[*1] Decided on October 22, 2010

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

PRESENT: McKeon, P.J., Schoenfeld, Hunter, Jr., JJ
570112/10.

McKeon, P.J., Schoenfeld, Hunter, Jr., JJ.

New Millenium Medical SupplyNY County Clerk’s No. 570112/10 a/a/o Gibson Stayman, Plaintiff-Respondent, against Calendar No. 10-106 Clarendon National Insurance Company, Defendant-Appellant. Defendant appeals from an order of the Civil Court of the City of New York, New York County (Peter H. Moulton, J.), dated April 23, 2009, which denied its motion for summary judgment dismissing the complaint. Per Curiam. Order (Peter H. Moulton, J.), dated April 23, 2009, reversed, with $10 costs, motion granted and complaint dismissed. The Clerk is directed to enter judgment accordingly. Plaintiff’s cause of action to recover assigned first-party no-fault benefits pursuant to a policy of insurance was not interposed within the applicable six-year statute of limitations (see Mandarino v Travelers Property Cas. Ins. Co., 37 AD3d 775 [2007]), since the cause of action accrued on the date the claim became overdue — here, 30 days after defendant’s receipt of the claim — not the date of defendant’s untimely denial of the claim (see Matter of Travelers Indem. Co. of Conn. v Glenwood Med., P.C., 48 AD3d 319 [2008]; Benson v Boston Old Colony Ins. Co., 134 AD2d 214 [1987], lv denied 71 NY2d 801 [1988]). Plaintiff’s reliance on Matter of Taggart v State Farm Mut. Auto. Ins. Co. (272 AD2d 222 [2000]) is misplaced, since that case involved a general denial of claim issued under 11 NYCRR 65.15(g)(2)(ii) (now 65-3.8[b][2]) terminating no-fault benefits on the ground that the claimant was no longer disabled, while the matter at bar involves the factually and legally distinct situation in which a specific claim for no-fault benefits has been submitted to an insurer for payment or denial. Therefore, the complaint should have been dismissed as time-barred (see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1]; Matter of Travelers Indem. Co. of Conn., supra; Benson, supra). THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT. Decision Date: October 22, 2010

10/22/2010
SUPREME COURT, APPELLATE TERM, FIRST DEPARTMENT
								April 2010 Term

Defendant appeals from an order of the Civil Court of the City of New York, New York County (Peter H. Moulton, J.), dated April 23, 2009, which denied its motion for summary judgment dismissing the complaint.

Per Curiam.

Order (Peter H. Moulton, J.), dated April 23, 2009, reversed, with $10 costs, motion granted and complaint dismissed. The Clerk is directed to enter judgment accordingly.

Plaintiff’s cause of action to recover assigned first-party no-fault benefits pursuant to a policy of insurance was not interposed within the applicable six-year statute of limitations (see Mandarino v Travelers Property Cas. Ins. Co., 37 AD3d 775 [2007]), since the cause of action accrued on the date the claim became overdue — here, 30 days after defendant’s receipt of the claim — not the date of defendant’s untimely denial of the claim (see Matter of Travelers Indem. Co. of Conn. v Glenwood Med., P.C., 48 AD3d 319 [2008]; Benson v Boston Old Colony Ins. Co., 134 AD2d 214 [1987], lv denied 71 NY2d 801 [1988]). Plaintiff’s reliance on Matter of Taggart v State Farm Mut. Auto. Ins. Co. (272 AD2d 222 [2000]) is misplaced, since that case involved a general denial of claim issued under 11 NYCRR 65.15(g)(2)(ii) (now 65-3.8[b][2]) terminating no-fault benefits on the ground that the claimant was no longer disabled, while the matter at bar involves the factually and legally distinct situation in which a specific claim for no-fault benefits has been submitted to an insurer for payment or denial. Therefore, the complaint should have been dismissed as time-barred (see Insurance Law § 5106[a]; 11 NYCRR 65-3.8[a][1]; Matter of Travelers Indem. Co. of Conn., supra; Benson, supra).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: October 22, 2010

Matter of Falzone (New York Cent. Mut. Fire Ins. Co.)

2010 NY Slip Op 07417 [15 NY3d 530]

October 21, 2010

Jones, J.

Court of Appeals

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

As corrected through Wednesday, January 12, 2011

[*1]

In the Matter of the Arbitration between Carmen I. Falzone, Now Known as Carmen I. Cordero, Appellant, and New York Central Mutual Fire Insurance Company, Respondent.

Argued September 16, 2010; decided October 21, 2010

Matter of Falzone (New York Cent. Mut. Fire Ins. Co.), 64 AD3d 1149, affirmed.

{**15 NY3d at 532} OPINION OF THE COURT

Jones, J.

In this CPLR article 75 proceeding arising from respondent’s determination denying petitioner’s claim for supplementary uninsured/underinsured motorist (SUM) benefits, the primary issue before this Court is whether the SUM arbitrator exceeded the scope of his authority by not [*2]giving preclusive effect to a prior arbitration award involving the same parties and accident.

On May 15, 2004, petitioner was involved in a two-car collision. Subsequently, she filed a claim for no-fault benefits with respondent insurer, alleging she had injured her shoulder. When respondent denied petitioner’s no-fault claim on the ground that her shoulder injury was not related to the accident, petitioner challenged the denial in arbitration. Disagreeing with respondent’s denial, the no-fault arbitrator, in May 2008, ruled{**15 NY3d at 533} that respondent’s denial based on lack of relatedness was inappropriate and awarded petitioner $4,354.56 in no-fault benefits.

After petitioner settled her lawsuit against the driver of the other vehicle for that driver’s $25,000 policy limit, she sought SUM benefits in the amount of $75,000 from respondent insurer. Citing the prior denial of no-fault benefits as being unrelated to the accident, respondent denied the claim for SUM benefits. On February 28, 2008, during the pendency of the no-fault arbitration, petitioner sought to challenge the denial of SUM benefits in a separate arbitration proceeding.

