[*1] Decided on April 5, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Schoenfeld, J.P., Shulman, Hunter, Jr., JJ
570946/10.

Plaintiffs appeal from an order of the Civil Court of the City of New York, New York County (Arlene P. Bluth, J.), dated June 5, 2008, which denied their motion for summary judgment in the principal sum of $9,902.18.

Per Curiam.

Order (Arlene P. Bluth, J.), dated June 5, 2008, reversed, without costs, and summary judgment is granted in favor of plaintiff Carnegie Hill Orthopedic Services, P.C. in the principal sum of $6,902.18, and plaintiff Devonshire Surgical Facility in the principal sum of $3,000. The Clerk is directed to enter judgment accordingly.

In this action to recover assigned first-party no-fault benefits, plaintiff Devonshire Surgical Facility established its prima facie entitlement to summary judgment on its claim for $3,000, and plaintiff Carnegie Hill Orthopedic Services, P.C., established its entitlement to summary judgment on its claim for $6,902.18 (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8, 9 [2007]; Devonshire Surgical Facility v American Tr. Ins. Co., 27 Misc 3d 137[A], 2010 NY Slip Op 50867[U] [2010]).

In opposition, defendant failed to raise a triable issue of fact. Even assuming that defendant issued timely denials of plaintiffs’ claims (see Country-Wide Ins. Co. v Zablozki, 257 AD2d 506 [1999], lv denied 93 NY2d 809 [1999]), the peer review report relied upon by defendant to deny plaintiffs’ claims is conclusory and fails to set forth sufficient facts to raise triable issues with respect to its defense of lack of medical necessity (see East Coast Acupuncture Servs., P.C. v American Tr. Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50213[U][2007]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. [*2]
Decision Date: April 05, 2011

[*1] Decided on April 5, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Schoenfeld, J.P., Shulman, Hunter, Jr., JJ
570945/10.

Plaintiffs appeal from an order of the Civil Court of the City of New York, New York County (Arlene P. Bluth, J.), dated June 4, 2008, which denied their motion for summary judgment on the complaint.

Per Curiam.

Order (Arlene P. Bluth, J.), dated June 4, 2008, reversed, without costs, and summary judgment is granted in favor of plaintiff Devonshire Surgical Facility in the principal sum of $3,000, and plaintiff Carnegie Hill Orthopedic Services, P.C. in the principal sum of $11,929.08. The Clerk is directed to enter judgment accordingly.

In this action to recover assigned first-party no-fault benefits, plaintiffs Carnegie Hill Orthopedic Services, P.C. and Devonshire Surgical Facility established their prima facie entitlement to summary judgment on their respective claims for $11,929.08, and $3,000 (see Insurance Law § 5106[a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). Specifically, defendant’s documentary submissions established its receipt of plaintiffs’ claims and that the claims were overdue (see Fair Price Med. Supply, Inc. v St. Paul Travelers Ins. Co., 16 Misc 3d 8, 9 [2007]; Devonshire Surgical Facility v American Tr. Ins. Co., 27 Misc 3d 137[A], 2010 NY Slip Op 50867[U] [2010]).

In opposition to the plaintiffs’ motion for summary judgment, defendant, which was precluded under a so-ordered stipulation from offering certain evidence pertaining to its defense of lack of medical necessity (see Wilson v Galicia Contr. & Restoration Corp., 10 NY3d 827, 830 [2008]), failed to raise a triable issue of fact (see Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d at 743; Devonshire Surgical Facility, supra). Accordingly, plaintiffs were entitled to judgment in their favor.
THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: April 05, 2011

Flatlands Acupuncture, P.C. v Fireman’s Fund Ins. Co.

2011 NY Slip Op 21133 [32 Misc 3d 17]

Accepted for Miscellaneous Reports Publication

AT2

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, August 3, 2011

[*1]

Flatlands Acupuncture, P.C., as Assignee of Pedro Ramirez, Appellant, v Fireman’s Fund Ins. Co., Respondent.

Supreme Court, Appellate Term, Second Department, April 5, 2011

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn, for appellant. Bruno, Gerbino & Soriano, LLP, Melville (Charles W. Benton of counsel), for respondent.

{**32 Misc 3d at 18} OPINION OF THE COURT

Memorandum.

Ordered that the order is modified by providing that the branches of defendant’s motion seeking to dismiss the $540 claim (dates of service Feb. 1, 2001-Feb. 26, 2001), the $630 claim (dates of service Mar. 2, 2001-Mar. 31, 2001), and the $540 claim (dates of service Apr. 3, 2001-Apr. 24, 2001) are denied; as so modified, the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved, by order to show cause, to dismiss the complaint pursuant to CPLR 3211 (a) (5) on the ground that the action was barred by the statute of limitations. The Civil Court granted the motion, and this appeal by plaintiff ensued.

A defendant moving for dismissal on statute of limitations grounds bears the initial burden of establishing, prima facie, that the time in which to sue has expired (see 6D Farm Corp. v Carr, 63 AD3d 903 [2009]; Island ADC, Inc. v Baldassano Architectural Group, P.C., 49 AD3d 815 [2008]). The time within which an action must be commenced is computed “from the time the cause of action accrued to the time the claim is interposed” (CPLR 203 [a]). In this case, the claim was interposed when the summons and complaint were filed on August 29, 2007 (CCA 400) and not, as defendant alternatively claims, on August 3, 2007 (the date of the summons and complaint) or on November 28, 2007 (the date of service on the New York State Department of Insurance). The parties agree that the six-year statute of limitations for contract actions is applicable to the instant case (CPLR 213 [2]; see Mandarino v Travelers Prop. Cas. Ins. Co., 37 AD3d 775 [2007]). Consequently, the statute of limitations bars any claim that accrued prior to [*2]August 29, 2001.

In order to make its prima facie showing, defendant was required, inter alia, to establish the date when the cause of action{**32 Misc 3d at 19} accrued (see Swift v New York Med. Coll., 25 AD3d 686 [2006]), i.e., when plaintiff possessed “a legal right to demand payment” (Matter of Prote Contr. Co. v Board of Educ. of City of N. Y., 198 AD2d 418, 420 [1993]). In the no-fault context, the cause of action accrues when payment of no-fault benefits becomes “overdue” (see Insurance Law § 5106 [a]; see also Benson v Boston Old Colony Ins. Co., 134 AD2d 214 [1987]; New Era Acupuncture, P.C. v MVAIC, 18 Misc 3d 139[A], 2008 NY Slip Op 50353[U] [App Term, 2d & 11th Jud Dists 2008]).

Upon a motion to dismiss pursuant to CPLR 3211 (a) (5), a court must take the allegations in the complaint as true and resolve all inferences in favor of the plaintiff (see Island ADC, Inc., 49 AD3d 815; Sabadie v Burke, 47 AD3d 913 [2008]). While plaintiff did not explicitly set forth in its complaint the date when each claim form was submitted or when each claim sought therein accrued, it averred that the accident occurred “on or about October 23, 2000,” that the claim forms in question were “timely submitted to the Defendant,” and that defendant “did not timely deny” the claims “nor did it timely request verification.” In moving to dismiss, defendant argued that even if all of plaintiff’s assertions are true, the action is untimely.

Defendant was required to “either pay or deny the claims in whole or in part” within 30 days after the claim forms were received (see former Insurance Department Regulations [11 NYCRR] § 65.15 [g] [3]).

