts will be served by having a single trial (see Bentoria Holdings, Inc. v Travelers Indem. Co., 84 AD3d 1135 [2011]; Curreri v Heritage Prop. Inv. Trust, Inc., 48 AD3d at 507-508; Lelekakis v Kamamis, 41 AD3d at 666; Naylor v Knoll Farms of Suffolk County, Inc., 31 AD3d 726, 727 [2006]). Here, the complaint alleged the existence of a common scheme to fraudulently incorporate the PCs through the use of Dr. McGee’s professional license, which, if established, would render all of the PCs ineligible to recover no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 319-322 [2005]). The common factual and legal issues presented as to whether the 12 PCs were fraudulently incorporated predominate the action and, thus, the interests of judicial economy and consistency of verdicts would be not be served by requiring the plaintiff to commence multiple actions. To the contrary, such fragmentation would increase litigation and place “an unnecessary burden on court facilities” (Shanley v Callanan Indus., 54 NY2d at 57), by requiring four separate trials instead of one.

Furthermore, the Supreme Court should have granted that branch of the plaintiff’s motion which was to dismiss the defendants’ counterclaims pursuant to CPLR 3211 (a) (7). The counterclaims are predicated on the defendants’ allegation that they are entitled to reimbursement for medical services provided under the medical payments coverage provisions of the subject insurance policies rather than the no-fault coverage provisions. However, medical payments coverage is excess coverage over mandatory no-fault coverage (see 11 NYCRR 65-1.1), and the defendants have failed to allege or otherwise demonstrate that the payments they seek exceed the no-fault threshold of $50,000 for basic economic loss of an eligible injured person for a single accident. Since the defendants have failed to allege facts which, if true, would entitle them to recover for medical services rendered under medical payments coverage, the counterclaims fail to state a cause of action (see generally Leon v Martinez, 84 NY2d 83, 87-88 [1994]; Jaymer Communications, Inc. v Associated Locksmiths of Am., Inc., 84 AD3d 888 [2011]).

The plaintiff’s remaining contention that the Supreme Court should have granted that branch of their motion which was pursuant to CPLR 3211 (a) (3) to dismiss the counterclaims because the defendants lacked standing to assert them is without merit. Rivera, J.P., Eng, Roman and Miller, JJ., concur. [Prior Case History: 25 Misc 3d 1232(A), 2009 NY Slip Op 52385(U).]

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered November 24, 2009. The order, insofar as appealed from, granted defendant’s motion to strike the action from the trial calendar and compel plaintiff to respond to defendant’s discovery demands.

ORDERED that the order, insofar as appealed from, is modified by providing that the branch of defendant’s motion seeking to compel plaintiff to respond to defendant’s discovery demands is granted to the extent of compelling plaintiff to provide the documents sought in items 19, 20, and 21 of defendant’s notice to produce and in interrogatory 11 (c) within 60 days of the date of the order entered hereon, and by further compelling plaintiff to produce its owner, John McGee, for an examination before trial within 30 days thereafter, or on such other date to which the parties shall agree, but in no event later than 60 days thereafter; 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 appeals from so much of an order as granted defendant’s motion to strike the action from the trial calendar and compel plaintiff to respond to defendant’s discovery demands and to produce its owner for an examination before trial (EBT).

It is uncontroverted that plaintiff filed a certificate of readiness for trial which stated that all pretrial discovery had been completed, despite the fact that its purported owner had not appeared for a scheduled EBT and there was outstanding documentary discovery. While defendant’s motion to strike the action from the trial calendar was untimely, under all of the circumstances presented, including the de minimis nature of the delay in moving to strike the [*2]action from the trial calendar, contrary to plaintiff’s contention, it cannot be said that the Civil Court’s determination to consider the motion rather than deny it as untimely was an improvident exercise of discretion (see CPLR 2004; Uniform Rules of the New York City Civil Court [22 NYCRR] § 208.17 [c]).

Defendant set forth detailed and specific reasons for believing that plaintiff is a professional service corporation which fails to comply with applicable state or local licensing laws and, thus, ineligible to recover no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), a defense which is not precluded. By obtaining discovery of certain documents, such as plaintiff’s financial and tax records, defendant will be able to ascertain whether plaintiff is ineligible for reimbursement of no-fault benefits (see e.g. CPLR 3101 [a]; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738 [2008]).

