SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered July 30, 2007. The order, insofar as appealed from, denied defendant’s cross motion for summary judgment.

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. Insofar as is relevant to this appeal by defendant, the court properly denied defendant’s cross motion for summary judgment, as defendant’s proof failed to eliminate all triable issues of material fact (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Defendant failed to establish prima facie that its claim denials were timely, thereby permitting it to interpose the precludable defenses of untimely notices of claim and proofs of claim. In any event, defendant failed to demonstrate as a matter of law that such defenses have merit. With respect to defendant’s second ground for summary judgment, its defense based on lack of coverage, while defendant’s documentation established that the vehicle occupied by plaintiff’s assignor in the underlying motor vehicle accident was not insured by defendant under the policy number claimed, defendant failed even to allege, much less prove prima facie, that it did not insure that vehicle on the date of the loss.

Accordingly, defendant failed to shift the burden and, thus, the order denying its cross motion for summary judgment is affirmed.

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

Golia, J., concurs in a separate memorandum: [*2]

Golia, J., concurs with the result only, in the following memorandum:

While I agree with the ultimate disposition in the decision reached by the majority, I wish to note that I disagree with its finding that “[d]efendant failed to establish prima facie that its claim denials were timely . . . .”

To the contrary, I find that the affidavit by defendant’s litigation examiner was sufficient to establish timely mailing by someone with personal knowledge of the office practices as well as having personal responsibility to assure that those practices were carried out.
Decision Date: December 02, 2008

—[*1] Stern & Montana, LLP, New York, N.Y. (Richard Montana of counsel), for appellant.

Joseph Henig, P.C., Bellmore, N.Y., for respondents.

In an action to recover no-fault medical payments under insurance contracts, the defendant appeals from so much of an order of the Supreme Court, Nassau County (Mahon, J.), dated January 28, 2008, as granted that branch of the motion of the plaintiff St. Barnabas Hospital, as assignee of Miguel Jimenez, which was for summary judgment on the first cause of action and denied that branch of its cross motion which was for summary judgment dismissing the first cause of action.

Ordered that the order is modified, on the law, by deleting the provision thereof granting that branch of the motion of the plaintiff St. Barnabas Hospital, as assignee of Miguel Jimenez, which was for summary judgment on the first cause of action and substituting therefor a provision denying that branch of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

The plaintiff St. Barnabas Hospital, as assignee of Miguel Jimenez (hereinafter the Hospital), made a prima facie showing of entitlement to judgment as a matter of law on the first cause of action to recover no-fault benefits by demonstrating that the prescribed statutory billing forms were mailed to and received by the defendant and that payment was overdue (see Westchester Med. Ctr. v Allstate Ins. Co., 53 AD3d 481 [2008]; Hospital for Joint Diseases v New York Cent. Mut. Fire Ins. Co., 44 AD3d 903, 904 [2007]; New York & Presbyt. Hosp. v Countrywide Ins. Co., 44 AD3d 729, 730 [2007]). [*2]

However, in opposition, the defendant raised a triable issue of fact as to whether the Hospital timely complied with the demand for verification (see Mount Sinai Hosp. v Allstate Ins. Co., 25 AD3d 673, 674 [2006]). The defendant was not obligated to pay or deny the claim until all demanded verification was provided by the Hospital (see New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512, 513 [2006]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96, 100-101 [2005], mod on other grounds 8 NY3d 294 [2007]; Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2005]).

Accordingly, the Supreme Court correctly denied that branch of the defendant’s cross motion which was for summary judgment dismissing the first cause of action, but should not have granted that branch of the Hospital’s motion which was for summary judgment on the first cause of action. Mastro, J.P., Rivera, Fisher and Eng, JJ., concur.

Supreme Court, Nassau County

014141/08

TO:Joseph Henig, P.C.

By: Marc Henig, Esq.

Attorney for Plaintiff

1598 Bellmore Avenue

P.O. Box 1144Bellmore, NY 11710

McDonnell & Adels, P.C.

Attorneys for Defendant

401 Franklin Avenue

Garden City, NY 11530

Daniel R. Palmieri, J.

These are plaintiff’s motion and defendant’s cross motion both for summary judgment pursuant to CPLR §3212. The motions are denied.

Plaintiff provided first-party no-fault benefits to a person covered by a policy of insurance issued by defendant.

Plaintiff treated the insured between September 11, 2007 and October 4, 2007 and billed on November 2, 2007. Defendant did not pay or deny the bill because it claims that it had reasonable cause to believe that the accidents and later treatment by plaintiff were the result of intoxication and thus excluded from coverage. Ins. Law §5103(b)(2), 11 NYCRR 6-3.8(g). The regulation provides that “if an insurer has reason to believe that the applicant was operating a motor vehicle while intoxicated or impaired and such intoxication or impairment was a contributing cause of the automobile accident, the insurer shall be entitled to all available information relating to the applicant’s condition at the time of the accident. The statute provides that an insurer may exclude from coverage a person who is injured as a result of operating a motor vehicle while intoxicated or impaired within the meaning of the VTL §1192.

Summary judgment is the procedural equivalent of a trial. S.J. Capelin Assoc. Inc. v Globe Mfg. Corp., 34 NY2d 338, 341 (1974). The function of the court in deciding a [*2]motion for summary judgment is to determine if triable issues of fact exist. Matter of Suffolk Cty Dept of Social Services v James M., 83 NY2d 178, 182 (1994). The proponent must make a prima facie showing of entitlement to judgment as a matter of law. Guiffrida v Citibank Corp., 100 NY2d 72, 82 (2003); Alvarez v Prospect Hosp., 68 NY2d 320, 324 (1986). Once a prima facie case has been made, the party opposing the motion must come forward with proof in evidentiary form establishing the existence of triable issues of fact or an acceptable excuse for its failure to do so. Zuckerman v City of New York, 49 NY2d 557, 562 (1980).

In an action for no-fault payments the plaintiff makes a prima facie showing of entitlement to judgment by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of the No-Fault benefits was overdue. Insurance Law 5106(a); Westchester Medical Center v AIG, Inc., 36 AD3d 900 (2nd Dept. 2007). On this motion plaintiff argues that it has presented a prima facie case for payment of no-fault benefits for services rendered. Plaintiff has submitted the requisite billing forms, certified mail receipts, signed return receipt cards, and an affidavit from a billing person stating that she/he personally mailed the claims. There is no dispute that defendant failed to pay or deny the claims within 30 days. On this record the Court finds that plaintiff has presented a prima facie case.

In opposition defendant relies upon its affirmative defense that the incident which caused the injuries were excluded from coverage because the injured party was intoxicated and injured as a result of such condition.

Pursuant to Insurance Law 5106(a), no-fault benefits are overdue if not paid by the insurer within 30 days after submission of proof of loss. See also, 11 NYCRR 65-3.8. The insurer is precluded from asserting any defenses to payment when it fails to deny the claim within the required 30-day period. Presbyterian Hosp. in the City of New York v Maryland Casualty Co., 90 NY2d 274, 278 (1997). A narrow exception to this preclusion rule is recognized for situations where the insurer raises a defense of lack of coverage. Central General Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 198 (1997). However, intoxication has been held to constitute an exclusion from coverage rather than no coverage thus requiring an insurer to deny or pay the claim or make avail of the regulations which address the exclusion and extend the time within which to pay or deny the claim. Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 (1997).