At the hearing in the SUM arbitration, held about two months after the decision in the no-fault arbitration, respondent again argued that the injury was unrelated to the accident, while petitioner countered that the SUM arbitrator was bound by the prior determination of the no-fault arbitrator under the doctrine of collateral estoppel. After the hearing, in August 2008, the SUM arbitrator issued an award in favor of respondent denying SUM benefits. In a finding directly opposite that of the no-fault arbitrator, the SUM arbitrator concluded that petitioner’s injury was not caused by the accident, and also found that her recovery from the other driver was more than adequate compensation for any injuries sustained in the accident.

Thereafter, petitioner commenced this CPLR article 75 proceeding to set aside the SUM arbitration award in respondent’s favor. Petitioner argued that respondent was collaterally estopped from relitigating the causation issue. Respondent sought confirmation of the award.

Supreme Court vacated the SUM arbitration award and ordered that a new arbitration be scheduled before a different arbitrator. The court concluded that although it is within an arbitrator’s discretion to determine the preclusive effect of a prior arbitration award, here, there was nothing in the SUM arbitrator’s decision to indicate whether petitioner’s collateral estoppel argument was even considered.

By a 3-2 vote, the Appellate Division reversed Supreme Court’s order and confirmed the SUM arbitration award (64 AD3d 1149 [4th Dept 2009]). The majority concluded that (1) “[t]he fact that a prior arbitration award is inconsistent with a subsequent award” is not a ground, pursuant to CPLR 7511, for vacating an arbitration award, (2) it is within the arbitrator’s sole discretion to determine the preclusive effect of a prior award, and (3) “the SUM arbitrator [*3]was not required to state{**15 NY3d at 534} that he had considered” the collateral estoppel argument raised before him. (64 AD3d at 1150.) The dissenting Justices countered that the SUM arbitrator exceeded his power by disregarding the preclusive effect of the prior no-fault arbitration award, which involved the same parties and was based on the same facts. Petitioner appeals as of right pursuant to CPLR 5601 (a); we now affirm.

It is well settled that a court may vacate an arbitration award only if it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator’s power (see Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]; Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, 79 [2003]; CPLR 7511 [b] [1] [iii]). Even where an arbitrator has made an error of law or fact, courts generally may not disturb the arbitrator’s decision (see Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d at 336 [“(C)ourts are obligated to give deference to the decision of the arbitrator. This is true even if the arbitrator misapplied the substantive law in the area of the contract” (citations omitted)]). Here, petitioner’s claim—that the arbitrator erred in failing to apply collateral estoppel to preclude litigation of the causation issue in the SUM arbitration—falls squarely within the category of claims of legal error courts generally cannot review.

In this appeal, we are merely applying this State’s well-established rule that an arbitrator’s rulings, unlike a trial court’s, are largely unreviewable (see Board of Educ. of Patchogue-Medford Union Free School Dist. v Patchogue-Medford Congress of Teachers, 48 NY2d 812, 813 [1979] [this Court, addressing the doctrine of res judicata, held that if a grievance is within the scope of the arbitration agreement and would do no harm to the State’s public policy in favor of arbitration, further judicial inquiry into arbitrability is foreclosed and “any remaining questions, including whether a prior award constitutes a bar to the relief sought, are within the exclusive province of the arbitrator to resolve” (citations omitted)]; Matter of City School Dist. of City of Tonawanda v Tonawanda Educ. Assn., 63 NY2d 846, 848 [1984] [“The effect, if any, to be given to an earlier arbitration award in subsequent arbitration proceedings is a matter for determination in that forum”]; compare with Clemens v Apple, 65 NY2d 746 [1985], and Matter of American Ins. Co. [Messinger—Aetna Cas. & Sur. Co.], 43{**15 NY3d at 535} NY2d 184, 191 [1977] [holding that if an issue between identical parties is resolved in an arbitration proceeding, the determination as to that issue may be binding on subsequent court proceedings under the doctrine of collateral estoppel where the parties have had a full and fair opportunity to litigate the issue]). Thus, if a court makes an error and fails to properly apply collateral estoppel, the issue can be reviewed and corrected on appeal. By contrast, if an arbitrator erred in not applying collateral estoppel, the general limitation on judicial review of arbitral awards precludes a court from [*4]disturbing the decision unless the resulting arbitral award violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator’s power.

Here, the prior (no-fault) arbitration award involved the same parties, the same accident, the same injuries, and resolution of the same issue (causation) as the subsequent (SUM) arbitration award. Respondent insurer, a party to the prior arbitration, lost on the causation issue. Petitioner, the prevailing party on that issue in the prior arbitration, reasonably argued that collateral estoppel should apply to bar relitigation of the causation issue in the subsequent SUM arbitration. The SUM arbitrator rejected petitioner’s argument, had the parties relitigate the causation issue and, contrary to the no-fault arbitrator’s determination, found in respondent insurer’s favor on the causation issue.

It is not for us to decide whether the SUM arbitrator erred in not applying collateral estoppel (i.e., not giving preclusive effect to the no-fault arbitrator’s determination on the issue of causation). Because the SUM arbitration award was not patently irrational or so egregious as to violate public policy, the instant SUM arbitration award (and whether the SUM arbitrator erred or exceeded his authority) is beyond this Court’s review powers.

Since the instant claim involves the doctrine of collateral estoppel, not res judicata, petitioner’s reliance on Appellate Division decisions barring subsequent arbitrations on res judicata grounds is misplaced.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Pigott, J. (dissenting). I respectfully dissent. In my view, the SUM arbitrator exceeded his authority in disregarding the no-fault arbitrator’s finding on the issue of causation and substituting his own, when the identical parties had previously litigated the identical issue.{**15 NY3d at 536}

Insurance Law § 5106, titled “Fair claims settlement,” was designed for its titled purpose: to provide a forum where persons sustaining injuries in auto accidents could quickly adjudicate whether or not their no-fault carriers would pay their claims (see Roggio v Nationwide Mut. Ins. Co., 66 NY2d 260, 264 [1985]). Here, petitioner applied for no-fault benefits and the insurer denied those benefits because its physician concluded that the shoulder injury was not related to the accident. Petitioner sought arbitration of that decision, taking a significant risk that a negative outcome on the causation issue would preclude her from bringing a civil suit to [*5]recover against her tortfeasor and, subsequently, her SUM carrier, for her shoulder injury (see Clemens v Apple, 65 NY2d 746, 748-749 [1985]).

