APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant, as limited by the briefs, appeals from so much of an order of the Civil Court of the City of New York, New York County (Barbara Jaffe, J.), dated January 24, 2006, as granted plaintiff Devonshire Surgical Facility summary judgment in the principal sum of $3,000, and granted plaintiff Carnegie Hill Orthopedic Services partial summary judgment in the principal sum of $41,157.88.

Per Curiam.

Appeal from order (Barbara Jaffe, J.), dated January 24, 2006, dismissed, without costs.

In view of plaintiffs’ unrefuted showing that the notice of appeal from the January 24, 2006 order was not filed within 30 days of the service of the order with notice of entry, it was untimely and the appeal must therefore be dismissed (see CPLR 5513[a]; Steinhardt Group, Inc. v Citicorp, 303 AD2d 326 [2003], lv denied 100 NY2d 506 [2003]). Were the appeal properly before us, we would affirm. Plaintiffs established prima case their entitlement to first party no-fault benefits and defendant failed to raise a triable issue to defeat summary judgment.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concurI concurI concur
Decision Date: October 08, 2008

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant, as limited by the briefs, appeals from so much of an order of the Civil Court of the City of New York, New York County (Barbara Jaffe, J.), dated January 24, 2006, as granted plaintiff Devonshire Surgical Facility summary judgment in the principal sum of $3,000.

Per Curiam.

Appeal from order (Barbara Jaffe, J.), dated January 24, 2006, dismissed, without costs.

In view of plaintiffs’ unrefuted showing that the notice of appeal from the January 24, 2006 order was not filed within 30 days of the service of the order with notice of entry, it was untimely and the appeal must therefore be dismissed (see CPLR 5513[a]; Steinhardt Group, Inc. v Citicorp, 303 AD2d 326 [2003], lv denied 100 NY2d 506 [2003]). Were the appeal properly before us, we would affirm. Plaintiff Devonshire established prima case its entitlement to first party no-fault benefits and defendant failed to raise a triable issue to defeat summary judgment.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
I concurI concurI concur
Decision Date: October 08, 2008

Civil Court of the City of New York, Kings County

105504/2004

Jaffe & Koumourdas

40 Wall Street -12th Floor

New York, NY 10005

Attorneys for Defendant

Moshe D. Fuld, P.C.

38 west 32nd Street -7th Floor

New York, NY 10001

Attorneys for Plaintiff

George J. Silver, J.

In this action to recover first-party no-fault benefits, interest and attorney’s fees pursuant to New York’s Insurance Law and no-fault regulations, defendant Country-Wide Insurance Company (hereinafter defendant) moves pursuant to CPLR § 5015 [a] [1] [2] and [3] for an order vacating the judgment entered against it.

Procedural Background

This action was commenced by plaintiff Deajess Medical Imaging PC (hereinafter plaintiff) by service of a summons and complaint upon defendant on or about October 21, 2004. Defendant served its answer on November 16, 2004. On November 4, 2005 summary judgment was granted in plaintiff’s favor as to all of plaintiff’s claims and judgment was entered against defendant in the amount of $18,694.39 plus statutory interest and attorney’s fees. In granting plaintiff’s motion for summary judgment, the motion court held that plaintiff had established its prima facie entitlement to no-fault benefits and that defendant failed to submit “admissible proof of any issue of fact.” The motion court rejected defendant’s argument that plaintiff’s motion was premature because discovery was still outstanding and held that defendant failed to annex exhibits in proper form to establish that discovery demands were served and not complied with. Defendant moved to reargue plaintiff’s summary judgment motion and on July 10, 2006, the return date of defendant’s motion, the parties entered into a written stipulation of settlement. The stipulation resolved defendant’s motion to reargue as follows: “[p]laintiff agrees to vacate the judgment for assignor Trinece Summer, defendant agrees to pay the remaining claims as per the Court’s Order of November 4, 2005 within 30 days inclusive of interest up until the day of payment.” The stipulation, which was a clear and unambiguous statement of the parties’ intent, was properly signed by the attorneys of record who were acting in an adversarial relationship. [*2]The stipulation was not so-ordered by the Court. Defendant now moves to have the judgment entered against it pursuant to the November 4, 2005 order vacated on the ground that newly discovered evidence exists which “if introduced at trial would probably have produced a different result and which could not have been discovered in time to move for a new trial under section 4404” (CPLR § 5015 [a] [2]). The newly discovered evidence cited by defendant includes a federal case involving Robert Scott Schepp, M.D., New York State appellate case law involving the plaintiff, a news article from Law.com, as well as the Andrew Carothers, M.D., P.C. trial in the New York City Civil Court, Richmond County, all of which defendant argues establish that plaintiff is fraudulently incorporated. Defendant also agues that the judgment was the product of “fraud, misrepresentation, or other conduct of an adverse party” (CPLR § 5015 [a] [3]) and that there was no meeting of the minds when the parties entered into the written stipulation of settlement. Finally, defendant contends that this case is subject to a stay issued by the Supreme Court, Nassau County in a separate action in which plaintiff and defendant are both parties (hereinafter the Nassau County action).

In opposition plaintiff contends that stipulations of settlement are favored by the courts and should be vacated only upon a showing of that the settlement was the product of fraud, overreaching, mistake or duress and argues that defendant has failed to make such a showing. Plaintiff also contends that this action has not been stayed by Nassau County action.

Discussion

It is well settled that stipulations of settlement are judicially favored and should not be lightly set aside (Cooper v Hempstead Gen. Hosp., 2 AD3d 566 [2d Dept]). “This is all the more so in the case of open court’ stipulations within CPLR § 2104, where strict enforcement not only serves the interest of efficient dispute resolution but also is essential to the management of court calendars and integrity of the litigation process” (Hallock v State of New York, 64 NY2d 224, 230; 474 NE2d 1178; 485 NYS2d 510 [1984] [citations omitted]). Stipulations of settlement are independent contracts that are subject to the principles of contract law (Hannigan v Hannigan, 2008 NY Slip Op 3589 [2d Dept]) and “[o]nly where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake or accident, will a party be relieved from the consequences of a stipulation made during litigation” (Hallock, 64 NY2d 224, 230). A “party seeking reformation of a contract by reason of a mistake must establish, with clear and convincing evidence, that the contract was executed under mutual mistake or a unilateral mistake induced by the other party’s fraudulent misrepresentation” (Moshe v Town of Ramapo, 2008 NY Slip Op 7238 [2d Dept] quoting Yu Han Young v Chiu, 49 AD3d 535, 536, 853 NYS2d 575 [2d Dept 2008]). “[E]ven a stipulation which was improvident will not be set aside unless it is manifestly unfair or unconscionable” (Cavalli v Cavalli, 226 AD2d 666, 667, 641 NYS2d 724 [2d Dept 1996]; see Wilutis v Wilutis, 184 AD2d 639, 640, 587 NYS2d 171 [2d Dept 1992]).

