—[*1] Short & Billy, P.C., New York, N.Y. (Naim M. Peress of counsel), for appellant.

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

In an action pursuant to Insurance Law § 5106 (a) to recover no-fault benefits allegedly awarded under an insurance contract issued by the defendant, the defendant appeals (1), as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Woodard, J.), dated December 19, 2006, as, upon reargument, granted the plaintiff’s motion for summary judgment on the complaint, which had been denied in a prior order of the same court dated June 20, 2006, and (2) from a judgment of the same court entered January 2, 2007, which is in favor of the plaintiff and against it in the principal sum of $86,829.36.

Ordered that the appeal from the order is dismissed; and it is further,

Ordered that the judgment is reversed, on the law, so much of the order dated June 20, 2006, as, upon reargument, granted the plaintiff’s motion for summary judgment on the complaint is vacated, and, upon reargument, the court adheres to its original determination in the order dated June 20, 2006, denying the motion; and it is further,

Ordered that one bill of costs is awarded to the defendant.

The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d [*2]241, 248 [1976]). The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501 [a] [1]).

The Supreme Court, upon reargument, should have adhered to its original determination denying the plaintiff’s motion for summary judgment. On that motion, the plaintiff established its prima facie entitlement to judgment as a matter of law by demonstrating that the necessary billing forms were mailed to and received by the defendant, and that payment of the no-fault benefits was overdue (see New York & Presbyt. Hosp. v Selective Ins. Co. of Am., 43 AD3d 1019 [2007]; Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]). However, in response, the defendant raised a triable issue of fact as to whether the benefits were overdue (cf. A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779, 780-781 [2007]; New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832, 833 [2007]). The defendant provided evidence showing that the plaintiff’s claim for the benefits was timely denied on the ground that the plaintiff submitted the billing forms more than 45 days after the last date of medical service (see 11 NYCRR 65-1.1, 65-3.3 [e]; St. Vincent’s Hosp. & Med. Ctr. v Country Wide Ins. Co., 24 AD3d 748, 749 [2005]; NY Arthroscopy & Sports Medicine PLLC v Motor Veh. Acc. Indem. Corp., 15 Misc 3d 89, 90 [2007]).

The defendant’s remaining contentions have been rendered academic in light of our determination. Spolzino, J.P., Ritter, Covello and Dickerson, JJ., concur.

Civil Court of the City of New York, Kings County

044270/04

For Plaintiff: Gary Tsirelman, P.C.

For Defendant: McDonnell & Adels, P.C.

Eileen N. Nadelson, J.

On September 12, 2005, this court granted Plaintiff’s Motion for Summary Judgment on default, awarding Plaintiff $635.00 for first party No-Fault insurance benefits. The judgment was filed and entered on September 16, 2005.

On or about February 13, 2006, Defendant filed a request for a Declaratory Judgment in the Supreme Court to have that court declare that Plaintiff’s assignors had staged the accident subject to the No-Fault claims. Plaintiff was neither named in the Declaratory Judgment nor notified of its pendency.

On March 15, 2006, the Supreme Court granted Defendant’s Declaratory Judgment on the default of the named assignors and issued a stay of all proceedings. The court’s order stated that Defendant had no duty to pay claims for No-Fault benefits to the named assignors and that the accident subject to these claims was to be deemed “intentionally staged fraudulent and therefore uncovered event.”[sic]

On March 30, 2006, Plaintiff, who was never served with a copy of the Supreme Court order, served Defendant with the Notice of Entry of the Civil Court’s order of September 12, [*2]2005. On May 3, 2006, Plaintiff proceeded to enter judgment on the default, and on May 12, 2006, Defendant’s new counsel advised Plaintiff of the Supreme Court stay. On July 27, 2006, the Civil Court clerk entered the Default Judgment against Defendant.

On September 14, 2006, Defendant filed this instant Order to Show Cause to enforce the Supreme Court stay and to vacate the Notice of Entry of the Civil Court Default Judgment. In its papers, Defendant asserts that Plaintiff is collaterally estopped from enforcing the Default Judgment based on the Supreme Court’s Declaratory judgment.

In support of its assertion, Defendant cites Mulverhill v. State, 257 AD2d 735, 682 NYS2d 478 (3d Dept. 1999), which states, in pertinent part:

The doctrine of collateral estoppel…precludes a party from re-litigating in a

subsequent action or proceeding an issue clearly raised in a prior action or

proceeding and decided against that party or those in privity…. Only two

elements need be established; first, that the identical issue was necessarily

decided in the prior action and is decisive in the present one, and, second,

that the party to be precluded had a full and fair opportunity to contest the

prior determination.