Petitioner submitted her own medical evidence to counter the insurer’s, and prevailed at the no-fault arbitration. The arbitrator concluded that petitioner’s shoulder injury was causally related to the accident and awarded her approximately $4,300. The insurer did not move to vacate or modify the award even though Insurance Law § 5106 (c) provides that “[a]n award by an arbitrator shall be binding except where vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent” (emphasis supplied).

Having lost at the no-fault arbitration and paying, in full, the sum awarded to petitioner for her shoulder injury, the insurer thereafter consented to petitioner’s settlement with the tortfeasor’s insurer for the face amount of the tortfeasor’s policy. However, the insurer again challenged causation relative to petitioner’s shoulder injury, this time during the SUM arbitration and over petitioner’s objection.

Apparently, what is sauce for the goose is no longer sauce for the gander. Had the arbitrator during the original no-fault arbitration found against the petitioner, any direct action against the tortfeasor would have been met with the defense of issue preclusion, with the tortfeasor relying on the no-fault arbitrator’s finding of no causation (see Clemens, 65 NY2d 746 [1985]). That, in turn, would have precluded petitioner from even bringing a SUM claim against her carrier, as it would have been impossible for her to succeed on such a claim without first exhausting the tortfeasor’s policy limits.

When a claim is initially denied, a no-fault claimant is faced with making the difficult choice: either (1) potentially losing at the no-fault arbitration and being precluded from bringing a{**15 NY3d at 537} civil suit, or (2) not seeking arbitration of the no-fault carrier’s denial of benefits so that the claimant can preserve his or her ability to bring a civil suit at a later date against the tortfeasor, thereby transferring the cost of the claimant’s medical care to his or her private insurance carrier, public insurance, or delaying payment.

These results, however, contradict the primary legislative purpose behind the no-fault law, namely, to ensure ” ‘that every auto accident victim will be compensated for substantially all of his economic loss promptly and without regard to fault,’ ” such that the insurer has nothing to lose and everything to gain from denying no-fault claims (Norman H. Dachs and Jonathan A. Dachs, Time to Reconsider ‘Clemens v. Apple’?, NYLJ, Nov. 14, 1995, at 3, col 1, quoting Rep of Joint Legislative Comm on Insurance Rates, Regulation and Recodification of the Insurance Law, 1973 NY Legis Doc No. 18, at 7; Norman H. Dachs and Jonathan A. Dachs, Collateral Estoppel and Res Judicata in Arbitration, NYLJ, Feb. 13, 1990, at 3, col 1). Simply put, under [*6]the majority holding there is a great deal of incentive for a no-fault carrier to deny claims because even if it loses at arbitration, it can revisit the issue in a later SUM proceeding.

In my view, petitioner should be permitted to rely on the no-fault arbitration causation findings in support of any subsequent arbitration involving the same issue against the same party, just as the tortfeasor and insurer would have been able to rely on that initial finding had petitioner been unsuccessful and instituted a civil suit. It cannot be reasonably argued that the insurer did not have a full and fair opportunity to litigate causation in the no-fault proceeding. After all, it submitted medical proof from its own physician after he conducted an examination that petitioner was contractually obligated to attend.

Moreover, the majority’s holding directly contradicts the dictates of Insurance Law § 5106 (c) that arbitration awards are binding unless vacated or modified by a master arbitrator because it allows an unsuccessful insurer to do an end run around that statute to the extent that it effectively nullifies the findings of the no-fault arbitrator. By accepting the SUM arbitrator’s “discretion” to disregard the findings of an arbitrator on an identical issue between the same parties, this Court grants the arbitrator more authority than a trial court, appellate court, or this Court, none of which are accorded the power to review the arbitrator’s rejection of petitioner’s issue preclusion argument.{**15 NY3d at 538}

All of the cases cited by the majority involve arbitrations arising from the invocation of arbitration provisions contained in either collective bargaining agreements or inter-company insurance arbitration agreements—parties of equal size and nature who together agree to submit to the resolution of their claims in a non-judicial forum. Petitioner, like so many motorists, is forced by a sophisticated insurer to choose between arbitration and engaging, at her own expense, in the costly litigation that is itself discouraged by the statute. Having done so, she finds herself in a hall of mirrors where winning in arbitration is only the beginning, not the end of her travail.

Finally, I note that the mere finding of a causal relation between the accident and petitioner’s shoulder injury at the no-fault arbitration stage would not have necessarily resulted in a finding that petitioner was entitled to recover damages for non-economic loss in the SUM arbitration. Petitioner would still be required to prove that her damages exceeded the amount of any policy of insurance that covered the original tortfeasor (see Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d 196, 205 [2007]). Indeed, that was the issue before the SUM arbitrator in this case, yet he never reached the “serious injury” threshold issue, opting instead to revisit the previously-determined causation finding and reach a different conclusion. Based on the foregoing, it is my view that the SUM arbitrator exceeded his authority by not granting the no-fault arbitrator’s causation finding preclusive effect, and I would therefore reverse. [*7]

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

Order affirmed, with costs.

[*1] Decided on October 20, 2010

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : PESCE, P.J., RIOS and STEINHARDT, JJ
2009-1401 Q C.

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered June 2, 2009, deemed from a judgment of the same court entered June 19, 2009 (see CPLR 5501 [c]). The judgment, entered pursuant to the June 4, 2009 order granting plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $1,446.67.