The only evidence offered by defendant in support of its claim that the settlement was procured through fraud or collusion are the conclusory allegations contained in the affirmations of defendant’s attorney. Bare, unsubstantiated allegations such as “[t]he purported judgment premised upon plaintiff’s misrepresentations”^[FN1] and “[p]laintiff obtained its judgment under false [*3]pretenses”^[FN2] and “[t]he judgment was obtained under collusion by the plaintiff and its attorney since plaintiff’s attorney was well aware of several litigations pending against their client based on their client’s corporate structure”^[FN3] are insufficient to vacate the stipulation as a product of collusion or fraud. Such speculation also fails to make the requisite showing to reform the stipulation on the ground that it was executed under a mutual or unilateral mistake (see M.S.B Dev. Co., Inc. v Lopes, 38 AD3d 723 [2d Dept 2007] [A party seeking reformation must show clearly that there has been a mistake] [emphasis added]). Moreover, defendant, a sophisticated insurer well-versed in no-fault litigation and represented by able and competent counsel at the time the stipulation was entered into, does not claim that the settlement was a product of duress or that its counsel lacked the authority to enter into the settlement.

Defendant’s claim that the stipulation of settlement should be vacated based upon newly discovered evidence of plaintiff’s allegedly fraudulent incorporation is also without merit.

Plaintiff and defendant entered into a second stipulation, so-ordered on March 26, 2007, in the Nassau County action in which defendant agreed that plaintiff’s right “to enforce voluntary settlements that have been entered into with any of the Insurers,” including defendant, would not be impaired. As a party to the Nassau County action defendant was certainly aware on March 26, 2007 that the plaintiff professional corporation may be fraudulently incorporated. Despite that awareness, defendant nevertheless agreed that plaintiff could freely enforce any and all voluntary settlements which plaintiff had previously entered into. This concession by defendant to plaintiff belies defendant’s argument that had it been aware of plaintiff’s allegedly fraudulent incorporation on July 10, 2006 it would not have entered into the stipulation at issue here. “Courts will not set aside a stipulation . . . simply because, in hindsight, a party decides that the agreement was improvident” (Town of Clarkstown v. M.R.O. Pump & Tank, Inc., 287 AD2d 497, 498, 731 NYS2d 231 [2d Dept 2001]). Therefore, because defendant has failed to meet any of the criteria necessary for the court to vacate the parties’ voluntary stipulation of settlement, defendant’s Order to Show Cause is denied in its entirety.

This constitutes the decision and order of the Court.

Dated: October 7, 2008

George J. Silver, J.C.C.

Jaffe & Koumourdas

40 Wall Street -12th Floor

New York, NY 10005

Attorneys for Defendant

Moshe D. Fuld, P.C.

38 west 32nd Street -7th Floor

New York, NY 10001

Attorneys for Plaintiff

Footnotes

Footnote 1: Defendant’sAffirmation in Support.

Footnote 2: Defendant’sAffirmation in Reply.

Footnote 3: Id.

Civil Court of the City of New York, Kings County

165871/2006

Counsel for Plaintiff:

Gary Tsirelman PC

55 Washington Street, Suite 606

Brooklyn, NY 11201

Tel.: (718) 438-1200

Counsel for Defendant:

Votto & Cassata, LLP

60 Bay Street, 3rd Floor

Staten Island, NY 10301

Tel.: (718) 720-2877

Peter P. Sweeney, J.

In this action pursuant to Insurance Law § 5101 et seq to recover assigned first-party no-fault benefits claimed to be due and owing under a policy of insurance issued by the defendant, defendant moves for summary judgment dismissing the action on the ground that plaintiff did not commence the action within the six-year statute of limitations contained in CPLR § 213[2]. Plaintiff cross-moves for summary judgment.

In support of its motion for summary judgment, defendant submitted admissible proof establishing that it received the underlying claim for first-party no-fault benefits on November 15, 2000, that it had issued a denial of the claim on November 29, 2000 on the ground that plaintiff’s assignor failed to attend an examination under oath (“EUO”) and that it had mailed a [*2]copy of the denial of claim to the plaintiff on the same day it was issued. Plaintiff commenced the action on December 1, 2006. Defendant argues that pursuant to CPLR § 213 [2], plaintiff was required to commence the action within six years from November 29, 2000 and that the commencement of the action on December 1, 2006 was untimely.

It is now fairly well settled that an action to recover assigned first-party no-fault benefits under a policy of insurance is fundamentally a breach of contract action subject to the six-year statute of limitations contained in CPLR §213[2] (see Mandarino v. Travelers Property Cas. Ins. Co., 37 AD3d 775, 831 NYS2d 452 [2nd Dep’t 2007]; Benson v. Boston Old Colony Ins. Co., 134 AD2d 214, 215, 521 NYS2d 14 [1st Dep’t1987], lv. denied 71 NY2d 801, 527 NYS2d 767, 522 NE2d 1065 [1988]; Travelers Indem. Co. of Connecticut v. Glenwood Medical, P.C., 48 AD3d 319, 319-320, 853 NYS2d 26, 26 [1st Dep’t 2008] ). The statute of limitations in a breach of contract action begins to run at the time the contract is breached, which in this case was when benefits become overdue (see Benson, 134 AD2d at 215; New Era Acupuncture, P.C. v. MVAIC, 18 Misc 3d 139(A), 2008 NY Slip Op. 50353(U) [App Term 2nd & 11 Jud Dists]. Benefits became overdue when the defendant failed to pay the claim within 30 days of November 15, 2000, when it received proof of the claim (see Insurance Law § 5106[a]; NYCRR § 65-3.8; Benson, 134 AD2d at 215; Micha v. Merchants Mutual Insurance Company, 94 AD2d 835, 463 NYS2d 110 [3rd Dep’t 1983] ). The commencement of the action on December 1, 2000 was therefore timely.

The fact that the defendant may have repudiated the contract on November 29, 2000 when it issued a denial of the claim and mailed a copy of the denial to the defendant does alter this result. Under the doctrine of anticipatory breach, where one party clearly and unequivocally repudiates his contractual obligations under a contract prior to the time performance is required, the non-repudiating party may deem the contract breached and immediately sue for damages (see American List Corp. v. U.S. News & World Report, 75 NY2d 38, 550 NYS2d 590, 549 NE2d 1161 [1989]; De Lorenzo v. Bac Agency Inc., 256 AD2d 906, 908, 681 NYS2d 846, 848 [3rd Dep’t 1998]; Long Is. R.R. Co. v. Northville Indus. Corp., 41 NY2d 455, 463, 393 NYS2d 925, 362 NE2d 558 [1977]).