Plaintiff opposes Defendant’s arguments. The Declaratory Judgment was brought against Plaintiff’s assignor to have the alleged accident deemed a staged event not covered by the No-Fault law. Plaintiff maintains that it cannot be collaterally estopped to enforce the No-Fault award because Plaintiff was not a party to the Supreme Court action and therefore had no opportunity to defend against Defendant’s assertions.

In analyzing the definition of collateral estoppel as stated above, this court believes that the requisite elements to hold Plaintiff estopped in the instant proceeding may not exist. First, the No-Fault action preceded the Declaratory Judgment action, and therefore the issue is not being re-litigated in a subsequent proceeding. Second, Defendant was not named in or notified of the Declaratory Judgment action, and therefore had no opportunity to contest the determination. And third, even though Plaintiff stands in privity with the persons named in the Declaratory Judgment, that decision was rendered on default of those persons. The court has no information as to the reason for such default, which could, in fact, be lack of service. If such be the case, that would negate the assumption that they were afforded the opportunity to contest and simply chose to decline.

However, regardless of our analysis of the collateral estoppel argument, this court lacks the jurisdiction to review the decision of the Supreme Court. Any argument Defendant may posit with respect to the underlying appropriateness of the Supreme Court decision must be made before that tribunal. At this point this court is obligated to give full effect to the Declaratory Judgment insofar as it stays all proceedings arising out of the alleged accident with respect to the instant assignor. Since the Entry of Judgment was filed after the Declaratory Judgment was [*3]issued, this court must find the Entry of Judgment of the No-Fault Summary Judgment to be a nullity. This is true even though Plaintiff acted innocently and without knowledge of Declaratory Judgement.

Having determined that the Entry of Judgment is a nullity, the court is faced with the fact that the Summary Judgment in favor of Plaintiff still stands since it predates the Declaratory Judgment. As a consequence, should the stay eventually be lifted, the judgment could be entered at that time. Therefore, this court feels compelled in the interests of efficient administration of justice to determine whether Defendant has provided sufficient grounds to vacate its default of the original No-Fault Motion for Summary Judgment.

Section 5015 of the CPLR provides the grounds upon which a default may be vacated. Simply stated, in order for a defaulting party to have the judgment vacated, within one year of entry of judgment, it must provide the court with a reasonable excuse for its default and evidence of a meritorious defense. In the instant case Defendant has provided absolutely no reason why it never appeared for the argument on the Summary Judgment motion. However, the Supreme Court’s decision on the Declaratory Judgment, even though rendered on default, does provide some evidence of a meritorious defense.

In F & C General Contractors Corp. v. Atlantic Mutual Mortgage Corp., 202 AD2d 629, 612 NYS2d 871 (2d Dept. 1994), the Appellate Court stated that “it is well established that, independent of statutory provisions, the court rendering a judgment, in its inherent power and control over its own proceedings, may vacate that judgment where it appears that substantial justice will be served and injustice prevented thereby.” In this case the court did not adhere to the one year statutorily imposed time limit.

Further, in Lane v. Lane, 175 AD2d 103, 572 NYS2d 14 (2d Dept. 1991), the Appellate Court exercised its discretion in permitting a person not even a party to the underlying action to bring a motion to vacate a judgment. The person seeking the vacatur was directly impacted adversely by the judgement he sought to vacate. The court stated that the default judgment was vacated in the interests of justice because “substantial justice will be subserved and injustice prevented.”

With respect to the instant motion, this court feels obligated to exercise its discretion in favor of vacating its initial Default Judgment in the interests of the efficient administration of the judicial system. As a general principle, the court prefers issues to be decided after a full hearing on the merits rather than by default. This is especially true in the instance of No-Fault claims in which assertions of staged accidents have become commonplace. Despite the fact that Defendant did not appear for oral argument on the Summary Judgment motion, the court notes that Defendant did submit opposition papers in which it posited the argument that the accident that was subject of the claim was staged and therefore not a covered event. This court would prefer to err on the side of caution and justice to make sure that fraudulent claims are not given the imprimatur of judicial sanction simply because a party fails to appear for oral argument. [*4]

Therefore, after deliberating on all of the arguments presented by both sides, the court grants Defendant’s motion to the extent of vacating the Entry of Judgment based on the Supreme Court stay, and further vacates its initial Default Judgment because the Supreme Court order, along with the facts alleged in Defendant’s opposition papers to the original motion, raise a question of fact that precludes summary judgment. CPLR 3212, See generally Gilson v. Metropolitan Opera, 5 NY3d 574, 807 NYS2d 558 (2005). In reaching this conclusion, the court is not making a determination of the collateral estoppel effect of the Declaratory Judgment on Plaintiff; rather it is simply denying Plaintiff’s Motion for Summary Judgment because questions of fact exist.

