[*1]

Supreme Court, Appellate Term, Second Department, March 10, 2009

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. Cascone & Kluepfel, LLP, Garden City (Joseph A. Potenza of counsel), for respondent.

{**25 Misc 3d at 49} OPINION OF THE COURT

Memorandum.

Order, insofar as appealed from, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed the motion and moved for summary judgment dismissing the complaint, arguing that a conflict of law analysis required the application of New Jersey law, pursuant to which plaintiff’s complaint should be dismissed on the ground that the supplies provided were not medically necessary. By order dated March 13, 2008, the District Court denied both motions. The instant appeal by plaintiff ensued.

There is no dispute that a conflict exists between New York law and New Jersey law with respect to the issues raised herein. New York law requires a claim for no-fault benefits to be timely and properly denied on a prescribed NF-10 denial of claim form (see Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664 [2004]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11 [1999]), does not permit insurer’s delay letters, which request no verification, to toll the statutory period in which a claim must be paid or denied (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2005]; Ocean Diagnostic Imaging P.C. v Citiwide Auto Leasing Inc., 8 Misc 3d 138[A], 2005 NY Slip Op 51314[U] [App Term, 2d & 11th Jud Dists 2005]), and provides that the defenses of lack of medical necessity and provider fraud are precluded if not timely and properly asserted (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; [*2]Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]). New Jersey law, on the other hand, permits the defense of lack of medical necessity to be raised at any time (see Kowaleski v Allstate Ins. Co., 238 NJ Super 210, 218, 569 A2d 815, 819 [1990]).

A conflict of law relating to an insurance policy must be resolved by applying the conflict of law rules relevant to contracts (see Zurich Ins. Co. v Shearson Lehman Hutton, 84 NY2d 309, 319 [1994]; Matter of Allstate Ins. Co. [Stolarz—New Jersey Mfrs. Ins. Co.], 81 NY2d 219, 226 [1993]). The Court of Appeals has adopted a “center of gravity” or “grouping of contacts” approach (Auten v Auten, 308 NY 155, 160 [1954]), which gives controlling effect to the law of the state that has “the most significant relationship to the transaction and the{**25 Misc 3d at 50} parties” (Restatement [Second] of Conflict of Laws § 188 [1]). In addition to the traditional determinative factor of the place of contracting, which should be given “heavy weight” in a grouping of contacts analysis (see Haag v Barnes, 9 NY2d 554, 560 [1961]), the places of negotiation and performance, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties are also to be considered (see Zurich Ins. Co., 84 NY2d at 319; Restatement [Second] of Conflict of Laws § 188 [2]). The accident herein occurred in New York. The relevant insurance policy was negotiated and entered into in New Jersey by the insureds who lived in New Jersey, for a vehicle which was garaged and registered in New Jersey. The assignor, who was driving the insureds’ vehicle at the time of the accident, also resided in New Jersey.

While “strong governmental interests . . . [may] be considered” (Matter of Allstate Ins. Co. [Stolarz—New Jersey Mfrs. Ins. Co.], 81 NY2d at 226), we find that governmental policy is not an overriding factor under the circumstances presented herein (see e.g. Matter of Eagle Ins. Co. v Singletary, 279 AD2d 56 [2000]). Therefore, upon the application of a “center of gravity” or “grouping of contacts” analysis, we find that the dispositive factors weigh in New Jersey’s favor and, therefore, its law should control (see e.g. Scotland v Allstate Ins. Co., 35 AD3d 584 [2006]; Matter of Eagle Ins. Co. v Singletary, 279 AD2d at 56). Consequently, since defendant is not precluded from raising the defense of lack of medical necessity under New Jersey law, defendant raised a triable issue of fact. Accordingly, the District Court’s order, insofar as appealed from, is affirmed.

Tanenbaum, J.P., Molia and LaCava, JJ., concur.

Civil Court of the City of New York, Kings County

116467/04

Genine D. Edwards, J.

Plaintiff commenced this action to recover no-fault benefits from the defendant, for acupuncture services performed by its licensed acupuncturist to its assignor, Alan Yensi. A bench trial ensued.

At the outset, the parties stipulated that the plaintiff proved its prima facie case and the defendant timely denied the claims. In addition, the bills and denials were admitted into evidence. Plaintiff rested. At that point the burden of production shifted to the defendant to prove the basis of its denial. Before defendant called its witness, it made a motion to dismiss, based upon Great Wall Acupuncture v. Geico Gen. Ins. Co., 16 Misc 3d 23, 842 N.Y.S.2d 131 (App. Term, 2d Dept. 2007); Ava Acupuncture, P.C. v. Geico Gen. Ins. Co., 17 Misc 3d 41, 844 N.Y.S.2d 570 (App. Term, 2d Dept. 2007), contending that an insurer is entitled to remit payment at the chiropractic rate indicated in the Workers’ Compensation Fee Schedule. The plaintiff argued in opposition that the defendant was required to reveal its procedures for choosing the rate and the calculation of the amount. This Court reserved its decision.

The defendant’s claim representative testified that the Workers’ Compensation Fee Schedule is the tool used to pay healthcare providers. Since that schedule does not address licensed acupuncturists, the defendant compared the educational and licensing requirements and found that the chiropractic requirements are closest to the licensed acupuncturist. Therefore, the plaintiff was paid at the chiropractic rate. On cross-examination the claim representative testified that he was not the representative who denied the plaintiff’s claims, but indicated that the representative processed and issued the claims in accord with defendant’s policies and procedures, including using the Workers’ Compensation Fee Schedule.

After due deliberation of the credible evidence submitted, this Court finds that the defendant shouldered its burden of producing a proper grounds for denying full payment of the no-fault benefits based upon the Workers’ Compensation Fee Schedule. Great Wall Acupuncture, 16 Misc 3d at 23; Ava Acupuncture, P.C., 17 Misc 3d at 41; Ops Gen. Counsel NY Ins. Dept. 10-06-04. The plaintiff did not rebut this defense.

[*2]Accordingly, judgment in favor of the defendant and the complaint dismissed.

This constitutes the decision and order of this Court.

Dated: March 6, 2009

________________________

Genine D. Edwards

Judge of the Civil Court

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from a decision of the Civil Court of the City of New York, Queens County (Kevin Kerrigan, J.), dated July 25, 2005, deemed from a judgment of the same court entered December 21, 2007 (see CPLR 5520 [c]). The judgment, after a nonjury trial, dismissed the complaint.

Judgment affirmed without costs.

