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.)

[*1]

Second Department, February 17, 2009

East Acupuncture, P.C. v Allstate Ins. Co., 15 Misc 3d 104, affirmed.

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn (Max Valerio of counsel), for appellant.

Saiber LLC, New York City (Agnes I. Rymer, David J. D’Aloia and McDonnell & Adels, P.C. [Martha S. Henley] of counsel), for respondent.

Andrew M. Cuomo, Attorney General, New York City (Benjamin N. Gutman and Peter Karanjia of counsel), amicus curiae, for Superintendent of Insurance of State of New York.

{**61 AD3d at 203} OPINION OF THE COURT

Balkin, J.

The principal issue on this appeal, which is a matter of conflicting decisions within our trial courts,^[FN1] is whether a toll on the accrual of statutory interest on overdue [*2]no-fault claims pursuant to 11 NYCRR 65-3.9 (c) applies to claims submitted to insurers by medical providers as assignees of policyholders, or is restricted to claims submitted directly by the policyholders themselves. We hold that the tolling regulation applies to both.

I.

The following facts are essentially undisputed. The plaintiff, East Acupuncture, P.C. (hereinafter East Acupuncture), a health care provider, treated several individuals injured in automobile{**61 AD3d at 204} accidents between July 20, 2000 and June 21, 2001 (hereinafter the injured persons), and received assignments of their no-fault benefits under automobile insurance policies issued by the defendant Allstate Ins. Co. (hereinafter Allstate). East Acupuncture, as an assignee, submitted claims for no-fault benefits to Allstate; in response, Allstate timely denied some claims, issued no denials for some claims, and untimely denied other claims.

As a result, by summons and verified complaint dated June 18, 2004, East Acupuncture, as the assignee of the injured persons, commenced the instant action against Allstate in the Civil Court of the City of New York, Kings County to recover the claimed no-fault benefits, alleging, in relevant part, that it timely submitted bills and claims to Allstate for the payment of such services, but that they remained unpaid. Contemporaneously therewith, by notice of motion dated July 19, 2004, East Acupuncture moved for summary judgment in its favor for the amount of the principal sums demanded in the complaint plus statutory interest, arguing that Allstate had failed to establish that it paid or denied East Acupuncture’s claims within the required 30 days under Insurance Law § 5106 (a).

While that motion was pending, East Acupuncture and Allstate engaged in negotiations and ultimately entered into a stipulation of settlement providing that East Acupuncture would receive: 80% of the outstanding principal of all the assigned no-fault claims for which it sought payment; 100% of interest, accrued from the date East Acupuncture filed its complaint, on claims that Allstate had timely denied; and 90% of interest, accrued from 30 days after Allstate received proof of claim, on claims that Allstate had not denied. Finally, for claims that Allstate had untimely denied, the stipulation entitled East Acupuncture to recover 100% of interest “beginning either from [30] days after insurer received the claim or the date [East Acupuncture]’s complaint was filed to be DETERMINED BY THE COURT.”

In their affirmations submitted to the Civil Court in support of and in opposition to East Acupuncture’s motion for summary judgment, East Acupuncture and Allstate disagreed as to whether the interest toll pursuant to 11 NYCRR 65-3.9 (c)^[FN2] applied to the no-fault claims of medical [*3]providers as assignees of{**61 AD3d at 205} policyholders (hereinafter provider/assignees), such as East Acupuncture, or was limited to the claims submitted by the injured persons directly. More pointedly, East Acupuncture sought interest from 30 days after the claims’ submission, while Allstate insisted that interest accrued only from the commencement date of the action. By order dated June 27, 2005, the Civil Court granted that branch of East Acupuncture’s motion which was for summary judgment awarding it interest on the untimely denied claims, with such interest accruing from 30 days after Allstate received proof of the claims. The Civil Court concluded that the interest toll pursuant to 11 NYCRR 65-3.9 (c) applied only to the claims of the injured persons, not to those of provider/assignees (see East Acupuncture, P.C. v Allstate Ins. Co., 8 Misc 3d 849, 851-852 [Civ Ct, Kings County 2005]).