While the plaintiff may have been entitled to bring the action under the doctrine of anticipatory breach when the defendant denied the claim, even though the 30 day period in which defendant had to pay the claim had yet to expire, plaintiff was well within its rights to elect to keep the contract in force and await the designated time for performance before bringing suit (Ga Nun v. Palmer, 202 NY 483, 493, 96 N.E. 99 [1911]; see also, Rachmani Corp. v. 9 East 96th Street Apartment Corp., 211 AD2d 262, 266, 629 NYS2d 382, 384 [1st Dep’t 1995] ). As the Court of Appeals wrote in Ga Nun: “The man who wrongfully renounces a contract into which he has deliberately entered cannot justly complain if he is immediately sued for a compensation in damages by the man whom he has injured; and it seems reasonable to allow an option to the injured party, either to sue immediately, or to wait until the time when the act was to be done, still holding it as prospectively binding for the exercise of this option, which may be advantageous to the innocent party, and cannot be prejudicial to the wrongdoer” (Ga Nun, 202 [*3]NY at 490-491, 96 N.E. at 101 – 102, citing Hochster v. De la Tour, 2 Ellis & Blackburn, 678). For the above reasons, defendant’s motion for summary judgment is DENIED.

Turning to plaintiff’s cross-motion for summary judgment, in Dan Medical, P.C. v. New York Cent. Mut. Fire Ins. Co.,14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006] ) the Appellate Term held that absent a sufficient foundation to demonstrate that the plaintiff’s claim forms constituted evidence in admissible form as business records, the “plaintiff failed to tender proof in evidentiary form to establish its prima facie case” (id. at 47). The Dan Medical Court further held that any admissions by the defendant regarding receipt of the plaintiff’s claim forms “did not concede the facts asserted in the claim forms and it remained plaintiff’s burden to proffer such evidence in admissible form, which it failed to do” (id.; see also Bajaj v. General Assur., 18 Misc 3d 25 [App Term, 2d & 11th Jud Dists 2007]; Midborough Acupuncture, P.C. v. New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132[A], 2006 NY Slip Op 51879[U] [App Term, 2d & 11th Jud Dists 2006] ).

Here, plaintiff’s submissions are devoid of any admissible proof, such as an affidavit from someone familiar with plaintiff’s business practices, establishing the admissibility of the claim form as a business record. Accordingly, plaintiff did not establish its prima facie case of entitlement to summary judgment notwithstanding defendant’s admission that it received the claim on November 15, 2000. Plaintiff’s failure to make out a prima facie case of entitlement to summary judgment mandates the denial of the motion regardless of the sufficiency of opposing papers (Winegrad v. New York University Medical Center, 64 NY2d 851, 487 NYS2d 316 [1985] ).

For the above reasons, it is hereby

ORDERED that defendant’s motion for summary judgment and plaintiff’s cross-motion for summary judgment are DENIED.

This constitutes the decision and order of the court.

Date: October 7, 2008________________________________

Peter P. Sweeney

Civil Court Judge

—[*1] Jasne & Florio, LLP, White Plains, N.Y. (Hugh G. Jasne of counsel), for appellant.

Goldberg Segalla, LLP, White Plains, N.Y. (Kevin Burns of counsel), for respondent.

In an action to determine the defendant’s claims for no-fault benefits de novo, the defendant appeals, as limited by his brief, from stated portions of a judgment of the Supreme Court, Orange County (Peter C. Patsalos, J.H.O.), entered June 14, 2007, which, after a nonjury trial, inter alia, dismissed his claims for medical expenses and lost earnings.

Ordered that the judgment is modified, on the law, by deleting the third, fourth, and sixth decretal paragraphs thereof, and so much of the seventh and eighth decretal paragraphs as dismissed the defendant’s claims for medical expenses related to his hospitalization from April 10, 1997 through April 12, 1997; as so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements, the defendant’s claims for medical expenses related to his hospitalization from April 10, 1997 through April 12, 1997, are reinstated, and the matter is remitted to the Supreme Court, Orange County, for further proceedings to determine the value of the defendant’s medical expenses related to his hospitalization from April 10, 1997, through April 12, 1997.

A no-fault arbitration tribunal twice concluded that the defendant James Stack was entitled to benefits arising from an automobile accident. Subsequently, the plaintiff, State Farm Automobile Insurance Company (hereinafter State Farm) commenced a de novo plenary action seeking a determination that medical expenses for Stack’s hospitalization were for a condition unrelated to the accident and that Stack failed to demonstrate his entitlement to lost earnings. After a nonjury trial, the Supreme Court determined, inter alia, that State Farm properly denied Stack’s claim for medical expenses as unrelated to the accident [*2]and that Stack failed to demonstrate his entitlement to lost earnings within the meaning of the no-fault statute. Stack contends that the Supreme Court’s judgment in favor of State Farm was not warranted by the facts.

As this case was tried without a jury, this Court’s authority is as broad as that of the trial court, and this Court may render a judgment it finds warranted by the facts, taking into account in a close case the fact that the trial judge had the advantage of seeing the witnesses (see Northern Westchester Professional Park Assoc. v Town of Bedford, 60 NY2d 492, 499 [1983]). Upon our review of the record, we find that the evidence did not support the determination of the Supreme Court that Stack’s condition was not causally related to the accident.

An insurer seeking to deny no-fault benefits on the basis that a claimant’s condition is not causally related to an accident “has the burden to come forward with proof in admissible form to establish the . . . evidentiary ‘found[ation for its] belief’ that the patient’s treated condition was unrelated to his or her automobile accident” (Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 19-20 [1999]). The testimony of State Farm’s expert witness, an anesthesiologist and pain management specialist, that his opinion was based solely upon a hospital discharge summary and insurance claim form, rendered his opinion speculative and of little probative value (see Gorden v Tibulcio, 50 AD3d 460 [2008]).

In contrast, the testimony of Stack’s expert witness, a neurologist who based his opinion upon his examination of Stack and his review of Stack’s relevant medical records, including, inter alia, CT scans and magnetic resonance imaging, and determined that Stack’s symptoms first appeared within two weeks of the accident and progressively worsened, was sufficient to establish that Stack’s condition was causally related to the accident (see Scudera v Mahbubur, 299 AD2d 535, 536 [2002]).

As to Stack’s claim for lost earnings, the evidence supported the Supreme Court’s determination that he failed to demonstrate that he sustained a compensable lost wage claim within the no-fault statute (see Konstantatos v County of Suffolk, 174 AD2d 653 [1991]). Although a party may recover lost profits while self-employed (see Young v Utica Mut. Ins. Co., 86 AD2d 764 [1982]), Stack’s testimony, that after the accident he was unable to maintain his real estate business and stock market portfolio in the manner to which he was accustomed, was insufficient in the absence of financial records, such as tax returns, to establish his alleged lost earnings with reasonable certainty (see Thomas v Puccio, 270 AD2d 480 [2000]). Spolzino, J.P., Ritter, Dillon and Dickerson, JJ., concur.

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

Nancy S. Linden (Bruno, Gerbino & Soriano, LLP, Melville, N.Y. [Charles W. Benton], of counsel), for respondent.

In an action to recover no-fault medical benefits under an insurance contract, the plaintiff appeals from an order of the Supreme Court, Nassau County (Brandveen, J.), dated March 25, 2008, which granted the defendant’s motion to vacate a clerk’s judgment of the same court entered October 10, 2007, in its favor and against the defendant in the principal sum of $51,585.52, upon the defendant’s failure to appear or answer the complaint.

Ordered that the order is affirmed, with costs.