At the trial in this action by a provider to recover assigned first-party no-fault benefits, plaintiff did not call any witnesses. Rather, plaintiff orally moved for the admission into evidence of its notice to admit and defendant’s response thereto, contending that they, and the exhibits annexed to plaintiff’s prior motion for summary judgment and defendant’s papers in opposition thereto, were sufficient to establish plaintiff’s prima facie case. Defendant objected and cross-moved for a directed verdict
dismissing the complaint. The Civil Court granted defendant’s cross motion for a directed verdict, holding that, without testimony from a witness to establish the admissibility of the documents upon which plaintiff sought to rely, plaintiff failed to establish a prima facie case. This appeal by plaintiff ensued. A judgment was subsequently entered dismissing the complaint.

At trial, “it remained plaintiff’s burden to proffer evidence in admissible form, i.e., by introducing into evidence the claim form[s] in question by, inter alia, calling a witness to lay a foundation for the admissibility of the claim form[s] as . . . business record[s], which plaintiff failed to do. Accordingly, in light of plaintiff’s failure to establish the admissibility of its claim form[s] as . . . business record[s], plaintiff did not establish a prima facie case and defendant was entitled to judgment dismissing the complaint” (Bajaj v General Assur. Co., 18 Misc 3d 25, 28-29 [App Term, 2d & 11th Jud Dists 2007] [citation omitted]; see also Art of Healing Medicine, [*2]P.C. v Travelers Home & Mar. Ins. Co., 55 AD3d 644 [2008]).

Weston Patterson, J.P., Golia and Steinhardt, JJ, concur.
Decision Date: March 05, 2009

[*1]

Civil Court of the City of New York, Richmond County, March 5, 2009

APPEARANCES OF COUNSEL

Epstein McDonald & McCarthy, New York City, for defendant. Baker Sanders Barshay Grossman Fass Muhlstock & Neuwirth, Mineola, for plaintiff.

{**24 Misc 3d at 230} OPINION OF THE COURT

Katherine A. Levine, J.

{**24 Misc 3d at 231}This case presents the novel issue of whether the notice requirements for verification requests, as contained in 11 NYCRR 65-3.5 and 65-3.6, apply to examinations under oath (EUO) that are noticed prior to the insurance company’s receipt of claim forms (preclaim EUO). As will be set forth below, this court decides this issue in the negative.

Plaintiff Prime Psychological, a medical services provider, brought this action seeking reimbursement in the amount of $1,341.14 for medical services it provided to assignor Andrea Ortiz stemming from her automobile accident. Defendant Nationwide Property and Casualty Ins. Co. seeks an order granting it summary judgment based upon Ortiz’s failure to appear for an EUO. Plaintiff opposes the motion and argues that defendant’s notice for an EUO was defective and accordingly failed to toll the statutory 30-day period in which defendant must deny the claim, hence rendering the denial untimely.

Plaintiff treated Ortiz in its medical facility on three occasions from November to December 2006, and on December 14, 2006 mailed Nationwide the consolidated bill, which the defendant received on December 18, 2006. Prior to its receipt of the bill, Nationwide scheduled Ortiz for two EUOs, pursuant to the provision in its insurance policy, both of which Ortiz failed to attend. Defendant submitted an affidavit from an investigator of the Special Investigation Unit (SIU) who had personal knowledge of the mailing practices and procedures surrounding EUO scheduling letters and stated that the EUO letters sent to Ortiz were made in the regular course of Nationwide’s business. The SIU investigator stated that he had personal knowledge that defendant mailed Ortiz three letters scheduling EUOs.^[FN*] The first letter was sent to Ortiz via certified mail [*2]on November 30, 2006, advising that her presence was required on December 15, 2006. On December 14, 2006, a voice mail was received from Ortiz’s attorney stating that Ortiz would not be present at the EUO. The next day, the defendant’s investigator spoke with an individual from the office of Ortiz’s attorney and advised him that since his voice mail was received after hours, it would not be counted as an attempt to adjourn. Accordingly, Ortiz’s failure to attend the EUO was counted as a no-show. Nationwide sent another letter to Ortiz on December 15, 2006, scheduling her EUO for January 3, 2007. Ortiz’s attorney called the defendant’s office{**24 Misc 3d at 232} on January 2 and requested an adjournment. Nationwide thus, by letter dated January 2, 2007, scheduled a final adjournment for January 11, 2007, which Ortiz failed to attend. Thus, only the last EUO was scheduled after Nationwide had received the bill.

On January 18, 2007, Nationwide denied the claim on the grounds that plaintiff’s claim was not billed in accordance with the fee schedule and that Ortiz’s failure to attend an EUO constituted a breach of the insurance policy condition that the eligible injured person may reasonably be required to submit to EUOs, which precluded coverage. Nationwide retroactively terminated Ortiz’s coverage, effective October 16, 2006.

To grant a motion for summary judgment it must clearly appear that no material and triable issue of fact is presented. (Manhattan Med. Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 1144[A], 2008 NY Slip Op 51844[U] [2008].) In support of its motion for summary judgment, defendant is required to establish, prima facie, that (1) its insurance policy in effect when the EUOs were sought contained an endorsement authorizing such verification; (2) the EUO scheduling letters were timely mailed; (3) the date and place of EUO were not unreasonable; and (4) assignor failed to appear for the scheduled EUO. (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 721 [2d Dept 2006]; Eagle Surgical Supply, Inc. v Progressive Cas. Ins. Co., 21 Misc 3d 49 [2d Dept 2008].)

Here, plaintiff argues that defendant failed to satisfy the second prong of its prima facie case since it did not notify Ortiz’s attorney about the “follow-up EUO.” While the SIU investigator’s affidavit is silent about any mailings to the applicant’s attorney, the EUO notifications that were sent to Ortiz were cc:ed to her attorney. The issue thus presented is whether the language requiring that an applicant’s attorney be notified of a follow-up verification request applies to a preclaim EUO.

As a condition to coverage under the revised mandatory personal injury protection endorsement, “the eligible injured person . . . shall . . . as may reasonably be required submit to examinations under oath by any person named by the [insurer] and subscribe the same” (11 NYCRR 65-1.1 [d] [Sec I, Conditions, Proof of Claim (b)]). Another condition to coverage under this section sets forth that an eligible person “shall submit to medical examination by physicians selected by, or acceptable to, the [insurer], when, and as often as, the [insurer] may reasonably require.” (11 NYCRR 65-1.1 [d] [Sec I, Conditions, Proof of Claim].){**24 Misc 3d at 233}

11 NYCRR 65-3.5 details the verification procedures to be followed after the insurer receives the completed application for no-fault benefits (NYS form N-F 2). The injured party or that party’s assignee medical services provider must then submit written proof of claim (claim form—usually verification of treatment by attending physician or other health care [*3]provider—NYS form N-F 3) to the insurer within 45 days after the date the medical services are rendered. Pursuant to Insurance Law § 5106 (a) and 11 NYCRR 65-3.5, an insurer is required to either pay or deny a claim for no-fault automobile insurance benefits within 30 days from the date an applicant supplies proof of claim or it will be precluded from offering any defenses at trial. (Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889-890 [2d Dept 2007]; see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997].)