This constitute the decision and order of the court.

Dated: November 23, 2007

__________________________

EILEEN N. NADELSON, J.C.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 (Arthur F. Engoron, J.), entered June 28, 2006. The order denied plaintiff’s motion for summary judgment.

Order affirmed with $10 costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was supported by an affirmation from plaintiff’s
counsel, an affidavit from an officer of plaintiff and various documents annexed thereto. In opposition, defendant argued, inter alia, that the affidavit by plaintiff’s officer failed to demonstrate personal knowledge of the facts set forth therein and that, as a result,
plaintiff failed to establish a prima facie case. The court below denied the motion on the ground that defendant’s denials were timely and were sufficient to raise a question of fact as to medical necessity. Plaintiff appeals from the denial of its motion for summary judgment.

Inasmuch as the affidavit submitted by plaintiff’s officer was insufficient to establish that said officer possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, the order denying plaintiff’s motion for summary judgment is affirmed, albeit on other grounds.

Weston Patterson, J.P., Golia and Belen, JJ., concur.
Decision Date: November 21, 2007

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 (Bernice Daun Siegal, J.), entered April 6, 2005, deemed an appeal from a judgment entered June 29, 2006 (CPLR 5520 [c]). The judgment, entered pursuant to the April 6, 2005 order granting plaintiff’s motion for reargument and, upon reargument, granting plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $2,424.81.

Judgment reversed without costs, so much of the order as, upon granting plaintiff’s motion for reargument, granted plaintiff’s motion for summary judgment vacated and plaintiff’s motion for summary judgment denied.

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

On appeal, defendant asserts that the affidavit by plaintiff’s corporate officer, submitted in support of plaintiff’s motion for summary judgment, failed to lay a proper foundation for the admission of the documents annexed to plaintiff’s moving papers and that, as a result, plaintiff failed to establish a prima facie case. We agree. The affidavit submitted by plaintiff’s corporate officer was insufficient to establish that said officer possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Bath Med. Supply, Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists]; [*2]Dan
Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, plaintiff’s motion for summary judgment is denied.

In light of the foregoing, we reach no other issue.

Pesce, P.J., Rios and Belen, JJ., concur.
Decision Date: November 21, 2007

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from a judgment of the Civil Court of the City of New York, Kings County (Delores J. Thomas, J.), entered April 17, 2006. The judgment denied the petition to vacate the master arbitrator’s award.

Judgment modified by adding thereto a provision confirming the master arbitrator’s award; as so modified, affirmed without costs.

Upon a review of the record, we find a rational basis for the determination of the master arbitrator upholding the arbitrator’s award which denied petitioner’s claim for assigned first-party no-fault benefits (see e.g. Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207 [1981]; Matter of Shand [Aetna Ins. Co.], 74 AD2d 442 [1980]). Accordingly, the court below properly denied the petition to vacate the master arbitrator’s award. However, upon denying the petition, the court was required, pursuant to CPLR 7511 (e), to confirm the award (see Matter of Exclusive Med. & Diagnostic v Government Empls. Ins. Co., 306 AD2d 476 [2003]).

Weston Patterson, J.P., Golia and Belen, JJ., concur.
Decision Date: November 21, 2007

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appellant.

Appeal from an order of the Civil Court of the City of New York, Queens County (Kevin Kerrigan, J.), entered March 6, 2006, deemed an appeal from the judgment entered on May 3, 2006 (see CPLR 5501 [c]) . The judgment, entered pursuant to the March 6, 2006 order granting plaintiff’s motion for summary judgment and denying defendant’s cross motion for summary judgment, awarded plaintiff the principal sum of $1,696.41.

Judgment reversed without costs, so much of the order entered March 6, 2006 as granted plaintiff’s motion for summary judgment vacated and plaintiff’s motion for summary judgment denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was granted and a judgment was entered pursuant thereto. The sole issue raised on appeal is whether defendant proffered sufficient evidence to demonstrate that there was an issue of fact as to whether the injuries plaintiff’s assignor allegedly sustained arose from an insured incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Upon a review of the record, we find that the affidavit submitted by defendant’s investigator was sufficient to demonstrate a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (id. at 199). Since defendant demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, supra; Zuckerman v City of New York, 49 NY2d 557 [1980]), plaintiff was not entitled to summary judgment. Accordingly, the judgment in favor of plaintiff is reversed, the order, insofar as it granted plaintiff’s motion for summary judgment, is vacated and plaintiff’s motion for summary judgment is denied.