Service upon the defendant was effectuated through delivery of the summons and complaint upon the Assistant Deputy Superintendent and Chief of Insurance pursuant to Insurance Law § 1212 (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 968 [2006]; Kaperonis v Aetna Cas. & Sur. Co., 254 AD2d 334 [1998]). Although the defendant’s motion was made pursuant to CPLR 5015 (a) (1), under the circumstances of this case, it may be treated as a motion made under CPLR 317 as well (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 142-143 [1986]; Mann-Tell Realty Corp. v Cappadora Realty Corp., 184 AD2d 497, 498 [1992]).

The defendant met its burden of showing that it did not receive actual notice of the summons [*2]in time to defend with an affidavit of its claims manager detailing its standard office practice concerning the handling of summonses and complaints, and asserting that the summons and complaint in this action was not received until after the entry of judgment (see Marine v Federal Ins. Co., 293 AD2d 721 [2002]). The plaintiff’s proof was insufficient to rebut that showing (see Matter of Phoenix Ins. Co. v Tasch, 306 AD2d 288 [2003]). Moreover, the defendant established that it may have a meritorious defense to the action (see Taieb v Hilton Hotels Corp., 60 NY2d 725, 727 [1983]; Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 535 [2004]; Presbyterian Hosp. in City of N.Y. v General Acc. Ins. Co. of Am., 229 AD2d 479, 480 [1996]; Presbyterian Hosp. in City of N.Y. v Liberty Mut. Ins. Co., 216 AD2d 448 [1995]). Accordingly, the defendant’s motion to vacate the clerk’s judgment entered upon its failure to appear or answer was properly granted. Fisher, J.P., Lifson, Covello, Balkin and Belen, JJ., concur.

—[*1] Hurwitz & Fine, P.C., Buffalo (Steven E. Peiper of counsel), for plaintiff-appellant-respondent.

Hogan Willig, PLLC, Amherst (John B. Licata of counsel), for defendant-respondent-appellant.

Appeal and cross appeal from a judgment (denominated order) of the Supreme Court, Erie County (Penny M. Wolfgang, J.), entered December 19, 2006 in a declaratory judgment action. The judgment, among other things, denied defendant’s motion for summary judgment.

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

Memorandum: Plaintiff commenced this action alleging that defendant failed to cooperate with plaintiff, as required by her insurance policy, when she was injured in a motor vehicle accident and that, based on that failure, plaintiff is entitled to a declaration that it has no duty to indemnify defendant or to pay her no-fault insurance benefits with respect to those injuries.

We conclude that Supreme Court properly denied defendant’s motion seeking summary judgment dismissing the complaint and confirming the award of the master arbitrator and properly granted that part of the cross motion of plaintiff seeking a de novo determination of its claim that it has no duty to indemnify defendant for claims arising from the motor vehicle accident, including claims for no-fault benefits. Contrary to the contention of defendant, the action is not barred by the doctrine of res judicata. Although the doctrine of res judicata generally applies with respect to a final arbitration award (see Rembrandt Indus. v Hodges Intl., 46 AD2d 623, 623-624 [1974], affd 38 NY2d 502 [1976]), Insurance Law § 5106 (c) and 11 NYCRR 65-4.10 (h) (1) (ii) expressly provide that either party to a matter submitted to arbitration has the right to a de novo determination of the dispute in the event that the master arbitrator’s award is $5,000 or greater, exclusive of interest and attorney’s fees, and that is the case here (see Matter of Greenberg [Ryder Truck Rental], 70 NY2d 573, 576-577 [1987]; Matter of Capuano v Allstate Ins. Co., 122 AD2d 138, 139 [1986]).

We further conclude that the court properly denied that part of plaintiff’s cross motion for [*2]summary judgment declaring that plaintiff has no duty to indemnify defendant for claims arising from the motor vehicle accident in question, including claims for no-fault benefits. Plaintiff failed to support its motion with evidence provided by an individual with personal knowledge of the facts (see Chiarini v County of Ulster, 9 AD3d 769, 769-770 [2004]), and the documents provided by plaintiff in support of the cross motion do not establish that defendant failed to cooperate with plaintiff, as alleged in the complaint. Thus, plaintiff failed to meet its burden of establishing its entitlement to judgment as a matter of law (see generally Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; New York Cas. Ins. Co. v Kushner, 309 AD2d 1235 [2003]). Present—Scudder, P.J., Martoche, Fahey, Peradotto and Gorski, JJ.

Supreme Court, Nassau County

8566/08

Anthony C. Donofrio, PLLC

Attorney for Petitioner

5518 Merrick Road

Massapequa, NY 11758

Short & Billy, PC

Attorneys for Respondent

217 Broadway, Suite 300

New York, NY 10007

William R. LaMarca, J.

Requested Relief

Complainant, JOSEPH MILLS (hereinafter referred to as “Dr. MILLS”), petitions the Court for an order, pursuant to 11 NYCRR §65-4.10(h), granting him a trial, de novo, with respect to a decision of an Arbitrator that upheld the denial of no-fault benefits to MILLS by respondent, GOVERNMENT EMPLOYEES INSURANCE CO. (hereinafter referred to as “GEICO”). GEICO opposes the petition on procedural as well as substantive grounds. The petition is determined as follows:

Background

In the underlying arbitration dispute, MILLS sought arbitration seeking payment of lost earnings under the no-fault provisions of his policy with GEICO which had coverage of $100,000.00 for lost earnings. Following MILLS’ claim, GEICO paid the amount of $13,950.48, but denied him further benefits, and in the arbitration, Dr, MILLS sought payment for the balance of the amount which he had not received.

In his petition, Dr. MILLS, claims that, prior to December 6, 2002, he was a full time treating chiropractor that treated patients at two (2) locations: Chiropractic Low Back Pain in Huntington, New York, and Nassau Chiropractic Pain Management in Valley Stream, New York. He states that, on September 4, 2002, he was involved in a motor vehicle accident on Route 108 in Cold Spring Harbor, New York where he sustained serious injuries to his spine. He contends that, from September 4, 2002 to December 6, 2002, he continued to treat patients at his facilities in a limited capacity until he was no longer [*2]physically able to do so on December 6, 2002, and that he hired part-time chiropractors to treat patients because of his diminished capabilities. On December 7, 2002, the date that Dr. MILLS claimed complete disability, he hired a full time chiropractor to take over his share of the work at the various facilities. He asserts that he has undergone serious spinal surgery, including the fusion of vertebrae in his spine with bone grafted from his hip and is presently receiving Social Security Disability benefits for being totally disabled since December 6, 2002.