However, an insurer may toll the 30-day period by properly requesting verification within 15 days from the receipt of the proof of claim form or bill (Psych. & Massage Therapy Assoc., PLLC v Progressive Cas. Ins. Co., 5 Misc 3d 723, 724 [Civ Ct, Queens County 2004], citing 11 NYCRR former 65.15 [d] [1]). The insurance regulations provide for an independent medical examination (IME) (and EUOs) as part of an insurer’s “entitlement to ‘additional verification’ ” following receipt of a provider’s statutory claim forms. (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18, 19 [App Term, 2d Dept 2004], affd in part 35 AD3d 720 [2006]; see 11 NYCRR 65-1.1 [d]; 65-3.5 [d]; see also All-Boro Med. Supplies, Inc. v Progressive Northeastern Ins. Co., 20 Misc 3d 554 [Civ Ct, Kings County 2008]; Lumbermens Mut. Cas. Co. v Inwood Hill Med., P.C., 8 Misc 3d 1014[A], 2005 NY Slip Op 51101[U] [Sup Ct, NY County 2005]; Inwood Hill Med. P.C. v Allstate Ins. Co., 3 Misc 3d 1110[A], 2004 NY Slip Op 50565[U] [Civ Ct, NY County 2004].) Where an EUO or IME is requested as additional verification after receipt of the claim, the insurer must schedule the IME within the same time frame as medical examinations—within 30 days from the date of receipt of the prescribed verification form (11 NYCRR 65-3.5 [d])—and must schedule an EUO within a reasonable time frame and as “expeditiously as possible.” (Eagle Surgical Supply, Inc. v Progressive Cas. Ins. Co., 21 Misc 3d 49, 51 [App Term, 2d Dept 2008].)

“[If the] requested verification[ ] has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar{**24 Misc 3d at 234} days, follow up with the party from whom the verification was requested, either by telephone call . . . or by mail. At the same time the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested.” (11 NYCRR 65-3.6 [b] [emphasis added].)

“A claim need not be paid or denied until all demanded verification is provided” (New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2d Dept 2004]; see Insurance Law § 5106 [a]; 11 NYCRR 65-3.5 [c]; 65-3.8 [a] [1]).

In the instant matter, it is clear that the defendant made two requests in writing to the insured for an EUO prior to its receipt of the statutory claim form from plaintiff on December 18, 2006, and that it adjourned the EUO scheduled on December 15th until January 3rd at the request of the assignor’s attorney on January 2, 2007. Therefore both the initial and follow-up scheduling letters preceded defendant’s receipt of the claim.

In Stephen Fogel Psychological (7 Misc 3d 18 [2004]), the Appellate Term found that an insurer had the right to conduct an IME prior to its receipt of the statutory claim form or its [*4]statutory equivalent which, “under the regulations, triggers the verification process.” (Id. at 20.) The insurance regulations first mention the right of an insurer to request an IME (and EUO) in the mandatory personal injury protection endorsement, “which is independent of the verification protocols,” and, in light of the broad language authorizing IMEs, the court found there “to be no reason to preclude an insurer from requesting an IME prior to its receipt of the statutory claim form” (id. at 20). The reviewing court stated that such an interpretation furthers “the policies underlying no-fault insurance, including . . . the expeditious processing of claims” (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 722 [2006]).

The Appellate Term then found that the right to an IME “at this juncture is not afforded by the verification procedures and timetables” because 11 NYCRR 65-1.1 (d) “is not, on its face or contextually, a ‘verification’ provision, and because the detailed and narrowly construed verification protocols are not amenable to application at a stage prior to submission of the claim form.” (7 Misc 3d at 21.) In All-Boro Med. Supplies, Inc. v Progressive Northeastern Ins. Co. (20 Misc 3d 554 [Civ Ct, Kings County{**24 Misc 3d at 235} 2008]), Judge Sweeney extended this reasoning to EUOs, finding that an insurance company acted within its rights under the endorsement by scheduling an EUO before it had received the claim.

In light of the above, and since defendant’s right to conduct an EUO of the assignor, at this juncture, is not afforded by the verification procedures and timetables, it is clear that the language governing the verification procedures and, hence, postclaim EUOs—that the insurer shall inform the applicant and such person’s attorney of the reason(s) why the claim is delayed (11 NYCRR 65-3.6 [b])—is inapplicable to this preclaim EUO. As such, the fact that neither the SIU investigator nor the claims representative mentioned whether the EUO notices were sent to the assignor’s attorney is of no consequence.

Having determined that defendant properly requested an EUO before it received a claim, and that it was not required to send the EUO requests to the attorney, the court must decide whether an insurer’s timely denial of a claim, based upon an insured’s failure to appear for a preclaim EUO, which constitutes a breach of a condition precedent to payment, is a valid ground upon which to award summary judgment to the defendant.

In Stephen Fogel Psychological (35 AD3d 720 [2006]), the Second Department disagreed with the second portion of the Appellate Term decision which had distinguished the contractual remedies available to an insurer based upon whether the IME no-show was preclaim or postclaim. In the case of postclaim IME no-shows, the insurer could rely upon the remedy available upon nonreceipt of requested verification—the 30-day period in which to pay or deny a claim does not begin to run and any claim for payment by the provider is deemed to be premature. (7 Misc 3d at 20, citing New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]; see All-Boro v Progressive, 20 Misc 3d at 556-557.) However, this was inapplicable to preclaim IME no-shows, which must be governed by “general principles of no-fault” law; i.e., that a failure to attend a preclaim IME would defeat the presumption of medical necessity that inures to a medical provider’s properly submitted claim and hence would defeat a provider’s motion for a summary judgment (7 Misc 3d at 21-22). [*5]

The Second Department disagreed with this portion of the ruling, declaring that there was no distinction between the contractual remedies an insurance company could invoke{**24 Misc 3d at 236} depending upon whether the failure to appear for an IME occurred before or after the submission of the claim form. Since the appearance of an insured at IMEs (and EUOs) was a condition precedent to the insurer’s liability on the policy, an insurer could retroactively deny a claim to the date of loss for a claimant’s failure to attend IMEs. (See also All-Boro v Progressive, 20 Misc 3d at 556 [where Judge Sweeney opined that a failure to appear for a preclaim EUO was a “valid ground for denying the claim ‘retroactively to the date of loss’ “].) However, once an insurer received a claim, it was “required to adhere to the statutory and regulatory scheme for the processing of no-fault claims” and it therefore had to pay or deny the claim within 30 days of its receipt. (Id.)