There are, therefore, two methods to compute the accrual date in the case at bar: the first is measured, in part, from the last date on which written notice of the accident must be given to the insurer, and the second is measured, in part, from the date the services were rendered. Since the accident occurred on or about October 23, 2000, and the action was commenced on August 29, 2007, it is clear that plaintiff does not benefit by using the first computation method.

Using the second computation method to ultimately arrive at the accrual dates, the calculations begin by determining when, at the latest, a claim form was required to be submitted for each service rendered. We note that the dates of the services for which plaintiff sought reimbursement ranged from October 27, 2000 through April 24, 2001. Plaintiff had 180 days from the date each service was rendered to timely submit a claim seeking reimbursement therefor, and defendant had 30 days from its receipt to either pay or deny such claim. Consequently, accepting the truth of plaintiff’s allegations that it timely submitted{**32 Misc 3d at 20} the claims and that defendant did not timely deny them, the accrual date, or the date that payment of no-fault benefits became overdue for each service for which reimbursement was sought, was, at the very latest, 210 days after each service was rendered, and plaintiff was required to bring its action within six years thereafter (CPLR 213 [2]). Accordingly, since this action was commenced on August 29, 2007, plaintiff was barred from seeking reimbursement for services rendered more than six years and 210 days prior to August 29, 2007. Upon a review of the complaint, we find that, while defendant’s motion to dismiss was properly granted as to the earlier claims, defendant did not meet its initial burden of demonstrating that the action was untimely with respect to the March 8, 2001 claim for $540 (dates of service Feb. 1, 2001-Feb. 26, 2001), the April 6, 2001 claim for $630 (dates of service Mar. 2, 2001-Mar. 31, 2001), and the May 8, 2001 claim for $540 (dates of service Apr. 3, 2001-Apr. 24, 2001). Although the dissenting Justice points to the fact that some of the claim [*3]forms submitted to defendant were “date stamped” as having been received by defendant’s claims management company on a certain date, and that such date should therefore represent the date from which the accrual of the cause of action could be computed, in the absence of an affidavit of defendant’s claims representative or of someone with personal knowledge of defendant’s standard practice and procedure explaining when and by whom such documents were date-stamped, we are not inclined to state definitively that a particular claim form was actually received by defendant on the date stamped and that such date would therefore represent the date from which to measure the accrual date. While under some circumstances, a date stamped on a document might be used to contradict the assertions made by a party offering such document, under the circumstances presented herein, we find no basis, as the dissenting Justice apparently does, to give defendant movant the benefit of using the date stamped on the documents in question in order to bolster defendant’s position. Indeed, a party could readily backdate any document to give the impression that is was received on a certain date were we not to require said party to attest to the underlying facts surrounding the stamping of the document. Furthermore, even if we were to consider such stamped document as indicative of the date of its receipt, we note that there is no date stamped on the March 8, 2001 claim for $540 (dates of service Feb. 1, 2001-Feb. 26, 2001). Accordingly, in our opinion, the order should be modified to the extent indicated.{**32 Misc 3d at 21}

We note that plaintiff’s argument that it was error for defendant to proceed by way of an order to show cause and for the Civil Court to sign the order to show cause is without merit. Nor is there merit to plaintiff’s contention that defendant failed to lay a proper foundation for the exhibits attached to its motion papers, since it was proper for defense counsel to use his affirmation as the vehicle for the submission of the annexed documents in support of the relief requested (see Zuckerman v City of New York, 49 NY2d 557, 563 [1980]).

Golia, J. (dissenting in part and concurring in part and voting to affirm the order of the Civil Court in the following memorandum). While I agree with the majority in its determination that the Civil Court properly granted the branch of defendant’s motion seeking to dismiss the claims submitted by plaintiff which were dated from November 3, 2000 through February 9, 2001, I disagree with the majority in denying the branch of defendant’s motion seeking to dismiss the remaining claims submitted by plaintiff which were dated March 8, 2001, April 6, 2001 and May 8, 2001. My disagreement with the majority centers on the methodology it employed in analyzing this case. A recitation of the facts is necessary in order to understand how the majority reached its decision as well as why I dissent from the majority’s determination that dismissal of the aforementioned claims was not warranted.

The assignor, Mr. Ramirez, was injured in an auto accident on or about October 23, 2000. He was treated by plaintiff medical provider on numerous occasions from October 27, 2000 through April 24, 2001. Incidental to these treatments, plaintiff generated seven separate claim forms, with each claim form demanding payment for several dates of treatment. Each of these claim forms was dated after each month’s course of treatment and listed that month’s treatment on the form. For example, the earliest form was dated November 3, 2000, and contained a list of treatments dated October 27, 2000, October 30, 2000, and October 31, 2000. The last form was dated May 8, 2001, and contained a list of treatments dated April 3, 2001, April 6, 2001, April [*4]10, 2001, April 18, 2001, April 20, 2001, and April 24, 2001, which is apparently the last treatment provided. Defendant made certain payments but did not pay for all the treatments and did not pay at the rate billed.

No action was taken by plaintiff for more than six years. Thereafter, on August 29, 2007, plaintiff filed a summons and complaint dated August 3, 2007 in the Civil Court. Service was{**32 Misc 3d at 22} effectuated upon defendant on November 28, 2007, by service upon the New York State Department of Insurance. Defendant filed a timely answer in which it raised, among other defenses, the affirmative defense of the statute of limitations.

Defendant moved by order to show cause dated January 23, 2009 to dismiss the complaint pursuant to CPLR 3211 (a) (5) on the ground that the action was barred by the statute of limitations.

The Civil Court granted defendant’s motion by order entered February 18, 2009, which stated: “Upon the foregoing cited papers, the Decision/Order on Defendant’s Order to Show Cause, dismissing Plaintiff’s Summons & Complaint with Prejudice, pursuant to CPLR 3211 (a) (5), is granted, because Plaintiff’s complaint is time-barred by the Statute of Limitations.”

It is plaintiff’s appeal from this order that creates the issues now before us. In order to reverse the motion court’s finding, this court must find that the Civil Court was in error and did not have reasonable grounds to support its decision.

It is uncontested that there were multiple claim forms submitted. Each form was dated, and each dated form contained a list of multiple dates on which the services were performed. These were simply a series of bills.

Clearly, plaintiff sent seven monthly claim forms dated November 3, 2000; December 5, 2000; January 9, 2001; February 9, 2001; March 8, 2001; April 6, 2001; and May 8, 2001. Furthermore, these claim forms billed for the prior month’s treatments and these claims were submitted to defendant on or about the date that they were generated.

This analysis is further supported by examining the claim forms, which were all submitted as an exhibit to defendant’s original motion. These forms were apparently “date stamped” by defendant’s claim management company and those “date stamps” are reasonably related to the date the claim form was generated. In this case, the very last claim form was dated May 8, 2001 for services provided from April 3, 2001 to April 24, 2001. The “date stamp” marking on that document was May 18, 2001, which means that the claim would accrue on June 18, 2001 and that the statute of limitations would expire on June 18, 2007. These are actual dates of service and submission of the claim. There is no reason to add time as to unknown, simply a guess as to what might have been.{**32 Misc 3d at 23}

The majority in its analysis does not address the fact that there are monthly billing statements, and does not acknowledge what actually occurred herein. Instead it chooses to postulate that if a covered service is provided on a certain date and there are no requests for verifications, then the latest date upon which a claim can be submitted to the insurer is 180 days after services are rendered or notice is given (see former Insurance Department Regulations [11 [*5]NYCRR] § 65.12) plus 30 days thereafter to pay or deny the claim (see former Insurance Department Regulations [11 NYCRR] § 65.15 [g] [3]). This totals 210 days before a claim is past due. While such analysis is a correct statement of the law, it fails to acknowledge the reality of the matter before us. Plaintiff, in its opposition papers, did not state that each of these claim forms was submitted on the last possible date. Indeed, plaintiff conveniently failed to address the issue of when the claim forms were submitted. This is an unusual omission, considering the fact that plaintiff’s papers were in opposition to a motion by defendant to dismiss on the specific ground of timeliness, the failure of which should result in this court’s affirmance of the Civil Court’s order.