Dr. MILLS states that, based upon a medical examination that concluded that no further treatment was necessary, GEICO denied his claim on March 9, 2003 and, thereafter, he underwent further surgery. He states that he submitted proof to GEICO of his additional surgery on September 9, 2003, as well as proof that he was receiving Social Security Disability Benefits, but after another medical examination GEICO again denied his claim, on July 13, 2004. Thereafter, the matter was heard by Arbitrator Laura A. Yantsos, Esq., who concluded in a nine (9) page decision, dated August 9, 2007, that Dr. MILLS had not suffered any loss of earnings and was not entitled to the balance of the policy. Said decision by Arbitrator Yantsos, was appealed by Dr. MILLS and upheld by Master Arbitrator Donald T. DeCarlo, by decision dated January 8, 2008. It is from the Master Arbitrator’s decision that Dr. MILLS seeks a trial de novo under11 NYCRR §65-4.10(h). It is Dr. MILLS position that the decision of Arbitrator Yantsos is completely arbitrary and abusive and that she exceeded her power and abused her discretion. He claims that the Arbitrator demanded documents far in excess of what was necessary or regular and required twenty (26) hours of appearance time and demonstrated that she had no understanding of the no-fault law.

The Arbitration Decision reflects an exhaustive and comprehensive analysis of the facts and documentary evidence presented, that included IRS records, business records, a Social Security claim and other related documents. Dr. MILLS claim was for lost earnings which is defined in Insurance Law §5102(2) as “[l]oss of earnings from work which the person would have performed had he not been injured, and reasonable and necessary expenses incurred by such person in obtaining services in lieu of those that he would have performed for income . . .”. The Arbitrator found that Dr. MILLS was acting, before and after the accident, first and foremost, as a manager and owner of medical corporations and practices and of the buildings in which the practices were located, and that he was not disabled from performing his duties as a manager/owner. As part of the evidence considered was a letter submitted by Dr. MILLS, written to “Scott” and prepared in conjunction with his Social Security Disability hearing, which indicated that he had gone on disability for more that a year in 1995, some seven (7) years prior to the subject accident, when he had injured his back and learned that he could not return to work on a full time basis and started doing medical management, that he ran his own medical management company for the last several years and did almost no treating, that he managed the medical practice of another doctor, and that he could not work as a chiropractor because he could not do repetitive bending. Moreover, the Arbitrator found that the two (2) practices opened by Dr. MILLS just a few months before the accident envisioned his role to be that of a medical manager, that he did not work exclusively as a treating chiropractor, that his tax returns did not accurately reflect legitimate business expenses and his deductions were grossly inflated and untraceable, and that real estate [*3]taxes imposed on the businesses were in fact for expenses of buildings owned by Dr. MILLS in his personal capacity. Indeed, after consideration of the credible evidence presented, the Arbitrator found that Dr. MILLS did not sustain a loss of earnings but, on the contrary, received greater income than he did prior to the accident.

In opposition to the petition, counsel for GEICO points out the following:

1. That the Court lacks personal jurisdiction over the respondent because the notice and petition were not properly served. 22 NYCRR §65-4.10(h) directs, as follows:

(h) Appeal from master arbitrators award:

(1) A decision of a master arbitrator is final and binding, except f for:

(I) court review pursuant to an Article 75 proceeding, or

(Ii) if the award of the master arbitrator is $5,000 or greater, exclusive of interest and attorneys fees, either party may in lieu of an Article 75 proceeding, institute a court action to adjudicate the dispute de novo. (emphasis supplied).

As the award of the master arbitrator was for $0 dollars, the instant action must be commenced as a special proceeding (CPLR §7502), which requires that a party file a petition (CPLR §304) and that the notice must be served in the same manner as a summons (CPLR §403[c]). It is clear that the petition was not served upon the defendant corporation, pursuant to CPLR §311(a) as complainant served the notice and petition, by mail, upon counsel for GEICO, which is insufficient service.

2. That complainant is not entitled to a trial de novo as a pre-requisite for a de novo action is an award of a master arbitrator in the amount of $5,000 or greater. There can be no de novo review if there is no monetary award. Harlev v United Servs. Auto Assn., 191 AD2d 768, 594 NYS2d 405 (3d Dept. 1993), General Accident Fire & Life Insurance Co. v Avlonitis, 156 AD2d 424, 548 NYS2d 543 (2nd Dept. 1989).

3. That the complainant is barred from seeking relief under CPLR Article 75 because CPLR §7511 with respect to vacating or modifying an arbitration award requires the application to be made within ninety (90) days of delivery to him. In the case at bar, the decision of the Master Arbitrator was mailed on January 8, 2008 and the instant application was filed on May 9, 2008. The ninety (90) day period had expired and claimant is not entitled to Article 75 relief.

4. That the decision of Arbitrator Yantsos has a factual and rational basis. As discussed above, the decision reflects an exhaustive and comprehensive analysis of the facts and documentary evidence presented.

5. That the decision of Arbitrator Yantsos is not capricious, arbitrary or irrational. The record demonstrates that Dr. MILLS claim that “working full time as a treating chiropractor was the primary source of his income and how he made his likelihood” was contrary to the record. Rather the record shows that he was a chiropractor/businessman, who worked in medical management for which he was not disabled.

6. That the decision of Master Arbitrator DeCarlo is proper and should be confirmed. Master Arbitrator DeCarlo found that “the Master Arbitrator is not a fact finder, and if the evidence is sufficient to support an Arbitrator’s decision, it is not the role of the Master Arbitrator to vacate or modify”. He concluded that “the decision of the Arbitrator on its face [*4]supports an affirmation of the decision below and I therefore, rule in favor of Respondent in this matter”. Counsel for GEICO cites Matter of Petrofsky v Allstate Insurance Co., 54 NY2d 207, 445 NYS2d 77, 429 NE2d 755 (C.A. 1981).

The Law

The Court of Appeals has outlined the scope of review by a master arbitrator in the Matter of Petrofsky v Allstate Insurance Company, supra , and Smith and Firemen’s Fund Insurance Company, 55 NY2d 224, 448 NYS2d 444, 433 NE2d 509 (C.A. 1982). In Petrofsky, the Court of Appeals vacated a master arbitrator’s determination which set aside the original arbitration award and found that the master arbitrator erred by engaging in an extensive review of the facts. In Smith, the Court of Appeals upheld the master arbitrator because he based his decision on a matter of law and there was no indication that the master arbitrator exceeded his statutory power by weighing the evidence or resolving issues such as the credibility of the witnesses:

An arbitration award may be reviewed for whether it has a rational basis. The rational basis standard was developed by the Court of Appeals in a series of four (4) cases: Garcia v Federal Insurance Company, 46 NY2d 1040, 416 NYS2d 544, 389 NE2d 1066 ( C.A. 1979), Furstenberg v Aetna Casualty & Surety Co., 49 NY2d 757, 426 NYS2d 465, 403 NE2d 170 (C.A. 1980), Cohn v Royal Globe Insurance Company, 49 NY2d 942, 428 NYS2d 88, 406 NE2d 739 (C.A. 1980) and Levine v Zurich American Insurance, 49 NY2d 907, 428 NYS2d 193, 405 NE2d 675 (C.A. 1980).