The record indicates that plaintiff objected to producing items 19 through 21 of defendant’s notice to produce, which sought plaintiff’s bank statements and canceled checks (item 19), plaintiff’s federal and state tax returns including attachments and schedules (item 20), and plaintiff’s payroll tax filings (item 21), and to providing the W-2 or 1099 forms sought in interrogatory 11 (c). We find that plaintiff’s objection to the foregoing demands lacked merit. Defendant has shown that plaintiff’s bank records are material and necessary (see CPLR 3101 [a]), and that special circumstances exist which warrant the disclosure of plaintiff’s income tax returns and payroll tax filings (see CPLR 3101 [a]; Ava Acupuncture, P.C. v Autoone Ins. Co., 28 Misc 3d 134[A], 2010 NY Slip Op 51350[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; Great Wall Acupuncture v State Farm Mut. Auto Ins. Co., 20 Misc 3d 136[A], 2008 NY Slip Op 51529[U] [App Term, 2d & 11th Jud Dists 2008]; Statewide Med. Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 134[A], 2006 NY Slip Op 52014[U] [App Term, 1st Dept 2006], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U] [Civ Ct, Bronx County 2005]; see also Dore v Allstate Indem. Co., 264 AD2d 804 [1999]; cf. Benfeld v Fleming Props., LLC, 44 AD3d 599, 600 [2007]; Altidor v State-Wide Ins. Co., 22 AD3d 435 [2005]). In addition, defendant is entitled to an EBT of McGee following the production of the documents (see CPLR 3101 [a]). However, as the record further reflects that plaintiff’s responses to the remainder of defendant’s interrogatories and defendant’s notice to produce were sufficient, the Civil Court should not have ordered plaintiff to provide additional responses.

In light of the foregoing and the misstatements of material facts contained within plaintiff’s certificate of readiness, the Civil Court did not improvidently exercise its discretion in granting the branch of defendant’s motion that sought to strike the action from the trial calendar and granting disclosure to the extent indicated above.

Pesce, P.J., Golia and Steinhardt, JJ., concur.
Decision Date: August 10, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin S. Garson, J.), entered May 28, 2009. 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, 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 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. Insofar as is relevant to this appeal, the Civil Court made a finding, pursuant to CPLR 3212 (g), that defendant’s NF-10 denial of claim forms were timely, but denied defendant’s cross motion on the ground that the peer review report annexed to defendant’s cross motion did not establish a lack of medical necessity for the services rendered.

In support of its cross motion, defendant submitted, among other things, an affirmed peer review report which set forth a factual basis and a medical rationale for the doctor’s determination that there was a lack of medical necessity for the services rendered. Defendant’s showing of a lack of medical necessity was not rebutted by plaintiff. In view of the foregoing, and the Civil Court’s CPLR 3212 (g) finding that defendant’s denial of claim forms were timely, a finding which plaintiff does not challenge, defendant’s cross motion for summary judgment dismissing the complaint should have been granted (see Delta Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d, 11th & [*2]13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

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

Pesce, P.J., Golia and Steinhardt, JJ., concur.
Decision Date: August 05, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Kathryn E. Freed, J.), entered December 1, 2009. The order granted a motion by defendant for the entry of a satisfaction of a default judgment to the extent of vacating the default judgment and deeming the action settled pursuant to a stipulation of settlement entered into by the parties, and denied plaintiff’s cross motion to vacate the stipulation of settlement.