Allstate appealed from that order to the Appellate Term of the Supreme Court for the Second, Eleventh and Thirteenth Judicial Districts. The parties reiterated their arguments below and were joined by the New York State Superintendent of Insurance (hereinafter the Superintendent), who was granted leave to file a brief and argue as amicus curiae.

Agreeing with Allstate and the Superintendent, the Appellate Term, by order dated January 3, 2007, reversed the order of the Civil Court and remitted the matter for a new calculation of interest on the untimely denied claims, with such interest accruing from the date East Acupuncture filed its complaint. The Appellate Term concluded that the interest toll pursuant to 11 NYCRR 65-3.9 (c) applied to the claims of both types of{**61 AD3d at 206} claimants, the injured persons and provider/assignees (see East Acupuncture, P.C. v Allstate Ins. Co., 15 Misc 3d 104 [App Term, 2d, 11th & 13th Jud Dists 2007]). The Appellate Term additionally noted that although the subject claims predated the no-fault regulations effective April 5, 2002 the regulations at issue had not been modified to any material extent (id. at 105 n).

By decision and order on motion dated August 28, 2007, this Court granted East Acupuncture’s motion for leave to appeal from the order of the Appellate Term. On its appeal, East Acupuncture maintains that the order of the Appellate Term should be reversed, inter alia, because the term “applicant,” as used in 11 NYCRR 65-3.9 (c), refers only to the injured persons, not to provider/assignees. For their part, Allstate and the Superintendent, as amicus curiae, argue that both types of no-fault claimants are subject to the interest toll under this regulation. [*4]

II.

By way of background, in 1973, the New York State Legislature enacted the Comprehensive Automobile Insurance Reparations Act (L 1973, ch 13; hereinafter the No-Fault Law)—presently codified in article 51 of the Insurance Law—supplanting common-law tort actions for most victims of automobile accidents with a system of no-fault insurance (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 281 [1997]; Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 214 [1996]).

“Under the no-fault system, payments of benefits ‘shall be made as the loss is incurred’ (Insurance Law § 5106 [a]). The primary aims of this new system were to ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003]; see Governor’s Mem approving L 1973, ch 13, 1973 McKinney’s Session Laws of NY, at 2335).

In order to fulfill these goals, the Insurance Law provides that a claim for no-fault automobile insurance benefits is overdue “if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained” (Insurance Law{**61 AD3d at 207} § 5106 [a];^[FN3] see New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492, 493 [2006]), and “[a]ll overdue payments shall bear interest at the rate of two percent per month” (Insurance Law § 5106 [a]). Building upon these precepts, the Superintendent has promulgated regulations implementing the No-Fault Law for the last 35 years, currently contained in 11 NYCRR part 65.^[FN4] More particularly, under 11 NYCRR 65-3.11 (a), an insurer shall pay benefits directly to the “applicant,” or, upon assignment by the applicant, “shall pay benefits directly to providers of health care services.” Pursuant to 11 NYCRR 65-3.8 (c), “[w]ithin 30 calendar days after proof of claim is received, the insurer shall either pay or deny the claim in whole or in part.” Under 11 NYCRR 65-3.8 (a) (1), “[n]o-fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim” (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d at 278; Cardinell v Allstate Ins. Co., 302 AD2d 772, 774 [2003]).

Relevant to the instant dispute, 11 NYCRR 65-3.9 governs the accrual of interest on overdue no-fault payments. Pursuant to 11 NYCRR 65-3.9 (a), “[a]ll overdue mandatory and additional personal injury protection benefits due an applicant or assignee shall bear interest at a rate of two [*5]percent per month” (see Hempstead Gen. Hosp. v Insurance Co. of N. Am., 208 AD2d 501 [1994]). However, 11 NYCRR 65-3.9 (c) provides that

“[i]f an applicant does not request arbitration or institute a lawsuit within 30 days after the receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations, interest shall not accumulate on the disputed claim or element of claim until such action{**61 AD3d at 208} is taken” (emphasis supplied), thereby providing a toll on the accrual of the statutory interest.

III.