CPLR § 7511(b) sets forth the four narrow grounds upon which an arbitration award may be vacated. These four grounds are 1) corruption, fraud, or misconduct in procuring the award; 2) partiality of an arbitrator appointed as a neutral; 3) that an arbitrator or agency making the award exceeded his power or so imperfectly executed it that a final definite award was not made; and 4) procedural defects, unless the party failed to notice the defect and failed to object to same. See also, Matra Building Corp v Alan Kucker, et al., 2 AD3d 732, 770 NYS2d 367 (2nd Dept. 2002). An arbitration award cannot be vacated even if the Court concludes that the arbitrators interpretation of an agreement misconstrues or disregards its plain meaning or misapplies substantive law unless the award is violative of a strong public policy, is totally irrational, or exceeds enumerated limitations of the arbitrators powers. Matra Building Corp. v Alan Kucker, et al., supra . The scope of review is extremely limited, as the goal of arbitration is to reach a final and definite resolution of the parties’ dispute without resorting to the judicial process, and the party commencing the action bears a heavy burden of proof. Indeed, an arbitration award will be confirmed if there is even a barely colorable justification for the outcome. Huntington Hospital v Huntington Hospital Nurses Association, 302 F. Supp. 2d 34 (EDNY, 2004).

. . . [I]n order to achieve arbitration’s dual purpose of an equitable result and expediency, the arbitrator’s award should be given great deference. Finality is the key. Accordingly, CPLR 7501 expressly forbids judicial review of the parties’ disputes. Therefore, failure to establish a statutory ground for vacatur under CPLR 7511 requires confirmation of the award (Matter of Granite Worsted Mills[Cowen] 25 NY2d 451, 255 NE2d 168, 306 NYS2d 934). Moreover, in New York there is a strong public policy favoring [*5]arbitration, consequently an award is not subject to vacatur “unless the court concludes that it is totally irrational or violative of a strong public policy” and thus in excess of the arbitrators powers (Hacket v. Milbank, Tweed, Hadley & McCloy, 86 NY2d 146, 630 NYS2d 274, 654 NE2d 95; Maross Constr. V. Central NY Regional Transp. Auth. 66 NY2d 341, 497 NYS2d 321, 488 NE2d 67).

Brown and Williamson Tobacco Corp. v. Chesley, 194 Misc 2d 540, 749 NYS2d 842 (NY County, 2002).

ConclusionAfter a careful reading of the submissions herein, the Court credits the analysis of GEICO’s counsel and finds that service of the petition was improper, that complainant is not entitled to a de novo trial, that a demand for relief under Article 75 is untimely, and that, even if juricdiction had been established and the application was timely, the awards of the Arbitrator and Master Arbitrator have a sound basis in the record and are not irrational, capricious or an abuse of discretion. It is the finding of the Court that the arbitration process afforded the complainant due process and is supported by adequate evidence in the record and is not totally irrational. See, Gulf Stream Coach v DiSanto, 173 Misc 2d 242, 661 NYS2d 498 (Sup. Lawrence Co. 1997); Ianotti v Safari Motor Coaches, 255 AD2d 848, 638 NYS2d 839 (3rd Dept 1996).Based on the totality of the evidence presented, the Court finds that there clearly was a rational basis for the arbitral decision and that the arbitrator acted within her powers.

Therefore, as CPLR § 7511(e) directs that once the Court denies a motion to vacate an award it shall confirm the arbitration award, the Arbitration Award is affirmed. GEICO is directed to settle judgment, on notice.

All further requested relief not specifically granted is denied.

This constitutes the decision and order of the Court.

Dated: October 1, 2008

_________________________

WILLIAM R. LaMARCA, J.S.C.

TO:

mills-geico,#

01/art75

—[*1] Alden Banniettis, Brooklyn, N.Y. (Jeff Henle of counsel), for appellant.

Teresa M. Spina, Woodbury, N.Y. (Emilio A. Cacace of counsel), for respondent.

In an action to recover no-fault benefits under an insurance contract, the plaintiff appeals, by permission, from an order of the Appellate Term of the Supreme Court for the Second and Eleventh Judicial Districts, dated April 26, 2007, which affirmed an order of the Civil Court of the City of New York, Kings County (Rubin, J.), entered August 8, 2005, which denied its motion for summary judgment on the complaint and granted the defendant’s cross motion for summary judgment dismissing the complaint.

Ordered that the order dated April 26, 2007, is affirmed, with costs.

The Appellate Term properly affirmed the Civil Court order denying the plaintiff’s motion for summary judgment on the complaint and granting the defendant’s cross motion for summary judgment dismissing the complaint. The plaintiff’s evidentiary submissions revealed that the defendant insurance company timely issued denial of claim forms in April and May of 2001, which partially denied payment upon the ground that no fee schedule existed for the treatment provided, and payment could thus be limited to a reasonable and customary fee. Although “[a] timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law” (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [2004]; see New York Univ. Hosp. Rusk Inst. v Hartford Acc. & Indem. Co., 32 AD3d 458, 460 [2006]; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664 [2004]), here the defendant’s denials of claim were issued on prescribed forms, and were not factually insufficient or vague. Under these circumstances, [*2]the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law (see Westchester Med. Ctr. v Allstate Ins. Co., 45 AD3d 579 [2007]; see also A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2007]; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d 778 [2007]).

Furthermore, the defendant made a prima facie showing of its entitlement to summary judgment dismissing the complaint by submitting evidentiary proof that no fee schedule for the reimbursement of acupuncture treatments existed in 2001, and that it properly limited payment to “charges permissible for similar procedures under schedules already adopted” (11 NYCRR 68.5 [b]; see Insurance Law § 5108; Ops Gen Counsel NY Ins Dept No. 04-10-03 [Oct. 2004]). In opposition to the cross motion, the plaintiff failed to raise an issue of fact as to whether reimbursement for its acupuncture services was properly limited.

The plaintiff further contends that the defendant failed to offer sufficient evidence in support of the “similar procedure” it chose for comparison to the services offered by the plaintiff in arriving at the rate of reimbursement. This contention, however, is not properly before this Court, as it was not raised in the Civil Court, and was not addressed by the Appellate Term (see Matter of New York City Hous. Auth. v Jackson, 48 AD3d 818, 820 [2008]). Spolzino, J.P., Ritter, Santucci and Carni, JJ., concur.

Supreme Court, New York County

105012/07

For the Petitioners:Agnes Neiger, Esq.

Jones Jones O’Connell LLP

45 Main Street, Suite 1101

Brooklyn, New York 11201

For the Respondents:

Patrice Soberano, Esq.

Short & Bill, P.C.

217 Broadway, Suite 300

New York, New York 10007

Marcy L. Kahn, J.

By notice of petition and petition dated April 4, 2007 and the exhibits annexed thereto, petitioner Chubb Insurance Company (“petitioner” or “Chubb”), moved for an order pursuant to CPLR §7511(b)(1)(iii) vacating the amended award of the arbitrator, dated January 17, 2007, in the arbitration proceeding between petitioner and respondent, GEICO Insurance Company (“respondent” or “GEICO”) on the ground that the arbitrator exceeded her powers, and sought to reinstate the original award issued by the arbitrator on November 3, 2006. Respondent submitted no opposition to the petition. By decision and order dated July 21, 2007, this court granted the petition on default, vacated the amended award and reinstated the original award. Respondent now moves to vacate the default judgment and, upon vacation, to reinstate the amended award. For the reasons stated, respondent’s motion is denied. [*2]

I. FACTUAL AND PROCEDURAL BACKGROUND

On January 22, 2003, Chenille Bonner (“Bonner”), a New York City Transit Authority (“NYCTA”) bus driver, was on duty in her bus when it became involved in a three-vehicle accident. As the NYCTA workers’ compensation insurer, Chubb paid $42,065.56 in benefits to and on behalf of Bonner as a result of the accident. (Pet. Exh. B).