Weston Patterson, J.P., Golia and Belen, JJ., concur. [*2]
Decision Date: November 21, 2007

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, Richmond County (Peter Paul Sweeney, J.), entered April 20, 2006, deemed an appeal from a judgment entered May 5, 2006 (CPLR 5520 [c]). The judgment, entered pursuant to the April 20, 2006 order granting plaintiff’s motion for summary judgment and denying defendant’s cross motion for summary judgment, awarded plaintiff the principal sum of $3,600.

Judgment affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant cross-moved for summary judgment on the ground that prior to the commencement of the subject action, a related no-fault
matter arising out of the same accident was submitted to arbitration. Defendant contended that the election to arbitrate precluded this action (see Roggio v Nationwide Mut. Ins. Co., 66 NY2d 260 [1985]). The court granted plaintiff’s motion for summary judgment and denied defendant’s cross motion. A judgment was subsequently entered.

Upon a review of the record, we find that defendant failed to establish that the instant action was barred. Defendant did not offer evidence to support its contention that there was a prior election by plaintiff to arbitrate a claim for no-fault benefits pertaining to plaintiff’s assignor for injuries allegedly sustained in the accident which gave rise to the claims at issue herein. [*2]

A provider generally establishes its prima facie entitlement to summary judgment by proof that it submitted the claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). Inasmuch as defendant raised no issue in the court below or on appeal with respect to plaintiff’s
establishment of its prima facie case, this court need not pass on the propriety of the implicit determination of the court below with respect thereto. The burden, therefore,
shifted to defendant to demonstrate the existence of a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

In opposition to plaintiff’s motion for summary judgment, defendant asserted that the amount sought by plaintiff exceeded the amount set forth in the applicable fee schedule and that it timely denied plaintiff’s claims on the ground of lack of medical necessity (11 NYCRR 65-3.8 [c]). However, defendant failed to establish that the denials were timely mailed since the affidavit of defendant’s representative did not state that he personally mailed the denials or set forth defendant’s standard office practice or procedure designed to ensure that items are properly addressed and mailed (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). Moreover, contrary to the dissent, we find no concession by plaintiff in its submissions as to the timeliness of the denials.

Since defendant failed to establish that the claims were denied within the 30-day prescribed period (11 NYCRR 65-3.8 [c]), defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N. Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]) including its proffered defenses of lack of medical necessity and that the
fees charged were excessive (see Benson Med., P.C. v Progressive Northeastern Ins.
Co., 12 Misc 3d 144[A], 2006 NY Slip Op 51427[U] [App Term, 2d & 11th Jud Dists]). Consequently, the judgment is affirmed.

Pesce, P.J., and Belen, J., concur.

Weston Patterson, J., dissents in a separate memorandum.

Weston Patterson, J., dissents and votes to reverse the judgment, vacate so much of the order as granted plaintiff’s motion for summary judgment and deny plaintiff’s motion for summary judgment.

I disagree with the majority opinion and vote to reverse the judgment and vacate the part of the order which grants plaintiff’s motion for summary judgment on the ground that defendant has rebutted the prima facie showing of plaintiff. Lack of medical necessity is a defense to an action for recovery of no-fault benefits, and may be asserted by the insurer provided that there has been a timely denial of the claim (see generally Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]). It is undisputed that defendant issued timely denials as evidenced by the denial of claim forms which were submitted as part of plaintiff’s moving papers (see generally [*3]A.B. Med. Servs. PLLC v. Electric Ins. Co., 7 Misc 3d 130[A], 2005 NY Slip Op 50542[U] [App Term, 2d & 11th Jud Dists]). Indeed, plaintiff concedes timeliness by its submissions and does not raise the issue either below or on appeal. Thus, the question presented here is not the sufficiency of the affidavit of mailing.

Rather, plaintiff moves for summary judgment solely on the grounds that defendant unreasonably denied the claims. Inasmuch as it is undisputed that defendant’s denials of benefits were timely made within the prescribed statutory period, and the defense of lack of medical necessity having been sufficiently asserted through submissions in admissible form to rebut the prima facie showing (see Liberty Queens Med., P.C. v Liberty Mutual Insurance Co., 2002 NY Slip Op 40420[U] [App Term, 2d & 11th Jud Dists]), plaintiff’s motion for summary judgment should not have been granted.

However, I am in agreement with the majority’s opinion that defendant’s cross motion for summary judgment was properly denied. Defendant failed to submit any admissible proof to establish that this action was barred.
Decision Date: November 21, 2007

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 (Arthur F. Engoron, J.), entered June 30, 2006. The order, insofar as appealed from, upon finding for all purposes pursuant to CPLR 3212 (g) that plaintiff established a prima facie case, denied plaintiff’s motion for summary judgment on the ground that triable issues of fact exist.