Under the current very relaxed requirement for no-fault cases, a plaintiff must nevertheless establish that it submitted its claim forms to the defendant. A plaintiff must do so either by affirmatively submitting proof of mailing (which will set a date) or by submitting defendant’s denial of claim form (which will set a date). Plaintiff’s failure to establish such proof of mailing renders this action premature. If a date is set, then the action must be dismissed as untimely.

It is for these reasons that I find the analysis by the majority to be unsupported in fact or law. I further find that the Civil Court had sufficient proof in its examination of the claim forms to warrant a finding that the statute of limitations had expired.

Pesce, P.J., and Steinhardt, J., concur; Golia, J., dissents in part and concurs in part in a separate memorandum.

Corona Hgts. Med., P.C. v Liberty Mut. Ins. Co.

2011 NY Slip Op 21130 [32 Misc 3d 8]

Accepted for Miscellaneous Reports Publication

AT2

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, July 27, 2011

[*1]

Corona Heights Medical, P.C., as Assignee of Dositeo A Arias Beltran, Appellant, v Liberty Mutual Ins. Co., Respondent.

Supreme Court, Appellate Term, Second Department, April 5, 2011

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn, for appellant. Bee Ready Fishbein Hatter & Donovan, LLP, Mineola (Michael Krall of counsel), for respondent.

{**32 Misc 3d at 9} OPINION OF THE COURT

Memorandum.

Ordered that the order is reversed, without costs, defendant’s motion to vacate the judgment entered on November 21, 2008 is denied and the judgment is reinstated.

Plaintiff commenced this action to recover assigned first-party no-fault benefits on October 5, 2005 and subsequently moved for summary judgment. Defendant opposed plaintiff’s motion. By order dated November 2, 2007, the Civil Court granted plaintiff’s motion, finding, among other things, that defendant had not established that its denials had been timely mailed. In a judgment entered on November 21, 2008, plaintiff was awarded the principal amount sought plus statutory interest and attorney’s fees. In the judgment, interest was calculated on each of the 12 claims at issue to commence 30 days after defendant’s receipt of each claim, as indicated on defendant’s claim denial forms.

Shortly after entry of the judgment, defendant moved, pursuant to CPLR 5015, to vacate the judgment, arguing that plaintiff was not entitled to the full amount of the judgment because the interest had been improperly calculated. Defendant contended that plaintiff was entitled to interest only from October 5, 2005, the date that plaintiff had commenced the action, and not, as plaintiff had computed, from 30 days after defendant’s receipt of the claim forms at issue. By order entered March 26, 2009, the Civil Court granted defendant’s motion to vacate the judgment and directed that the amount of interest awarded be recalculated to run from October 5, 2005 until November 2, 2007. This appeal by plaintiff ensued. [*2]

Insurance Law § 5106 (a) provides that first-party benefits are overdue “if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained . . . [and that] overdue payments shall bear interest at the rate of two percent per month.” If arbitration is not requested or an action is not commenced “within 30 days after the receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations, interest shall not accumulate on the disputed claim or element of claim until such action is taken” (Insurance Department Regulations [11 NYCRR] § 65-3.9 [c]). Furthermore, if a dispute has been submitted to arbitration or to the courts, “interest shall accumulate, unless the applicant unreasonably delays the . . . court proceeding” (Insurance Department Regulations [11 NYCRR] § 65-3.9 [d]).{**32 Misc 3d at 10}

Where, as here, a defendant has not established the proper mailing of the denial of claim form, the claim is considered not to have been denied and payment of benefits will therefore be considered to be “overdue” within the meaning of Insurance Law § 5106 (a). Accordingly, interest on the claim will not be tolled (cf. LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 12 NY3d 217, 223 [2009]), and commences to accrue “30 days after the claim was presented to the defendant for payment until the date the claim was or is paid” (Hempstead Gen. Hosp. v Insurance Co. of N. Am., 208 AD2d 501, 501 [1994]). As plaintiff calculated interest on the claims in question as commencing 30 days after defendant’s receipt of said claims, the Civil Court erred, in its order entered March 26, 2009, in directing that interest be recalculated from the date of the commencement of the action. Similarly, it was error to direct that interest accrue until the date of the order granting plaintiff’s motion for summary judgment, since interest accrues “until the date the claim was or is paid” (id.). It is noted that plaintiff is not entitled to interest pursuant to the Civil Practice Law and Rules, since Insurance Law § 5106 (a) and the regulations promulgated thereunder supersede the provisions for interest contained in the CPLR (Matter of Government Empls. Ins. Co. [Lombino], 57 AD2d 957, 959 [1977]; see also Smith v Nationwide Mut. Ins. Co., 211 AD2d 177 [1995]).

Accordingly, the order is reversed, defendant’s motion to vacate the judgment is denied, and the judgment entered on November 21, 2008 is reinstated.

Golia, J. (concurring in part and dissenting in part and voting to reverse the order and remit defendant’s motion to vacate the judgment to the Civil Court for a determination de novo following a hearing to determine the actual date the denial of claim forms were received by plaintiff).

Although I disagree with the majority in finding that the accumulation of interest will not be tolled until after a denial of claim (NF-10) was received by plaintiff, I am constrained to accept that analysis in view of a recent opinion letter issued by the Superintendent of the Insurance Department.

Opinions of General Counsel of the New York Insurance Department No. 10-09-05 (Sept. 14, 2010) states:

“2 . . . Interest is not tolled during the period that a claim becomes overdue until the insurer issues to the insured a denial of claim. Interest is only{**32 Misc 3d at 11} suspended or tolled from the date the claimant fails [*3]to commence an action within 30 days of the receipt of the denial of claim form until an action is actually commenced.”

Nevertheless, I find that the majority’s holding here that, “[w]here, as here, a defendant has not established the proper mailing of the denial of claim form[s], the claim is considered not to have been denied” is inappropriate.

A careful reading of the November 2, 2007 order of the Civil Court does not indicate, as the majority states, that defendant failed to establish “the proper mailing of the denial of claim form[s]” (emphasis added). The Civil Court simply found that “the affidavits proffered by defendant’s agents . . . did not establish . . . that defendant’s denials were timely mailed” (emphasis added). There is a distinction.

A defendant’s failure to prove timely mailing may well result in summary judgment for the plaintiff. However, as was made abundantly clear by the Court of Appeals in LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co. (12 NY3d 217 [2009]), the untimely mailing of a denial of claim form will not stop the tolling of interest.