The critical issue before this Court is whether the toll on the accrual of statutory interest on overdue no-fault claims pursuant to 11 NYCRR 65-3.9 (c) applies to claims submitted to insurers by provider/assignees (see 11 NYCRR 65-3.11 [a]), or is restricted to claims submitted directly by the injured persons. East Acupuncture contends that because 11 NYCRR 65-3.9 (a) uses the terms “applicant” and “assignee,” the omission of the term “assignee” in 11 NYCRR 65-3.9 (c) evidences that the interest toll applies only to claims submitted by the injured persons. In contrast, Allstate argues that, for interest tolling purposes, there is no reason to distinguish between claims submitted by provider/assignees and claims submitted by the injured persons because the term “applicant” is used in 11 NYCRR 65-3.9 (c) to refer generically to both provider/assignees and injured persons. In an amicus curiae brief, the Superintendent argues that the term “applicant,” as used in the no-fault regulations, encompasses provider/assignees and that this interpretation is consistent with prior case law and the expression of the Superintendent’s intent.

In matters of statutory and regulatory interpretation, “legislative intent is the great and controlling principle, and the proper judicial function is to discern and apply the will of the [enactors]” (Matter of ATM One v Landaverde, 2 NY3d 472, 476-477 [2004], quoting Mowczan v Bacon, 92 NY2d 281, 285 [1998] [internal quotation marks omitted]).

“Legislative intent may be discerned from the face of a statute, but an apparent lack of ambiguity is rarely, if ever, conclusive . . . Generally, inquiry must be made of the spirit and purpose of the legislation, which requires examination of the statutory context of the provision as well as its legislative history” (Matter of Sutka v Conners, 73 NY2d 395, 403 [1989]; see Matter of ATM One v Landaverde, 2 NY3d at 477; Mowczan v Bacon, 92 NY2d at 285).

Moreover, “regulations . . . should be construed to avoid objectionable results” (Matter of ATM One v Landaverde, 2 NY3d at 477).

Because the statutory text is the clearest indicator of legislative intent, “the starting point in any case of interpretation{**61 AD3d at 209} must always be the language itself, giving effect to the plain meaning thereof” (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998]; see Matter of Jansen Ct. Homeowners Assn. v City of New York, 17 AD3d 588, 589 [2005]). “Pursuant to the maxim of statutory construction expressio unius est exclusio alterius, ‘where a law expressly describes a particular act, thing or person to which it shall apply, an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted and excluded’ ” (Matter of Town of Eastchester v New York State Bd. of Real Prop. Servs., 23 AD3d 484, 485 [2005], quoting McKinney’s Cons Laws of NY, Book 1, Statutes § 240). Nonetheless, “a statute or ordinance must be construed as a whole and . . . its various sections must be considered together and with reference to each other” (People v Mobil Oil Corp., 48 NY2d 192, 199 [1979]; see Matter of Notre Dame Leasing v Rosario, 2 NY3d 459, 464 [2004]; Levine v Bornstein, 4 NY2d 241, 244 [1958]).

Responsibility for administering the Insurance Law rests with the Superintendent, who has broad power to interpret, clarify, and implement the legislative policy by promulgating regulations (see Insurance Law § 301; Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d 196, 201 [2007]; Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d at 863-864). “[T]he interpretation given to a regulation by the agency which promulgated it and is responsible for its administration is entitled to deference if that interpretation is not irrational or unreasonable” (Matter of 427 W. 51st St. Owners Corp. v Division of Hous. & Community Renewal, 3 NY3d 337, 342 [2004] [internal quotation marks [*6]omitted]; see Matter of Brooklyn Assembly Halls of Jehovah’s Witnesses, Inc. v Department of Envtl. Protection of City of N.Y., 11 NY3d 327, 334 [2008]; Matter of Visiting Nurse Serv. of N.Y. Home Care v{**61 AD3d at 210} New York State Dept. of Health, 5 NY3d 499, 506 [2005]). However, “courts are not required to embrace a regulatory construction that conflicts with the plain meaning of the promulgated language” (Matter of Visiting Nurse Serv. of N.Y. Home Care, 5 NY3d at 506).