A variation of the requirement that an insurer must either deny or pay a claim exists with respect to persons injured when believed to have been operating their vehicle while intoxicated. If an insurer has reason to believe that alcohol consumption was a contributing factor in causing the accident, the insurer is entitled to all available information relating to the applicant’s condition at the time of the accident 22 NYCRR §65-3.8(g) and proof of claim shall not be completed until information, which has been requested pursuant to subdivision 65-8.5(a) or (b), has been furnished to the insurer by the applicant or the authorized [*3]representative. Regulation §65-3.5(c) provides that an insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification is requested. This latter section does not confine or require the insurer to seek information solely from the provider but rather contemplates that verification information may be sought from any source.

In sum, intoxication may operate as an exclusion from coverage rather than as a non-covered event , thus requiring either timely payment or denial or in lieu thereof, timely requests for verification. A provider establishes a prima facie case for summary judgment by showing proper billing, mailing and lack of payment but an insurer may demonstrate the existence of triable factual issues by showing that it made timely requests for verification regarding alleged intoxication that were not answered. Westchester Med. v. Allstate Ins. Co., 53 AD3d 481 (2d Dept. 2008); Westchester Med. v. State Farm Mut. Auto., 44 AD3d 750 (2d Dept. 2007).

The insurer has raised questions of fact sufficient to deny summary judgment to plaintiff by showing that it had reason to believe that intoxication was a contributing cause of the accident causing injury and made timely requests for verification (including follow-up requests) from plaintiff and the police.

The incident was a one car accident, the driver was charged with driving while intoxicated and the affirmed supporting deposition of the laboratory technician contains information that the blood alcohol level was 0.19%, a level sufficient to fall within the scope of the statute.

A dispute over whether a toxicology report was ever sent has been held to create a question of fact so as to bar summary judgment, Westchester Medical Center v. Allstate Insurance Company, supra; Westchester Medical Center v. progressive Casualty Insurance Co., 51 AD3d 1012 (2d Dept. 2008); cf Nyack Hospital v. State Farm Mut. Ins. Co., 19 AD3d 569 (2d Dept. 2005).

There is no factual dispute here as to plaintiff’s compliance with the request for verification as to the possible intoxication condition of the insured. Plaintiff does not refute defendant’s numerous requests for toxicology results or deny its response that defendant should obtain such results from the police authorities. Thus, there is no issue of fact as to plaintiff’s noncompliance. See, Central Suffolk Hospital v. New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 (2d Dept. 2005).

In Westchester Medical Center v. Progressive Casualty Insurance Company, 43 AD2d 1039 (2d Dept. 2007), and in Central Suffolk Hosp. v. New York Cent. Mut. Fire Ins. Co., supra, the court granted summary judgment in favor of a defendant against a plaintiff because there was no issue of fact as to the hospital’s failure to provide verification as to intoxication.

With respect to defendant’s cross motion, it has not been established as a matter of law that the injured person was intoxicated and that the intoxication contributed to the injury causing accident. Defendant’s evidence is sufficient to raise questions of fact as to whether [*4]the exclusion for intoxication is applicable. Notably absent here are any specifics as to how the acident was caused by plaintiff’s intoxication. See Westchester Medical Center v. Progressive Casualty Insurance Company, 51 AD3d 1014 (2d Dept. 2008); Lynch v. Progressive Ins. Co., 12 AD3d 570 (2d Dept. 2004).

Although plaintiff does not dispute the request for verification and its inability to provide such information, plaintiff contends that the denial of claim is lacking in specificity, there by rendering defendant’s ultimate denial as ineffective. See General Acc. Ins. Group v. Circucci, 46 NY2d 862 ( 1979 ); Todaro v. Geico Gen. Ins. Co., 46 AD3d 1086 (3rd Dept. 2007); Olympic Chiropractic, P.C., v. American Transit Ins. Co., 14 Misc 3d 129(A). (App. Term 2d and 11th Judicial Districts 2007). The denial of claim form dated October 21, 2008 which is not attached, addressed or disputed by plaintiff, specifies by reference to regulation and the insured as to intoxication or impairment and thus provides enough detail as the reason for the denial. Plaintiff’s contention that it had no way of knowing the basis for denial is based solely on a subsequent denial of claim and fails to take into account requests for verification followed by the first denial. See St. Vincent’s Hosp. Of Richmond v. Government Employees Ins. Co., 50 AD3d 1123 (2d Dept. 2008).

Based on the foregoing, questions of fact exist as to whether the insured was intoxicated and whether such condition contributed to causing the injury, necessitating denial of both plaintiff’s motions and defendant’s cross motions for summary judgment.

All parties shall appear at a Preliminary Conference at the Supreme Courthouse, 100 Supreme Court Drive, Mineola, NY, lower level, on December 18, 2008 , at 9:30 a.m. No adjournments of this conference will be permitted absent the permission of or Order of this Court. All parties are forewarned that failure to attend the conference may result in Judgment by Default, the dismissal of pleadings (see 22 NYCRR 202.27) or monetary sanctions (22 NYCRR 130-2.1 et seq.).

Based on the foregoing, summary judgment is denied to both plaintiff and defendant as to the Second and Third Causes of Action.

This shall constitute the Decision and Order of this Court.

E N T E R

DATED: December 1, 2008

_____________________________

HON. DANIEL PALMIERI

Acting Supreme Court Justice

TO:Joseph Henig, P.C.

By: Marc Henig, Esq.

Attorney for Plaintiff

1598 Bellmore Avenue

P.O. Box 1144

Bellmore, NY 11710 [*5]

McDonnell & Adels, P.C.

Attorneys for Defendant

401 Franklin Avenue

Garden City, NY 11530

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 (Andrea Phoenix, J.), entered December 10, 2007. The order denied plaintiffs’ motion for partial summary judgment.

Order modified by providing that plaintiffs’ motion for partial summary judgment is granted to the extent of awarding plaintiff A.B. Medical Services, PLLC summary judgment on its claims seeking to recover the sums of $230.10, $71.40, $361.46, $361.46, $1,546.20, $501.76, $71.06, $1,573.24 and $569.36; plaintiff LVOV Acupuncture, P.C. summary judgment on its claims seeking to recover the sums of $650.50, $248.28 and $435.98; and plaintiff RW Health Plus Chiropractic, P.C. summary judgment on its claims seeking to recover the sums of $290.64, $269.60 and $134.80, and the matter is remanded to the court below for the calculation of statutory interest and attorney’s fees thereon, and for further proceedings on all remaining claims.

In this action by providers to recover assigned first-party no-fault benefits, plaintiffs moved for partial summary judgment on various claims, and defendant opposed the motion. The court below denied plaintiffs’ motion. This appeal by plaintiffs ensued. [*2]

Since defendant did not argue in the court below that plaintiffs’ medical biller and billing manager failed to establish that he possessed personal knowledge of plaintiffs’ practices and procedures so as to lay a foundation for the admission, as business records, of plaintiffs’ documents, we do not pass on the propriety of the determination of the court below with respect thereto (see Mary Immaculate Hosp. v New York Cent. Mut. Fire Ins. Co., 21 Misc 3d 130[A], 2008 NY Slip Op 52046[U] [App Term, 9th & 10th Jud Dists 2008]; 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]).