Thus, by the confusion raised in this distinction, I further recommend that the Insurance Department revisit and clarify this issue. The punitive interest assessed against a carrier for failing to timely pay a valid claim was meant to serve as a strong incentive to pay claims in a timely manner and to punish those that do not. It would be inappropriate to allow a plaintiff to intentionally choose not to prosecute its claim in hopes that the carrier would not be able to establish mailing or that the court simply finds that it has not. Under those circumstances, the plaintiff would be receiving a windfall in excess of 24% interest per year for up to six years.

If the stated purpose of the No-Fault Law is to resolve claims expeditiously, then it must apply equally to the claimant as well as the carrier.

Weston, J.P., and Rios, J., concur; Golia, J., concurs in part and dissents in part in a separate memorandum.

[*1] Decided on April 1, 2011

District Court of Nassau County, Second District

Novacare Medical P.C., a/o Winston J. Thorpe, Plaintiff(s) against Travelers Property Casualty Ins. Co., Defendant(s).

07821/10

Friedman, Harfenist, Langer & Kraut, LLP 3000 Marcus Ave., Suite 2E1, Lake Success, NY 11042, Attorney for Plaintiff

Law Office of Karen Dodson, 100 Baylis Road, Suite 100, Melville, NY 11747, attorney for Defendant

Michael A. Ciaffa, J.

Defendant moves for an order granting it summary judgment dismissing plaintiff’s no-fault claims. Plaintiff opposes the motion.

The claims at issue involve electro-diagnostic testing that plaintiff performed upon its assignor, Winston J. Thorpe, based upon a neurologist’s referral. According to defendant’s peer review doctor, the medical records and findings that he reviewed “are inadequate in supporting the need for electro-diagnostic testing on this claimant.” Plaintiff’s opposition disputes the peer review doctor’s opinion, but it submits no expert proof of its own controverting the opinion of defendant’s expert.

Plaintiff’s opposition raises an important threshold legal question: is submission of an affirmed peer review report sufficient, by itself, to shift the burden to the plaintiff to submit opposing expert proof in order to defeat an insurer’s summary judgment motion? Recent Appellate Term decisions provide no clear answer to this question. Upon closer analysis, however, the Appellate Term’s decisions limit such burden shifting to cases where the peer review report sets forth a facially valid “factual basis and medical rationale.” While the quantum [*2]of proof needed to meet that burden may not be as stringent as required at a trial, cf. Nir v. Allstate Ins. Co., 7 Misc 3d 544, 546-7 (Civ Ct Kings Co 2005), the law continues to place the burden upon the defendant to satisfy the time-tested standards for obtaining summary judgment. If the opponent can show that an expert’s opinion is conclusory, or fails to address essential factual issues, or is based upon disputed or incorrect facts, the motion should be denied regardless of whether the opponent submits opposing expert proof. Nothing in the recent caselaw suggests the existence of a special exception for no-fault cases.

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The general rules governing summary judgment motions are well-settled. Summary judgment is a “drastic remedy” which “should not be granted where there is any doubt” as to the existence of a material triable issue. Sillman v. Twentieth Century-Fox, 3 NY2d 395, 404 (1957). The proponent of the motion “must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case.” Winegrad v, NYU Med Center, 64 NY2d 851, 853 (1985). “Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers.” Id.

Once the moving party meets its initial burden, “the burden shifts to the party opposing the motion. . . to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action.” Alvarez v. Prospect Hosp., 68 NY2d 329, 324 (1986). But the converse of this rule is equally true: unless and until the moving party meets its initial burden, the burden of submitting contrary evidentiary proof is not properly imposed on the opponent.

The latter rule finds common application in medical malpractice cases. In Winegrad v. NYU Med. Center, supra, for instance, the Court held that “bare conclusory assertions” from the defendant doctors, denying that they deviated “from good and accepted medical practices,” were insufficient to establish that a plaintiff’s cause of action “has no merit so as to entitle defendants to summary judgment.” 64 NY2d at 853. The Court of Appeals accordingly reversed a lower court decision granting summary judgment to the defendants. Id. It did so notwithstanding the fact that the plaintiffs had submitted “only their Counsel’s affidavit” in opposition to defendants’ motion. Id. at 852.

Likewise, where a defendant doctor’s medical expert fails to address essential factual issues in his moving affidavit contesting a claim of medical malpractice, and bases his opinion upon “disputed or apparently incorrect facts,” the Second Department’s decisions call for denial of the defendant’s motion “despite the insufficiency of the evidence proferred by the plaintiffs in opposition . . .” See e.g. Muscatello v. City of New York, 215 AD2d 463 (2d Dept. 1995); Gray v. South Nassau Communities Hosp., 245 AD2d 337 (2d Dept. 1997). [*3]

The instant no-fault action involves an area of the law that often presents similar issues of medical judgment, akin to those presented in a medical malpractice case. Over the last several years, the District Court has seen an increasing number of summary judgment motions by insurers seeking dismissal of a no-fault claim, based upon an affirmed peer review report. See generally, Siegel and Lusting, Insurer’s Use of Peer Review Report at Summary Judgment, NYLJ 6/15/09, at p. 1 col. 4. The trend in the Appellate Term decisions seems to look favorably upon such motions. Under the

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NOVACARE/THORPE V. TRAVELERS

controlling appellate court precedents, however, in order for the insurer to prevail on the motion, the peer review report must nonetheless set forth a sufficient “factual basis and medical rationale” for the peer doctor’s conclusions. Id., citing cases; see e.g. Elmont Open MRI v. Clarendon Natl. Ins. Co., 2010 NY Slip Op 52061 (App Term, 9th & 10th Jud Dists.).

The published decisions of the Appellate Term, Second Department, have not precisely defined the phrase “factual basis and medical rationale.” To the extent that lower courts have attempted to define the phrase, see e.g. Nir v. Allstate Ins. Co., supra, the Appellate Term, to date, has not accepted any one definition. Nor has it insisted upon proof from a peer review doctor that links the doctor’s opinion to “generally accepted” medical practices. See Elmont Open MRI v. Clarendon Nat. Ins. Co., 2010 NY Slip Op 52061, supra, reversing decision and order of District Court, Nassau Co. (Ciaffa, J.), dated May 12, 2009.

Nevertheless, this Court sees no indication in the Appellate Term’s recent decisions that a conclusory unsubstantiated peer review report, by itself, is enough to meet the insurer’s initial burden. Older decisions by the Appellate Term make plain that “bare, conclusory assertion[s]” in a peer review report are insufficient “to create a triable issue of . . . medical necessity.” See Choicenet Chiropractic P.C. v. Allstate Ins. Co., 2003 NY Slip Op 50672 (App Term, 2d & 11th Jud Dists). A fortiorari, “bare conclusory assertions” in a peer review report should likewise be insufficient to satisfy the moving party’s burden on a summary judgment motion alleging lack of medical necessity.

Moreover, if a peer review report ignores or misrepresents documented facts in the medical records, the opponent can and should be able to point out such shortcomings. Although the Appellate Term has held that the records and reports reviewed by the peer review doctor “are not part of the defendant’s prima facie showing,” see Active Imaging, P.C. v. Progressive Northeastern Ins. Co., 2010 NY Slip Op 51842 (App Term, 2d, 11th & 13th Jud Dists), the opponent can certainly make use of such reports and records in challenging whether the peer doctor’s opinion includes a sufficient “factual basis and medical rationale.” Absent appellate authority to the contrary, this Court sees no reason why plaintiff’s counsel cannot utilize the underlying medical records, as plaintiff’s counsel does here, as part of a broad-based effort to convince the Court that defendant’s moving papers are insufficient to meet the insurer’s burden [*4]on a motion for summary judgment.