Order, insofar as appealed from, reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment on the ground that defendant’s defenses were precluded by a defective denial of claim form. Defendant did not oppose the motion. The court granted plaintiff’s unopposed motion to the extent of holding that plaintiff made a prima facie showing for all purposes pursuant to CPLR 3212 (g), but the court nevertheless found that defendant’s denial of claim form raised triable issues of fact. This appeal by plaintiff ensued.

Since defendant raised no issue in the court below or on appeal concerning plaintiff’s establishment of its prima facie case, we do not pass on the propriety of the court’s determination with respect thereto. Consequently, having found that plaintiff made a prima facie showing, since defendant did not submit any opposition, plaintiff’s motion for summary judgment should have been granted (see Zuckerman v City of New York, 49 NY2d 557 [1980]).

In view of the foregoing, plaintiff’s motion for summary judgment is granted, and the matter is remanded to the court below for the calculation of statutory interest and an
assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations [*2]promulgated thereunder.

Weston Patterson, J.P., Golia and Belen, JJ., concur.
Decision Date: November 20, 2007

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, Kings County (Richard Velasquez, J.), entered August 24, 2006. The order denied plaintiff’s motion for summary judgment.

Order affirmed with $10 costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was supported by an affirmation from plaintiff’s counsel, an affidavit by an officer of plaintiff and various documents annexed thereto. The affidavit executed by plaintiff’s officer stated in a conclusory manner that the documents attached to plaintiff’s motion papers were plaintiff’s business records. In
opposition, defendant argued, inter alia, that the affidavit by plaintiff’s officer failed to lay a proper foundation for the documents annexed to plaintiff’s moving papers and that, as a result, plaintiff failed to establish a prima facie case.

Since the affidavit submitted by plaintiff’s officer was insufficient to establish that said officer possessed personal knowledge of plaintiff’s practices and procedures, so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, plaintiff’s motion for summary judgment was properly denied. [*2]

Weston Patterson, J.P., Golia and Belen, JJ., concur.
Decision Date: November 20, 2007

[*1]

Argued October 11, 2007; decided November 20, 2007

Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 34 AD3d 532, affirmed.

{**9 NY3d at 316} OPINION OF THE COURT

Graffeo, J.

In this action, a hospital seeks to recover no-fault insurance benefits for services rendered to a patient injured in a motor vehicle accident. We conclude that the insurance company’s failure to timely request verification of the patient’s assignment of benefits to the [*2]hospital precludes the carrier from now contesting the validity of the assignment. We therefore affirm the order of the Appellate Division so holding.

Plaintiff New York and Presbyterian Hospital treated patient Browne in 2004 for injuries he sustained as a result of an automobile accident. At the time of the accident, Browne had an automobile insurance policy with defendant Travelers Property Casualty Insurance Company affording him first-party no-fault coverage. In October 2004, the hospital, through its contract billing agent—Hospital Receivables Systems, Inc.—sought payment of $24,344.96 from Travelers for services provided to Browne. The billing agent sent Travelers a hospital facility form (NYS Form NF-5), a UB-92 form and an assignment of benefits form (NYS Form NF-AOB). The assignment portion of the NYS Form NF-5 and the assignment of benefits form both indicated that Browne’s signature was “on file,” but neither form displayed his actual signature.

Travelers did not reject the forms or request verification of the assignment. After Travelers failed to pay or deny the claim within 30 days of its receipt, the hospital commenced this action against Travelers and Farmington Casualty Company (an affiliated carrier) for payment of its bill as well as statutory interest and attorneys’ fees under Insurance Law § 5106 (a).^[FN1] In its answer, Travelers raised as an affirmative defense the lack of a valid assignment between Browne and the hospital.

Both parties moved for summary judgment and Supreme Court granted the hospital’s motion and directed entry of judgment{**9 NY3d at 317} against Travelers in the amount of $24,344.96 plus statutory interest and attorneys’ fees. The court held that Travelers’ failure to timely contest any deficiency in the assignment documents precluded the carrier from raising the issue in this proceeding. The Appellate Division affirmed and we granted Travelers leave to appeal.

New York’s no-fault automobile insurance system is designed “to ensure prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003]). In furtherance of these goals, the Superintendent of Insurance has adopted regulations implementing the No-Fault Law (Insurance Law art 51), including circumscribed time frames for claim procedures. [*3]

These regulations require an accident victim to submit a notice of claim to the insurer as soon as practicable and no later than 30 days after an accident (see 11 NYCRR 65-1.1, 65-2.4 [b]). Next, the injured party or the assignee (typically a hospital, as in the case here) must submit proof of claim for medical treatment no later than 45 days after services are rendered (see 11 NYCRR 65-1.1, 65-2.4 [c]).^[FN2] Upon receipt of one or more of the prescribed verification forms used to establish proof of claim, such as the NYS Form NF-5, an insurer has 15 business days within which to request “any additional verification required by the insurer to establish proof of claim” (11 NYCRR 65-3.5 [b]).^[FN3] An insurer may also request “the original assignment or authorization to pay benefits form to establish proof of claim” within this time frame (11 NYCRR 65-3.11 [c]). Significantly, an insurance company must pay or deny the claim within 30 calendar days after receipt of the proof of claim (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]). If an insurer seeks additional verification, however, the 30-day window is tolled until it receives the relevant information requested (see 11 NYCRR 65-3.8 [a] [1]).