The record shows that defendant failed to pay or deny the claims by A.B. Medical Services, PLLC (A.B. Med.) seeking the sums of $230.10 and $71.40 within the 30-day prescribed period and that it also failed to establish that such period was extended by its issuance of a timely request for verification. Consequently, defendant was precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]), with exceptions not relevant to these claims. As a result, defendant failed to establish the existence of a triable issue of fact with respect to said claims, and A.B. Med. was entitled to summary judgment thereon.

An insurer’s 30-day period in which to either pay or deny a claim may be extended where the insurer submits, within 15 business days of its receipt of the NF-3 claim form, a request for additional verification (see Insurance Department Regulations [11 NYCRR] § 65-3.5 [b]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96, 100 [2005]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2002]). “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 [2004]). Since the affidavit of defendant’s no-fault litigation supervisor lacks specificity to support the assertion that defendant did not receive the verification it requested, it was insufficient to establish that the verification was still outstanding and, thus, that defendant’s time to pay or deny the claims was tolled (see Westchester Med. Ctr. v Countrywide Ins. Co., 45 AD3d 676 [2007]; New York & Presbyt. Hosp. v Countrywide Ins. Co., 44 AD3d 729 [2007]; Westchester Med. Ctr. v Liberty Mut. Ins. Co., 40 AD3d 981 [2007]; cf. Westchester Med. Ctr. v Allstate Ins. Co., 53 AD3d 481 [2008]). As a result, the claims by plaintiff A.B. Med. in the sums of $361.46, $361.46, $1,546.20, $501.76, $71.06, $1,573.24 and $569.36, and the claims by plaintiff RW Health Plus Chiropractic, P.C. (RW Health) in the sums of $290.64, $269.60 and $134.80 are overdue (see Insurance Law § 5106 [a]; Insurance Department Regulations [11 NYCRR] § 65-3.8 [a]), and A.B. Med. and RW Health are entitled to summary judgment upon said claims (see Westchester Med. Ctr., 45 AD3d 676).

Plaintiffs’ contention that defendant’s submissions from the acupuncturist who performed the peer reviews were insufficient to raise a triable issue of fact with respect to the claims submitted by LVOV Acupuncture, P.C. (LVOV) is correct. Since the acupuncturist’s peer review reports were unsworn, the reports were of no probative value (see Dowling v Mosey, 32 AD3d 1190 [2006]; Macri v St. Agnes Cemetery, 44 Misc 2d 702 [1965]). Accordingly, defendant’s submissions failed to raise a triable issue of fact as to medical necessity with respect to LVOV’s claims in the sums of
$650.50, $248.28 and $435.98, and LVOV is entitled to summary judgment upon said claims.

However, contrary to plaintiffs’ contention, defendant, through the submission of the [*3]affidavit of its no-fault litigation supervisor and affirmed peer review reports established that the claims by A.B. Med. seeking the sums of $604.24 and $644.50, and by RW Health seeking the sums of $303.30 and $202.20 were properly and timely denied based upon a lack of medical necessity (see A.B. Med. Servs. PLLC v American Tr. Ins. Co., 15 Misc 3d 132[A], 2007 NY Slip Op 50680[U] [App Term, 2d & 11th Jud Dists 2007]; Amaze Med. Supply Inc. v Travelers Prop. Cas. Corp., 7 Misc 3d 128[A], 2005 NY Slip Op 50452[U] [App Term, 2d & 11th Jud Dists 2005]). As a result, A.B. Med. and RW Health are not entitled to summary judgment upon said claims.

Although plaintiffs argue that defendant’s denial of a claim by A.B. Med. seeking the sum of $182.37 was untimely, plaintiffs’ exhibits included a copy of said denial of claim form, which is timely on its face and which denied the claim based upon an affirmed peer review report which was also attached to plaintiff’s moving papers. Given the affidavit of defendant’s no-fault litigation supervisor setting forth defendant’s standard office practice and procedure for the generation and mailing of defendant’s denial of claim forms (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]), plaintiff is not entitled to summary judgment upon said claim.

In view of the foregoing, plaintiffs’ motion for summary judgment is granted to the extent of awarding A.B. Med. summary judgment on its claims seeking to recover the sums of $230.10, $71.40, $361.46, $361.46, $1,546.20, $501.76, $71.06, $1,573.24 and $569.36, LVOV summary judgment on its claims seeking to recover the sums of $650.50, $248.28 and $435.98, and RW Health summary judgment on its claims seeking to recover the sums of $290.64, $269.60 and $134.80, and the matter is remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees due thereon pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on the remaining claims.

Rudolph, P.J., McCabe and Molia, JJ., concur.
Decision Date: November 26, 2008

—[*1] Carman, Callahan & Ingham, L.L.P., Farmingdale (Michael F. Ingham of counsel), for appellant.

Gregory J. Allen, State Insurance Fund, Liverpool (Susan B. Marris of counsel), for respondent.

Spain, J. Appeal from an order of the Supreme Court (Egan, Jr., J.), entered February 6, 2008 in Albany County, which denied petitioner’s application pursuant to CPLR 7511 to vacate an arbitration award.

On July 12, 2004, Michael Chesebro was driving in the Village of Baldwinsville, Onondaga County when his vehicle was struck in the rear by Deborah Redden,^[FN1] who was operating a 1999 Dodge minivan owned by her employer, Julie J. Taddeo, the owner of Affordable Wheelchair Transportation. Chesebro was injured. Petitioner insured the minivan, which was registered as a [*2]passenger vehicle but bore livery license plates belonging to a commercial vehicle, a 1998 Dodge minivan also owned by Taddeo, which was insured by another carrier. It is uncontested that on this day Redden was using the passenger vehicle bearing the livery plates to transport passengers for Taddeo’s business.

After paying workers’ compensation benefits to Chesebro, respondent filed an application (a PIP form) for arbitration with the New York Personal Injury Subrogation Arbitration Forum, seeking intercompany reimbursement of those paid benefits ($50,000) from petitioner pursuant to the loss transfer provisions of Insurance Law § 5105 (a). Petitioner submitted a PIP form denying the claim, asserting that its insured’s passenger vehicle was her personal vehicle and not used primarily for the transportation of persons or property, as required by Insurance Law § 5105 (a). After limited documentary evidence was submitted,^[FN2] the arbitrator determined that respondent was entitled to reimbursement from petitioner. Petitioner then commenced this proceeding to vacate the arbitration award, which Supreme Court denied, and petitioner now appeals.