In short, there appears to be no basis in the law, and no basis in logic, for accepting an affirmed peer review doctor’s opinion, carte blanche, without scrutinizing the report’s contents. As plaintiff’s counsel cogently argues, “[e]very peer review report is different and requires individual scrutiny to determine whether or not in contains a [sufficient] factual basis and medical rationale.” The Court agrees that such scrutiny is

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INDEX #07821/10

NOVACARE/THORPE V. TRAVELERS

necessary and appropriate before it decides whether the burden should be shifted back to the plaintiff to submit contrary expert proof. If the plaintiff can demonstrate, through references to the medical records or otherwise, that the peer review doctor’s opinion lacks a sufficient “factual basis” and/or “medical rationale” because it is conclusory, or because it fails to address essential factual issues or is based upon disputed or apparently incorrect facts, the defendant’s motion should be denied regardless of whether plaintiff submits expert proof of its own.

In the instant matter, plaintiff’s opposition points to such shortcomings in the peer review report. The peer review doctor’s opinion rests, in large part, upon his factual assumption that the medical records failed to document “persistent radicular symptoms”. However, as plaintiff’s counsel demonstrates, this assertion is contradicted by the very medical records that defendant’s expert reviewed.

Notably, the reports of claimant’s treating physicians document, over a course of nearly a month, the persistence of radiating pain in claimant’s neck and back. Several weeks after claimant’s accident, his family physician, Dr. Grigoran, performed a physical examination which resulted in an assessment of “cervical radiculopothy.” Upon Dr. Grigoran’s referral to a neurologist, Dr. Kahn, claimant was examined again. Despite having undergone weeks of conservative treatment, claimant was still suffering from “frequent” neck and back pain, accompanied by “numbness”. A cervical compression test was “positive” for “radicular symptomology.” So, too, the results of a Spurling test were reported as “positive”.

In light of theses symptoms and test results, Dr. Kahn’s diagnosis included findings of “Cervical/Lumbar radiculopothy,” and “Cervical radiculitis.” His recommendations included the performance of EMG/NCS tests of the cervical/lumbar spine and upper/lower extremities “to elucidate the degree and location of compression on existing nerve roots and peripheral nerves.” Not surprisingly, the electro-diagnostic test results revealed “an abnormal study, consistent with a left C5-6 and right L4-5 and L5-S1 radiculopothy.”

When such test results are viewed together with claimant’s well documented medical history, it is difficult to accept, at face value, the peer review doctor’s factual assumption that he found no evidence of “persistent radicular symptoms” which may have justified Dr. Kahn’s [*5]decision to recommend electro-diagnostic testing. Moreover, in the peer doctor’s description of the accepted standards and protocols for electro-diagnostic testing, defendant’s peer review doctor acknowledges that such tests may be medically appropriate for patients whose radicular symptoms “are persistent or unresponsive to initial conservative treatments.”

In the face of the medical record evidence, cited above, and the absence of

PAGE 5

INDEX #07821/10

NOVACARE/THORPE V. TRAVELERS

proof of a more definitive, clear cut standard for prescribing electro-diagnostic tests, plaintiff’s opposition makes a convincing case that defendant’s moving papers fail to meet its burden. To a significant extent, the peer review doctor’s opinion rests upon conclusory assumptions and disputed or incorrect facts. Consequently, such an opinion, by itself, is insufficient to prove defendant’s entitlement to judgment as a matter of law on its lack of medical necessity defense. In these circumstances, the absence of opposing expert proof from plaintiff is immaterial.

Finally, two other issues need to be addressed. The Court concludes that defendant’s proof of mailing of its denials is sufficient, and that its fee schedule defense was established, through proper proof, as a matter of law. Plaintiff’s opposition failed to demonstrate the existence of a triable issue on either point. Accordingly, at any subsequent trial of this action, defendant need not adduce proof of timely mailing of its denials, or adduce further proof of the fee schedule reduction. However, the issue of medical necessity will need to be tried.

SO ORDERED:

DISTRICT COURT JUDGE

Dated: April 1, 2011

[*1] Decided on March 29, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Lowe, III, P.J., Shulman, Hunter, Jr., JJ
571027/10.

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Raul Cruz, J.), entered on or about December 10, 2009, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Raul Cruz, J.), entered on or about December 10, 2009, reversed, without 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 duly mailed the notices of the independent medical examinations (IMEs) to the assignor and that the assignor failed to appear for the IMEs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2006]). In opposition, plaintiff failed to raise a triable issue regarding the reasonableness of the requests or the assignors’ failure to attend the IMEs (see Inwood Hill Med. P.C. v General Assur. Co., 10 Misc 3d 18, 20 [2005]; Marina v Praetorian Ins. Co., 28 Misc 3d 132[A], 2010 NY Slip Op 51292[U] [2010]). Plaintiff’s contention that defendant failed to prove the mailing of the IME notices to the assignor’s attorney is unavailing absent competent proof in the record establishing that the assignor was represented by counsel with regard to the subject no-fault claim.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: March 29, 2011

State Farm Mut. Auto. Ins. Co. v Langan

2011 NY Slip Op 02437 [16 NY3d 349]

March 29, 2011

Lippman, Ch. J.

Court of Appeals

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, May 11, 2011

[*1]

State Farm Mutual Automobile Insurance Company, Respondent-Appellant, v John Robert Langan, as Administrator of the Estate of Neil Conrad Spicehandler, Deceased, Appellant-Respondent.

Argued February 8, 2011; decided March 29, 2011

State Farm Mut. Auto. Ins. Co. v Langan, 55 AD3d 281, modified.

{**16 NY3d at 352} OPINION OF THE COURT

Chief Judge Lippman. [*2]

At issue in this appeal is whether the insured decedent, the victim of an intentional crime, was injured as the result of an accident within the meaning of the uninsured motorist endorsement and certain other provisions of the insured’s policy. Since the occurrence must be viewed from the insured’s perspective, we conclude that it was indeed an accident and that the insured is entitled to benefits under the policy provisions at issue.

Decedent, Neil Conrad Spicehandler, was struck by a vehicle at 7th Avenue and 32nd Street in Manhattan on February 12, 2002. He sustained a compound fracture of his left lower leg, requiring surgery, and died from complications shortly after the operation. Decedent was one of many who were injured when the driver, Ronald Popadich, intentionally drove his vehicle into pedestrians. Popadich later pleaded guilty to second degree murder and admitted that he intended to cause Spicehandler’s death.

Decedent was an insured under an automobile liability policy purchased by defendant Langan through plaintiff State Farm. As the administrator of decedent’s estate, Langan made a claim{**16 NY3d at 353} seeking to recover benefits under the policy’s uninsured/underinsured motorist (UM) endorsement, mandatory personal injury protection endorsement (PIP endorsement) and death, dismemberment and loss of sight endorsement (Coverage S).^[FN*] The policy’s UM endorsement provides that it

“will pay all sums that the insured or the insured’s legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured, caused by an accident arising out of such uninsured motor vehicle’s ownership, maintenance or use”

subject to relevant policy exclusions. The PIP endorsement and Coverage S likewise state that they will pay benefits for injuries sustained as the result of “an accident.” These endorsements exclude coverage on several bases, but none specifically excludes coverage for an injury that results from intentional conduct. State Farm denied and disclaimed liability because it determined, as relevant here, that decedent’s death was caused not by an accident, but by the intentional conduct of the operator of the vehicle.