Applying these principles to the matter at bar, we find that the term “applicant” as used in 11 NYCRR 65-3.9 (c) refers to both provider/assignees and injured persons. Since the Superintendent’s parallel interpretation is neither irrational nor unreasonable, it is entitled to deference (see Matter of 427 W. 51st St. Owners Corp. v Division of Hous. & Community Renewal, 3 NY3d at 342; Matter of Visiting Nurse Serv. of N.Y. Home Care v New York State Dept. of Health, 5 NY3d at 506). In light of the fact that the no-fault regulations do not provide a general definition of the term “applicant,” the plain meaning of this term in 11 NYCRR 65-3.9 (c) would seem to refer to any entity, whether an injured person or a provider/assignee, who submits a claim or applies to an insurance company for no-fault benefits (see Majewski, 91 NY2d at 583). Indeed, in some instances, these regulations use the term “applicant” as a generic reference to both provider/assignees and injured persons (see e.g. 11 NYCRR 65-3.2 [b]; 65-3.3 [a]; 65-4.2 [b] [1] [i]); while, in other instances, the term “applicant” is used to refer specifically to injured persons (see e.g. 11 NYCRR 65-3.5 [e]; 65-3.8 [g]). However, construing the no-fault regulations as a whole and considering their various sections in reference to each other, as we must (see People v Mobil Oil Corp., 48 NY2d at 199), the Superintendent’s interpretation of the term “applicant,” as used in 11 NYCRR 65-3.9 (c), as a generic reference to both provider/assignees and injured persons is entitled to deference not only because the no-fault regulations do not use this term consistently and exclusively as a reference to injured persons, but because the Superintendent’s definition is consistent with the manner in which it is used in certain other instances.

The Superintendent’s interpretation of 11 NYCRR 65-3.9 (c) is additionally consistent with the spirit and purpose of the No-Fault Law (see generally Matter of ATM One v Landaverde, 2 NY3d at 477). One of the primary aims of the no-fault system is to ensure prompt payment of claims (see Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d at 860; Cardinell v Allstate Ins. Co., 302 AD2d at 774). The interest which accrues on overdue no-fault benefits at a rate of two percent per month (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.9 [a]) is a statutory penalty designed to encourage prompt adjustments of claims and inflict a punitive economic sanction on those insurers who do not comply (see Dermatossian v New York City Tr. Auth., 67 NY2d 219, 224 [1986]; Cardinell v Allstate Ins. Co., 302 AD2d at 774). Interpreting 11 NYCRR 65-3.9 (c) as applying the interest toll only to injured persons would allow a provider/assignee, who delays commencing legal action or requesting arbitration on denied claims, to continue to accrue interest pursuant to Insurance Law § 5106 (a) throughout this period of delay. Rewarding such delay with what amounts to essentially a windfall of punitive interest payments is at odds with the legislative goal of promptly resolving no-fault claims.{**61 AD3d at 211}

IV.

Finally, the Superintendent’s interpretation conforms with the general principle that an assignee stands in the shoes of an assignor and thus acquires no greater rights than those of its assignor (see Matter of International Ribbon Mills [Arjan Ribbons], 36 NY2d 121, 126 [1975]; Long Is. Radiology v Allstate Ins. Co., 36 AD3d 763, 765 [2007]; TPZ Corp. v Dabbs, 25 AD3d 787, 789 [2006]). ” ‘It is axiomatic concerning legislative enactments in derogation of common law . . . that they are deemed to abrogate the common law only to the extent required by the clear import of the statutory language’ ” (Blue Cross & Blue Shield of N.J., Inc. v Philip Morris USA Inc., 3 NY3d 200, 206 [2004], quoting Morris v Snappy Car Rental, 84 NY2d 21, 28 [1994]). Under the interpretation of 11 NYCRR 65-3.9 (c) urged by East Acupuncture, a provider/assignee would not be subject to the toll on the accrual of [*7]statutory interest provided for by that regulation even though the toll would apply to its assignor, the injured person, if the injured person had submitted the same claim for no-fault benefits to the insurer itself. Because such an abrogation of the common law is not required by the language of 11 NYCRR 65-3.9 (c) (see Blue Cross & Blue Shield of N.J., Inc. v Philip Morris USA Inc., 3 NY3d at 206), the Superintendent’s contrary interpretation is neither irrational nor unreasonable and is, again, entitled to due deference (see Matter of 427 W. 51st St. Owners Corp. v Division of Hous. & Community Renewal, 3 NY3d at 342).