Here, the defendant established the standard office practices and procedures used to ensure that the verification requests and the denial were properly addressed and mailed, and presented an affidavit from an SIU investigator who had personal knowledge of both the mailings and the EUO no-show. Defendant has established that it timely denied the claim and summary judgment is granted to defendant.

Footnotes

Footnote *: Defendant also submitted an affidavit from a claims representative who personally denied the claims and had personal knowledge of the office’s business procedures concerning the mailing of denials.

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered August 13, 2007, deemed from a judgment of the same court entered August 30, 2007 (see CPLR 5501 [c]). The judgment, entered pursuant to the August 13, 2007 order granting plaintiff’s motion for summary judgment and denying defendant’s cross motion for summary judgment, awarded plaintiff the principal sum of $1,131.

Judgment reversed without costs, so much of the order as granted plaintiff’s motion for summary judgment vacated, plaintiff’s motion for summary judgment denied, and matter remanded to the Civil Court for all further proceedings.

In this action by a provider to recover assigned first-party no-fault benefits, the court granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for summary judgment. The instant appeal by defendant ensued. A judgment was subsequently entered.

On appeal, defendant argues that the affidavit by plaintiff’s billing manager, submitted in support of plaintiff’s motion for summary judgment, failed to lay a proper foundation for the admission of the documents annexed to plaintiff’s moving papers and that, as a result, plaintiff failed to establish a prima facie case. We agree. The affidavit submitted by plaintiff’s billing manager was insufficient to demonstrate that she possessed personal knowledge of plaintiff’s [*2]practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 15 Misc 3d 144[A], 2007 NY Slip Op 51161[U] [App Term, 2d & 11th Jud Dists 2007], affd 55 AD3d 644 [2008]; Bath Med. Supply, Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists 2007]; Dan Med. P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, the judgment is reversed, so much of the
order as granted plaintiff’s motion for summary judgment is vacated, and plaintiff’s motion for summary judgment is denied. We note that no issue is raised with respect to the denial of defendant’s cross motion for summary judgment.

Pesce, P.J., Golia and Rios, JJ., concur.
Decision Date: February 27, 2009

Civil Court of the City of New York, Kings County

131695/07

Plaintiff:

Sylvain R. Jakabovics, Esq.

2630 Ocean Avenue, Suite A-3

Brooklyn, NY 11229

Defendant:

Law Offices of Moira A. Doherty

50 Charles Lindbergh Boulevard, Suite 400

Uniondale, New York 11553

Genine D. Edwards, J.

In this action, plaintiff seeks to recover no-fault benefits from the defendant. Plaintiff now moves for summary judgment and defendant cross-moves for the same relief.

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence in admissible form to demonstrate the absence of any material issues of fact. St. Claire v. Empire Gen. Contr. & Painting Corp., 33 AD3d 611, 821 NYS2d 471 (2d Dept. 2006). See also Alvarez v. Prospect Hosp., 68 NY2d 320, 508 NYS2d 923 (1986). The motion shall be supported by an affidavit from a person with knowledge of the facts. See CPLR 3212 (b). If the moving party fails to make such a showing, the motion must be denied, irrespective of the sufficiency of the opposing papers. See De Santis v. Romeo, 177 AD2d 616, 576 NYS2d 323 (2d Dept. 1991). Once the movant provides sufficient proof the burden of production rests on the adverse party to demonstrate the existence of a triable issue of fact. See Katona v. Low, 226 AD2d 433, 641 NYS2d 62 (2d Dept. 1996).

Plaintiff established a prima facie case as to the creation and mailing of the subject bill, in the amount of $1,104.00. Defendant, however, persuasively contends that plaintiff’s lawsuit is premature since the plaintiff failed to comply with outstanding verification requests. Defendant properly proved timely service of its initial verification request for an invoice, CPT codes and medical records. In response, plaintiff provided an invoice, but failed to provide proper CPT codes and medical records. Defendant sent a second and third verification request, acknowledging receipt of plaintiff’s invoice, but indicating that the proper coding and medical records were still [*2]outstanding. There was no further response from the plaintiff. Although plaintiff’s affiant indicated that it was his duty to handle verification requests and responses, he never asserted that he or anyone else did so in this matter.

This Court finds that the burden rests with the plaintiff to properly verify its claim. Plaintiff cannot simply rest on its laurels and ignore a verification request. See Lenox Hill Radiology and MIA P.C. v. Global Liberty Insurance, 20 Misc 3d 434, 858 NYS2d 587 (Civ. Ct. New York County 2008). Defendant did all it could do by sending two follow-up requests. Since the plaintiff desires to be paid, the onus is on it to ensure that the defendant has all of the required information to verify and pay the claim. Plaintiff completely ignored its burden and commenced this action prematurely.

Furthermore, it should be noted that, whether the plaintiff possesses the verification requested or it is in the hands of the referring physician, plaintiff cannot shift its obligation to verify a claim to the defendant.

Accordingly, the complaint is dismissed.

This constitutes the decision and order of this Court.

Dated: February 26, 2009

____________________________

Genine D. Edwards

J.C.C.

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Queens County (Lee A. Mayersohn, J.), entered February 14, 2008. The order, insofar as appealed from as limited by the brief, granted defendant George German’s motion to vacate a default judgment as against him.

Order, insofar as appealed from, reversed without costs, defendant George German’s motion to vacate the default judgment as against him denied and default judgment as against George German reinstated.

Plaintiff’s subrogor was a passenger in a motor vehicle which, in 1999, was involved in an accident with a motor vehicle allegedly owned by defendant George German and operated by defendant Manuel C. German. As a result of the accident, plaintiff’s subrogor was injured, and received no-fault benefits from plaintiff in the sum of $14,511.93. Thereafter, plaintiff commenced this subrogation action against defendants. Upon defendants’ default, a judgment in the principal sum of $14,511.93 was entered against them in June of 2001.

In February of 2007, defendant George German (hereinafter defendant) moved to vacate [*2]the default judgment as against him and to restore the action to the calendar. The parties stipulated to vacate the judgment as against him and to permit his affidavit in support of the vacatur motion to serve as his answer. The matter was scheduled for trial, and when defendant failed to appear, the original default judgment against him was reinstated. Defendant moved three more times by order to show cause to vacate the reinstated default judgment as against him. The first time, the motion was marked off the calendar when defendant failed to appear. The second time, the motion was denied based upon defendant’s failure to set forth a meritorious defense. Defendant’s third order to show cause resulted in an order vacating the reinstated judgment as against him, and the matter was restored to the calendar.