ORDERED that the judgment is reversed without costs, the order granting plaintiff’s motion for summary judgment is vacated and plaintiff’s motion for summary judgment is denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed the motion on the ground that plaintiff’s assignor had failed to appear at duly scheduled examinations under oath
(EUOs). The Civil Court granted plaintiff’s motion for summary judgment, and this appeal by defendant ensued. A judgment was subsequently entered, from which the appeal is deemed to be taken (see CPLR 5501 [c]).

Defendant submitted an affirmation of an associate of the law firm retained by defendant to conduct the EUOs. The affirmation set forth facts sufficient to establish that plaintiff’s assignor had failed to appear at the affirmant’s law office for duly scheduled EUOs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]; Crotona Hgts. Med., P.C. v Farm Family Cas. Ins. Co., 27 Misc 3d 134[A], 2010 NY Slip Op 50716[U] [App Term, 2d, 11th & 13th Jud Dists 2010]). Since appearance at an EUO is a condition precedent to an insurer’s liability on the policy (see Insurance Department Regulations [11 NYCRR] § 65-1.1; [*2]Stephen Fogel Psychological, P.C., 35 AD3d at 722), the judgment is reversed, the order granting plaintiff’s motion for summary judgment is vacated and plaintiff’s motion is denied.

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: October 20, 2010

[*1] Decided on October 20, 2010

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : PESCE, P.J., WESTON and STEINHARDT, JJ
2009-101 K C.

Appeal from an order of the Civil Court of the City of New York, Kings County (Wavny Toussaint, J.), entered June 26, 2008. The order granted defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint on the ground that the services rendered were not medically necessary. Plaintiff opposed the motion. The Civil Court granted the motion, finding that plaintiff had failed to establish the existence of a triable issue of fact. The instant appeal by plaintiff ensued.

Defendant made a prima facie showing of its entitlement to summary judgment dismissing the complaint by establishing that it had timely denied the claims on the ground of lack of medical necessity (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]), and by submitting an affirmed peer review report from its doctor setting forth a factual basis and medical rationale for his conclusion that the services rendered were not medically necessary (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. [*2]Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Plaintiff contends that defendant failed to establish its prima facie entitlement to summary judgment since, although defendant’s peer review doctor listed the medical reports and/or records of third parties that he had reviewed in reaching his
conclusion that the services rendered were not medically necessary, defendant failed to annex to its moving papers copies of these documents. We reject this contention since these reports and records are not part of defendant’s prima facie showing. We note that, pursuant to CPLR 3212 (f), a court has discretion to deny a motion for summary judgment or order a continuance to permit affidavits to be obtained or disclosure to be had, if “facts essential to justify opposition may exist but cannot then be stated.” However, plaintiff failed to “put forth some evidentiary basis to suggest that discovery might lead to relevant evidence” (Trombetta v Cathone, 59 AD3d 526, 527 [2009]; see Canarick v Cicarelli, 46 AD3d 587 [2007]; Kimyagarov v Nixon Taxi Corp., 45 AD3d 736 [2007]; Ruttura & Sons Constr. Co. v Petrocelli Constr., 257 AD2d 614 [1999]), and the “mere hope” that discovery will uncover the existence of a material issue of fact is insufficient to delay a summary judgment determination (Giraldo v Morrisey, 63 AD3d 784, 785 [2009]). Inasmuch as plaintiff failed to rebut defendant’s prima facie showing of its entitlement to summary judgment, defendant’s motion was properly granted. Accordingly, the order is affirmed.
Pesce, P.J., Weston and Steinhardt, JJ., concur.
Decision Date: October 20, 2010

Amato v State Farm Ins. Co.

2010 NY Slip Op 20431 [30 Misc 3d 238]

October 13, 2010

Hirsh, J.

District Court Of Nassau County, First District

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

As corrected through Wednesday, February 2, 2011

[*1]

Richard E. Amato D.C., as Assignee of Sandra J. Burrell, Plaintiff, v State Farm Insurance Company, Defendant.

District Court of Nassau County, First District, October 13, 2010

APPEARANCES OF COUNSEL

Abrams, Fensterman, Eisman, Greenberg, Formato & Einiger, LLP, for plaintiff. Lawrence Rogak, LLC, for defendant.

{**30 Misc 3d at 239} OPINION OF THE COURT

Fred J. Hirsh, J.

Facts

This action raises issues regarding the extent to which a no-fault insurance carrier may rely upon the results of an independent medical examination (IME) to deny payment for medical treatment provided after the IME.

Plaintiff sues to recover first-party no-fault benefits for chiropractic care provided to Sandra Burrell during the period January 3, 2006 through January 30, 2007.

Burrell was injured in a motor vehicle accident that occurred on February 16, 2005. State Farm Insurance Company (State Farm) provided no-fault insurance benefits to Burrell for medical treatment received for injuries sustained in this accident.

Burrell received chiropractic treatment for the injuries she sustained in the accident from Richard E. Amato, D.C. (Dr. Amato). Burrell assigned her right to receive first-party no-fault benefits for her chiropractic care to Dr. Amato.

State Farm requested that Burrell submit to an IME to be conducted by Todd Aordkian, D.C. (Dr. Aordkian). The IME was conducted on September 8, 2005.

Dr. Aordkian’s examination found the range of motion of Burrell’s cervical and lumbar spine to be essentially normal. The only objective finding he made was decreased sensation along the right leg.

In addition to conducting an IME, Dr. Aordkian also reviewed medical records of the doctors who had provided treatment to Burrell prior to the IME and report of a cervical MRI dated April 30, 2005.

Dr. Aordkian’s diagnosis was a resolved cervical and lumbar sprain. Dr. Aordkian [*2]issued a report dated September 16, 2005 in which he concluded Burrell needed no further chiropractic treatment for the injuries arising from the February 16, 2005 automobile accident.

Dr. Aordkian testified at trial that Burrell’s condition would not improve even if she received additional chiropractic treatment.

Burrell received additional chiropractic treatment from Dr. Amato during the period January 3, 2006 through January 30, 2007.