V.

We further find that East Acupuncture’s reliance upon LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co. (46 AD3d 1290, 1291-1292 [2007], lv granted 10 NY3d 717 [2008]) is misplaced. In LMK, the Appellate Division, Third Department rejected the no-fault insurer’s contention that the trial court improperly awarded interest to the provider/assignees by not tolling interest for the period between 30 days after they received the claim denial until commencement of their action (see LMK Psychological Servs., P.C., 46 AD3d at 1291). Although noting that this contention was not raised by the insurer in the lower court and thus unpreserved for appellate review, the Appellate Division, Third Department went on to conclude that the interest toll only applied to no-fault claims timely denied by the insurer (id. at 1291-1292). Likewise, East Acupncture’s reliance on New York & Presbyt. Hosp. v Allstate Ins. Co. (30 AD3d at 494) is also misplaced.{**61 AD3d at 212}

This ruling, enunciated as dicta, is inapposite since it did not confront the precise issue presented by this appeal: whether the term “applicant,” as used in 11 NYCRR 65-3.9 (c), refers to both injured persons and provider/assignees (see Sabella and Lustig, Outside Counsel, Accrual Date for Payment of Interest in No-Fault Cases, NYLJ, May 29, 2008, at 4, col 4).

VI.

In conclusion, we hold that the term “applicant,” as used in 11 NYCRR 65-3.9 (c), refers to both provider/assignees and injured persons and that the toll on statutory interest provided for therein applies to no-fault claims submitted to insurers by both types of claimants. Accordingly, the Appellate Term properly determined that interest pursuant to Insurance Law § 5106 (a) did not begin to accrue on the claims that were untimely denied by Allstate until East Acupuncture filed its complaint. Thus, the Appellate Term properly reversed the order of the Civil Court and remitted the matter for the new interest calculation.

East Acupuncture’s remaining contentions are either not properly before this Court or without merit.

VII.

In accordance with the foregoing, the order dated January 3, 2007 is affirmed.

Mastro, J.P., Miller and McCarthy, JJ., concur.

Ordered that the order dated January 3, 2007 is affirmed, with costs.

Footnotes

Footnote 1: Among the conflicting decisions within our trial courts in the Second Judicial Department are: Brooklyn Chiropractic Assoc., P.C. v Progressive Cas. Ins. Co. (17 Misc 3d 13, 15 [App Term, 2d & 11th Jud Dists 2007] [interest accrues upon commencement of arbitration or action]), Vista Surgical Supplies, Inc. v State Farm Mut. Auto. Ins. Co. (15 Misc 3d 1143[A], 2007 NY Slip Op 51127[U] [Civ Ct, Kings County 2007] [same]), Tsai Chao v Country-Wide Ins. Co. (11 Misc 3d 1090[A], 2006 NY Slip Op 50794[U] [Dist Ct, Nassau County 2006] [same]), and Elmont Open MRI & Diagnostic Radiology, P.C. v Country-Wide Ins. Co. (15 Misc 3d 552 [Dist Ct, Nassau County 2007] [interest accrues 30 days after claim submission]).

Footnote 2: 11 NYCRR 65-3.9 specifically provides, in relevant part, the following:

“(a) All overdue mandatory and additional personal injury protection benefits due an applicant or assignee shall bear interest at a rate of two percent per month, calculated on a pro rata basis using a 30-day month. When payment is made on an overdue claim, any interest calculated to be due in an amount exceeding $5 shall be paid to the applicant or the applicant’s assignee without demand therefor. . . .

“(c) If an applicant does not request arbitration or institute a lawsuit within 30 days after the receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations, interest shall not accumulate on the disputed claim or element of claim until such action is taken. If any applicant is a member of a class in a class action brought for payment of benefits, but is not a named party, interest shall not accumulate on the disputed claim or element of claim until a class which includes such applicant is certified by court order, or such benefits are authorized in that action by Appellate Court decision, whichever is earlier.