As relevant here, Insurance Law § 5105 (a) provides that an insurer liable for first party benefits or a workers’ compensation carrier that pays benefits in lieu of first party benefits, which another insurer would otherwise be obligated to pay but for the No-Fault Law, has a right to recover “only if at least one of the motor vehicles involved [weighs] more than [6,500 pounds] unloaded or is . . . used principally for the transportation of persons or property for hire” (emphasis added). The latter alternate requirements have been recognized to be “condition[s] precedent to ultimate recovery” (Matter of Progressive Cas. Ins. Co. v New York State Ins. Fund, 47 AD3d 633, 634 [2008]), and were added by amendment in 1977 “to limit the right of insurance carriers to recover first-party payments” (Matter of State Farm Mut. Auto. Ins. Co. v Aetna Cas. & Sur. Co., 132 AD2d 930, 931 [1987], affd 71 NY2d 1013 [1988]). Respondent, as the applicant seeking reimbursement, bore the burden of proof to show entitlement to recover benefits paid^[FN3] (see e.g. Matter of Hanover Ins. Co. v State Farm Mut. Auto. Ins. Co., 226 AD2d 533, 534 [1996]; Matter of Eveready Ins. Co. v Lumberman’s Mut. Cas. Co., 201 AD2d 649, 649 [1994]; Republic Claims Serv. Co. v Allstate Ins. Co., 160 AD2d 925, 926 [1990]). Insurance Law § 5105 (b) “provides that mandatory arbitration is the sole remedy regarding disputes between insurers over responsibility for payment of first-party benefits” (State Farm Mut. Auto. Ins. Co. v Nationwide Mut. Ins. Co., 150 AD2d 976, 977[*3][1989]).

Here, the record is devoid of evidence establishing the “principal use” of the passenger vehicle insured by petitioner. No proof established when the livery plates were put on the passenger vehicle, or if this plate-switching or use of the passenger vehicle to transport persons or property for hire occurred on any occasions other than the date of the accident, i.e., if it was Taddeo’s or Redden’s practice to use this passenger vehicle “for hire.” Petitioner did not submit an affidavit from its insured and none of the documentary evidence established that the “principal use” of the vehicle it insured was other than its registered status as a passenger vehicle (compare Victoria Ins. Co. v Utica Mut. Ins. Co., 8 AD3d 87, 87 [2004]), i.e., the only evidence is that on the day of this accident, the passenger vehicle was being used “for hire,” bearing livery plates from another vehicle.

Where, as here, the parties are obligated by statutory mandate to submit their dispute to arbitration (see Insurance Law § 5105 [b]), the arbitrator’s determination is subject to “closer judicial scrutiny” than with voluntary arbitration (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]). “To be upheld, an award in a compulsory arbitration proceeding must have evidentiary support and cannot be arbitrary and capricious” (id. [citations omitted]; see Matter of Utica Mut. Ins. Co. [Selective Ins. Co. of Am.], 27 AD3d 990, 992 [2006]). On this record, there is no evidentiary support or rational basis for the arbitrator’s determination that petitioner’s insured passenger vehicle was used “principally . . . for hire” as required for respondent to obtain reimbursement under Insurance Law § 5105 (a) (see Matter of Progressive Cas. Ins. Co. v New York State Ins. Fund, 47 AD3d at 634; Matter of Allstate Ins. Co. v American Arbitration Assn., 26 AD3d 374, 374 [2006]; Matter of Kemper Ins. Co. v Westport Ins. Co., 9 AD3d 431, 432 [2004]). To the extent that the arbitrator granted respondent’s application based upon its finding that petitioner’s insured passenger vehicle was “at the time” being used as a vehicle for hire, such a conclusion is inadequate to support the award and is “in disregard of the standard prescribed by the legislature” (Mount St. Mary’s Hosp. of Niagara Falls v Catherwood, 26 NY2d 493, 506 [1970]), i.e., that one of the vehicles be used “principally . . . for hire” (Insurance Law § 5105 [a] [emphasis added]). The arbitration award should, therefore, be vacated.

Further, respondent relies heavily on petitioner’s failure to produce evidence presumably within its possession or reach regarding the principal use of its insured’s vehicle. However, the record does not reflect that respondent availed itself of any of the avenues for discovery, such as requesting a hearing at which witnesses could be called (see CPLR 7506 [c]), asking the arbitrator to issue subpoenas to procure documentary evidence (see CPLR 7505; see also Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR 7505, at 682-683 [1998]) or, as a last resort, applying to the court for an order directing disclosure in aid of arbitration upon a showing of extraordinary circumstances (see CPLR 3102 [c]; see also Siegel, NY Prac § 597, at 1052-1054 [4th ed]; Matter of Goldsborough v New York State Dept. of Correctional Servs., 217 AD2d 546, 547 [1995], appeal dismissed 86 NY2d 834 [1995]). While “[u]nder the CPLR, arbiters do not have the power to direct the parties to engage in disclosure proceedings” (De Sapio v Kohlmeyer, 35 NY2d 402, 406 [1974]; see Matter of Goldsborough v New York State Dept. of Correctional Servs., 217 AD2d at 547), avenues of disclosure were clearly available (see Siegel, NY Prac § 597, at 1052-1054 [4th ed]).

Mercure, J.P., Carpinello, Kane and Kavanagh, JJ., concur. Ordered the order is reversed, on the law, without costs, petitioner’s application granted and arbitration award vacated.

Footnotes

Footnote 1: Chesebro’s vehicle then struck the vehicle in front of him.

Footnote 2: Respondent’s proof included the accident report, Department of Motor Vehicles records, claim payment data sheets, copies of bills paid, and workers’ compensation award decisions. Petitioner submitted the Department of Motor Vehicles records, pictures of the vehicles and insurance documents.

Footnote 3: We do not agree with the arbitrator’s conclusion that petitioner’s position, that its insured vehicle was not used “principally . . . for hire,” is an affirmative defense. Rather, the principal use of the vehicle is a threshold part of respondent’s required showing, as the applicant seeking reimbursement under Insurance Law § 5105 (a) (see CPLR 3018; cf. Matter of State Farm Mut. Auto. Ins. Co. v City of Yonkers, 21 AD3d 1110, 1111 [2005]).

Nassau Dist Ct

C572/07

REPRESENTATION:

Law Office of Amos Weinberg, 49 Somerset Drive South, Great Neck, NY 10020-1821, Attorney for Plaintiff

Law Office of Teresa M. Spina, 88 Froehlich Farm Blvd., Suite 202, Woodbury, NY 11797

Robert A. Bruno, J.

The motion by plaintiff pursuant to CPLR §3212 for summary judgment for the relief demanded in the complaint is denied. As to the claims for $604.24 for services rendered on May 16, 2006, and all claims from June 1, 2006 onward (the last six claims), summary judgment is granted to the defendant and the complaint is dismissed as to those claims.

This is an action by plaintiff, a former medical services provider, to recover no-fault benefits from the defendant arising out of an automobile accident on April 16, 2006 in which plaintiff’s assignor, one David Ruiz, was allegedly injured. Plaintiff seeks summary judgment regarding $182.37 – $114.33 for services rendered on April 21, 2006; $268.18 – 215.26 for services rendered on April 25-28, 2006; $154.30 – $114.33 for services rendered on May 16, 2006; $407.17 – $114.33 for services rendered on April 28, 2006; $604.24 for services May 16, 2006; $407.17 – $114.33 for services rendered on May 26, 2006; $1,546.20 for services rendered on June 28, 2006; $1,573.24 for services rendered on June 28, 2006; $188.16 for services rendered on June 1-30, 2006; $71.06 for services rendered on July 7, 2006; $407.17 for services rendered on June 30, 2006; and $188.16 for services rendered on July 6-31, 2006.