In accordance with Insurance Law §5105, Chubb filed an inter-company arbitration demand against GEICO and Statewide Insurance Company (“Statewide”), the insurers of the other two vehicles,^[FN1] seeking reimbursement of the first-party benefits it had paid to its insured. As one of the vehicles involved in the accident was a NYCTA bus weighing in excess of 6500 pounds unloaded and constituting a vehicle for hire (see Pet. Exh. A), the jurisdictional requirements of §5105(a) were satisfied. The case was then submitted to arbitration with Arbitration Forums Inc. (“AFI”) pursuant to §5105(b) and 11 NYCRR §65.10 of the no-fault regulations on September 19, 2005. (Pet. Exh. C).

On October 31, 2006, the arbitration was held before the AFI arbitrator, Sabrina Owens (“Owens” or the “arbitrator”). On November 3, 2006, Owens issued her decision in the matter under AFI Docket No. I068-07725-05-00 (the “original award”), finding each of the respondents to be fifty per cent liable, and awarding Chubb a total of $42,065.56. (Pet. Exh. D).

Thereafter, by letter to the arbitrator dated November 22, 2006, respondent GEICO requested that the award against it be vacated due to an “incorrect application of New York regulations regarding PIP loss transfer requirements . . . .” (Pet. Exh. E). In essence, GEICO argued that because GEICO also provided motor vehicle insurance coverage for the NYCTA bus, it was “united in interest” with Chubb and recovery by Chubb against it was barred.

On January 17, 2007, the arbitrator issued an amended decision and award (the “amended award”), in which she determined that Statewide bore fifty per cent of the liability and that GEICO bore no liability in the case. (Pet. Exh. F). The amended award reduced Chubb’s recovery to $21,032.78.

Thereafter, petitioner commenced a proceeding to vacate the amended award and reinstate the original award, arguing that the arbitrator exceeded vacating the original award and her powers in issuing the amended award. As proof of service on the Superintendent of Insurance was provided by petitioner and respondent submitted no opposition to the petition, this court issued a decision and order dated July 20, 2007 (“Chubb I“), granting the petition on default but also addressing the merits [*3]of the petition.^[FN2]

Petitioner served respondent with notice of entry of the judgment on or about September 4, 2007. On May 9, 2008, GEICO filed the instant motion to vacate the default judgment in Chubb I. Chubb has opposed the motion. GEICO thereafter furnished a reply affirmation.

II.PARTIES’ CONTENTIONS

On this motion, GEICO claims that this court’s decision in Chubb I should be vacated on the ground of excusable default, as its failure to appear in the Article 75 proceeding was reasonable and it has a meritorious defense to the proceeding. Proffering the representation of its claims representative, Simon King (“King”), GEICO maintains that its failure to appear in the Article 75 proceeding was reasonable and should be excused, because its files do not reflect that it was ever served with process or received any notice of the proceeding until after the entry of judgment against it on September 4, 2007. (Aff. of Merit of Simon King, sworn Apr. 23, 2008 [the “King affidavit”], at ¶11).

GEICO states that it has a meritorious defense, arguing that the original award was so irrational as to require vacation. Specifically, GEICO argues that Chubb, Bonner’s worker’s compensation carrier, was aligned in interest with GEICO, which provided no-fault motor vehicle coverage for Bonner’s NYCTA bus, as well as for one of the other vehicles involved in the accident. It argues that to permit a worker’s compensation carrier to recover from the no-fault insurer of the same person would improperly eliminate the worker’s compensation offset for no-fault insurers mandated by Insurance Law §5102(b)(2). It also argues that there should have been no consideration of negligence through intercompany loss transfer pursuant to Insurance Law §5105(a) because of Chubb’s status as a worker’s compensation carrier, and that Chubb is the sole source of Bonner’s medical benefits under 11 NYCRR §65-3.16(a)(9). Contending that the arbitrator recognized her own error and, accordingly, amended her award appropriately, GEICO argues that the amended award should be reinstated.

Chubb responds that GEICO has failed to establish either a reasonable excuse for its default or a meritorious defense to the petition. Chubb contends that GEICO cannot furnish a reasonable excuse for its default because the statement by King is conclusory and unsupported by specific factual allegations. It proffers an affidavit of service upon the office of the Superintendent of the New York State Insurance Department (“NYSID”) as the duly appointed representative of GEICO and the [*4]acknowledgment of such service and delivery to GEICO by that office on April 16, 2007. (Affirm. of Agnes Neiger, Esquire in Opp.[“Neiger Aff.”], dated July 10, 2008, Exh. D). Chubb further maintains that GEICO’s defense, namely, that the original award is irrational and should be vacated, does not address the issue before this court in Chubb I, that being whether the arbitrator exceeded her authority in issuing the amended award.

Chubb also argues that GEICO’s request to the arbitrator for modification of the original award failed to comply with the requirements of CPLR §7509, as GEICO submitted its request more than twenty days after the original award was issued. Chubb reiterates that because the amendment of the award did not fall within the statutory parameters specified in CPLR §§7509 and 7511(c), the arbitrator exceeded her authority in amending the original award in response to the request, rendering GEICO’s position unmeritorious.

III.DISCUSSION

It is settled law that “[a] party seeking to vacate a default must demonstrate both a reasonable excuse for [that party’s] nonappearance and a meritorious defense to the action.” (Eugene Di Lorenzo, Inc. v. A.C. Dutton Lumber Co., 67 NY2d 138, 141 [1986]; Central City Brokerage Corp. v. Acosta, 49 AD3d 455 [1st Dept. 2008]. On this motion, GEICO has failed to establish either a reasonable excuse or a meritorious defense.

A. Reasonable Excuse

GEICO’s assertion that it was not properly served with the petition is belied by both the affidavit of service sworn on April 13, 2007 and the affidavit of acknowledgment of service dated April 16, 2007. The affidavit of service attests to the fact that on April 13, 2007, GEICO was served by personal delivery with a true copy of the notice of petition and petition to Dora Lewis of the NYSID and that Ms. Lewis was a duly appointed representative of GEICO for the purpose of receiving service of process.^[FN3] (Neiger Aff., Exh. D). The affidavit of acknowledgment of service reveals that on April 16, 2007, Salavatore Castiglione, Assistant Deputy Superintendent and Chief of NYSID, acknowledged that the notice of petition was served upon him on April 13, 2007 and that he notified GEICO of service by forwarding the acknowledgment and a copy of the notice of petition to Mr. Robert M. Miller of GEICO at its address in Woodbury, New York on April 16, 2007. (Id.) GEICO presents no facts contradicting this evidence, or demonstrating that it had a new address for the forwarding of service of process and had [*5]failed through inadvertence to notify the Superintendent of Insurance of that fact. Further, there are no facts before this court demonstrating that the notice of petition was ever returned undelivered to the Insurance Department. Although GEICO does claim that a copy of the notice of petition could not be located in its files, no facts have been presented to this court supporting GEICO’s claim that it was never served on the company.