A party seeking to vacate a default judgment must demonstrate a reasonable excuse for the default and a meritorious defense to the action (see CPLR 5015 [a] [1]; see also Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138 [1986]; Putney v Pearlman, 203 AD2d 333 [1994]). While the determination of what constitutes a reasonable excuse for a default generally lies within the sound discretion of the motion court (see Grutman v Southgate At Bar Harbor Home Owners’ Assn., 207 AD2d 526, 527 [1994]; Bergdorf Goodman Inc. v Hillard, 1 Misc 3d 127[A], 2003 NY Slip Op 51544[U] [App Term, 2d & 11th Jud Dists 2003]), reversal is warranted where the motion court has improvidently exercised its discretion (see Roussodimou v Zafiriadis, 238 AD2d 568 [1997]). Furthermore, where the record demonstrates a pattern of default or neglect, the default should be considered intentional and, therefore, not excusable (see Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553 [2001]). In the instant case, defendant’s consistent and repeated defaults demonstrated a pattern of neglect, and the default should not be excused. We conclude that it was an improvident exercise of discretion for the Civil Court to have granted defendant’s motion to vacate the default judgment as against him.

We note that in view of our finding that defendant failed to establish a
reasonable excuse for the default, it is unnecessary for us to address the issue of whether a meritorious defense was demonstrated.

Accordingly, the order, insofar as appealed from, is reversed, defendant George German’s motion to vacate the default judgment as against him is denied, and the default judgment is reinstated.

Pesce, P.J., Golia and Rios, JJ., concur.
Decision Date: February 24, 2009

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Edmund M. Dane, J.), entered December 12, 2007. The order denied plaintiffs’ motion for summary judgment.

Order affirmed without costs.

In this action by providers to recover assigned first-party no-fault benefits, plaintiffs moved for summary judgment. Defendant opposed the motion on the grounds
of lack of coverage, failure by plaintiffs’ assignors to appear for independent medical examinations and lack of medical necessity. The court below denied plaintiffs’ motion for summary judgment, finding that although plaintiffs established their prima facie entitlement to summary judgment, defendant raised triable issues of fact. The instant appeal by plaintiffs ensued.

A provider generally establishes its prima facie entitlement to summary judgment by [*2]proof of the submission of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). A review of the record indicates that the affidavit submitted by plaintiffs’ billing manager sufficed to establish that the annexed claim forms constituted evidence in admissible form (see CPLR 4518; Fortune Med., P.C. v Allstate Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50243[U] [App Term, 9th & 10th Jud Dists 2007]). Consequently, the record establishes plaintiffs’ prima facie entitlement to summary judgment.

In opposition to plaintiff’s motion for summary judgment, defendant asserted, inter alia, that the alleged injuries do not arise out of an insured incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 201 [1997]). In support of said defense, defendant submitted the affidavit of its litigation examiner, the police report, the affidavit of its investigator, and transcripts of statements made by the assignors and the insured, which demonstrated that defendant possessed a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (Central Gen. Hosp. at 199).

Accordingly, the denial of plaintiffs’ motion for summary judgment is affirmed, albeit on other grounds. In light of the foregoing, we reach no other issue.

Rudolph, P.J., Tanenbaum and LaCava, JJ., concur.
Decision Date: February 24, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered November 15, 2007, deemed from a judgment of the same court entered December 14, 2007 (see CPLR 5501 [c]). The judgment, entered pursuant to the November 15, 2007 order denying defendant’s motion for summary judgment and granting plaintiff’s cross motion for summary judgment, awarded plaintiff the principal sum of $3,600.

Judgment reversed without costs, order entered November 15, 2007 vacated, plaintiff’s cross motion for summary judgment denied, defendant’s motion for summary judgment granted and complaint dismissed.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment on the ground that it timely denied plaintiff’s claims based on plaintiff’s owner’s failure to appear for scheduled examinations under oath (EUOs). Plaintiff opposed the motion and cross-moved for summary judgment. By order entered November 15, 2007, the Civil Court denied defendant’s motion for summary judgment and granted plaintiff’s cross motion for summary judgment, finding that defendant did not comply with the EUO scheduling regulations, since the initial EUO was not scheduled within 30 days of defendant’s receipt of plaintiff’s claims. This appeal by defendant ensued. A judgment was subsequently entered.

Defendant’s contention that plaintiff failed to make out a prima facie case entitling it to summary judgment is without merit. A provider generally establishes its prima facie entitlement to summary judgment by proof of the submission of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see [*2]Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). In addition, the affidavit submitted by a provider in support of its summary judgment motion must lay a sufficient foundation to establish that the annexed documents constitute evidence in admissible form (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]). In the instant case, the affidavit submitted by plaintiff’s billing manager was sufficient to establish that she possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers. Further, any deficiency in plaintiff’s moving papers regarding proof of mailing of the claim forms was cured by defendant’s claim denial forms and the affidavit of defendant’s no-fault litigation examiner, in which receipt of the claims in question was conceded (see East Acupuncture, P.C. v Electric Ins. Co., 16 Misc 3d 128[A], 2007 NY Slip Op 51281[U] [App Term, 2d & 11th Jud Dists 2007]; Oleg Barshay, D.C., P.C. v State Farm Ins. Co., 14 Misc 3d 74 [App Term, 2d & 11th Jud Dists 2006]). Accordingly, plaintiff made a prima facie showing of its entitlement to summary judgment.

In support of its motion for summary judgment and in opposition to plaintiff’s cross motion for summary judgment, defendant asserted that it timely denied plaintiff’s claims based on plaintiff’s owner’s failure to appear for scheduled examinations under oath (EUOs). Plaintiff asserts that the EUO scheduling letters were ineffective since they were not sent to plaintiff but rather to an attorney. However, since defendant’s counsel received a letter from said attorney a short time before the initial EUO scheduling letter was mailed advising counsel that the attorney represented plaintiff with respect to EUO requests which were already pending, such a contention lacks merit (see St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338, 340 [2002]; New York Hosp. Med. Ctr. of Queens v State Farm Mut. Auto. Ins. Co., 293 AD2d 588, 591 [2002]).