It is well settled that summary judgment is a drastic remedy which should not be granted where there is any doubt about the existence of a triable issue of fact (Bhatti v. Roche, 140 AD2d 660). It is nevertheless an appropriate tool to weed out meritless claims and defenses(Lewis v. Desmond, 187 AD2d 797; Gray v. Bankers Trust Co. of Albany, N. A., 82 AD2d 168). Generally speaking, to obtain summary judgment, it is necessary that the movant establish its claim or defense by the tender of evidentiary proof in admissible form sufficient to warrant the court, as a matter of law, in directing judgment in its favor (CPLR §3212[b]). The burden then shifts to the non-moving party. To defeat the motion for summary judgment, the opposing party must come forward with evidence in admissible form to demonstrate the existence of a material issue of fact requiring a trial (CPLR §3212, subd [b]) (see also GTF Marketing, Inc. v. Colonial Aluminum Sales, Inc., 66 NY2d 965; Zuckerman v. City of New York, 49 NY2d 557). [*2]However, a movant’s failure to make such a prima facie showing requires a denial of the motion, regardless of the sufficiency of the opposing papers (Alvarez v. Prospect Hospital, 68 NY2d 32).

A no-fault claim is overdue if it is not paid or denied within thirty [30] days of receipt (see Insurance Law §5106[a]; 11 NYCRR 65-3.8[a][1] & [c]) unless, within fifteen [15] business days of receipt of the claim, the insurer requests additional verification (see 11 NYCRR 65-3.5[b]). In addition, it is well settled that an insurer is not obligated to pay or deny a claim until it has received verification of all relevant information requested (see 11 NYCRR 65-3.8[b][3];. Central Suffolk Hosp. v. New York Central mutual Fire Insurance Company, 24 AD3d 492; Hospital for Joint Diseases v. State Farm Mutual Automobile Insurance Company, 8 AD3d 533; St. Vincent’s Hospital of Richmond v. American Transit Insurance Company, 299 AD2d 338).

The Court finds that the plaintiff has failed to make out a prima facie case for judgment as to the first six dates of service listed above. To the extent that the Safir affidavit is silent as to the date the various claims herein were mailed to the defendant, defendant’s denial of claim forms (annexed to the Safir affidavit as Exhibits B) indicate the dates on which the claims were received, and adequately establish that plaintiff sent, and that defendant received, these claims (see Ultra Diagnostics Imaging v Liberty Mutual Ins. Co., 9 Misc 3d 97, 98 [App Term, 2d Dept 2005]). These same documents however also demonstrate that each of the first six claims was partially paid and partially denied, except for the fifth claim for $604.24 for services rendered on May 16, 2006, which was fully denied based upon a peer review, within thirty (30) days of their receipt. The affidavits in opposition of Megan Wolfe and Cindy Herdter, Geico claims representatives, dated August 21, 2007, confirm these facts.

As to the timely partial denials based upon a dispute as to the proper fee schedule, the first, second, third, fourth, and sixth above listed claims, a question of fact exists as to the proper fee to be charged and paid. Accordingly, summary judgment is denied as to these claims.

The plaintiff has failed to reply with medical evidence regarding the fifth claim, denied in full based upon a peer review report, and summary judgment is therefore granted to the defendant as to that claim.

As to the last six claims submitted for the period June 1, 2006 and thereafter (claims 7-12), the evidence demonstrates that timely first and second requests for verification were mailed to the plaintiff and received. These were never fully responded to. In addition, and for the reasons set forth below, defendant has demonstrated its right to summary judgment as to these claims.

11 NYCRR 65-3.8(f) provides:

An insurer shall be entitled to receive proper proof of claim and a failure to observe any of the time frames specified in this section shall not prevent an insurer from requiring proper proof of claim. [*3]

The proof of claim to which the defendant is entitled includes any requested EUO. (11 NYCRR 65-3.8[a][1]). Even a late request for additional verification is not invalid, but merely shortens the time within which the claim must be denied once the requested verification is received and the toll created by the verification request is lifted (Nyack Hosp. v. General Motors Acceptance Corp., 27 AD3d 96). An insurer is under no obligation to deny a claim before the requested verification is received (Central Suffolk Hosp. v. New York Cent. Mutual Fire Insurance Company, 24 AD3d 492), and its time to pay or deny a claim does not begin to run again until its receipt of the requested verification (Nyack Hospital v. Progressive Casualty Insurance Company, 296 AD2d 482).

As to the last six claims for services which are the subject of this summary judgment motion, the above mentioned affidavits of Megan Wolfe and Cindy Herdter, sworn to on August 21, 2007, and attached to the moving papers together with other documents, including the denials issued herein, also satisfy the business record exception to the hearsay rule and establishes that timely verification requests and delay letters were mailed to plaintiff and received by it which tolled the running of the thirty day period in which an insurer must normally pay or deny a claim (11 NYCRR 65-3.8[a][1]), and that timely requests for an Examination Under Oath (EUO) were made as to each of the last six claims herein. The provider was first requested to appear at the offices of counsel for the defendant in Woodbury, New York on October 4, 2006 to be examined with respect to 21 separate patients, including Mr. Ruiz.

On September 28, 2006, Dr. Braver wrote to counsel for the defendant, allegedly agreeing to appear for an EUO, but with conditions, including that the appearance be adjourned to a Friday and that the examination be conducted in Brooklyn. He further demanded that he be provided a list of questions, that he be paid an attendance fee of $1,400 per day, and that he testify on 21 separate days, a separate day for each patient. He did not object to the date, other than it was not a Friday, and did not appear on October 4, 2006. On October 3, 2006 the defendant wrote to plaintiff setting forth, as per plaintiff’s request, a new date, Friday, October 20, 2006, and agreeing to hold the examination in Brooklyn, but requesting that the one day examination cover each of the patients with pending claims. On October 10, 2006, the plaintiff again wrote to the defendant’s counsel, insisting that he be paid $1,400 per day and that he testify as to no more than one patient per day. He did not appear on October 20, 2006. Finally, on December 12, 2006, counsel for the defendant wrote to the plaintiff requesting that he select a single convenient date in January, 2007 on which to testify as to each pending claim. On January 10, 2007, plaintiff allegedly wrote to the defendant, allegedly agreeing to appear for the requested EUO, but still refusing to appear for a global examination. Defendant claims not to have received this letter, and on February 21 and 22, 2007, defendant denied each of these six claims, citing the doctor’s conviction and license suspension, and his failure to submit to an EUO.

The no-fault claimant is required to cooperate in good faith with the insurer in the investigation of its claim (Dilon Medical Supply Corp. v. Travelers Ins. Co., 7 Misc 3d 927). This the plaintiff has utterly failed to do. While on the surface appearing to agree to appear for an EUO, the plaintiff imposed such an absurd condition, namely that he be paid $1,400.00 twenty-one (21) separate times to appear on twenty-one (21) separate days, for an examination which defendant was prepared to complete in a single day. This would have necessitated the [*4]defendant spending $29,400.00 to obtain the verification information to which it was legally entitled. Nothing in the regulations permit the imposition of such a condition upon an insurer and the Court finds that Dr. Braver’s conduct was nothing more than an arrogant and transparent attempt to deprive the defendant of the information to which it was entitled. Such conduct constituted a refusal to provide appropriate verification information and accordingly the defendant’s time within which to pay or deny the claim never ran out (Nyack Hospital v. Progressive Casualty Insurance Company, supra ; Westchester Medical Center v. Mercury Cas. Co., —- NYS2d ——, 2008 WL 2939450 June 27, 2008). The last six claims were therefore not overdue and plaintiff’s action is premature as to them. Accordingly, the Court concludes that defendant is entitled to summary judgment as a matter of law and the complaint is dismissed as to the last six claims listed above.