Thus, the record establishes that service of the notice or petition and petition was effected pursuant to Insurance Law §1212(b).^[FN4] GEICO has failed to provide a sworn factual basis to controvert these allegations. As GEICO has not shown that it was not properly served with the petition in this proceeding, GEICO does not have a reasonable excuse for its failure to appear in this proceeding prior to filing the instant motion.

B. Meritorious Defense

GEICO’s claim of a meritorious defense in this proceeding is equally unavailing. In Chubb I, the issue before the court was whether the arbitrator exceeded her powers in issuing the amended award, which Chubb sought to vacate pursuant to CPLR §§ 7509 and 7511(b)(1). (See Chubb I, section II, at 3). On this motion, rather than addressing that issue, GEICO challenges the rationality of the original award. These misdirected arguments do not constitute a meritorious defense to Chubb’s petition.

Although, as GEICO contends, New York courts have been liberal in vacating default judgments in light of the strong public policy favoring the resolution of cases on their merits (Reply Affirm. of Patrice Soberano, Esquire dated July 25, 2008 in Support of Resp. Mot., at ¶14; see Aliksanyan v. Sundman, 98 AD2d 607 [1st Dept. 1983]; Balint v. Marine Midland Bank, 112 AD2d 1023 [2d Dept. 1985]), in most of the cases relied upon by GEICO, the motion to vacate the default judgment was filed promptly upon receipt of the notice of entry of the default judgment by the prevailing party. (See, e.g., Glass v. Janbach Properties, 73 AD2d 106, 108 [2d Dept. 1980][motion to vacate filed eight days after receipt of notice of entry of default judgment]). Here, by contrast the motion to vacate the default [*6]was filed some eight months after service of the notice of entry of the judgment. Moreover, in Chubb I this court did address the merits of this proceeding, rather than merely granting a default judgment based upon GEICO’s failure to respond to the petition. (See Chubb I, section III at 4-8).

GEICO proffers no factual or legal basis for this court to vacate its judgment in Chubb I. Instead, GEICO argues that the arbitrator made an error of law in issuing the original award in contravention of both a governing statute and a regulation. Specifically, GEICO maintains that the original award, which permitted Chubb, the workers’ compensation carrier for Bonner, to recover from GEICO, the no-fault insurer for the same party, violates the statutory scheme set forth in Insurance Law §5102(b)(2). Under that scheme, first-party benefits paid by a no-fault insurer to reimburse a person for basic economic loss on account of personal injury are to be offset by any amounts recovered on account of workers’ compensation benefits, rather than the reverse. (See Ins. Law §5102[b][2]; Arvatz v. Empire Mut. Ins. Co., 171 AD2d 262 [1st Dept. 1991][“. . . Insurance Law §5102(b)(2) provides that workers’ compensation benefits serve as an offset against first-party benefits payable under no-fault as compensation for basic economic loss'”]; New York Cent. Mut. Fire Ins. Co. v. Tower Ins. Co. of New York, Index No. 100446/07, [Sup. Ct. NY Co. July 6, 2007][vacating arbitrators’ award of medical expenses from no-fault insurer to workers’ compensation carrier as contrary to Insurance Law §5102(b)]). GEICO further asserts that the original award does not comply with 11 NYCRR § 65-3.16(a)(9), which provides:

(p)ursuant to section 5102(b)(2) of the Insurance Law, when the applicant is entitled to workers’ compensation benefits due to the same accident, the workers’ compensation carrier shall be the sole source of reimbursement for medical expenses.

(11 NYCRR §65-3.16[a][9]; see also New York Cent. Mut. Fire Ins. Co. v. Tower Ins. Co. of New York, supra [“because the compensation carrier is solely responsible for the medical expenses, it turns the law on its head to allow the carrier to recover from the no-fault insurer”]). Assuming, without deciding, the correctness of GEICO’s statement of the law and its application to the circumstances presented here,^[FN5] GEICO had a remedy, which was to make a successful motion in this court to vacate the original award pursuant to CPLR §7511, but, for [*7]reasons still unexplained, failed to do so. Rather, GEICO sought to have the arbitrator modify her award. In doing so, GEICO sought its remedy in an inappropriate manner. Should a party to an arbitration proceeding seek to vacate or modify an award, the appropriate means to do so is by way of CPLR article 75 procedure. (See Caso v. Coffey, 41 NY2d 153, 157 [1976][a requirement that arbitrators be prepared to defend their awards would “discourage qualified and competent persons from serving as arbitrators”]).

Chubb subsequently brought its petition seeking to vacate the amended award. Despite having been properly served with the petition by personal service on the Superintendent of Insurance, GEICO failed to respond. Having been presented no contentions on the merits by GEICO, this court considered Chubb’s argument that the arbitrator exceeded her authority and determined that the arbitrator had done so. (See CPLR §7511[b][1][iii]; Matter of the Board of Educ. of the Dover Union Free School Dist. v. Dover-Wingdale Teachers’ Ass’n, 61 NY2d 913,915 [1984] [arbitration award may be vacated where the award is “in excess of a specifically enumerated limitation upon arbitral authority”]). Thus, this court decided the issue on the merits in favor of Chubb. (See Chubb I at 4-8).

Further, GEICO’s motion, which effectively seeks an order from this court confirming the amended award, is untimely, as it has been approximately one year and eight months, long after the expiration of the one-year statutory time period, since the delivery of the amended award to GEICO. (CPLR §7510).

As GEICO proffers neither a reasonable excuse for its nonappearance in this proceeding prior to the filing of the instant motion, nor a meritorious defense to the petition, the motion to vacate the default judgment must be denied.

IV.CONCLUSION

For the foregoing reasons, respondent’s motion to vacate the default judgment of this court dated July 20, 2007 is denied.

The foregoing constitutes the decision and order of this court.

ENTER:

______________________

Marcy L. Kahn, J.S.C.

Dated:New York, New York

September 29, 2008

Footnotes

Footnote 1:In addition to the NYCTA bus, GEICO insured a third-party vehicle involved in the accident.

Footnote 2:See Chubb I, section III, at 4-8.

Footnote 3: CPLR §317 is not applicable here, since the agent for

service of process was personally served.

Footnote 4:Insurance Law §1212(b) provides:

Service of process upon any such insurer in any proceeding in any court of competent jurisdiction may be made by serving the superintendent, or any salaried employee of the department whom the superintendent designates for such purpose, all of whom shall have authority to accept such service pursuant to any such power of attorney.

Footnote 5:The instant situation is complicated by the fact thatGEICO is the no-fault insurer of both the workers’compensation vehicle and one of the third-parties’ vehicles.