A review of the record indicates that defendant established that the insurance policy in effect when the EUOs were sought contained an endorsement authorizing verification by EUO (cf. Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50526[U] [App Term, 2d & 11th Jud Dists 2005]; Star Med. Servs. P.C. v Eagle Ins. Co., 6 Misc 3d 56 [App Term, 2d & 11th Jud Dists 2004]). Inasmuch as the accident in which plaintiff’s assignor was allegedly injured occurred after the April 5, 2003 effective date of the emergency first amendment to revised Department of Insurance Regulation 68, contrary to plaintiff’s contention, defendant was not required to schedule the EUO within 30 days of receiving plaintiff’s claims but only within a reasonable time thereafter (see Eagle Surgical Supply, Inc. v Progressive Cas. Ins. Co., 21 Misc 3d 49 [App Term, 2d & 11th Jud Dists 2008]). Since the date selected for the EUO was reasonable and plaintiff did not appear for the scheduled EUO, defendant’s motion for summary judgment should have been granted since the action was premature (see Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 [2005]; see also Insurance Department Regulations [11 NYCRR] § 65-1.1; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]; 2003 Ops Ins Dept No. 03-02-12 [www.ins.state.ny.us/ogco2003/rg030212.htm; http://www.courts.state.ny.us/reporter/webdocs/failure_to_attend_no_fault_ime.htm).

In light of the foregoing, the judgment is reversed, the order entered November 15, 2007 [*3]vacated, plaintiff’s cross motion for summary judgment denied, defendant’s motion for summary judgment granted and complaint dismissed.

Pesce, P.J., Weston Patterson and Steinhardt, JJ., concur.
Decision Date: February 20, 2009

[*1]

District Court of Nassau County, First District, February 17, 2009

APPEARANCES OF COUNSEL

Robert E. Dash, Syosset, for plaintiff. Freiberg & Peck, LLP, New York City, for defendant.

{**24 Misc 3d at 195} OPINION OF THE COURT

Gary F. Knobel, J.

Motion by defendant for an order discontinuing this action pursuant to CPLR 3217 (b), or in the alternative, for an order dismissing the plaintiff’s complaint pursuant to CPLR 3211 (a), is denied in its entirety. However, the plaintiff is directed to immediately purchase a new index number (see CPLR 2001).

The unusual procedural issues raised by this motion involve (1) the application of the recent amendment to CPLR 2001, which not only gives the court discretion to correct or ignore mistakes or omissions occurring at the commencement of an action, it requires the court to excuse the commencement error if a substantial right of a party is not prejudiced, (2) the effect of this amendment on the Court of Appeals’ commencement-by-filing decisions, (3) whether the revised version of CPLR 2001 should be applied when there is a defect in an action, such as the one at bar, that has been commenced by service of process, and (4) the timing of a motion to dismiss the complaint based upon the affirmative defenses alleging commencement infirmities, i.e., “fail[ure] to properly commence an action” and “fail[ure] to properly obtain an index number.”{**24 Misc 3d at 196}

The procedural history of this case is as follows:

Vinings Spinal Diagnostic, P.C., as assignee of Andrew Amitrano, commenced an action on November 26, 2001, under index No. 18354/01, against the defendant Progressive Casualty Insurance Company. The plaintiff sought to recover no-fault insurance benefits for medical services in the sum of $808.80 rendered to Andrew Amitrano on or about June 7, 2000.

In April of 2002, the plaintiff moved for an order pursuant to CPLR 3215 granting a default judgment against the defendant. That motion was subsequently withdrawn by stipulation, signed by all parties, dated April 1, 2002. Thereafter, the defendant filed an answer asserting 12 affirmative defenses.

On September 11, 2002, the defendant moved for an order pursuant to CPLR 3126 striking the plaintiff’s complaint for plaintiff’s failure to respond to the defendant’s outstanding discovery demands. The plaintiff opposed said motion and cross-moved for various [*2]forms of relief. By order dated November 27, 2002, this court denied defendant’s motion as moot since plaintiff had responded to the defendant’s outstanding discovery demands. The court’s order also denied the plaintiff’s cross motion as it was not properly noticed (see CPLR 2215).

On May 8, 2003, this action was referred to mandatory arbitration in accordance with 22 NYCRR 28.2. On October 16, 2003, the case was heard before an arbitrator where both parties appeared. The arbitrator’s award entered on January 13, 2004, stated that the action was “withdrawn without prejudice in order to re-institute the suit with the proper parties.” It appears that the parties entered into a stipulation of discontinuance in 2003. A review of the Clerk’s file of this action reveals that the stipulation of discontinuance dated “—2003” and filed with the Clerk’s office on March 14, 2004, provided, in relevant part, that:

“It is hereby stipulated and agreed by and between the attorneys for the respective parties herein that the above captioned is discontinued without prejudice[.] This discontinuance shall in no way prevent the institution of an action for the bills herein under John M. Horvath, D.C., P.C. The defendant, Progressive Insurance Company, shall serve an answer to the plaintiff’s complaint within forty (40) days of service thereof as service of the complaint is to be served on the law firm of Freiberg & Peck . . . by either personal delivery or certified mail, return{**24 Misc 3d at 197} receipt requested, and Freiberg and Peck agree to accept service of process on behalf of [defendant] Progressive Casualty Insurance Company.” (Emphasis added.)

The stipulation of discontinuance was signed by the attorneys for both parties (see CPLR 3217 [a] [2]). Consequently, the stipulation had the effect of discontinuing the action pending under index No. 18354/01.

Thereafter, on or about March 19, 2004, notwithstanding the fact that the action under index No. 18354/01 had been discontinued, an amended summons and complaint bearing that same District Court index number was served by regular mail on Freiberg & Peck. The name of the plaintiff, as contemplated by the parties’ stipulation, that was set forth on the amended summons and complaint was John M. Horvath, D.C., P.C., rather than Vinings Spinal Diagnostic, P.C. The plaintiff never purchased a new index number. Defendant served an amended answer to the plaintiff’s amended summons and complaint on March 24, 2004. The amended answer asserted three jurisdictional defenses, a fourth affirmative defense that “[t]he plaintiff has failed to properly commence an action,” a fifth affirmative defense that “[t]he Court has no jurisdiction over the parties,” and an eleventh affirmative defense that “[t]he plaintiff has failed to properly obtain an index number.” The defendant’s attorney claims that defendant’s file was archived in an “off-site storage facility” and “misplaced by the storage facility.”

Three years later, on January 25, 2007, this case was scheduled for a discovery conference by the Clerk of the Civil Term. The parties entered into a discovery stipulation which outlined the time frames for which both parties had to complete discovery. A review of the Clerk’s file indicates that [*3]this stipulation required the defendant to provide the plaintiff “with all relevant denial of claim forms, peer reviews/IMEs, including medical records reviewed by peer/IME doctor, within ninety (90) days of the date of this Stipulation (4-26-2007).” If the defendant failed to timely furnish these records, it would be precluded from offering that information at the time of trial. The plaintiff also stipulated to provide various discovery to the defendant. In addition, the parties reserved the right to schedule depositions following the exchange of the written discovery.