Dr. Amato submitted the bills for this treatment to State Farm. State Farm denied payment of the bills for this treatment{**30 Misc 3d at 240} because “New York No-Fault Chiropractic benefits were denied on 9/30/05 based upon the physical examination of Dr. Aordkian performed on 9/8/05.”

Dr. Aordkian testified he had not seen any medical reports or records relating the treatment Burrell received from Dr. Amato from January 3, 2006 through January 30, 2007. He did not know what Burrell’s condition was when she received this treatment or whether her condition had worsened after he conducted the IME.

The parties stipulated to the timely submission of the bills for the treatment and the timely issuance of denials. The parties stipulated into evidence the bills, the report of the independent medical examination performed by Dr. Aordkian and the medical reports and records reviewed by Dr. Aordkian when he conducted the IME.

Discussion

The no-fault regulations permit an insurer to demand the injured party submit to an IME “as often as[ ] the Company may reasonably require.” (11 NYCRR 65-1.1 [d].)

An applicant for no-fault benefits is not to be treated as an adversary. (11 NYCRR 65-3.2 [b].) The basic goal of an insurer in processing no-fault claims is “the prompt and fair payment to all automobile accident victims.” (11 NYCRR 65-3.2 [a].)

The purpose of an IME is to assist the carrier in determining the extent of the claimant’s injuries and the claimant’s need for continuing medical treatment. (See Rowe v Wahnow, 26 Misc 3d 8, 11-12 [App Term, 1st Dept 2009, McKeon, P.J., dissenting].)

The purpose of the no-fault statute is to insure prompt payment of medical claims regardless of fault. (Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997], rearg denied 90 NY2d 937 [1997].)

In order to meet this purpose, an insurer must pay or deny a claim within 30 days of receipt. (11 NYCRR 65-3.8 [a] [1].) An insurer may toll or extend its time to pay a claim by timely demanding an IME, an examination under oath or verification. (Hospital for Joint Diseases v New York Cent. Mut. Fire Ins. Co., 44 AD3d 903 [2d Dept 2007]; 11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1].)

A no-fault insurance carrier is precluded from asserting at trial any precludable defense not asserted in a timely denial.{**30 Misc 3d at 241} (Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312 [2007]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997].)^[FN*]

In this case, State Farm denied no-fault benefits for chiropractic care provided by Amato to Burrell between January 3, 2006 and January 30, 2007 based upon an IME cutoff based upon the IME performed by Dr. Aordkian on September 8, 2005.

However, like all other no-fault claims, timely submission of these claims by Amato created a presumption that the treatment was medically necessary. (All County Open MRI & Diagn. Radiology P.C. v Travelers Ins. Co., 11 Misc 3d 131[A], 2006 NY Slip Op 50318[U] [App Term 9th & 10th Jud Dists 2006]; Prime Psychological Servs., P.C. v Progressive Cas. Ins. Co., 24 Misc 3d 1244[A], 2009 NY Slip Op 51868[U] [Civ Ct, Richmond County 2009].) The burden shifted to the defendant to rebut the presumption of medical necessity. (A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 10 Misc 3d 50 [App Term 2d & 11th Jud Dists 2005]; AP Orthopedics & Rehabilitation, P.C. v Allstate Ins. Co., 27 Misc 3d 698 [Civ Ct, Richmond County 2010].)

The term “IME cutoff” is a misnomer. The No-Fault Law and regulations do not permit a carrier to unilaterally deny a claimant future benefits based upon an IME. An “IME cutoff” is nothing more than the opinion of the doctor that based upon the claimant’s complaints and the doctor’s objective findings at the time the IME is performed the claimant no longer needs medical care or treatment and/or diagnostic testing. The determination the claimant no longer needs treatment is generally based upon the examining doctor’s findings which result in the doctor concluding (1) the claimant has fully recovered from the injuries; (2) the claimant has made as full a recovery as is possible taking into account the nature and extent of the injuries, the claimant’s age, preexisting conditions or other factors; and/or (3) additional treatment or testing will not provide any medical benefit to the claimant. In this case, Dr. Aordkian{**30 Misc 3d at 242} determined Burrell had made as full a recovery as possible and therefore needed no further chiropractic care.

Medical treatment is not necessary if it is inconsistent with generally accepted medical standards. (Delta Med. Supplies, Inc. v NY Cent. Mut. Ins. Co., 14 Misc 3d 1231[A], 2007 NY Slip Op 50241[U] [Civ Ct, Kings County 2007]; CityWide Social Work & Psychological Servs. v Travelers Indem. Co., 3 Misc 3d 608 [Civ Ct, Kings County 2004].) In order to make such a determination, the defendant must establish a factual basis and a medical rationale for finding the tests or treatment were not medically necessary. (Prime Psychological Servs., P.C. v Progressive Cas. Ins. Co., 24 Misc 3d 1244[A], 2009 NY Slip Op 51868[U] [Civ Ct, Richmond County 2009]; Nir v Allstate Ins. Co., 7 Misc 3d 544 [Civ Ct, Kings County 2005].)

An IME is a snapshot of the injured party’s medical condition as of the date of the [*3]IME. The opinion of the doctor conducting an IME and issuing a report that no further treatment or testing is needed is nothing more than an expert’s opinion that at the time the examination was conducted the claimant did not need any further treatment or testing. As regards the need for future treatment, the IME is nothing more than an expert’s prediction that the claimant has fully recovered or received the maximum therapeutic benefit from the treatment and does not presently need any additional treatment.

However, there is no legal reason why claims for medical treatment submitted after an “IME cutoff” has been issued should be treated any differently than claims submitted prior to the IME. Therefore, a timely submitted claim for medical services rendered after the issuance of an IME cutoff is presumed to be medically necessary. The timely submission of a post-IME cutoff claim shifts the burden to the defendant to establish a factual basis and medical rationale for its determination that the treatment was unnecessary.

Dr. Aordkian testified that he did not review any reports or records relating to the treatment Burrell received after the IME. He was unaware of the reasons Burrell sought and obtained the treatment. He was unaware of the treatment provided. Therefore, the defendant failed to prove either a factual basis or a medical rationale for its determination that the chiropractic treatment was unnecessary.