Were the court not dismissing these six claims on that basis, plaintiff’s motion would nevertheless be denied. Defendant also alleges, and plaintiff does not deny, that discovery is not complete in that it served various disclosure demands upon the plaintiff together with its answer to the complaint, which demands have never been responded to. This court agrees with the holding in Ostia Medical, PC. v. Government Employees Ins. Co., 1 Misc 3d 907(A) wherein that court held:

“…there is no discovery prohibition if litigation is chosen by a medical provider to recover no-fault benefits. Once again, the Court must state that the plaintiff elected to proceed by way of litigation in the Nassau County District Court and thus, it must comply with the discovery procedures set forth in the CPLR and the UDCA (see, UDCA §1101[a]; CPLR §3101; see also Albatros Medical P.C. v. GEICO, supra ).”

In order to defeat a motion for summary judgment on the ground that discovery is not complete, the movant must show that further discovery may raise triable issues of fact(LMK Psychological Services, P.C. v. Liberty Mut. Ins., 30 AD3d 727). Although not necessary to the determination of the plaintiff’s motion, defendant here has met that burden. The plaintiff has not yet been fully examined concerning his refusal to submit to an EUO. In addition, the affidavit submitted in support of plaintiff’s motion, regarding the plaintiff’s billing and mailing procedures, is provided by the very same person who plaintiff alleged, as part of his defense at his license suspension hearing, was responsible for the billing “errors” for which he was prosecuted. This would obviously be fertile ground for examination as well. Therefore, if the Court were not granting the defendant summary judgment, it would nevertheless deny plaintiff’s motion pursuant to CPLR §3212(f), grant the defendant’s motion pursuant to CPLR §3126, and dismiss the action unless plaintiff provided all outstanding discovery and submitted to an examination before trial within 30 days of the date of this decision.

Accordingly, the fifth and the last six claims herein (claims 7-12) are dismissed. Summary judgment is denied as to the first, second, third, fourth, and sixth claims herein.

The foregoing constitutes the decision and order of the Court.

SO ORDERED: [*5]

__________________________________

DISTRICT COURT JUDGE

Dated: November 24, 2008

cc: Law Office of Amos Weinberg

Law Office of Teresa M. Spina

Supreme Court, Queens County

13672/07

Orin R. Kitzes, J.

The following papers numbered 1 to 11 read on this motion by plaintiff for an order pursuant to CPLR 3212 granting plaintiff partial summary judgment in its favor and against defendants on the first, second, third, fifth, sixth, seventh, eighth, ninth, and tenth causes of action for a money judgment in the amount of sixty one thousand two hundred seventy five dollars and seven cents with interest from the respective reimbursement dates; and cross-motion by defendants for an order pursuant to CPLR 3212 granting defendants ASTORIA MEDICAL SERVICES PC, NORTHERN MEDICAL SERVICES PC., PRECISE MEDICAL DIAGNOSTICS PC, and NY MEDICAL & DIAGNOSTIC PC summary judgment in their favor and dismissing the complaint as against defendants ASTORIA MEDICAL SERVICES PC, NORTHERN MEDICAL SERVICES PC., PRECISE MEDICAL DIAGNOSTICS PC, and NY MEDICAL & DIAGNOSTIC PC; and for an order pursuant to CPLR 3124 directing plaintiff to respond to defendants’ written interrogatories, notice for discovery and inspection, and to produce a witness for deposition.

Upon the foregoing papers it is ordered that the motions are decided as follows:

This action seeks recoupment of payments made by Utica National Insurance Group (“Utica”) to defendant Arthur Luban M.D. (“Luban”) and the defendant professional corporations ostensibly owned by Luban. (the “Defendant Entities”). The payments made by Utica were made pursuant to New York’s No-fault law for treatment and services allegedly provided by Luban and the Defendant Entities to automobile accident victims covered under the No-fault provisions of [*2]Utica automobile liability insurance policies. According to plaintiff, Arthur Luban M.D. and the defendant entities were not eligible to receive the No-fault payments they took from Plaintiff Utica National Insurance Group under section 5102(a)(1) of the Insurance Law, because the Defendants did not meet the New York State licensing requirements of Section 1503(a) of New York Business Corporation Law which requires that only persons licensed to practice medicine may own and control a medical professional corporation. Plaintiff claims that it paid bills and invoices from Providian Medical P.C. in the amount of $29,998.12, from Harbor Medical Diagnostic P.C. in the amount of $2,647, Valiant Medical Services in the amount of $4,321.06, Vital Medical Care in the amount of $23,308.75 and Bay Medical Services in the amount of $1,000. These were entities which operated in Queens and Kings County as professional service corporations ostensibly owned and controlled by Arthur Luban and allegedly established to provide medical goods and services to, among others, New York patients injured in automobile accidents.

Plaintiff has now moved for partial summary judgment to recover the $61,275.07 it paid directly to these entities for medical services, with interest from the respective reimbursement dates. Defendants have opposed this motion. It is axiomatic that the Summary Judgment remedy is drastic and harsh and should be used sparingly. The motion is granted only when a party establishes, on papers alone, that there are no material issues and the facts presented require judgment in its favor. It must also be clear that the other side’s papers do not suggest any issue exists. Moreover, on this motion, the court’s duty is not to resolve issues of fact or determine matters of credibility but merely to determine whether such issues exist. See, Barr v. County of Albany, 50 NY2d 247 (1980); Miceli v. Purex, 84 AD2d 562 (2d Dept. 1981); Bronson v March, 127 AD2d 810 (2d Dept. 1987.) Finally, as stated by the court in Daliendo v Johnson, 147 AD2d 312,317 (2d Dept. 1989), “Where the court entertains any doubt as to whether a triable issue of fact exists, summary judgment should be denied.”

In support of its motion, plaintiff has submitted a series of Consent and Decree Orders defendant Luban, who was registered as the sole owner and shareholder of the Defendant entities, entered into with the New York Department of Health, State Board for Professional Misconduct. In sworn filings, defendant Luban admitted that he did not in fact control the defendant entities which were instead controlled by persons who were not licensed to practice medicine, relegating Luban to the role of owner in name only. The New York Department of Health, State Board for Professional Misconduct concluded, and Luban in his admissions acknowledged, that these facts were all in contravention of Article 15 of the New York Business Corporation Law, including Section 1503(a), which requires that only persons licensed to practice medicine may own and control a medical professional corporation.

Plaintiff has also submitted a copy of the Uni Claims Payment History of Utica National Insurance Group and the Affidavit of Utica SIU Investigator Wendy Tiffin. This evidence show that plaintiff has paid certain of the Luban entities $61,275.07 since the April 4th, 2002 enactment of 11 NYCRR § 65-3.16(a)(12).