The branch of defendant’s motion pursuant to CPLR 3217 seeks an order discontinuing this action upon the ground that the plaintiff failed to properly commence the second action by{**24 Misc 3d at 198} its failure to purchase a new index number. Defendant further contends pursuant to CPLR 3211 (a) that any refiling by plaintiff of this action under a new index number would be time-barred by the six-year statute of limitations since the plaintiff was required to properly recommence its action by June 12, 2006.

In opposition plaintiff acknowledges that the prior action under index No. 18354/01 was discontinued by stipulation. It contends, however, that the defendant waived any claim regarding the plaintiff’s failure to purchase a new index number by serving an answer to the plaintiff’s amended summons and complaint and not raising an objection. The plaintiff further contends that the defendant should be barred by the doctrine of laches from bringing this motion to dismiss after the statute of limitations has expired.

The first issue the court will determine is the effect the stipulation of discontinuance has upon this action.

A party asserting a claim has a statutory right to voluntarily discontinue an action (CPLR 3217 [a] [1]). It is well settled that the voluntary making and filing of a stipulation of discontinuance has the effect of terminating an action. Several courts have held that when an action is discontinued by consent, “it is as though the action never existed” (American Progressive Health Ins. Co. of N.Y. v Chartier, 6 AD2d 579, 580 [1958]; see also Newman v Newman, 245 AD2d 353 [1997]). Moreover, courts have held that since no action is pending, there is no vehicle through which a motion can be made. The remedy by motion to enforce a stipulation is available only in connection with an existing action or special proceeding (see Bruck v Contos, 24 Misc 2d 1093 [1960]).

However, stipulations dismissing or discontinuing a case must be fairly and reasonably construed, in light of the surrounding circumstances and in view of the result which the parties were attempting to accomplish (Nordred Realties, Inc. v Langley, 169 Misc 659 [1938], affd 279 NY 636 [1938]). Notwithstanding the fact that a stipulation of discontinuance is entered into, an action is not automatically terminated unless there has been a showing that the parties have executed an express, unconditional stipulation of discontinuance (see Pegalis v Gibson, 237 AD2d 420 [1997]).

In the instant case, the action captioned Vinings Spinal Diagnostic, P.C. as assignee of Andrew Amitrano v Progressive Casualty Insurance Company which bore index No. 18354/01,{**24 Misc 3d at 199} was effectively discontinued on March 19, 2004, in accordance with the signed stipulation of discontinuance. The terms of the stipulation clearly express an intent by both parties to discontinue that action (see CPLR 3217 [a] [2]).

Consequently, the court must now determine the effect of plaintiff’s recommencement of the action at bar without purchasing a new index number, and the [*4]timeliness of defendant’s motion to dismiss.

In 1992, the method of commencing an action in supreme and county courts was changed by the Legislature from a commencement-by-service to commencement-by-filing system, making the payment of a filing fee and the filing of the initiatory papers the acts that commence an action (CPLR 304, 306-a; Matter of Gershel v Porr, 89 NY2d 327, 330 [1996]; Matter of Fry v Village of Tarrytown, 89 NY2d 714, 719 [1997]). This new commencement system became effective in the District Court 12 years later on September 8, 2005. The Legislature’s main reason for converting to a commencement-by-filing system was to raise money for state coffers by requiring the payment of a filing fee when the action was commenced (Matter of Fry v Village of Tarrytown at 719; Bellew v City of New York, 272 AD2d 104 [2000]). Although the legislative goal of raising substantial revenue was quickly met, extensive litigation arose over procedural issues pertaining to a defect in compliance with the statutory requirements of the commencement-by-filing system. There is no rule or section of the CPLR, or in the Uniform District Court Act, which serves as a basis upon which a defendant or a respondent can seek dismissal of the action or proceeding based on the specific ground of improper commencement or defective commencement in the filing of the action (see CPLR 3211 [a], [e]; 304, 305; UDCA 400). As a result, many trial and appellate courts disagreed over whether these infirmities were personal, or subject matter, jurisdictional defects. The Court of Appeals wrestled with these issues over a 10-year period in cases such as Matter of Fry v Village of Tarrytown (89 NY2d 714 [1997]), Matter of Gershel v Porr (89 NY2d 327 [1996]), Harris v Niagara Falls Bd. of Educ. (6 NY3d 155 [2006]) and Matter of Ballard v HSBC Bank USA (6 NY3d 658 [2006]), and set forth the following principles in balancing the competing interests of the parties in the commencement process:

(1) strict compliance with the commencement-by-filing system was mandatory, and noncompliance could result in outright dismissal of the proceeding;{**24 Misc 3d at 200}

(2) the improper commencement of an action, such as the failure to obtain a new index number for a subsequent identical action, or the failure to pay the fee for an index number, did not deprive a court of subject matter jurisdiction (if the defect did not undermine the constitutional or statutory basis to hear a case);

(3) these types of commencement infirmities fell into the category of a defect in personal jurisdiction, not subject matter jurisdiction;

(4) personal jurisdiction could only be obtained over a defendant if the defendant’s constitutional right to due process has not been violated and the plaintiff has complied with the commencement filing rules;

(5) defendant’s right to challenge personal jurisdiction, on the ground that the plaintiff committed an error, omission or defect in commencing the action, could be waived by the defendant intentionally or unintentionally; and

(6) defendant could only assert the right to object to personal jurisdiction by timely raising the objection in an answer as an affirmative defense, or in a pre-answer motion to dismiss.