The defendant could have obtained the necessary information through verification and could have had Dr. Aordkian or any other qualified expert review the material and render an opinion{**30 Misc 3d at 243} regarding the medical necessity of the treatment rendered. State Farm did not do this.

For the foregoing reasons, the court finds for the plaintiff.

The clerk is ordered to enter judgment in favor of the plaintiff and against the defendant in the sum of $1,920.90 together with interest and legal fees in accordance with the No-Fault Law and regulations and costs and disbursements as taxed by the clerk.

Footnotes

Footnote *: Four defenses are not subject to the preclusion rule: (1) fraudulent incorporation (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]); (2) lack of coverage (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]); (3) staged accident (Central Gen. Hosp. v Chubb Group of Ins. Cos., supra; Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2d Dept 2005]; V.S. Med. Servs., P.C. v Allstate Ins. Co., 11 Misc 3d 334 [Civ Ct, Kings County 2006]); and (4) exhaustion of coverage (Hospital for Joint Diseases v Hertz Corp., 22 AD3d 724 [2d Dept 2005]); Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2d Dept 2004]).

Westchester Med. Ctr. v Government Empls. Ins. Co.

2010 NY Slip Op 07331 [77 AD3d 737]

October 12, 2010

Appellate Division, Second Department

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

As corrected through Wednesday, December 15, 2010

Westchester Medical Center, as Assignee of Glenda Jenkins, Appellant, v Government Employees Insurance Company, Respondent.

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

Teresa M. Spina, Woodbury, N.Y. (Jeanne M. Ortega of counsel), for respondent.

In an action to recover no-fault medical payments under an insurance contract, the plaintiff appeals from an order of the Supreme Court, Nassau County (Galasso, J.), entered December 17, 2009, which denied its motion for summary judgment on the complaint.

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

In opposition to the plaintiff’s prima facie showing of entitlement to judgment as a matter of law (see Westchester Med. Ctr. v Progressive Cas. Ins. Co., 51 AD3d 1014, 1017 [2008]; Westchester Med. Ctr. v State Farm Mut. Auto. Ins. Co., 44 AD3d 750, 752 [2007]), the defendant failed to raise a triable issue of fact as to whether it properly denied the plaintiff’s claim for no-fault benefits based on the alleged intoxication of the plaintiff’s assignor at the time of the accident. Since the defendant failed to submit any evidence whatsoever from which the circumstances of the accident could be ascertained, the nature of the accident is unknown, and, thus, the defendant’s evidence, while presenting a factual question as to whether the plaintiff’s assignor was operating a vehicle in an intoxicated condition, was insufficient by itself to raise a triable issue of fact as to whether the plaintiff’s assignor was “injured as a result of operating a motor vehicle while in an intoxicated condition” (Insurance Law § 5103 [b] [2] [emphasis added]; see 11 NYCRR 65-3.14 [b]; cf. Westchester Med. Ctr. v Progressive Cas. Ins. Co., 51 AD3d at 1017; Westchester Med. Ctr. v State Farm Mut. Auto. Ins. Co., 44 AD3d at 752; Lynch v Progressive Ins. Co., 12 AD3d 570 [2004]; Scahall v Unigard Ins. Co., 222 AD2d 1070 [1995]; Cernik v Sentry Ins., 131 AD2d 952 [1987]; McCarthy v Commercial Union Ins. Co., 194 Misc 2d 295, 297 [2002]). Accordingly, while, under the circumstances of this case, there is no merit to the plaintiff’s remaining contentions concerning the facial sufficiency of the form used to deny the claim and the Supreme Court’s consideration of certain uncertified medical records (see Westchester Med. Ctr. v Progressive Cas. Ins. Co., 51 AD3d at 1017; Westchester Med. Ctr. v Allstate Ins. Co., 45 AD3d 579, 580 [2007]), its motion for summary judgment should nonetheless have been granted. Skelos, J.P., Santucci, Dickerson and Leventhal, JJ., concur.

[*1] Decided on October 5, 2010

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : PESCE, P.J., RIOS and STEINHARDT, JJ
2009-1441 K C.

Appeal from an order of the Civil Court of the City of New York, Kings County (Peter Paul Sweeney, J.), entered November 19, 2007. The order denied defendant’s motion to vacate a prior order of the same court (Robin S. Garson, J.), dated October 15, 2007, which had granted on default plaintiff’s motion for summary judgment.

ORDERED that the order entered November 19, 2007 is reversed without costs, defendant’s motion to vacate the October 15, 2007 order is granted, and plaintiff’s motion for summary judgment is denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. When defendant attempted to file opposing papers almost a month after their stipulated due date, the Civil Court rejected defendant’s papers and, by order dated October 15, 2007 (Robin S. Garson, J.), granted plaintiff’s motion on default. In November 2007, defendant moved to vacate the October 15, 2007 order pursuant to CPLR 5015 (a) (1). By order entered November 19, 2007 (Peter Paul Sweeney, J.), the Civil Court denied defendant’s motion without prejudice, stating that “[d]efendant is granted leave to submit a motion to reargue or renew before Judge Garson, who initially granted the judgment in dispute.” The instant appeal by defendant ensued.

It is well settled that a party seeking to vacate an order granting summary judgment on default must demonstrate a reasonable excuse for the default and the existence of a meritorious cause of action or defense (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; Mora v Scarpitta, 52 AD3d 663 [2008]). In the exercise of its discretion, a court can accept a claim of law office failure as an excuse (see CPLR 2005), if the [*2]facts submitted in support thereof are in evidentiary form sufficient to justify the default (see Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553, 554 [2001]) and include “a detailed explanation of [the] oversights” (Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 433 [2004]; see also Grezinsky v Mount Hebron Cemetery, 305 AD2d 542 [2003]; Morris v Metropolitan Transp. Auth., 191 AD2d 682, 683 [1993]). The affirmations of the attorneys employed by the law firm representing defendant satisfied these criteria.