State Farm commenced this declaratory judgment action seeking a declaration that it was not obligated to provide benefits in connection with decedent’s death. Defendant answered and counterclaimed, requesting a declaration that State Farm was required to provide coverage under the policy. Plaintiff’s motion and defendant’s cross motion for summary judgment were denied because the parties had not, at that point, provided the court with information regarding [*3]the outcome of the criminal action against Popadich, which the court deemed “essential” to determining whether decedent’s injuries were caused by an intentional act (2004 NY Slip Op 30243[U]). The Appellate Division upheld the portion of the Supreme Court order that denied summary judgment on the issue of whether the incident was covered by the policy, finding that there was insufficient proof to determine whether decedent had been the victim of an intentional crime, but that, if he had, the incident would not be covered (18 AD3d 860, 862 [2d Dept 2005]).

After Popadich was convicted of second degree murder, State Farm renewed its motion for summary judgment, again seeking{**16 NY3d at 354} a declaration that it was not required to provide benefits under the policy. Langan opposed the motion and cross-moved for summary judgment, urging that whether the incident was an accident within the meaning of the policy must be determined from the perspective of the insured. Supreme Court granted State Farm’s motion and denied Langan’s cross motion on the basis of Popadich’s conviction (2006 NY Slip Op 30400[U]).

On appeal, a majority of the Appellate Division modified to declare that State Farm was required to provide benefits under the mandatory PIP and Coverage S endorsements and, as so modified, affirmed (55 AD3d 281 [2d Dept 2008]). The Court determined that State Farm was not required to provide UM benefits because the purpose of statutorily required uninsured motorist coverage is to provide an individual with the same level of coverage he or she would be entitled to if injured in an accident with an insured motorist covered by an applicable policy. Since a standard liability policy would not have covered Popadich for his intentional criminal conduct, the Court found that Langan’s UM coverage was not applicable under the circumstances presented here. However, the Court determined that in other contexts it was appropriate to determine whether a particular event was an accident from the insured’s point of view, that the incident was clearly unexpected from decedent’s perspective and that, as a result, State Farm was required to provide coverage under the PIP and Coverage S endorsements.

Two Justices dissented in part and would have affirmed Supreme Court’s order declaring that State Farm was not required to provide coverage. The dissent agreed that Langan was not entitled to UM benefits under current law based on Popadich’s intentional conduct, but observed that there had been a recent national trend to allow for coverage in similar circumstances and that strong public policy considerations weighed in favor of coverage. The dissent would have denied PIP and Coverage S benefits based on the law of the case and, in any event, disagreed that the same term should be interpreted differently within the same policy. Both parties appeal pursuant to leave granted by the Appellate Division, which certified for our review the question of whether its order was properly made. We modify and answer the certified question in the negative.

This appeal turns on whether decedent’s injuries were caused by an accident [*4]within the meaning of the policy. Although the endorsements at issue do not define the term “accident,” we have previously held that it is not to be “given a narrow,{**16 NY3d at 355} technical definition,” but should be interpreted according to how it would be understood by the average person (Miller v Continental Ins. Co., 40 NY2d 675, 676 [1976]). We have determined that, for purposes of automobile insurance policies, the term “accident” means an event typically involving violence or the application of external force (see Michaels v City of Buffalo, 85 NY2d 754, 758 [1995]). In order to determine whether a particular event was ” ‘accidental, it is customary to look at the casualty from the point of view of the insured, to see whether or not . . . it was unexpected, unusual and unforeseen’ ” (Miller, 40 NY2d at 677 [citation omitted]). Although we have noted that the perspective of the injured victim should not be used to determine whether an accident has occurred, ” ‘[b]ecause an injury is always fortuitous to a non-consenting victim’ ” (Michaels, 85 NY2d at 759 [citation omitted]), here we have the situation where the victim is also the insured.

It is clear that, viewed from the insured’s perspective, the occurrence was an unexpected or unintended event—and therefore an “accident”—even though Popadich admittedly intended to strike decedent with the vehicle. The language of the policy also suggests that this type of situation would be covered as it was an accident caused by the use of a motor vehicle that did not have an applicable insurance policy. Significantly, Insurance Department regulations require that an automobile owner’s liability insurance policy contain a provision specifying “that assault and battery shall be deemed an accident unless committed by or at the direction of the insured” (11 NYCRR 60-1.1 [f]). Although the provisions at issue here do not involve liability coverage, the regulation is relevant to the understanding of the extent of coverage provided by the endorsements.

The argument against requiring coverage, advanced by State Farm and relied upon by the Appellate Division, is based on the general principle that mandatory uninsured motorist benefits are meant to provide coverage that is coextensive with, and not greater than, that afforded by a standard liability policy. They rely on our statement that the purpose of mandatory UM benefits is ” ‘to provide the insured with the same level of protection he or she would provide to others were the insured a tortfeasor in a bodily injury accident’ ” (Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d 196, 204 [2007], quoting Matter of Prudential Prop. & Cas. Co. v Szeli, 83 NY2d 681, 687 [1994]).

In support of its position, State Farm relies on McCarthy v Motor Veh. Acc. Indem. Corp. (16 AD2d 35 [4th Dept 1962], affd{**16 NY3d at 356} 12 NY2d 922 [1963]), a case where the plaintiff victim was injured when the insured motorist committed an intentional assault against her using his vehicle. After the insurer denied coverage because the occurrence was not an [*5]accident within the meaning of the policy, plaintiff sought to recover under the policy’s MVAIC endorsement—a statutorily required endorsement intended to afford coverage to a person injured by an uninsured or unidentified motorist, equal to that available to one injured by a motorist covered by an applicable liability policy (see McCarthy, 16 AD2d at 38). MVAIC is funded by assessments levied against all of the insurance companies licensed to conduct business in the state (see McCarthy, 16 AD2d at 39). McCarthy held that since an intentional assault committed by an insured motorist was not an accident subject to coverage under the standard liability policy, such an occurrence would likewise be excluded from coverage under the MVAIC endorsement (see 16 AD2d at 43). The Court also determined that allowing recovery under MVAIC would be inconsistent with the purpose for which the special fund had been established (see McCarthy, 16 AD2d at 44).

This case differs from McCarthy in two important respects. First, UM coverage, although required by statute, is part of the insured’s own policy—a policy that the insured selected and for which he pays premiums. Benefits received through coverage under the UM endorsement do not come out of a state fund. Second, the insured is the victim in this case, not the tortfeasor, and the public policy against providing coverage for an insured’s criminal acts is not implicated.

We hold that, consistent with the reasonable expectation of the insured under the policy and the stated purpose of the UM endorsement (to provide coverage against damage caused by uninsured motorists), the intentional assault of an innocent insured is an accident within the meaning of his or her own policy. The occurrence at issue was clearly an accident from the insured’s point of view and Langan is entitled to benefits under the UM endorsement.