In 2007, the Legislature saw a need to overrule the aforecited Court of Appeals decisions “to fully foreclose dismissal of actions for technical . . . non-prejudicial defects” in commencement, such as the “late payment of the fee [to purchase an index number] because of a bounced check (which is subsequently cured) or the failure to purchase a second index number,” regardless of whether the defendant objected in a timely and proper manner (see 2007 Rep of Advisory Comm [*5]on Civ Prac, at 24-25, reprinted in 2007 McKinney’s Session Laws of NY, at 2219 [hereinafter Report]). Consequently, the Legislature amended CPLR 2001^[FN*] to mandate a court “[a]t any stage of an action” to excuse or forgive and correct a mistake, omission, defect or irregularity in the commencement of an action unless “a substantial right of [an adverse] party” would be “prejudiced.”{**24 Misc 3d at 201} The Legislature, unlike the Court of Appeals, now distinguished between types of commencement defects: (a) minor, harmless errors which the court must excuse, and (b) major, inexcusable deficiencies that are not subject to correction in the court’s discretion because a “substantial right” of the defendant would be affected, such as the failure by the plaintiff to properly commence the action within the statute of limitations, or the filing of a bare summons without a complaint in contravention of the statutory requirement (see CPLR 304). With respect to the latter circumstance, the 2007 Report of the Advisory Committee on Civil Practice to the Chief Administrative Judge of the Courts of the State of New York (at 25, reprinted in 2007 McKinney’s Session Laws of NY, at 2219) specifically stated that the amendment to CPLR 2001 was not meant to overrule the 1984 Court of Appeals decision of Parker v Mack (61 NY2d 114 [1984]), that was issued in the previous era of commencement by service of process. Parker held that the service of a summons which (1) failed to recite the nature of the action and relief sought, as required by CPLR 305 (b), and (2) was served without a complaint, rendered the commencement of the action a nullity. The Parker Court implied that this type of commencement infirmity was such a serious defect in an initiatory process document that it deprived a court of subject matter jurisdiction, i.e., the power of the court to act to hear and determine the case before it. The “nullity” concept expressed in Parker was echoed 12 years later by the Court of Appeals in Matter of Gershel v Porr (the service of process on the defendant before that process was filed with the county clerk rendered the action a nullity), and by the dissent in Matter of Fry v Village of Tarrytown, but was distinguished in Matter of Ballard v HSBC Bank USA (6 NY3d 658, 663 [2006]), Harris v Niagara Falls Bd. of Educ. (6 NY3d 155 [2006]) and Matter of Fry (89 NY2d at 718-719). However, the Court of Appeals has never expressly overruled its decisions in Gershel or Parker. Consequently, last year, when the Appellate Division, Third Department, in Matter of Miller v Waters (51 AD3d 113 [2008]), was presented with an opportunity to interpret and apply the 2007 amendment to CPLR 2001, it seized upon the Legislature’s treatment of a Parker commencement defect as a defect in subject matter jurisdiction, depriving the court of the power to act. The Miller court declared that “[a]lthough the language of [CPLR 2001] is broad . . . the [amended] statute was not intended to allow courts to create subject matter jurisdiction{**24 Misc 3d at 202} where it does not exist” (Miller, 51 AD3d at 117). The court concluded that it will adhere to the precedent in the Third Department that “nonfiling of the papers necessary to institute the action is a nonwaivable, jurisdictional defect” (Miller at 116, 118). Thus, the Legislature’s amendment of CPLR 2001 will most likely revive the debate as to whether the nonfiling (or filing) [*6]of proper papers to commence an action or proceeding is a component of subject matter jurisdiction rather than personal jurisdiction.

Turning to the branch of defendant’s motion seeking the dismissal of the complaint based upon the infirmities in the commencement of this action, the relief sought must be denied, whether the revised version of CPLR 2001 is considered and applied, or whether the statutes in effect and the principles of law pronounced by appellate courts between 1996 and 2007 are applied.

Here the parties charted their own procedural course by entering into stipulations which (1) permitted the commencement of a subsequent action by a different plaintiff for the same relief sought in the original action, and allowed for service of the complaint on the defendant at its counsel’s office by certified mail, and (2) set forth a discovery schedule. Consequently, since the action at bar was recommenced in the District Court six months prior to the effective date (Sept. 8, 2005) of the commencement-by-filing system in District Court (see UDCA 400), the plaintiff was not, contrary to defendant’s contentions, required to first purchase an index number and file the summons and complaint before serving the “amended” summons and complaint. Nevertheless, the plaintiff was still required to purchase a new index number for the subsequent action (see UDCA 1911 [a] [1], [2]).

The commencement errors committed by plaintiff’s counsel—serving an amended complaint and serving process by regular mail instead of certified mail in accordance with the parties’ stipulation, and failing to purchase a new index number—were technical, nonprejudicial procedural defects that should be disregarded in accordance with the 2007 revision of CPLR 2001 (see Report, supra). This holding would also be consistent with the enactment in 2005 of section 400 (3) of the Uniform District Court Act, which mandates that the “[f]ailure to include the index number on the papers as served shall be cured by stipulation between the parties or by leave of court, which shall not be unreasonably withheld.”{**24 Misc 3d at 203}

Even if the former CPLR 2001 and the overruled Court of Appeals precedent are applied to the issue of whether the commencement infirmities herein can be excused, the same conclusion as set forth above should be reached. Although the defendant raised the affirmative defense of lack of personal jurisdiction in its answer and specifically noted that there were commencement defects, the defendant waived these objections by failing to move to dismiss the complaint based upon those grounds within 60 days after serving its answer (see CPLR 3211 [e]; Matter of Fry at 721 n 4; Federici v Metropolis Night Club, Inc., 48 AD3d 741, 742 [2008]; Page v Marusich, 30 AD3d 871, 873 [2006]; Sirkis v Cohen, 23 AD3d 369, 369-370 [2005]; Jacobowitz v Leak, 19 AD3d 453, 455 [2005]; Dimond v Verdon, 5 AD3d 718, 719 [2004]). CPLR 3211 (e) specifically requires, inter alia, the defendant to make a motion within that 60-day time limit for the dismissal of the case due to improper service of process. However, this court broadly interprets that provision in CPLR 3211 (e) to also require the defendant to timely move to dismiss the case based upon a defect in the commencement of an action. Consequently, this court declines to follow the Third Department appellate precedent of Sangiacomo v County of Albany (302 AD2d 769, 771 [2003]), and trial court decision in Laursen v Dundee Cent. School Dist. (13 Misc 3d 1209[A], 2006 NY Slip Op 51745[U] [2006]), which held that there is no time limit for that type of motion. The purpose of the 60-day time frame is to flesh out and address issues regarding personal jurisdiction during an early stage of the litigation rather than when the case is ready for trial. This is especially true where, as here, the defendant appeared and defended the subsequent action for three years before moving for dismissal based upon [*7]commencement infirmities (see Majchrowicz v Kolpak, Inc., 38 AD3d 1186, 1188 [2007]; Page v Marusich, 30 AD3d 871, 873 [2006]; Sirkis v Cohen, 23 AD3d 369, 369-370 [2005]; compare Matter of Miller v Waters, 51 AD3d 113 [2008]; Sangiacomo v County of Albany, 302 AD2d 769, 771 [2003]). In addition, defendant failed to demonstrate undue hardship pursuant to CPLR 3211 (e) to justify an extension of time to move for dismissal of the complaint on those grounds (see Britt v Buffalo Mun. Hous. Auth., 48 AD3d 1181 [2008]; Vandemark v Jaeger, 267 AD2d 672 [1999]).

Footnotes

Footnote *: CPLR 2001 provides that

“[a]t any stage of an action, including the filing of a summons with notice, summons and complaint or petition to commence an action, the court may permit a mistake, omission, defect or irregularity, including the failure to purchase or acquire an index number or other mistake in the filing process, to be corrected, upon such terms as may be just, or, if a substantial right of a party is not prejudiced, the mistake, omission, defect or irregularity shall be disregarded, provided that any applicable fees shall be paid.” (Emphasis added.)