ORDERED that the order is modified by striking the provision vacating the default judgment and by providing that defendant’s motion for an order directing entry of a satisfaction of the judgment pursuant to CPLR 5021 is granted; as so modified, the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the parties entered into a stipulation of settlement following the entry of a default judgment against defendant. After defendant paid plaintiff the amount called for in the stipulation of settlement, defendant moved to compel plaintiff to execute and file a satisfaction of judgment pursuant to CPLR 5020 or, in the alternative, for the court to direct the clerk to make an entry that the judgment had been satisfied pursuant to CPLR 5021. Plaintiff opposed the motion and cross-moved to vacate the stipulation of settlement, alleging that it had been entered into by mistake or through fraudulent inducement. The Civil Court granted defendant’s motion to the extent of vacating the default judgment and deeming the action settled. The court also denied plaintiff’s cross motion, holding that the stipulation had been signed by the principal owner of plaintiff’s [*2]firm and that the checks which defendant had issued in payment of the amount called for in the settlement had been cashed by plaintiff’s firm. Plaintiff appeals, contending that the stipulation of settlement should have been vacated and, in any event, that there was no basis for the Civil Court to have vacated the default judgment, as this relief was never requested by defendant.

Stipulations of settlement are favored by the courts and not lightly cast aside (see Hallock v State of New York, 64 NY2d 224, 230 [1984]; Matter of Galasso, 35 NY2d 319, 321 [1974]; Racanelli Constr. Co., Inc. v Tadco Constr. Corp., 50 AD3d 875 [2008]). Pursuant to CPLR 2104, when a stipulation is reduced to a writing and signed by a party or its attorney, it is binding upon that party. Furthermore, strict enforcement of a stipulation of settlement not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and the integrity of the litigation process (see Hallock v State of New York, 64 NY2d at 230; Racanelli Constr. Co., Inc. v Tadco Constr. Corp., 50 AD3d at 876). Only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation (see Hallock v State of New York, 64 NY2d at 230; Matter of Frutiger, 29 NY2d 143, 149-150 [1971]; Racanelli Constr. Co., Inc. v Tadco Constr. Corp., 50 AD3d at 876; Nigro v Nigro, 44 AD3d 831 [2007]; Davidson v Metropolitan Tr. Auth., 44 AD3d 819 [2007]).

Contrary to plaintiff’s contentions, plaintiff did not establish that the stipulation of settlement had been entered into through mutual mistake, nor has there been a sufficient showing that there existed a unilateral mistake on the part of plaintiff of a nature that would warrant the vacatur of the stipulation (see Matter of Marquez, 299 AD2d 551 [2002]). Moreover, we do not find that there has been a sufficient showing to demonstrate that defendant fraudulently induced plaintiff to enter into the stipulation of settlement (see Matter of Kaplan, 141 AD2d 545 [1988]). We, however, agree with plaintiff that neither the stipulation nor defendant’s motion called for the vacatur of the default judgment. Accordingly, the order is modified by striking the provision thereof vacating the default judgment and by providing that defendant’s motion for an order directing entry of a satisfaction of the judgment pursuant to CPLR 5021 is granted. Pesce, P.J., Weston and Steinhardt, JJ., concur.
Decision Date: August 04, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Peter Paul Sweeney, J.), entered September 30, 2009. The order, insofar as appealed from, 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, plaintiff moved for summary judgment, and defendant cross-moved for summary
judgment dismissing the complaint. The Civil Court held that there is an issue of fact with respect to the medical necessity of the services rendered to plaintiff’s assignor because defendant had not annexed the medical records upon which the peer review relied and defendant had failed to establish a foundation for the admission of the records. Defendant appeals from so much of the order as denied its cross motion for summary judgment dismissing the complaint.

Defendant established that it had timely mailed the denial of claim form (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]), which denied the claim at issue on the ground of lack of medical necessity. In support of its cross motion for summary judgment, defendant also submitted, among other things, a peer review report, which set forth a factual basis and medical rationale for the conclusion that there was a lack of medical necessity for the services at issue. Contrary to the determination of the Civil Court, there was no need for defendant to annex the medical records examined by the peer review doctor (cf. Matter of State of New York v Wilkes, 77 AD3d 1451 [2010]). Furthermore, [*2]since the purpose of the peer review report submitted by defendant was not to attempt to prove that plaintiff’s assignor was injured as documented in his medical records, or that she was treated as set forth in those records, but to establish that, assuming the facts set forth therein were true, the treatment allegedly provided by plaintiff was not medically necessary, defendant was not required to demonstrate that the records fell within an exception to the rule against hearsay (see id.; 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]). Consequently, defendant established its prima facie entitlement to summary judgment (see Delta Diagnostic Radiology, P.C. v Integon Natl. Ins. Co., 24 Misc 3d 136[A], 2009 NY Slip Op 51502[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co., 18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d & 11th Jud Dists 2007]; A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]). Defendant’s showing that the services rendered to plaintiff’s assignor were not medically necessary was unrebutted by plaintiff. Accordingly, defendant’s cross motion for summary judgment dismissing the complaint should have been granted.