This result is also in keeping with the national trend toward allowing innocent insureds to recover uninsured motorist benefits under their own policies when they have been injured through the intentional conduct of another (see e.g. American Family Mut. Ins. Co. v Petersen, 679 NW2d 571 [Iowa 2004]; Shaw v City of Jersey City, 174 NJ 567, 811 A2d 404 [2002]; Wendell v State Farm Mut. Auto. Ins. Co., 293 Mont 140, 974{**16 NY3d at 357} P2d 623 [1999]). Although the above decisions are not binding on this Court, we are persuaded that the view that has been adopted by these jurisdictions is the better one.

For many of the same reasons, Langan is entitled to coverage under the PIP endorsement and Coverage S. The average insured’s understanding of the term “accident” is unlikely to vary from endorsement to endorsement within the same policy. The occurrence, from the insured’s perspective, was certainly unexpected and unforeseen and should be considered an accident subject to coverage. Contrary to State Farm’s argument, we perceive no danger that this result will frustrate efforts to fight fraud in the no-fault insurance system. Significantly, there is [*6]no allegation whatsoever of fraud in this case and it is patent that benefits should continue to be denied to those who intentionally cause their own injuries.

The argument that Langan is entitled to attorneys’ fees was not addressed by the courts below and should be remitted to Supreme Court for its determination in the first instance.

Accordingly, the order of the Appellate Division should be modified, without costs, by granting defendant judgment declaring in accordance with this opinion and remitting to Supreme Court for further proceedings in accordance with this opinion, and, as so modified, affirmed. The certified question should be answered in the negative.

Smith, J. (dissenting). I would affirm the order of the Appellate Division.

As a general matter, it is true that whether a particular event is an “accident” should be viewed from the point of view of the insured. The insured here was Spicehandler, the event was an accident from his point of view, and his estate was therefore properly allowed to recover under the so-called PIP and Coverage S endorsements.

But uninsured/underinsured motorists (UM) coverage is different. Its purpose is to protect an insured who is injured by a tortfeasor without liability insurance—a purpose accomplished by putting the insured in the position that he would have been in if the tortfeasor had been insured. This requires a determination of whether the tortfeasor could have made a claim under a hypothetical policy of liability insurance—and the tortfeasor should thus be treated as the “insured” for purposes of analysis. Since Popadich drove his car into Spicehandler on purpose, the event was not an accident from Popadich’s point of view;{**16 NY3d at 358} Popadich could not have obtained indemnification from a liability insurer; and Spicehandler’s estate should not be permitted to recover under the UM endorsement.

This is essentially what we held when we affirmed the Appellate Division’s decision in McCarthy v Motor Veh. Acc. Indem. Corp. (16 AD2d 35 [4th Dept 1962], affd 12 NY2d 922 [1963]). The majority tries to distinguish McCarthy on what it calls two grounds, which seem really to be one—that UM coverage is “part of the insured’s own policy” and that “the insured is the victim in this case, not the tortfeasor” (majority op at 356). The distinction will not withstand analysis. The purpose of UM coverage is the same as the purpose of the MVAIC endorsement at issue in McCarthy: “to afford coverage,” as the majority puts it, “to a person injured by an uninsured or unidentified motorist, equal to that available to one injured by a motorist covered by an applicable liability policy” (majority op at 356). The essential rationale for McCarthy is that the victim of an uninsured motorist should not be in a better position than the victim of an insured one. That rationale was sound in McCarthy, and is sound here. [*7]

I see no justification for departing from McCarthy. A more serious argument might be made—though it is not made here—for a more significant change in the law: modifying, in cases involving automobile liability policies required by statute, the general rule that liability insurance cannot cover intentional torts. As McCarthy mentions, a standard automobile liability policy provides coverage only for accidents, and thus would not cover “an assault and battery committed by the insured” (16 AD2d at 41; see also e.g. Matter of Travelers Indem. Co. v Richards-Campbell, 73 AD3d 1076 [2d Dept 2010]; Matter of Aetna Cas. & Sur. Co. v Perry, 220 AD2d 497 [2d Dept 1995]). This limitation seems to be derived from the long-established rule, based on public policy, that insurance may not indemnify a tortfeasor for intentional wrongdoing (Messersmith v American Fid. Co., 232 NY 161, 165 [1921]; Town of Massena v Healthcare Underwriters Mut. Ins. Co., 98 NY2d 435, 445 [2002]). Courts in some jurisdictions have made compulsory liability insurance an exception to this rule, reasoning that the purpose of liability insurance, to the extent that it is required by law, is to protect injured victims, not tortfeasors, and that victims should be protected no less against intentional than against negligent torts (e.g. Speros v Fricke, 98 P3d 28, 36-38 [Utah 2004]; Dotts v Taressa J.A., 182 W Va 586, 390 SE2d 568 [1990]; Wheeler v{**16 NY3d at 359} O’Connell, 297 Mass 549, 9 NE2d 544 [1937]). Whether such an exception is justified, and if so whether it should be created by judges or by legislators, are questions that we should not address until we have a case that presents them.

Judges Ciparick, Graffeo, Pigott and Jones concur with Chief Judge Lippman; Judge Smith dissents and votes to affirm in a separate opinion in which Judge Read concurs.

Order modified, etc.

Footnotes

Footnote *: This action solely concerns claims made under Langan’s own policy—not the policy of either the driver or the vehicle.

Matter of New York Schools Ins. Reciprocal v Armitage

2011 NY Slip Op 02191 [82 AD3d 1628]

March 25, 2011

Appellate Division, Fourth Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, May 11, 2011

In the Matter of New York Schools Insurance Reciprocal, Appellant, v Patricia Armitage, Respondent. Alex Celniker et al., Proposed Additional Respondents.

—[*1] Baxter Smith & Shapiro, P.C., West Seneca (Lauren E. Dillon of counsel), for petitioner-appellant.

Louden Law Firm, P.C., Malta (Michelle Murphy-Louden of counsel), for respondent-respondent Patricia Armitage.

Appeal from an order of the Supreme Court, Erie County (Rose H. Sconiers, J.), entered February 10, 2010. The order denied the petition for a stay of arbitration.

It is hereby ordered that the order so appealed from is unanimously affirmed without costs.

Memorandum: Petitioner appeals from an order denying its petition seeking a permanent stay of arbitration. Respondent sought arbitration following petitioner’s denial of her claim for no-fault insurance benefits. The propriety of the denial of benefits is a “dispute involving the insurer’s liability to pay first party benefits” (Insurance Law § 5106 [b]), and we therefore conclude that Supreme Court properly refused to grant a permanent stay of arbitration (see generally Ryder Truck Lines v Maiorano, 44 NY2d 364, 368-369 [1978]). Petitioner further contends that the issue whether the offset for workers’ compensation benefits exceeds the monthly limit of first party benefits is not a matter for arbitration. We reject that contention (see Insurance Law § 5102 [a] [2]; see generally § 5106 [b]; Matter of Johnson v Buffalo & Erie County Private Indus. Council, 84 NY2d 13, 18-19 [1994]; Matter of Cady [Aetna Life & Cas. Co.], 96 AD2d 967 [1983], affd 61 NY2d 594 [1984]). Finally, we reject petitioner’s contention that, by refusing to grant a permanent stay of arbitration, the court denied petitioner its right to seek a loss-transfer claim from additional proposed respondents (see generally Matter of Liberty Mut. Ins. Co. [Hanover Ins. Co.], 307 AD2d 40, 42-43 [2003]). Present—Scudder, P.J., Fahey, Carni, Green and Gorski, JJ.

[*1] Decided on March 24, 2011

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: Shulman, J.P., Hunter, Jr., J.
570324/10

Shulman, J.P., Hunter, Jr., J.