Defendants claim that plaintiff’s submissions have not established that any of the Defendant entities was fraudulently incorporated and that consequently, plaintiff’s motion should be denied. Defendants point out that neither plaintiff’s counsel nor Wendy Tiffin, Plaintiff’s Special Investigative Unit Investigator, has any personal knowledge of any relevant facts. [*3]Furthermore, defendants claim that the Consent Agreements and Orders do not support plaintiff’s claims. According to defendants, the Consent Agreements, executed by Dr. Luban as the sole shareholder of the P.C.s, state that the Respondents do not contest the allegations and specifications in the statements of charges. However, the Respondents did not admit anything, in fact, defendants point out that at paragraph E in the Factual Allegations in the Statements of Charges sets forth that persons who were not licensed to practice medicine were instrumental in controlling the Respondents, including, but not limited to, “hiring and supervising professional staff, accessing bank accounts, disbursing funds, and otherwise handling banking and financial affairs.” Defendants claim that these admissions do not rise to the level of control by unlicensed persons that would invalidate payments to Defendant entities.

Defendants also point out that in the matters of the seven entities whose Certificates of Incorporation were revoked on consent, the Consent Agreements And Orders specifically provide: “…that pursuant to Article 10 of the Business Corporation Law, the Respondent will be permitted to wind up all of its affairs, including, but not limited to, collection of outstanding accounts receivable, notwithstanding this revocation…”. According to defendants, this indicates that the State Board for Professional Medical Conduct agreed that these seven (7) P.C.s could continue to collect outstanding receivables. Apparently, arguing that these receivables included money paid by plaintiff. Defendants also claim that plaintiff’s submission of the Uni-Claims Payment History is deficient in that it does not even identify the patients-assignors, nor any other details, i.e., the treating doctor, services performed, nor that payments were made on dates which the defendant entities were in violation of the ownership rules.

Provisions of the no-fault law require insurers to reimburse patients or their medical provider assignees for “basic economic loss” (Insurance Law § 5102[a][1]). A provider of healthcare services is not eligible for reimbursement, however, “if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York” (11 NYCRR 65-3.16[a][12]). The Court of Appeals has interpreted 11 NYCRR 65-3.16(a)(12) to allow insurance carriers to withhold reimbursement for no-fault claims from fraudulently licensed medical corporations and to “look beyond the face of licensing documents to identify willful and material failure to abide by state and local law” State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 (2005.) State law mandates that professional service corporations be owned and controlled only by licensed professionals (see Business Corporation Law §§ 1503[a]; 1507, 1508), and that licensed professionals render the services provided by such corporations (see Business Corporation Law § 1504[a]).

In State Farm Mut. Auto. Ins. Co. v Mallela, supra, the court found that the complaint did not clearly indicate, one way or the other, whether plaintiff had paid money to defendants after the amended regulation took effect. As such, the Court declined to consider whether State Farm could recover money already paid out under theories of fraud or unjust enrichment. This Court is presented with a complaint that clearly seeks to recover money paid to defendants who had failed to meet the applicable state licensing requirements, which prohibit non-physicians from owning or controlling medical service corporations. This Court finds that, under the reasoning of State Farm Mut. Auto. Ins. Co. v Mallela, supra, and its progeny, [see First Help Acupuncture P.C. v State Farm Ins. Co., 12 Misc 3d 130(A),(2006); see also Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 (2006); see generally Metroscan Imaging P.C. v GEICO Ins. Co., [*4]13 Misc 3d 35,(2006.)] and the applicable state regulations, it is appropriate to allow the insurance carrier to recover money already paid out to ineligible recipients.

Here, the evidence presented by the plaintiff established, prima facie, its entitlement to summary judgment on its first, second, third, fifth, sixth, seventh, eighth, ninth, and tenth causes, as those actions relate to defendants Providian Medical P.C., Harbor Medical Diagnostic P.C., Valiant Medical Services, Vital Medical Care, and Bay Medical Services. Plaintiff has established that these defendants violated 11 NYCRR § 65-3.16(a)(12) by receiving money from plaintiff when they were ineligible for reimbursement from plaintiff for No-fault benefits. Plaintiff has failed to show any proof that the other defendants received such payments or controlled defendants Providian Medical P.C., Harbor Medical Diagnostic P.C., Valiant Medical Services, Vital Medical Care, and Bay Medical Services. Consequently only defendants Providian Medical P.C., Harbor Medical Diagnostic P.C., Valiant Medical Services, Vital Medical Care, and Bay Medical Services are obligated in damages to plaintiff for payments of $61,275.07 issued to these defendants subsequent to April 4th, 2002.

Contrary to defendants claim, Dr. Luban signed numerous Consent and Decree Orders, that established he was in violation of New York Education Law Section 6530(12) and of Article 15 of the New York Business Corporation Law, including Section 1503(a), which requires that only persons licensed to practice medicine may own and control a medical professional corporation. Whether Dr. Luban had actual intent to defraud at the time of incorporation is immaterial to the issue of whether the defendants were entitled to reimbursement where non-physicians were in control of and running the entities thus failing meet the state licensing requirements. All that must be established is that Dr. Luban was not in control of the Professional Corporation at the time the services were rendered. The consent decrees establish this lack of control. Furthermore, the references in the consent decrees to defendants’ being able to wind up and collect receivables are not an indication that the entities could collect for medical services. Clearly these entities could have been owed money for other than prohibited work and the decrees afforded the opportunity to collect for such work, while closing down pursuant to the Consent Decrees. Consequently, defendants Providian Medical P.C., Harbor Medical Diagnostic P.C., Valiant Medical Services, Vital Medical Care, and Bay Medical Services. were not entitled to reimbursement for the services rendered and are obligated to repay plaintiff for the amounts paid. Accordingly, the plaintiff’s motion for partial summary judgment is granted to the extent that judgment on its first, second, third, fifth, sixth, seventh, eighth, ninth, and tenth causes in favor of plaintiff and against defendants Providian Medical P.C., Harbor Medical Diagnostic P.C., Valiant Medical Services, Vital Medical Care, and Bay Medical Services is granted. State Farm Mut. Auto. Ins. Co. v Mallela, supra. The action shall proceed on the remaining causes of action.

Based on the above, the branch of the cross-motion by defendants for an order pursuant to CPLR 3212 granting defendants ASTORIA MEDICAL SERVICES PC, NORTHERN MEDICAL SERVICES PC., PRECISE MEDICAL DIAGNOSTICS PC, and NY MEDICAL & DIAGNOSTIC PC summary judgment in their favor and dismissing the complaint as against defendants ASTORIA MEDICAL SERVICES PC, NORTHERN MEDICAL SERVICES PC., PRECISE MEDICAL DIAGNOSTICS PC, and NY MEDICAL & DIAGNOSTIC PC, is granted to the extent that the first, second, third, fifth, [*5]sixth, seventh, eighth, ninth, and tenth causes are dismissed as against these defendants. The branch of the defendants motion seeking discovery is granted. Discovery shall proceed regarding the remaining causes of action. Plaintiff shall respond to defendants’ written interrogatories, notice for discovery and inspection, and to produce a witness for deposition. The court notes that it was not presented with any basis to deny the motion for summary judgment in order for this discovery to be completed. CPLR 3212 (f).