“(d) If an applicant has submitted a dispute to arbitration or the courts, interest shall accumulate, unless the applicant unreasonably delays the arbitration or court proceeding” (emphasis added).

Footnote 3: Insurance Law § 5106 (a) (“Fair claims settlement”) provides, in relevant part, as follows:

“Payments of first party benefits and additional first party benefits shall be made as the loss is incurred. Such benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained. If proof is not supplied as to the entire claim, the amount which is supported by proof is overdue if not paid within thirty days after such proof is supplied. All overdue payments shall bear interest at the rate of two percent per month” (emphasis added).

Footnote 4: Although East Acupuncture’s claims predate the current version of the no-fault regulations, which became effective April 5, 2002, the regulations at issue were not materially amended and are cited herein as presently promulgated.

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 (Robert H. Spergel, J.), entered January 9, 2008. The order, insofar as appealed from, granted defendant’s cross motion for summary judgment dismissing the complaint.

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 and defendant cross-moved for summary judgment dismissing the complaint on the ground that plaintiff’s assignor had failed to appear for independent medical examinations (IMEs). In support of its cross motion, defendant submitted, inter alia, an affidavit of an employee of Independent Physical Exam Referrals, Inc. (IPER), the company which scheduled the IMEs. The District Court granted defendant’s cross motion for summary judgment dismissing the complaint. On appeal, plaintiff argues only that defendant’s cross motion for summary judgment should have been denied because the affidavit executed by IPER’s employee was insufficient to establish that defendant’s request and follow-up request for an IME were mailed to plaintiff’s assignor.

Contrary to plaintiff’s contentions, the affidavit submitted by defendant was sufficient to establish that defendant’s requests and follow-up requests for IMEs were mailed to plaintiff’s assignor (see Chi Acupuncture, P.C. v Kemper Auto & Home Insurance Co., 14 Misc 3d 141[A], 2007 NY Slip Op 50352[U] [App Term, 9th & 10th Jud Dists 2007]). Accordingly, the order, insofar as appealed from, is affirmed.

Rudolph, P.J., Tanenbaum and LaCava, JJ., concur. [*2]
Decision Date: February 13, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from a judgment of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered September 21, 2007. The judgment, entered pursuant to an order granting plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $2,217.50.

Judgment reversed without costs, order granting plaintiff’s motion for summary judgment vacated and plaintiff’s motion for summary judgment denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. In opposition, defendant argued, inter alia, that there was an issue of fact as to the medical necessity of the supplies furnished by plaintiff. By order dated August 22, 2007, the court granted plaintiff’s motion for summary judgment. Judgment was subsequently entered pursuant to the order. The instant appeal by defendant ensued.

On appeal, defendant argues that the affidavit of plaintiff’s billing manager and corporate officer, submitted in support of plaintiff’s motion, 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 its prima facie case. We agree. The affidavit submitted by plaintiff’s billing manager and corporate officer was insufficient to establish that he 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. 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 [*2]44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, plaintiff’s motion for summary judgment should have been denied.

Pesce, P.J., Weston Patterson and Steinhardt, JJ., concur.
Decision Date: February 13, 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, Kings County (Loren Baily-Schiffman, J.), entered October 29, 2007. The order, insofar as appealed from, denied plaintiff’s motion to, inter alia, compel the deposition of defendant.

Order, insofar as appealed from, reversed without costs and plaintiff’s motion granted to the extent that defendant is ordered to appear for a deposition within 30 days of the date of the order entered hereon.

In this action to recover assigned first-party no-fault benefits, plaintiff moved to, inter alia, compel the deposition of defendant. Defendant failed to oppose plaintiff’s motion or to seek a protective order. Accordingly, the motion should have been granted to the extent of compelling defendant to appear for a deposition (see Crossbay Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 15 Misc 3d 110, 112 [App Term, 2d & 11th Jud Dists 2007]).

Pesce, P.J., Weston Patterson and Steinhardt, JJ., concur.
Decision Date: February 13, 2009