An insurer’s failure to pay or deny a claim within 30 days carries substantial consequences. By statute, overdue payments{**9 NY3d at 318} earn monthly interest at a rate of two percent and entitle a claimant to reasonable attorneys’ fees incurred in securing payment of a valid claim (see Insurance Law § 5106 [a]). More importantly, a carrier that fails to deny a claim within the 30-day period is generally precluded from asserting a defense against payment of the claim (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997], rearg denied 90 NY2d 937 [1997]). This Court has recognized a narrow exception to this preclusion remedy for situations where an insurance company raises a defense of lack of coverage (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). In such cases, an insurer who fails to issue a timely disclaimer is not prohibited from later raising the defense because “the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed” (Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188 [2000]). [*4]

As a corollary to the Presbyterian preclusion rule, Appellate Division case law consistently holds that a carrier’s failure to seek verification or object to the adequacy of claim forms pursuant to 11 NYCRR 65-3.5 precludes it from interposing any defenses based on such deficiencies (see e.g. Westchester Med. Ctr. v Safeco Ins. Co. of Am., 40 AD3d 984 [2d Dept 2007]; LMK Psychological Servs., P.C. v Liberty Mut. Ins. Co., 30 AD3d 727, 728-729 [3d Dept 2006]). We concur and note that an insurer that requests additional verification after the 10- or 15-business-day periods but before the 30-day claim denial window has expired is entitled to verification. In these instances, the 30-day time frame to pay or deny the claim is correspondingly reduced (see 11 NYCRR 65-3.8 [j]; Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 300 [2007]).

Here, after Travelers obtained the NYS Form NF-5 and the assignment of benefits form—both of which plainly stated that the patient’s signature was “on file”—it did not ask for further verification or request the original assignment, as permitted by the regulations. Travelers also failed to pay or deny the claim within 30 calendar days of receipt of the hospital’s proof of claim. Nevertheless, Travelers argues that its neglect in demanding verification or timely denying coverage is irrelevant because the hospital’s failure to proffer a validly executed assignment equates to a lack of coverage, a defense that is not subject to preclusion under Chubb. We disagree.{**9 NY3d at 319}

In Chubb, the insurer asserted as a defense that the claimant’s injuries arose out of a prior work-related accident rather than a car accident. Alternatively, the carrier refused payment on the ground that the patient’s treatment was excessive. We held that the insurer was not barred from arguing that the injuries were unrelated to the accident because, if true, the treatment would not have been covered by the automobile liability policy in the first instance. On the other hand, we indicated that an excessive treatment defense ordinarily does not implicate a coverage issue, in which situation the preclusion rule applies (90 NY2d at 199).^[FN4]

Here, there is no dispute that the hospital rendered medical services to Browne in the amount of $24,344.96 for injuries arising out of a motor vehicle accident, that Browne’s policy with Travelers was in effect at the time of the accident and that the policy covered the [*5]accident. In our view, any defect or deficiency in the assignment between Browne and the hospital simply does not implicate a lack of coverage warranting exemption from the preclusion rule. We therefore determine that the failure by Travelers to seek verification of the assignment in a timely manner prevents the carrier from litigating the issue now.^[FN5]

To conclude otherwise, as proposed by the dissent, frustrates a core objective of the no-fault regime—”to provide a tightly timed process of claim, disputation and payment” (Presbyterian, 90 NY2d at 281). Upon receipt of a no-fault claim, the regulations shift the burden to the carrier to obtain further verification or deny or pay the claim. When, as here, an insurer does{**9 NY3d at 320} neither, but instead waits to be sued for nonpayment, the carrier should bear the consequences of its nonaction. To allow an insurance company to later challenge a hospital’s standing as an assignee merely encourages the carrier to ignore the prescribed statutory scheme. As we observed in Presbyterian:

“No-fault reform was enacted to provide prompt uncontested, first-party insurance benefits. That is part of the price paid to eliminate the common-law contested lawsuits . . . The tradeoff of the no-fault reform still allows carriers to contest ill-founded, illegitimate and fraudulent claims, but within a strict, short-leashed contestable period and process designed to avoid prejudice and red-tape dilatory practices” (id. at 285 [citation omitted]).