Allstate Insurance Company,NY County Clerk’s No. Petitioner-Appellant,570324/10 -against- Alexandre DeMoura a/a/oCalendar No. 10-162 Miriam Cruceta, Respondent-Respondent. Petitioner appeals from an order of the Civil Court of the City of New York, New York County (Tanya R. Kennedy, J.), dated March 16, 2009, which denied its petition to vacate an arbitration award in favor of respondent awarding him unpaid no-fault benefits in the principal sum of $11,170.42, and granted respondent’s cross petition to confirm the arbitration award. Per Curiam. Order (Tanya R. Kennedy, J.), dated March 16, 2009, reversed, without costs, and matter remanded to Civil Court for a framed issue hearing regarding whether the $50,000 limit of the subject insurance policy was exhausted before petitioner-insurer was obligated to pay respondent’s claim. When an insurer “has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]). A defense that the coverage limits of the policy have been exhausted may be asserted by an insurer despite its failure to issue a denial of the claim within the 30-day period (New York & Presby. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]), and an arbitrator’s award directing payment in excess of the $50,000 limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d at 245; 11 NYCRR 65-1.1). Moreover, as petitioner-insurer correctly argues, such error “will not be waived if the party relying on it asserts it . . . in opposition to an application for confirmation” (Matter of Brijmohan v State Farm Ins. Co., 92 NY2d at 822). Here, petitioner’s submissions on its motion to vacate the arbitration award and in opposition to respondent’s cross motion to confirm the award raised a triable issue of fact regarding whether the $50,000 policy limit had been exhausted before payment could be made to respondent on its claim (see 11 NYCRR 65-3.15). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue. We note that petitioner’s remaining arguments are without merit. THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. I concurI concur Decision Date: March 24, 2011

MARCH 24, 2011
SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT
								June 2010 Term

Petitioner appeals from an order of the Civil Court of the City of New York, New York County (Tanya R. Kennedy, J.), dated March 16, 2009, which denied its petition to vacate an arbitration award in favor of respondent awarding him unpaid no-fault benefits in the principal sum of $11,170.42, and granted respondent’s cross petition to confirm the arbitration award.

Per Curiam.

Order (Tanya R. Kennedy, J.), dated March 16, 2009, reversed, without costs, and matter remanded to Civil Court for a framed issue hearing regarding whether the $50,000 limit of the subject insurance policy was exhausted before petitioner-insurer was obligated to pay respondent’s claim.

When an insurer “has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Countrywide Ins. Co. v Sawh, 272 AD2d 245 [2000]). A defense that the coverage limits of the policy have been exhausted may be asserted by an insurer despite its failure to issue a denial of the claim within the 30-day period (New York & Presby. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]), and an arbitrator’s award directing payment in excess of the $50,000 limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 822 [1998]; Countrywide Ins. Co. v Sawh, 272 AD2d at 245; 11 NYCRR 65-1.1). Moreover, as petitioner-insurer correctly argues, such error “will not be waived if the party relying on it asserts it . . . in opposition to an application for confirmation” (Matter of Brijmohan v State Farm Ins. Co., 92 NY2d at 822).

Here, petitioner’s submissions on its motion to vacate the arbitration award and in opposition to respondent’s cross motion to confirm the award raised a triable issue of fact regarding whether the $50,000 policy limit had been exhausted before payment could be made to respondent on its claim (see 11 NYCRR 65-3.15). Therefore, we remand the matter to Civil Court for a framed issue hearing on that issue.

We note that petitioner’s remaining arguments are without merit.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. [*2]

I concurI concur
Decision Date: March 24, 2011

Westchester Med. Ctr. v Lincoln Gen. Ins. Co.

2011 NY Slip Op 02379 [82 AD3d 1085]

March 22, 2011

Appellate Division, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, May 11, 2011

Westchester Medical Center, Respondent, v Lincoln General Insurance Company, Appellant.

—[*1] Bruno, Gerbino & Soriano, LLP, Melville, N.Y. (Charles W. Benton of counsel), for appellant. Joseph Henig, P.C., Bellmore, N.Y., for respondent.

In an action to recover no-fault medical benefits under an insurance contract, the defendant appeals from an order of the Supreme Court, Nassau County (Martin, J.), entered October 28, 2009, which denied its motion pursuant to CPLR 5015 (a) to modify a judgment of the same court dated April 30, 2009, which, upon an order granting the plaintiff’s motion for summary judgment on the complaint, was in favor or the plaintiff and against it in the principal sum of $416,039.42.

Ordered that the order entered October 28, 2009, is affirmed, with costs.

The plaintiff hospital, as assignee of Bartolo Reyes, was awarded judgment against the defendant in the principal sum of $416,039.42, in this action to recover no-fault medical benefits under a contract of insurance entered into between the plaintiff’s assignee and the defendant. The defendant thereafter moved to modify the judgment pursuant to CPLR 5015 (a), belatedly asserting that the judgment exceeded the coverage limit of the subject policy due, in part, to payments previously made under the policy to other health care providers. In the order appealed from, the Supreme Court properly denied the defendant’s motion to modify the judgment.

The defendant failed to specify on which of the five subdivisions of CPLR 5015 (a) its motion was based, much less establish its entitlement to relief on any of the enumerated grounds. To the extent that the defendant sought modification pursuant to CPLR 5015 (a) (2) based upon “newly-discovered evidence,” the defendant failed to demonstrate that the evidence offered in support of the motion, i.e., an affidavit of an employee setting forth the policy limits and the amount of benefits paid for alleged prior claims, “was not available at the time of the prejudgment proceedings” (Jonas v Jonas, 4 AD3d 336, 336 [2004]; see Sicurelli v Sicurelli, 73 AD3d 735 [2010]).

Moreover, although courts possess inherent discretionary power to grant relief from a judgment or order in the interest of justice, this “extraordinary relief” is not appropriate under the circumstances presented (Jakobleff v Jakobleff, 108 AD2d 725, 726-727 [1985]; see Selinger v Selinger, 250 AD2d 752 [1998]). The plaintiff previously moved for summary judgment on the complaint, seeking a certain amount of benefits, in accordance with the no-fault billing statement sent to the defendant, and [*2]this Court reversed the denial of that motion and granted the plaintiff’s motion for summary judgment on the complaint (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2009]). Only after the plaintiff obtained, upon this Court’s order, a judgment from the Clerk of the Supreme Court, Nassau County, representing, inter alia, the amount of benefits sought in the complaint, did the defendant raise the issue of exhaustion of the policy limits. Under these circumstances, modification of the judgment in the interest of justice is not warranted.

The parties’ remaining contentions are without merit. Skelos, J.P., Balkin, Austin and Sgroi, JJ., concur.

Motion by the respondent to dismiss an appeal from an order of the Supreme Court, Nassau County (Martin, J.), entered October 28, 2009, on the ground that the appeal is frivolous, and to impose a sanction upon the appellant and for an award of an attorney’s fee. By decision and order on motion of this Court dated March 19, 2010, the motion was held in abeyance and referred to the panel of Justices hearing the appeal for determination upon the argument or submission thereof.

Upon the papers filed in support of the motion, the papers filed in opposition or relation thereto, and upon the argument of the appeal, it is

Ordered that the motion is denied. Skelos, J.P., Balkin, Austin and Sgroi, JJ., concur.