Weston, J.P., and Pesce, J., concur.

Rios, J., concurs in a separate memorandum.

Rios, J., concurs in the following memorandum:

Contrary to the finding of the majority, in my opinion, the affidavit of defendant’s representative failed to describe on personal knowledge the mailing procedure employed at GEICO by the mailroom employees.

The affidavit alleges in conclusory terms that the envelopes containing the denials are placed in a mail bin for collection by mailroom employees and that they are:
“routinely collected by GEICO’s mail department personnel at least twice daily and delivered to the GEICO mailroom, located within the building at the Woodbury location. These envelopes are postmarked with that day’s date by a GEICO mailroom employee. Proper postage due is also affixed by GEICO’s mail personnel through a United States Post Office authorized postage machine. On that same day, a GEICO mailroom employee brings these postmarked, postage paid envelopes to the United States Post Office, Woodbury location, at 217 Woodbury Road, Woodbury, New York, 11797. This GEICO employee then personally relinquishes these envelopes to a United States Postal Service employee.”

In my view, the affidavit fails to establish a procedure sufficient to demonstrate that the mailing is forwarded to the claimant, especially where no certificate of bulk mailing from the postal service is offered (see Residential Holding Corp. v Scottsdale Ins. Co.,286 AD2d 679 [2001]; Hospital For Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374 [2001]).

Notwithstanding the apparent flaw in defendant’s proof, the majority points to the holding in St. Vincent’s Hosp. of Richmond v Government Employees Ins. Co. (50 AD3d 1123 [2008]), [*3]which held that a similar affidavit established a general office procedure sufficient to ensure that documents were properly addressed and mailed. In St. Vincent’s, the appellate court credited a statement by the insurer’s representative that
“the contents of this mail pick-up bin are collected by GEICO’s mail department personnel . . . Within 48 hours of its arrival in the GEICO mail room, the mail is delivered to the local United States Postal Service location and mailed.”

Accordingly, I am constrained to concur with my colleagues in their determination.
Decision Date: August 04, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Cheree A. Buggs, J.), entered January 8, 2010. The order, insofar as appealed from, denied defendant’s cross motion for summary judgment dismissing the complaint and limited the issues for trial to defendant’s defense that plaintiff’s submission of its bills to defendant was late.

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, plaintiff moved for summary judgment, and defendant cross-moved for summary judgment dismissing the complaint on the ground, among others, that plaintiff’s assignors had failed to comply with a condition precedent to coverage in that they had failed to appear for an independent medical examination (IME). The Civil Court denied both motions and limited the issues of fact for trial (see CPLR 3212 [g]). Defendant appeals.

In support of its cross motion, defendant submitted an affidavit of an employee of Comprehensive Medical Reviews, which had been hired by defendant to schedule the IMEs. That affidavit sufficiently established that the IME notices had been timely sent to plaintiff’s assignors in accordance with Comprehensive Medical Reviews’ standard office 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 an affidavit of the chiropractor who was to perform the IMEs, which established that the assignors had failed to appear for the duly [*2]scheduled IMEs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]). In addition, defendant sufficiently established that the denial of claim forms were timely mailed in accordance with defendant’s standard office practices and procedures (see St. Vincent’s Hosp. of Richmond, 50 AD3d at 1124).

As the appearance of an assignor at an IME is a condition precedent to the insurer’s liability on the policy (see Insurance Department Regulations [11 NYCRR] § 65-1.1; Stephen Fogel Psychological, P.C., 35 AD3d 720), defendant’s motion for summary judgment dismissing the complaint should have been granted.

The remaining contentions raised on appeal either lack merit or need not be reached in light of this determination.

Pesce, P.J., Weston and Steinhardt, JJ., concur.