Finally, Travelers contends that an assignment of benefits is a necessary component of the hospital’s prima facie case for recovery of no-fault benefits. Even assuming that this is true, we conclude that an assignment form stating that the patient’s signature is “on file” satisfies that burden where the carrier does not timely take action to verify the existence of a [*6]valid assignment (see Hospital for Joint Diseases v Allstate Ins. Co., 21 AD3d 348 [2d Dept 2005]). Since Travelers does not otherwise contest the hospital’s entitlement to no-fault payments, the courts below appropriately awarded summary judgment to the hospital. We have considered Travelers’ remaining contentions and find them without merit.

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

Pigott, J. (dissenting). I respectfully dissent. In my view, Travelers should not be precluded from asserting the affirmative defense that plaintiff Hospital lacked standing to sue—i.e., that it did not obtain a valid assignment from the recipient of medical services—even though Travelers did not obtain additional verification or deny the claim within the prescribed time periods set forth in the no-fault insurance regulations.^[FN*]

As explained by the majority, Travelers failed to request additional{**9 NY3d at 321} verification after receiving the Hospital’s claim and assignment of benefits forms, nor did it deny or pay the claim within the required 30-day time period. Nevertheless, after the Hospital commenced this action against Travelers for payment, Travelers asserted an affirmative defense that the Hospital lacked standing to bring the suit on the grounds that it did not obtain a valid assignment of benefits from the patient.

Of course, a plaintiff must have standing in order to bring an action in the courts of this State. “Whether a person seeking relief is a proper party to request an adjudication is an aspect of justiciability which, when challenged, must be considered at the outset of any litigation” (Society of Plastics Indus. v County of Suffolk, 77 NY2d 761, 769 [1991], citing Matter of Dairylea Coop. v Walkley, 38 NY2d 6, 9 [1975]). “Standing is a threshold determination, resting in part on policy considerations, that a person should be allowed access to the courts to adjudicate the merits of a particular dispute that satisfies the other justiciability criteria” (Society of Plastics Indus., 77 NY2d at 769). This Court has also recognized that “questions of . . . standing of parties may be characterized as raising questions of subject matter jurisdiction” (Lacks v Lacks, 41 NY2d 71, 74 [1976]; see also City of New York v State of New York, 86 NY2d 286, 292 [1995] [“The issue of lack of capacity to sue does not go to the jurisdiction of the court, as is the case when the plaintiffs lack standing”]).

Only where there is a properly executed assignment does an assignee become the “real party in interest” and acquire standing to enforce the rights of an assignor (James McKinney & Son v Lake Placid 1980 Olympic Games, 61 NY2d 836, 838 [1984]). “[T]o effect an assignment . . . there [must] be a perfected transaction between the assignor and assignee, intended by those parties to vest in the assignee a present right in the things [or rights] assigned” (Leon v Martinez, 84 NY2d 83, 88 [1994], citing 4 Corbin, Contracts § 879, at 528 [1951]). Without an assignment from the patient, a medical services provider clearly lacks standing to sue a no-fault insurance carrier to directly collect payment for services it rendered to the patient (see 11 NYCRR 65-3.11 [b] [1], [2] [“(i)n order for a health care provider (or) hospital to receive direct payment from the insurer, the{**9 NY3d at 322} health care provider or hospital must submit to the insurer . . . a properly executed Authorization to Pay Benefits” or “a properly executed assignment” from the injured party]).

As discussed by the majority, in Central Gen. Hosp. v Chubb Group of Ins. Cos. (90 NY2d 195 [1997]), we held that a no-fault insurer was not precluded from raising a defense of lack of coverage despite an untimely disclaimer. In so holding, the Court stated that “[t]he denial of liability based upon lack of coverage within the insurance agreement . . . is distinguishable from disclaimer attempts based on a breach of a policy condition” (id. at 199). The majority here further explains that a carrier is not precluded from asserting a noncoverage defense because “the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed” (majority op at 318, quoting Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188 [2000]). In my view, a carrier’s defense based on the lack of a valid assignment equates to a defense implicating “lack of coverage within the insurance agreement” (Chubb, 90 NY2d at 199), and thus, should similarly not be precluded. Although there is no dispute that the assignor-patient was covered by the insurance policy with Travelers and received medical treatment at the Hospital, similar to our concerns in Chubb, the policy here does not contemplate [*7]payment to the Hospital in the first instance. Indeed, the Hospital has no legal right to collect payment if and until a valid assignment is obtained from the patient. Thus, in my view, Travelers’ defense challenging the validity of the assignment is akin to a defense premised upon lack of coverage.