Defendant also demonstrated a meritorious defense to the action. The affidavit of an employee of defendant’s claims department showed that defendant had timely mailed the denial of claim forms 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]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). The employee’s affidavit also established that the claims were denied based upon the annexed verified peer review report and affirmed independent medical examination reports, which concluded that there was a lack of medical necessity for the services rendered. Consequently, defendant set forth a triable issue of fact sufficient to defeat plaintiff’s motion for summary judgment.

We note that, contrary to the Civil Court’s direction, relief from an order granted upon default should be sought by means of a motion pursuant to CPLR 5015, not by a motion to renew or reargue (see e.g. Raciti v Sands Point Nursing Home, 54 AD3d 1014 [2008]).

Accordingly, the order is reversed, defendant’s motion to vacate the October 15, 2007 order is granted and plaintiff’s motion for summary judgment is denied.

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: October 05, 2010

[*1] Decided on October 5, 2010

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : PESCE, P.J., RIOS and STEINHARDT, JJ
2009-1378 Q C.

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered April 21, 2009, deemed from a judgment of the same court entered June 9, 2009 (see CPLR 5501 [c]). The judgment, entered pursuant to the April 21, 2009 order granting plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $975.

ORDERED that the judgment is reversed without costs, the order granting plaintiff’s motion for summary judgment is vacated and plaintiff’s motion for summary judgment is denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. In opposition to the motion, defendant argued, based upon an affirmed peer review report, that the medical equipment provided to plaintiff’s assignor was not medically necessary. In an order dated April 21, 2009, the Civil Court granted plaintiff’s motion, concluding that plaintiff had established its entitlement to judgment as a matter of law and that defendant’s affidavit in opposition to the motion failed to establish that defendant timely denied the claim. This appeal by defendant ensued. A judgment was subsequently entered, from which the appeal is deemed to be taken (see CPLR 5501 [c]).

Contrary to defendant’s contention, the affidavit by plaintiff’s billing manager was sufficient to demonstrate that the documents annexed to plaintiff’s motion were admissible pursuant to CPLR 4518 (see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 55 AD3d 644 [2008]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). The affidavit submitted by defendant’s claims division employee established that defendant’s denial of claim form, which denied plaintiff’s claim due to, among other things, a lack of medical necessity, had been timely mailed in accordance with [*2]defendant’s standard office practices and procedures (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Defendant also annexed a copy of an affirmed peer review report setting forth a factual basis and medical rationale for the doctor’s conclusion that the supplies were not medically necessary. As a result, defendant proffered sufficient evidence in admissible form to demonstrate the existence of a triable issue of fact as to medical necessity (see Velen Med. Supply, Inc. v GEICO Ins. Co., 23 Misc 3d 132[A], 2009 NY Slip Op 50735[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; see also 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]). Consequently, plaintiff’s motion for summary judgment should have been denied.

Accordingly, the judgment is reversed, the order granting plaintiff’s motion for summary judgment is vacated, and plaintiff’s motion for summary judgment is denied.

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: October 05, 2010

[*1] Decided on October 5, 2010

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : PESCE, P.J., RIOS and STEINHARDT, JJ
2009-1371 Q C.

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered April 28, 2009, deemed from a judgment of the same court entered June 9, 2009 (see CPLR 5501 [c]). The judgment, entered pursuant to the April 28, 2009 order granting plaintiff’s motion for summary judgment and denying defendant’s cross motion for summary judgment dismissing the complaint, awarded plaintiff the principal sum of $1,268.73.

ORDERED that the judgment is affirmed without costs.

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

Contrary to defendant’s contention, the affidavit submitted by plaintiff’s billing administrator was sufficient to establish that the documents annexed to plaintiff’s moving papers were admissible pursuant to CPLR 4518 (see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 55 AD3d 644 [2008]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). As defendant raises no other issue on appeal regarding plaintiff’s establishment of its prima facie case, we do not otherwise pass upon the propriety of the determination of the Civil Court with respect thereto.

Since the affidavit executed by defendant’s claim representative stated that she began working for defendant after the denial of claim forms at issue were allegedly mailed by defendant, and defendant did not otherwise establish the actual mailing of the denial of claim forms or its standard office practices and procedures for the mailing of denial of claim forms [*2]during the pertinent time period, defendant failed to establish that its denial of claim forms were timely mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Points of Health Acupuncture, P.C. v Geico Ins. Co., 25 Misc 3d 140[A], 2009 NY Slip Op 52445[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Consequently, defendant failed to establish that it was not precluded from raising most defenses, including its proffered defenses (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; Infinity Health Prods., Ltd. v Eveready Ins. Co., 21 Misc 3d 1 [App Term, 2d & 11th Jud Dists 2008]). Accordingly, as defendant failed to establish its entitlement to summary judgment or even demonstrate the existence of a triable issue of fact, the judgment is affirmed.

Pesce, P.J., Rios and Steinhardt, JJ., concur.
Decision Date: October 05, 2010

A.M. Med. Servs., P.C. v Liberty Mut. Ins. Co.

2010 NY Slip Op 20416 [29 Misc 3d 87]

Accepted for Miscellaneous Reports Publication

AT2

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

As corrected through Wednesday, January 12, 2011

[*1]

A.M. Medical Services, P.C., as Assignee of Emily A. Mizheritskaya, Appellant, v Liberty Mutual Insurance Co., Respondent.

Supreme Court, Appellate Term, Second Department, October 5, 2010

APPEARANCES OF COUNSEL

Law Office of Alden Banniettis, Brooklyn (Jeff Henle of counsel), for appellant. Carman, Callahan & Ingham, LLP, Farmingdale (Adeel Jamaluddin of counsel), for respondent.

{**29 Misc 3d at 88} OPINION OF THE COURT

Memorandum.