Dated: November 24, 2008…………………………………………..

Orin R. Kitzes, J.S.C.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Joseph J. Esposito, J.), entered May 23, 2007. The order, inter alia, granted the motion by defendant Shauky M. Musa-Obregon to vacate a default judgment entered April 7, 2005 insofar as it was against him.

Order reversed without costs, motion by defendant Shauky M. Musa-Obregon to vacate the default judgment insofar as it was against him denied and default judgment against him reinstated.

Plaintiff commenced this action to recover payments of uninsured and basic no-fault benefits on behalf of its subrogor, who allegedly sustained serious injuries in a motor vehicle accident on October 21, 2002. After plaintiff was awarded a default judgment on April 7, 2005, defendant Shauky M. Musa-Obregon (defendant) moved to vacate so much of the judgment as was against him on the ground that he was not served. The parties entered into a so-ordered stipulation which provided that the default judgment was vacated and defendant’s affidavit in support of his motion would constitute his answer to the complaint. After another default by defendant, an inquest was held and the default judgment was reinstated against him. Defendant moved to vacate the default judgment on the ground of excusable default, submitting in support of his motion an affirmation from his attorney and various exhibits annexed thereto. Plaintiff [*2]opposed the motion, arguing, inter alia, that defendant failed to explain why he did not appear for trial. The court below granted defendant’s motion. Plaintiff’s appeal ensued.

In order to vacate a default judgment under CPLR 5015 (a), the defaulting party must demonstrate a reasonable excuse for his default as well as a meritorious defense to the action (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138 [1986]; Mora v Scarpitta, 52 AD3d 663 [2008]; Montague v Rivera, 50 AD3d 656 [2008]). In the present case, since defendant’s attorney failed to allege personal knowledge of the facts asserted, his affirmation is of no probative value (see Warrington v Ryder Truck Rental, Inc., 35 AD3d 455, 456 [2006]; V.S. Med. Servs., P.C. v New York Cent. Mut. Ins. Co., 20 Misc 3d 134[A], 2008 NY Slip Op 51473[U] [App Term, 2d & 11th Jud Dists 2008]). Consequently, defendant failed to establish a reasonable excuse for his default and his motion to vacate the default judgment should have been denied.

Weston Patterson, J.P., Golia and Steinhardt, JJ., concur.
Decision Date: November 21, 2008

—[*1] Basch & Keegan, L.L.P., Kingston (Derek J. Spada of counsel), for appellant.

Finder & Cuomo, L.L.P., New York City (Paul L. Meli of counsel), for respondent.

Spain, J. Appeal from an order of the Supreme Court (Czajka, J.), entered January 8, 2007 in Columbia County, which, among other things, denied plaintiff’s motion for summary judgment.

The facts are undisputed. On May 29, 2005, plaintiff was a passenger in a car driven by his friend and owned by plaintiff’s mother. They stopped for gas and, while plaintiff was pumping gasoline, the gas pump nozzle popped out of the car’s fuel tank, causing some gasoline to spill on the ground and, unbeknownst to him, on his clothing. Plaintiff then entered the gas station store to purchase a pack of cigarettes. Shortly after leaving the gas station in the vehicle, plaintiff attempted to light a cigarette, causing the gasoline on his clothing to ignite. As a result, he suffered severe burns to the right side of his body, right arm and leg.

Defendant denied plaintiff’s claim for no-fault insurance benefits on the ground that his injuries did not arise out of the use or operation of a motor vehicle (see Insurance Law § 5102 [b]; § 5103 [a] [1]). Plaintiff then commenced the instant action in Supreme Court seeking to recover no-fault insurance benefits. After discovery was completed, plaintiff moved for summary judgment on the issue of his entitlement to no-fault insurance benefits and defendant cross-moved for a declaratory judgment that defendant has no obligation to plaintiff. Supreme Court granted defendant’s cross motion and denied plaintiff’s motion. Plaintiff now appeals.

No-fault insurance benefits are payable only if a person’s injury “aris[es] out of the use [*2]or operation of a motor vehicle” (Insurance Law § 5102 [b]; see § 5103 [a] [1]). Inasmuch as “[t]he vehicle must be a proximate cause of the injury before the absolute liability imposed by the statute arises” (Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 215 [1996]), we agree with Supreme Court’s conclusion that plaintiff’s injuries—sustained when he attempted to light a cigarette, igniting gasoline that he had spilled on his clothing—did not arise out of the use of the vehicle. Indeed, plaintiff’s injuries would have occurred even if he had never reentered the vehicle and his friend had driven away (see Sullivan v Barry Scott Agency, Inc., 23 AD3d 889, 890 [2005]; cf. Matter of Farm Family Cas. Ins. Co. [Trapani], 301 AD2d 740, 741-742 [2003]). Thus, although plaintiff’s injuries occurred while he was inside the moving vehicle, because “the vehicle itself was not a cause of the damage,” he is not entitled to no-fault benefits (Walton v Lumbermens Mut. Cas. Co., 88 NY2d at 215; see Sullivan v Barry Scott Agency, Inc., 23 AD3d at 890, Sochinski v Bankers & Shippers Ins. Co., 221 AD2d 889 [1995]).

Mercure, J.P., Peters, Malone Jr. and Stein, JJ., concur. Ordered that the order is affirmed, with costs.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered August 28, 2007, deemed from a judgment of said court entered September 26, 2007 (see CPLR 5512 [a]; Neuman v Otto, 114 AD2d 791 [1985]). The judgment, entered pursuant to the August 28, 2007 order granting plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $740.25.

Judgment affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment, asserting, among other things, that defendant had failed to timely deny the claim. The court granted plaintiff’s motion, holding that the statutory time period in which defendant had to pay or deny the claim was not tolled because defendant’s follow-up verification request letter was premature. The instant appeal by defendant ensued.

Since defendant raises no issue on appeal with respect to plaintiff’s establishment of its prima facie entitlement to summary judgment, we do not pass on the propriety of the determination of the court below with respect thereto.

In opposition to plaintiff’s motion, defendant argued that the statutory time period in which it had to pay or deny the claim was tolled due to the assignor’s delay in appearing for an examination under oath (EUO). However, contrary to defendant’s contention, the September 19, 2006 letter did not constitute a proper request for verification since it neither demanded nor required a response (see New York & Presbyt. Hosp. v Eagle Ins. Co., 17 AD3d 646 [2005]; Englinton Med. P.C. v MVAIC, 14 Misc 3d 135[A], 2007 NY Slip Op 50164[U] [App Term, 2d [*2]& 11th Jud Dists 2007]). Consequently, the 30-day claim determination period (see Insurance Department Regulations [11 NYCRR] § 65-3.8 [c]) was not tolled, and defendant’s denial of claim form was untimely. As a result, defendant was precluded from raising most defenses, including its proffered defense of lack of medical necessity (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Accordingly, the judgment is affirmed.

In view of the foregoing, we pass on no other issue.

Pesce, P.J., Weston Patterson and Rios, JJ., concur.
Decision Date: November 05, 2008