Further, contrary to the majority’s position, in my view, standing cannot be artificially created by a carrier’s failure to object within the time periods set forth in the no-fault insurance regulations. Put another way, a medical services provider cannot establish standing by merely relying upon a carrier’s prelitigation inaction. By allowing a plaintiff to do so, the majority, in essence, creates a rule whereby a plaintiff can establish its standing by estoppel, as a result not only of a defendant’s inaction, but by its simple neglect, oversight or clerical error.

I must take issue with the majority’s view that this position would encourage noncompliance with the no-fault statutory and regulatory scheme. If an insurer fails to timely pay a valid claim, it is subject to the payment of interest at 2% per month plus attorneys’ fees (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.9,{**9 NY3d at 323} 65-3.10), which is why these matters are better resolved in an arbitration setting rather than through the courts as has occurred here. Our decision today, in my view, encourages the use of the courts by eliminating an essential element of most lawsuits—standing—and runs the risk of encouraging this type of litigation at the carrier’s peril.

Thus, here, the Hospital should be required to affirmatively prove standing, upon Travelers’ objection, as part of its prima facie case (see TPZ Corp. v Dabbs, 25 AD3d 787, 789 [2d Dept 2006] [holding that the plaintiff was not entitled to summary judgment in an action to collect on a promissory note because “it failed to present competent proof of its standing as an assignee of the note” and defendant challenged “(t)he validity of the assignment of the note to the plaintiff, and the plaintiff’s standing to prosecute (the) action” in its answer]; Rockland Lease Funding Corp. v Waste Mgt. of N.Y., 245 AD2d 779 [3d Dept 1997] [holding that the plaintiff lacked standing to bring the action where there was no record evidence supporting its contention that it obtained an assignment]). The Hospital could have done so simply by producing proper documentary evidence of the assignment vesting it with the right to collect payment. Because the Hospital failed to do so, it did not establish its entitlement to judgment as a matter of law.

Accordingly, I would reverse the Appellate Division order and deny plaintiff’s motion for summary judgment.

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

Order affirmed, with costs.

Footnotes

Footnote 1: Originally, plaintiff Hospital for Joint Diseases, as the assignee of two other patients, jointly sued Travelers and Farmington for nonpayment of no-fault benefits. Those claims were subsequently withdrawn.

Footnote 2: A hospital may request payment from the insurer by submitting a properly executed authorization to pay benefits or properly executed assignment on one of the prescribed verification forms or an assignment of benefits form (see 11 NYCRR 65-3.11 [b]).

Footnote 3: Where a claimant submits an application for no-fault benefits (NYS Form NF-2) without verification forms, the insurer has 10 business days to forward the “prescribed verification forms it will require prior to payment of the initial claim” (11 NYCRR 65-3.5 [a]).

Footnote 4: As another example, courts have held that an insurance company is not prevented from later denying a claim where the injured party deliberately caused the collision as part of a fraudulent scheme, holding that an intentional crash is not an “accident” covered by the policy (see Matter of Allstate Ins. Co. v Massre, 14 AD3d 610 [2d Dept 2005]; State Farm Mut. Auto. Ins. Co. v Laguerre, 305 AD2d 490 [2d Dept 2003]).

Footnote 5: We note that this conclusion is consistent with Appellate Division precedents that have considered similar circumstances (see Westchester Med. Ctr. v Safeco Ins. Co. of Am., 40 AD3d 984 [2d Dept 2007]; LMK Psychological Servs., P.C. v Liberty Mut. Ins. Co., 30 AD3d 727 [3d Dept 2006]; Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2d Dept 2005], appeal dismissed 8 NY3d 895 [2007]; Hospital for Joint Diseases v Allstate Ins. Co., 21 AD3d 348 [2d Dept 2005]; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2d Dept 2005], lv denied 5 NY3d 713 [2005]; New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2d Dept 2004], lv denied 3 NY3d 609 [2004]; Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co., 233 AD2d 433 [2d Dept 1996], lv dismissed 89 NY2d 1030 [1997]).

Footnote *: As a side note, at least one commentary has noted that the Civil Court of the City of New York and District Courts in Nassau and Suffolk Counties have been inundated with lawsuits filed by medical providers seeking reimbursement of first-party benefits for services rendered to injured claimants. It attributes this “litigation explosion” to two factors: (1) the perception of the medical providers that the American Arbitration Association forum, where medical providers have traditionally filed claims, is biased in favor of the insurer; and (2) decisions of the courts over the past six or seven years which have been favorable to the medical providers (see Lustig and Schatz, Outside Counsel, The End of Litigation Explosion in New York No-Fault, NYLJ, June 21, 2007, at 4, col 4).