Ordered that the order is reversed without costs, defendant’s motion to vacate the default judgment is denied, and the judgment is reinstated.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment in July 2003, which motion it subsequently withdrew. In May 2004, plaintiff made a second motion for summary judgment. When defendant failed to submit written opposition thereto, plaintiff’s motion was granted on default and, in September 2007, a default judgment in the sum of $15,457.33 was entered against defendant. In March 2009, defendant moved, inter alia, to vacate the default judgment pursuant to CPLR 5015 (a) (3). Defendant argued that the default judgment had been obtained through plaintiff’s fraud, misrepresentation or misconduct since the claim forms plaintiff had annexed to its motions contained handwritten notations which were not on the original claim forms included with the complaint and provided to defendant, and the motions were supported by affidavits containing false statements. By order entered April 24, 2009, the Civil Court granted defendant’s motion, finding that defendant was deprived of the opportunity to timely oppose plaintiff’s motion for summary judgment since plaintiff had failed to provide defendant with a courtesy copy of its motion, which the court found to be “tantamount to fraud.” The instant appeal by plaintiff ensued.

CPLR 5015 (a) (3) provides that a judgment may be vacated on the ground of “fraud, misrepresentation, or other misconduct of an adverse party.” When a defendant’s CPLR 5015 (a) (3) motion alleges intrinsic fraud—i.e., that the plaintiff’s allegations are false—the defendant must also provide a reasonable excuse for its default (see Bank of N.Y. v Stradford, 55 AD3d 765 [2008]; Bank of N.Y. v Lagakos, 27 AD3d 678 [2006]).{**29 Misc 3d at 89}

In support of its motion, defendant argued that plaintiff had submitted affidavits which contained false statements and that plaintiff had annexed to its motion papers false documentation. Defendant was, thus, alleging that plaintiff had obtained the default judgment through “intrinsic fraud” (Bank of N.Y. v Lagakos, 27 AD3d at 679). Consequently, defendant was required to show a reasonable excuse for its default (see Bank of N.Y. v Stradford, 55 AD3d at 765-766), which defendant failed to do. The affirmation of defendant’s attorney did not show that counsel had personal knowledge of any facts pertaining to the alleged law office failure and, therefore, the affirmation was insufficient to establish an excuse for the default (see Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553, 554 [2001]). Further, since defendant’s attorney’s “supplemental” affirmation was, in fact, a reply affirmation, the factual allegations asserted for the first time therein must be disregarded (see McNair v Lee, 24 AD3d 159 [2005]; Juseinoski v Board of Educ. of City of N.Y., 15 AD3d 353, 355 [2005]).

In view of the foregoing, we find that the Civil Court improvidently exercised its discretion in granting defendant’s motion. Accordingly, the order is reversed, defendant’s motion to vacate the default judgment is denied and the judgment is reinstated.

Golia, J. (dissenting and voting to affirm the order in the following memorandum). In my opinion, defendant’s default was excusable as the result of law office failure. The recognized and viable excuse of law office failure, in conjunction with the meritorious defense of intrinsic fraud committed by plaintiff, constitutes sufficient grounds to have the default judgment vacated.

It is well settled in New York that a defendant seeking to vacate a default judgment must demonstrate a reasonable excuse for its default and a meritorious defense to the action (see CPLR 5015 [a] [1]; see also Fidelity & Deposit Co. of Md. v Andersen & Co., 60 NY2d 693 [1983]; Stewart v Warren, 134 AD2d 585 [1987]). It is also settled law that, under CPLR 2005 and supporting case law, a court may, in its discretion, accept a claim of law office failure as satisfying the reasonable excuse requirement (see CPLR 2005; Vierya v Briggs & Stratton Corp., 166 AD2d 645 [1990]; Searing v Anand, 127 AD2d 582 [1987]; Alternative Automotive v Mowbray, 101 AD2d 715 [1984]). Here, law office failure is established through the affirmations of defendant’s attorneys.{**29 Misc 3d at 90}

Unlike the majority, I find that the affirmations submitted in support of defendant’s motion to vacate the default judgment established sufficient knowledge of the facts asserted.

“Personal knowledge is not presumed from a mere positive averment of the facts. A court should be shown how the deponent knew or could have known such facts and if there is no evidence from which the inference of personal knowledge can be drawn then it is presumed that such does not exist (1 Carmody-Wait 2d, NY Prac § 4:28, at 644)” (Bova v [*2]Vinciguerra, 139 AD2d 797, 798 [1988] [citation omitted]).

The affirmation of defendant’s attorney, Adeel Jamaluddin, is prefaced by a statement of personal knowledge of the within matter. The affirmation of another of defendant’s attorneys, Paul Barrett, detailed his employment with the firm responsible for the law office failure. These affirmations, in conjunction with the attorneys’ obvious familiarity with the facts of the instant case, clearly establish the requisite personal knowledge demanded of an affirmation. Defendant’s law firm inadvertently lost essential documents, i.e., plaintiff’s 2003 motion papers for summary judgment, and subsequently miscalendared the December 2004 court date, all as a result of personnel turnover (at a minimum five different assigned counsels and one law assistant). As the foregoing clearly constitutes law office failure, defendant established a reasonable excuse for its default.

In addition to demonstrating an excusable default, defendant must also establish a meritorious defense. It is alleged from the documents submitted herein that plaintiff committed intrinsic fraud. Unlike extrinsic fraud, which is intended to induce a judgment as a result of the opposing party’s default, intrinsic fraud is a more subtle concept based on a misrepresentation made to the court, in this case the alteration of documents (see generally 60A NY Jur 2d, Fraud and Deceit § 3; Bank of N.Y. v Lagakos, 27 AD3d 678 [2006]). The handwritten entries on the submitted documents herein could appear both to influence the court’s attention and to direct it to matters that plaintiff deems important, as well as to disfavor other matters. Clearly, it is axiomatic that documents entered into the record should never be altered in any way, for any purpose. Such an alteration of submitted documents constitutes a meritorious defense of intrinsic fraud. Based on the foregoing, I would affirm the Civil Court’s order.{**29 Misc 3d at 91}

Pesce, P.J., and Rios, J., concur; Golia, J., dissents in a separate memorandum.